The keynote at our recent Self-Management Symposium was delivered
in the form of an interview of Professor Isaac Getz of ESCP Europe Business
School and Brian Carney of the Wall Street Journal, co-authors of the book
Freedom,
Inc. One of the things they discuss in their book is
"managing to the 3%". They discussed it in the interview and,
as I listened to them speak, it occurred to me that this may well be one of
the most dangerous risks to organizations everywhere.
Let me try to outline the concept:
Getz and Carney discuss, in their book, a particular manufacturing
firm. The owner happens to be walking through the factory one day and
sees a worker standing at the supply closet, holding a pair of worn
gloves. The owner stops and asks the employee if there's something he
can help with. The employee responds that he's waiting for the supply
clerk to come to the supply closet so that he can turn in his worn out gloves
and receive a new pair. The owner nods and says that's fine, and moves
on. But he can't shake the feeling that something's not right. So
he tracks down the factory accountant and asks him how much it costs the
company for a pair of gloves. I don't recall the exact cost, but it was
a few dollars. He then asks how much it costs the company for that
particular employee to sit for 15 minutes and wait for a new pair of gloves
(the employee worked on a line that was running at reduced capacity while he
sat and waited for new gloves). Again, I don't recall the exact amount,
but it was around $100 per 15 minutes. After mulling this over for a
few minutes, the owner of the company called everyone together and abolished
the "new glove" process. He indicated that gloves would be
freely available to anyone who needed them.
You see, he realized something very important: their policy, intended to
keep dishonest employees from stealing gloves (or, at the minimum, taking
gloves more frequently than they really needed to) was actually costing the
company money. He calculated that for every time an employee had to go
sit and wait 15 minutes for the clerk to open the supply room, receive the
old gloves and approve and sign out a new pair, the company was losing the
equivalent in lost productivity to 20 pairs of gloves! Their policy,
designed to ensure the company didn't lose money, was actually costing the
company more money than if they'd just set the gloves out for people to take
when they needed them!
Now, I may have some of the details a little off (I can't recall the exact
numbers), but you get the general point. The thing is, though, this
tendency to enact these "policies" in order to ensure our
organizations don't "lose" money, quite often end up costing us
more in the long-run. And the irony is (according to Getz and Carney)
that, really, only about 3% of the general population is going to take
advantage of the system anyways. So, basically, we enact a rule in
order to keep the 3% in line, and in doing so, crush the productivity of the
other 97% who are actually working hard, trying to accomplish something
productive.
And, before you disregard this, know that I see this "3%"
mentality quite often--even in our affiliate companies (organizations that
are supposed to be amongst the most self-managed in the world). The
truth is, we grow up in a world that is designed to thwart that lowest common
denominator--that 3%. So many of our government's stifling regulations
are designed to ensure that small minority of the population doesn't get away
with doing something wrong. Problem is, those regulations are, many
times, exactly that: stifling--not just to the 3%, but to
everyone.
Don't get me wrong: every society must have some general codes of
conduct. But, as our organizations age, and as we become more
"professional", we think that success depends on us having a whole
volume of "does" and "don'ts". Self-Management,
though, is designed to be a principle-based organizational model (not one
governed by a bunch of complex rules). The two fundamental principles
are you don't use force and you do what you say you're going to do.
Think about it: doesn't that cover just about everything? You don't use
force--not to get someone to do something you want them to do, NOR to get
something that you want (that's called stealing). And you do what you
say you'll do. Isn't that kinda the recipe for a productive
society?
And here's the beauty of an organization like a business: you have a choice
as to who is a part of the organization. If someone refuses to adhere
to those basic principles, then they just don't get to be a part of your
organization any more. Let's go back to our initial example with the
gloves. The owner in the story realized that he was losing quite a bit
of money every time someone had to come go through the "new glove"
process. So instead he decided that anyone who needed gloves could
simply grab a pair of gloves as needed. The unstated (perhaps) rule,
though, was that you can't steal gloves. This change in process freed
up the 97% who were honest and hard-working to accomplish even more. If
also, of course, freed up the 3% (who were inclined to steal) to take gloves
home (and perhaps sell them on the black market; who knows). The thing
is, even if those 3% stole a lot of gloves, the additional productivity by
the 97% more than made up for the losses. Further, someone is bound to
find out about the 3% at some point; some guy walking buy might see another
worker stuffing a handful of gloves in his pocket. And he, then,
realizing that this shady glove-thief is not abiding by the first principle
(you don't steal), can simply go through whatever process exists to
disassociate with the thief.
So, I ask you this: what kind of organization do you want to be a part
of? One that has books of rules and regulations, processes for ensuring
the 3% can't take too many pairs of gloves? Or one that acknowledges
that 97% of the people within the organization aren't going to steal gloves,
and are simply being tied down by the opprossive regulations, and works to
eliminate the 3% instead?
That's a real question. Comment below; I'm interested in your
thoughts.
