co-authored with Gary Hamel and excerpted from the July-August 2020 issue of the Harvard Business Review
The loss of “good jobs” in the U.S. economy and elsewhere has inspired a slew of proposals, including mandatory labor representation on corporate boards, benefits for gig economy workers, tax breaks for investments in human capital, and a minimum guaranteed income. While some of these ideas have merit, they don’t address what we believe is the root of the problem: the widespread assumption that low-wage jobs are filled by minimally capable people—a prejudice that has denied millions of employees the opportunity to enhance their skills and exercise their minds.
The view of employees as semiprogrammable machines goes back to the early decades of the Industrial Revolution, when most workers were poorly educated. It was reinforced by Frederick Taylor in 1911, when he published The Principles of Scientific Management,in which he described the typical laborer as “so stupid that the term ‘percentage’ has no meaning to him.” The solution, said Taylor, was to strip judgment from frontline jobs: “It is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that…faster work can be assured.” And who was to do the enforcing? Professionally trained managers, of course.
Taylor’s model of industrial bureaucracy set up a caste system of thinkers and doers that persists to this day. Although the total quality management and kaizen movements both emphasized employee empowerment, the basic bureaucratic approach still dominates. A 2019 Gallup survey found that only one in five U.S. employees strongly agreed with the statement “My opinions seem to count at work” and fewer than one in 10 with the statement “I take risks at my job that could lead to new products or solutions.” In the 2015 American Working Conditions Survey, just 11% of frontline U.S. employees said they were consistently able to influence decisions important to their work. Meanwhile, our analysis of Bureau of Labor Statistics data shows that 70% of U.S. employees are in jobs deemed to require little or no originality.
Though today’s employees are far better educated than their early-20th-century forebears, the distinction between managers and employees—the clever and the compliant—is still deeply entrenched. As a result, a vast reservoir of human ingenuity is going untapped. That depresses the performance of individual firms and the economy overall.
Yet a growing band of organizations around the world have freed their employees from the yoke of bureaucratic control. These companies significantly outperform their peers. They include Nucor (America’s preeminent steelmaker), Buurtzorg (the Dutch home-health-care provider), and Svenska Handelsbanken (the Swedish bank). These champions of empowerment pay better-than-average wages—not because they’re exceptionally generous but because their employees create exceptional value. They share a deep belief that “ordinary” employees, when given the chance to learn, grow, and contribute, are capable of extraordinary accomplishments. That conviction, when consistently acted upon, produces a workforce that’s deeply knowledgeable, relentlessly inventive, and ardently focused on the customer.
The question is, why haven’t more organizations followed suit? Even the best-intentioned CEOs have found themselves watching helplessly as their companies’ top-heavy management structures squeeze the enthusiasm and originality out of employees. For instance, near the end of his tenure as co-CEO of SAP, Jim Hagemann Snabe discovered that the German software giant had amassed more than 50,000 KPIs (key performance indicators) covering every job in the company. He was horrified. “We were trying to run the company by remote control,” he recalls. “We had all this amazing talent, but we had asked them to put their brains on ice.”
In this article we offer a path out of the bureaucratic trap, drawing on the example of the tire manufacturer Michelin. The company has been challenging many of the unspoken norms that characterize France’s notoriously hierarchical corporate giants, whose shop floors are known more for militant protests than for constructive engagement with management. Since 2012, under the banner of responsabilisation (French for “empowerment”), Michelin has dramatically increased the authority and accountability of its frontline workers, reversing the centralization that has characterized the automobile sector for five decades. In early 2020 the responsabilisation program was on course to deliver half a billion dollars’ worth of manufacturing improvements, prompting Jean-Dominique Senard, Michelin’s CEO from 2012 to 2019, to proclaim it one of his “proudest achievements.”
Read the full article on the Harvard Business Review site.