GIVE EVERYONE THE INFORMATION TO ACT

MICHAEL ARRIVED early the next morning, hoping that Elizabeth could show him more about how empowerment worked and that it really gets results.

As he reached the Fulfillment Area, Michael was greeted by a tall, energetic woman. “Hi. I’m Elizabeth Meadows, and this is the area my associates and I own.”

“What do you mean, you own it?” Michael asked.

“I mean,” smiled Elizabeth, “we have all the information we need to make any important decision that has to be made to serve our customers, ensure quality of the products we sell, and make a profit for our company.”

“Maybe that explains what happened when I was walking down here to meet you this morning,” Michael said. “I overheard one of the fulfillment people telling someone on the phone that the missing items would be replaced at no cost and sent overnight to arrive tomorrow. Frankly, I was amazed. People in fulfillment don’t usually have the authority to make that kind of decision.”

Elizabeth, who had been peering at Michael as she listened, said, “Right. But people in fulfillment who have information can take on the responsibility for that kind of decision and know that it won’t hurt the company. In fact, with information they would know just what dividends such excellent customer service will pay in the future. They can weigh the cost against the benefit of replacing the item at no cost.”

“How can they know that?” asked Michael.

Elizabeth gestured to indicate the area around them. “Information!” she said with a smile. “Timely and accurate information that they can access freely.”

For the first time, Michael really took in the graphs and charts that were everywhere on the walls, the computer screens filled with charts and tables of data, and the people working quickly and with little or no supervision.

“It’s impressive, all right,” Michael said hesitantly. “But I’m still skeptical about whether information sharing really works. As a matter of fact, that’s why I came back to talk to Sandy Fitzwilliam. I need to know that the three keys to empowerment really work. I want results.”

Elizabeth stared into Michael’s eyes. Then she asked, “Have you ever noticed what happens when you occasionally see someone who wants to write a check to pay for groceries at the supermarket? The cashier verifies the person’s ID and writes the number on the check, right? Then what happens?”

“The customer has to wait around while the cashier calls the manager or assistant manager to come over and approve the check,” answered Michael. “The manager’s talking to someone two aisles over as he or she is initialing the check. Now that I think about it, it doesn’t seem right—especially since the ‘wake-up call’ you have given me.”

“Why isn’t it right?” asked Elizabeth.

“It sends a message that the store doesn’t trust the cashiers and that the only employees there who have brains are the managers. The rest of the people might as well leave their brains at home because maybe they’ll need them after work. Furthermore, it makes the customer feel distrusted, as well.”

“Right,” said Elizabeth. “In that process, what do you suppose happens to the cashier’s self-esteem?”

“It’s eroded, and that drop in esteem can easily rub off on the customer service.”

“Right again. Now, what do you think would happen if the cashiers were given all the detailed information about the impact that bad checks have on the business and then were given check approval power?”

“Fewer bounced checks?” Michael wondered aloud.

“Right! That’s what all the research says about places where it’s been done. Further, the people have higher self-esteem and can provide more attentive customer service. When you give people information and a chance to act like owners, they’ll usually come through,” Elizabeth explained.

“That example is helpful, but can you give me another example?” Michael requested.

“Sure,” said Elizabeth. “A friend of mine owns a restaurant. I was telling her about the power of sharing information with her people. She just wasn’t buying it. She didn’t think certain information was any of her people’s business. To help her move from her ‘stuck’ position, I had her call together all the folks who work at her restaurant one night at closing time—the hostess, waiters, dish washers, chef, everyone. They sat at tables in small groups and answered the following question: ‘Of every sales dollar that comes into this restaurant, how many cents do you think go to the bottom line as profit that can be returned to the owner or reinvested in the business?’”

“What did they say?” Michael asked.

“The lowest guess was forty-five cents and the highest was seventy-five cents. When my friend told them the correct answer was eight cents, they were shocked. They thought the restaurant was a money machine. Imagine what that misconception did to their attitude toward things like breakage and food wastage.”

“They wouldn’t care,” said Michael.

“That’s for sure,” replied Elizabeth. “What really convinced my friend I was right about the power of sharing information was the remark the head chef made: ‘You mean if I burn a six-dollar steak that we charge the customer fifteen dollars for, we have to sell at least five steaks to recover the six-dollar loss?’ He had it figured out, and so did everyone else.”

“Interesting,” mused Michael. “So they started thinking in business terms. Did it make any difference?”

“Last year my friend declared, ‘None of you will get a raise unless you can read our balance sheet and explain what it means.’ And for the first time the restaurant showed over a 10 percent profit. When my friend shared 25 percent of that new profit with her staff, they were thrilled and started talking about additional ways they could cut costs and increase profits in the future.”

“So you have to show people that you trust them by sharing information,” commented Michael.

Elizabeth made another sweeping gesture toward the department and said, “As I said before, this place belongs to us. We own it! Now you can understand what our banner means,” she said, pointing to a banner on the wall:

Give people the information to act; then look for magic to happen!

“Fascinating,” said Michael. “Tell me more about how has this worked for you?”

“We’ve learned that once you share information and trust starts to develop, you can begin to establish high standards,” said Elizabeth. “You can talk about closing the gaps between what’s happening today in terms of cost, profits, and so on, and what’s possible tomorrow, and it makes sense to everyone. We usually try to identify a few particular measures—things like order-processing time, customer reactions to service, order fulfillment costs, for example—and then we share timely and accurate information about how we are doing. In fact, people can get the information when they need it so they can solve problems and recognize progress.”

“Sounds like the old idea of continuous improvement,” Michael interjected.

“It is,” replied Elizabeth, “but, more importantly, it’s also continuous innovation. Continuous improvement only makes sense when people have information and are trusted to use their skills and abilities. Continuous innovation goes even further. See that?” Elizabeth pointed to a sign:

Every “misteak”
is an opportunity to increase competence.

“Sandy had these signs posted around the company when we began our journey. Everyone thought she was crazy. Why would she want to encourage people making mistakes? The way you’re looking at me, I’d say you think so, too.”

“It bothers me,” Michael said. “I’m a stickler for details, so I want to correct the spelling on your sign. More importantly, I don’t want mistakes made in our organization. What does making mistakes have to do with improving performance?”

“Let me ask you something,” said Elizabeth. “When a mistake is made in your organization, what’s the first question asked: ‘What can we learn?’ or ‘Who is to blame?’”

Michael answered, “I have to admit that most times it’s ‘Who is to blame?’”

“Sure,” agreed Elizabeth, “and this can be devastating to what we want. We know we want continuous improvement and also continuous innovation. But blaming people when they make mistakes kills the spirit of innovation. People can’t innovate while they’re busy protecting themselves. On the other hand, permission to take risks, make mistakes, and challenge the way things have been done in the past opens up people’s ability to learn and use their talents. That’s why Sandy wanted people here to see mistakes as okay—to be lighthearted about them—to celebrate them, even.”

“Interesting,” Michael said. “It reminds me of an article I read about encouraging innovation and creativity. I couldn’t understand when it mentioned that one company shoots off a cannon every time there’s a goof. Now I get it.”

“Incidentally,” Elizabeth grinned, “if you did go over and correct the spelling on the sign, you’d have some associates here frowning. Since everyone’s gotten the message, m-i-s-t-e-a-k has become the official spelling of mistake in our company.”

“You mean they’re protective of their right to make errors?”

“In a way, I suppose they are. What do you think happens when people are encouraged to make mistakes that come from innovating and taking risks? Do you think they act more responsibly or less?”

Michael thought about that. He realized he’d come up against a basic belief about people. “I used to think they would act less responsibly. Now I want to think they’d act more responsibly. What have you found?”

“They act with greater responsibility. That’s a significant outcome of empowerment. Shifting the definition of a mistake from something bad or wrong to an opportunity to learn encourages people to think and to monitor their own performance. In other words, it empowers them. And what we’re learning, again and again, is that when people are empowered, they perform at a higher level. What we must do is hold people accountable for nothing but the best, while recognizing that people must make mistakes to continue to improve.”

“I’ve just figured out something about this matter of ‘misteaks,’” Michael said with a smile. “When people are blamed for mistakes, they become self-protective. In fact, they’ll cover up mistakes in an effort to avoid blame. This limits the information that flows from the mistake, information everyone could learn from.”

“That emphasizes the trust-building element of sharing information,” said Elizabeth. “But there are far more practical advantages to the strategy. Want to hear another example?”

Michael nodded. Elizabeth pointed to a coffee mug sitting on a table that had “FOUR HOURS” written on it in large letters.

“Therein lies a miraculous tale based on sharing information and letting people run with their ideas,” said Elizabeth. “About a year ago we began to look at our performance. We learned that when customers placed orders, it was taking us three to five days before it was shipped. Until we got that information, we never thought much about it. Now that we had it, we wondered, ‘Why should it take so long?’ We did some checking and learned that in our industry the typical shipping time for an order was about two days. We wanted to do better than twice the industry average! We began to determine how we could improve.

“Now keep in mind that had we not had the information available to examine, we would not even have been aware of the need for improvement. Also, if some manager had just challenged us to ship orders quicker, we wouldn’t have had the commitment.”

“I see how that works,” said Michael. “The fact that you found it out yourself got you on your own case. And you didn’t just know you needed to be better. You decided how much better you needed to be.”

“Right. Once we saw the information—especially about how our performance compared to other companies—we knew we had to do something. We made the decision ourselves to change things right here in this department.” Michael was noticing the pride Elizabeth took in telling him this story. It was as if he was listening to the owner of the company.

“Within one month of becoming aware of the problem,” Elizabeth continued excitedly, “we had cut the shipping time down to the two-day industry average, but we didn’t stop there. We knew we could do better. We wanted to see how far we could take it. We continued to track information on our performance. We began to change the way we responded to orders. Every order was now seen as an opportunity to please a customer. Everyone pulled together as a team. Within another month we had cut our shipping time down to less than a day. And now, a year later, our typical shipping time is four hours.”

“Four hours! Down from three to five days to four hours—that’s incredible!” Michael exclaimed.

“Indeed, it’s like a miracle. Amazing results can come from simply giving people the information with which to work, plus the freedom to operate with that information.”

Michael began to get excited. “OK, I get it now. People’s full talents can’t be used by the organization when they don’t feel safe and when they don’t have information. When they do feel safe, free to experiment, and apprised of all the information management has, they develop the same feelings as owners. Owners are the ones who feel responsible for everything working right in the company, because they have the information to see a more complete picture. Owners don’t hold back—they give the success of the company their full attention. When people begin to feel like owners, they begin to act like owners. Now you’ve got yourself a smarter, more competent organization.”

“Right,” said Elizabeth, “but let me add one important point: In an empowered organization, position power means very little. Instead we rely on expertise and relationships and on people taking responsibility for their own actions.”

“I like that,” said Michael. He had a sudden insight about all the great computer technology his company had at its disposal. Up to this point only he and his managers had been using it to share and access sensitive information. The people in the company had all sorts of computer technology available for their use, but he knew that a great deal of information was not at their disposal. He thought, We could make so much better use of our technology if only he and the other managers would share more of the information they used to make decisions. Indeed, maybe by their sharing, others would be encouraged to share more with each other, as well as with the management team.

Michael thought, We are just not making nearly as much use of the technological expertise within our company as we could. He made some notes in his organizer and then looked up at Elizabeth.

“But I still wonder,” said Michael thoughtfully. “Does everyone really want to meet this challenge? Don’t some people just want to get by?”

“Sure,” said Elizabeth. “We’ve found that a small percentage of people simply don’t want the extra responsibility and accountability that comes with having more information. But the vast majority do. It’s a matter of reactivating their natural desire.”

“You think that people would rather be magnificent than ordinary, right?”

“Exactly,” said Elizabeth. “It’s just that their desire for magnificence is . . . well . . . dormant. For years in many organizations you were promoted by doing what you were told. ‘Don’t rock the boat, and you’ll get ahead’ became a way of life.”

“As a result,” agreed Michael, “people need to relearn how to take initiative, be responsible and empowered. I’m certainly learning that. Tell me more about how creating autonomy through boundaries makes a difference.”

“Of course,” agreed Elizabeth. “Why don’t we walk over to the cafeteria and get a cup of coffee?”