The following is an excerpt from Kaufman Global’s latest White Paper: Engage the Organization and a Performance Culture Will Follow. This paper examines the reasons why leaders fail to pursue engagement, even while it’s proven to be fundamental to value creation. Content stems from research completed with top leaders and known change agents with diverse industry backgrounds.
Engagement is about working together, being involved, two-way communication and, most of all, the ability to have input, make decisions, and take action on those things within one’s immediate control. This level of involvement surely generates value. However, value can be a complex topic. If you doubt this, read a little about prospect theory, loss aversion and anchoring. Here, we are talking about the benefits that are derived from efficient and effective processes.
The most basic definition; the worth of something, implies subjectivity. Value for a product or service is best understood where it is created, and where it is consumed. Since the term means different things to different people we need to find some common ground. A simple way to think about it goes like this: Value remains when waste is removed. Waste is anything an all-knowing, all-seeing customer would not be willing to pay for — because it has no worth to them. Just as the customer has an opinion about value, those closest to creation of the product or service know the most about how to mitigate waste and increase value. This definition allows anyone to ask and answer value questions related to their personal situation, such as: “Would the customer be willing to pay for:
- me looking for my missing wrench?” No.
- us counting excessive inventory?” No.
- our inability to find or retain the best talent for this job?” No.
- accidents that result from an unsafe work environment?” No.
You get the idea.
The individual or team touching the product, service or process creates value, and the customer judges it. However boundaries can’t go completely undefined and left to personal whims. In day-to-day work, value is bounded in absolute terms like quality, quantity, time, etc. These definitions are turned into metrics and spread across the enterprise, but usually at levels too high to effectively measure individual or workgroup performance. Only through engaging the organization at this level ― those doing the job — can we react to the dynamic environment, make real-time adjustments and capture the value that is otherwise lost.
Peter Drucker, the highly regarded organizational design and management thinker, described “knowledge workers.” This was a natural evolution from manual labor and factories to offices, information, data and design work. We need to expand the concept of knowledge worker and describe a new one: Value Workers. These are individuals and small teams (aka natural workgroups) with common deliverables. They subjectively know the most about and best way to achieve optimal results within their sphere of influence. Value workers apply their deep local knowledge at their position along the value chain. A few examples:
Manufacturing | The assembly line worker knows the most about how to reduce the amount of movement required for the job. The maintenance technician and equipment operator are best able to increase Overall Equipment Effectiveness (OEE) and reduce Mean Time To Repair (MTTR). The Plant Manager optimizes factory output by engaging the functions and taking decisive action.
Psychiatric Hospitals | The direct care worker may recognize patient behavioral triggers sooner than their physicians due to daily interaction and familiarity. The unit treatment team is best equipped to improve a patient’s mental health by making necessary changes to the treatment plan. The Hospital Administrator balances the needs of the patients, nursing staff and doctors and sets priorities.
Oilfields | The maintenance technician controls cost by managing the proper inventory of materials to complete a job. The operations manager knows the most about balancing customer priorities for field technical equipment. The oilfield operator knows which component suppliers contribute to the best rig operating conditions or uptime.
If leaders want better results they must embrace pushing decisions and the ability to make change happen down into the organization where value workers engage.
Download and read the entire White Paper here: Engage the Organization and a Performance Culture Will Follow.