2.
FROM CONTROL TO TRUST
“Trust people and they will be true to you; treat them greatly and they will show themselves great.”
What happens if you throw out the organizational chart, take away roles and responsibilities, let people decide on their own salaries, working hours and holidays? What happens if you create the space for trust rather than control? This is exactly what Peter King did as the general manager of Energeticos, an engineering company in the South American country of Colombia, part of the Scotland-based Wood Group. The firm was making a loss in 2004, but by 2012 had grown from 60 to 1,050 people with annual sales growing from $4m to $56m USD. Not only had it become financially profitable, but the workforce was alive with energy.
A key part of the success of the transformation was moving away from control from the top down to allowing leadership and decisions to take place within the workforce itself. It involved letting go of the belief that people cannot be trusted and instead trusting that people have a genuine intrinsic motivation to do good work if they are given autonomy, purpose and responsibility.
Peter took on the role of GM for Energeticos in June 2003, a new role for him. He recalls: “I remember walking into the office scared stiff but I knew that this was normal and it would take time before I felt comfortable."
When Peter arrived at Energeticos it was barely making a profit and in 2004 it made a loss of $300,000 USD. For a small company of only 60 employees, this was a lot to lose. The firm was bailed out by a sister company of the Wood Group which gave it a lifeline. Peter decided that it would no longer be enough simply to bump along. The situation needed to change radically. At the time he had read a book called Maverick by Brazilian CEO Ricardo Semler on how he had transformed his company by doing radical things to empower his employees. When he read it he felt “this is what companies should be like." Companies should be built on trust.
“Rising early, I went into the office at 6.45 and started writing my own company ‘manual’. I continued writing till 9am and was finished. It was only a little manual, 5" x 3" a few pages, not a long tome. With both nervousness and excitement I sent the booklet out to staff. I did this without permission from Head Office."
Central to the changes he instigated at Energeticos was Peter’s belief that people work better with trust and a sense of responsibility. “I remember having a secretary in Aberdeen, Scotland, who typed a letter for me and gave it to me to sign. I said ‘thanks’ and signed it, without looking at it. She was stunned and asked ‘Aren’t you going to read it?’ ‘No,’ I said. Later she came back with another letter and again I signed it without reading. If you are not watching people, and they know you are not watching them, they are more conscious of doing the job properly."
Energeticos started publishing everything for staff, even management salaries. This surprised people for a while, and then it just became the norm. Peter also gave the responsibility to the staff to decide on what their own salaries should be. There were 70 process engineers at the time in 2011, who were all upset about their salaries. They were all told what was in the budget, the financial situation of the company with complete transparency, and the comparative salary benchmark for their role with Energeticos’ competitors. Peter asked them to organize themselves and come up with their own level grading schemes and salaries. They did exactly that. It was very hard work and involved time for them to work it through, but they came back with a good grading system and salaries that were highly competitive.
Peter reflects: “When I asked people to take responsibility I also promised that I would go with whatever they came up with. Even if I disagreed or thought it was silly. It was important to keep my promise and show real trust. They never came up with something stupid when we told them the truth. These occasions gave me a lot of confidence in human beings. When we are given trust and responsibility, overwhelmingly we do our best."
The experienced engineers who were in their 50s and 60s played a key role in mentoring the younger staff in sharing their experience at Energeticos. They were much loved and groups of young engineers would go to them for support and advice. They even created an Energeticos School to share ideas and experience from 7-9am. No additional pay was involved; it was simply established for the sheer zest for learning. It took three months for management to even know it was happening, when a poster was noticed on a wall. Peter recalls this as being a very satisfying moment, to see how they could organize themselves without the push from top-down leadership.
Peter also did away with the established hierarchy. The organization functioned in teams allocated for projects and leaders allocated to various disciplines. Energeticos didn’t even have an organizational chart; it was simply not needed anymore. People found other, more creative ways to organize themselves.
He explains how he created the space for staff to find their own role, one that they were suited for, rather than given to them through a job description:
“Roles and responsibilities only become important when you have them. When we found good people who applied to the company we would give them three months to wander around the company and then tell us what they would like to do. Lots of companies want to label and assign a role to people too early. One person ended up on the commercial side, another became a project engineering supervisor and one came as a document controller and ended up as an IT manager. Two ladies serving coffee ended up in purchasing. We looked at the person, not the role, and were flexible."
Having a trust-based culture did not mean there were no difficult decisions to be made. At one point the company was not bringing in enough income and needed to let go of staff. “We stayed with our principles and got managers to sit with groups of 10 staff to share with them openly the company situation. All staff understood what we were doing and appreciated us giving them time of two to three weeks to search for other opportunities rather than telling them on a Friday afternoon that they had lost their job. Those that left went on the First Back list. We treated people with respect as a partner in the business."
“Not Knowing is considering that there are other ways of working and doing things. A lot of people explore new ideas. Mine was not a tentative exploration. I was passionate about this," says Peter. This philosophy is characteristic of his leadership approach.
Peter helped the people at Energeticos manage the disequilibrium created by the change by giving them the freedom to make decisions and empowering them to take responsibility for the business. His willingness to give up control and instead trust in people’s abilities created a culture that enabled people to face up to their own challenges, rather than revert to relying on those higher up to solve them.
Vlatka Hlupic, Professor of Business and Management at Westminster Business School in London, specializes in studying organizations that move away from traditional, command and control approaches to collaborative approaches.68 She has found that when employees are given the freedom to self-organize in groups according to their own interests and experiment with new ideas, they are not only more engaged and motivated to perform, but there is also a significant positive impact on the organization’s bottom line. Paradoxically, giving up control and power creates the conditions for increased power, because more things get done and more can be achieved.
A useful idea in Peter’s story is the concept of “pacing." He did not relinquish total control, something which may have left the employees feeling too much uncertainty. Instead he was able to transition from control to trust gradually, allowing people to adapt to having more responsibility.
Our ability to engage with Not Knowing is related to our willingness to let go of control and engage with what is. Our challenge is to value our powerlessness as much as our expertise. This comes not from a place of nihilism, but from a place of humility; to see the possibility that is only available by acknowledging the limits of our expertise and going beyond the edges of what we know.
