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Kenneth C. Levine and Peter J. Sherman

Management

Ten Simple Principles for Treating Employees as Assets

Use process improvement to get the best out of your organization’s workers

Published: Monday, July 26, 2010 - 15:02

With so much focus on customers, we often lose sight of our employees and the critical roles they play in our organizations. It’s always instructive to remember that organizations are the employees, and that customer service and quality are dependent on these skilled, motivated people.

Employees should be seen as assets, not expenses. Assets are something you invest in. One indisputable fact is that frontline workers, those who interact daily with customers, know the customers the best. They’re the most familiar with the processes in place and have solid and perceptive ideas about how to improve them. Unfortunately, managers have been trained to think they are supposed to know all the answers. They don’t.

Continuous process improvement initiatives can bring about positive changes but often do not involve rank-and-file employees. These initiatives are sometimes blamed for downsizing. Often, they are viewed as “flavor of the month” management programs, creating skeptics and cynics of the very people who are needed to embrace new and better ways to do work and provide services to customers.

Many organizations have missed the point. Some act as if they can treat employees badly (especially now, when the sluggish economy prevents them from going anywhere else), and then expect these same employees, miraculously, to treat external customers with world-class service. Who are these companies kidding? Just their ivory-tower executives.

So, what should you do?  The following 10 simple principles can help remind you to treat employees as assets rather than negative cash flow.

1. Tell the truth

Leveling with your employees is a good place to begin. With reduced revenues and soaring costs, something has to change. Owning up to this reality reflects strength of character. Use this candidness to rally the minds and hearts of all employees.

Sadly, lack of transparency and failure to state the truth and are much too common today. Some recent examples include BP’s conflicting responses to the oil spill in the Gulf of Mexico, and Johnson & Johnson’s vagueness as to the number of Tylenol bottles recalled. When was the last time you heard a CEO or senior executive talk straight to her employees and customers?

2. Make and keep commitments

Integrity is the glue of any organization, and it begins and ends with trust. Trustworthiness is earned by making and keeping commitments. So, for example, don’t tell people that their jobs are not at risk unless you can promise them lifetime employment (and it is doubtful that you can). Someone once shared that his organization is pretty good at keeping commitments—but rarely makes any.  

3. Engage employees in key decisions and planning

Managers must recognize that no one individual, no matter how brilliant, strategic, and accomplished a leader she is, can see the whole picture. Even if management could come up with all of the right decisions that should be made, employees have to implement these changes. Create cross-organizational teams with representation from all levels in the organization to drive change.   

People at all levels like to be included, and getting their buy-in will help ensure ideas get implemented in a timely manner. Encourage a frank and open dialogue with your employees. Listening is a hallmark of any good manager because it encourages your employees’ best thinking. Let people challenge a concept and have an opportunity to express their concerns. It’s amazing what happens when you cultivate and embrace ideas from your frontline workers about improving the business. You inspire ownership. In addition, the need for checking work and complex control plans with elaborate and time-consuming documentation for audit purposes will diminish.

4. Communicate that improving your job and quality is everyone’s responsibility

Make suggestions for improvements a part of everyone’s job description. Then provide management support for implementing these improvements. Give the responsibility for implementing improvements to the employees making the suggestions (this is appropriate because they want to see the change happen). Have employees set annual objectives for improving key processes.

5. Focus on satisfying internal customers

Not all employees interact with external customers. However, all employees are internal customers (or internal suppliers) of other employees. Train your employees to identify their internal customers and determine their requirements. One form of this is a “service level agreement.” If everyone meets the requirements of all of their internal customers the first and every time, the probability of the external customers’ needs being satisfied will be greatly enhanced.

6. Understand and leverage “What’s in it for me?” for all employees

By putting yourself in your employees’ shoes and asking the question, “What’s in it for me?” you can create an improvement initiative that is truly desired by employees. Most employees like to make improvements but are often discouraged by the system. This encourages them to park their brains at the door when they come to work. But in fact, it is a lot more fun to think at work. Personal recognition and reward are also powerful ways to unleash creativity and productivity.

7. Respect and show consideration for employees who are threatened by change

All employees have a fear of change. Understand that it is natural for them to feel threatened. If they are currently good at their jobs, why would they want the rules to change?

Supervisory managers are most affected by change. Many have attained their standing by being good at telling others what (and sometimes how) to do everything. Effective change management requires supervisors to take on new roles as facilitators, coaches, and mentors. This may be difficult for those who have come up through the ranks. The key is to understand that these are the people who have spent their careers enabling the organization to achieve the success you currently enjoy. Every attempt should be made to find a way to successfully transition all employees in the change process with training, career counseling, and other support when needed.

8. Drive out fear

No one can give their best performance unless they feel secure. Employees should not be afraid to express their ideas or ask questions. Fear can take many forms, resulting in impaired performance and padded figures. Industries and government should embrace new knowledge because it can yield better job performance, and should not be fearful of this knowledge because it could disclose some of their shortcomings.

Focus on processes that need improvement rather than blaming people for poor performance. According to W. Edwards Deming, most people are hard-working, dedicated employees. If there is a problem with their work, it is most likely due to the systems they work in that were created by management.

9. Implement a well-planned process improvement initiative

Organizations must continue to improve to survive. Therefore, some consistent method (with a consistent vocabulary) for improvement is needed. Lean Six Sigma is by far the best available methodology for doing this because this methodology continues to adapt and grow, and no other competing methodology is apparent. If these terms convey “baggage” in your organization, then call your initiative “operational excellence” or “performance excellence” because no one can argue with these terms. Train employees as needed, rather than training the masses up front and then having them forget what they learn before using these methods and tools. Commit your organization to pursue a path of continuous improvement. Create a tight plan to address all the above issues (and more), and begin the journey.

10. Walk the talk

Your employees have too much to do. They cannot do everything that they are asked. They may decide on their priorities based on watching their managers. Therefore, if you don’t “walk the talk,” they will conclude that this initiative is not important. An executive vice president recently opened a national meeting by saying how important the meeting was, and that everyone should take the new improvement initiative very seriously. Then he left. Make sure you are a visible and integral part of the solution.

Closing thoughts

Recently, a specialist at a hospital was asked who was responsible for the overall health of a colleague who was in the ICU for almost a month. The doctor, an infectious disease specialist, said that this role was rotated weekly. When pressed about who was responsible this week, the doctor paused and then reluctantly said that, in reality, the hospital was in charge. This is clearly unacceptable. What has happened to true customer focus and service?

Times are tough. Unfortunately, organizations typically focus on downsizing to offset revenue shortfalls in the short term. This is shortsighted. Repeated downsizing leads to low morale and damaged performance capabilities. And yes, you may get away with one more price/rate increase this time, but you better be ready to tell your customers and constituents what you are doing now to prevent the next increase. An alternative is to treat your employees as assets by following these simple principles.

Discuss

About The Author

Kenneth C. Levine and Peter J. Sherman

Kenneth C. Levine is a certified Six Sigma Master Black Belt and a certified purchasing manager. He is retired from The Coca-Cola Co. after 24 years of service. During that time, he led Coca-Cola USA’s total quality management initiative. He also worked in many diverse organizational functions during his career, including banking, information technology, procurement, market research, marketing, national sales, and sales management. Currently Levine teaches managerial science at Georgia State University (GSU) and is co-director of GSU’s lean Six Sigma certification program. Levine holds a bachelor of science in mathematics from the University of Florida, a master’s degree in actuarial science from Georgia State University, and a doctorate in business administration from Nova Southeastern University. He has been published in the Journal of the Medical Association of Georgia, the Journal of Risk and Insurance, Managerial Planning, Quality Digest, The Association for Operations Management’s Lead Times, and the American Society for Quality’s Lean Enterprise Forum.

 

Peter J. Sherman is a certified lean Six Sigma Master Black Belt and a certified quality engineer. He has 22 years experience, including serving as Senior Black Belt for AT&T’s Product Development Group. He began his career in quality and process improvement working in Japan as a visiting M.I.T. scholar from 1986 to 1987. In Japan he was privileged to work with W. Edwards Deming and learn firsthand such quality practices as The Toyota Production System, kaizen, and quality circles. Sherman has led Six Sigma initiatives across the entire value chain, including product development, sales, fulfillment, installation, customer support, and billing. Sherman is lead Instructor at Emory University’s Six Sigma Program in Atlanta, Georgia, and has been published in iSixSigma, Quality Progress, Quality Digest, Hospitals & Health Networks, and in Solutions (supplement to the Journal of Financial Planning). He holds a master’s degree in engineering from M.I.T. and a masters of business administration from Georgia State University. He is a member of the American Society for Quality and the International Society of Six Sigma Professionals.