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The innovative organization and behavioral technology for the 1990's.

New Approaches

New approaches to organizing and managing a company or institution are at the top of the list of contemporary executive thinking. Various forms of new organizational approaches have been discussed for over 20 years with the latest being TQM (total quality management). However, we are now at a point with the global economy of having to learn and implement a new approach, or risk becoming another victim of unplanned obsolescence.

* Today's Condition and Environment

Today the end-use markets are fragmented, requiring faster and more targeted responses. There have been tremendous advances in the ability to capture, manipulate, and transmit information electronically, thereby making possible faster input of data and empowerment instructions for more effective and timely decision making. The strategies are increasingly shifting from cost- and volume-based sources of competitive advantages to the new focus on increased value to the customer. Competitive strength is now derived from the ability to deliver quality, variety, customization, and convenience in a timely manner using increased specialization and service levels.

* The Japanese Influence

In the beginning of this new organizational thrust (1950s), the Japanese observed, copied and improved upon our management styles and then effectively infused them into their work-team organizational structure. Dr. Deming, the American assisting Japan, pushed for building the quality into the production process rather than using only post-production quality checks. Dr. Juran also went to Japan and assisted in the rebuilding of their organizations to fit the new developing global economy. Japan could not initially compete on the productivity and price model of the U.S., so they pushed for quality. They also had the problem of a small domestic market and a limited workforce. To overcome these obstacles, they treated human capital as a fixed cost rather than as a variable cost as in the U.S. They also aimed at global niche markets with cooperation from their government. A similar scenario was taking place in Germany, except the Germans also incorporated flexibility and product variety to meet the different needs of their global customers and built on their traditional apprentice program.

* America Wakes Up

Meanwhile, by the late '70s, the U.S. was overproducing for domestic demand and ignoring the global techniques of focusing on customer requirements and quality. The (1980s) NBC white paper, "If Japan Can, Why Can't ..." awakened the U.S. sleeping economic giant to look at itself. The government as well as business and industry began focusing on how the U.S. organizes and manages a company and its employees. McKinsey had already reported on excellence (1980), and Crosby (1979) was about to begin his quality college. Dr. Deming as well as Dr. Juran were rediscovered in the U.S. and were immediately courted by U.S. industry. Dr. Deming became the primary guru because of the NBC white paper. As a result, quality circles and Deming's 14 points became the initial new methods. However, most companies only implemented a partial program or a few of the components, setting themselves up for ultimate program failures. (Interestingly, Dr. Deming and Dr. Juran were both at the Western Electric Hawthorne plant, famous for the Hawthorne effect, 50 years before they became the rediscovered U.S. gurus.)

* Malcolm Baldrige National Quality Awards

The government began seeing the need to influence the economy and management methods in order to stay globally and domestically competitive. The Malcolm Baldrige National Quality Award which encourages a change of concept and not just a change of technique became the new carrot everyone strives for. It was first awarded to three companies in 1988. (Motorola, Commercial Nuclear Fuel Division of Westinghouse Electric, and Globe Metallurgical). The award's criteria are centered around the organization approach to customer focus and quality results through total employee participation. The award is broken down into 7 areas, with 30% of the criteria on customer focus and 25% on leadership and human behavior management. The rest is concerned with information and analysis, strategic quality planning, quality assurance of products and services, and quality results.

This new organizational approach is beyond the traditional line and staff or the more recent participative management model. These are merely components of this new approach, which we have chosen to call Innovative Management. In 1989, the federal government began requiring various federal agencies, such as the Department of Defense, to develop and implement a quality program based primarily on the Baldrige Quality Award criteria. One of the recommendations, and a part of Juran's Trilogy model, is to require suppliers to have a quality program. Also, the new government model no longer requires agencies to take the lowest contract bid, but mandates focus also on the contractor's quality program.

Opportunities to Advance Today's Companies

* Total Utilization of Workforce Talents

Today and throughout the '90s, organizations' and nations' competitiveness will be based on improved production processes and total utilization of workforce talents. One of the major blockages to increased utilization is managements' underlying fear of trusting subordinates. Such trust includes empowering decision making at the lowest level, belief in subordinates' (associates) brainpower, and belief that others are motivated by more than money. Implementing Human Behavior Technology in a company helps reduce or eliminate these non-productive and obstructive executive fears.

* Improved Product and Production Process

People throughout the world are demanding high-quality goods and services that are competitively priced available in a variety of forms, customized to specific needs, and conveniently accessible. The global public no longer wants or is willing to wait patiently for just state-of-the-art products and services. Since today's consumers spend more time making money than spending it, they can afford something better than they used to buy. They demand the new technologies to provide quality, variety, customization, convenience, and timeliness at mass production prices.

* Globalization of Business Competition

To a large extent, the shift away from protectionism reflects globalization of wealth and competition, new flexible technologies for global competitive standards, and new organizations that house these functions. To meet new standards, new organizations are ideally composed of flexible networks consisting more of service and highly skilled workers than production workers. The management and worker association needs to be both broader and deeper during production and service delivery, and when interfacing with the customer.

* Return on Investments and Stock Prices

The result to companies and stockholders of this new strategy is improved return on investment and rising stock prices. However, this is not a 90-day solution but a 2 to 5-year strategically planned program with a 100% management commitment.

Problems Holding Companies Back

* Command and Control Models

The traditional command and control models for managing organizations are too costly and slow to adapt. This many-layered organizational approach is obsolete. In the past, such models were effective because nations and companies competed primarily on the basis of productivity and prices. However, companies burdened by this organizational method today are unable to respond to competitive challenges, whether local or international, because they are unresponsive to customers and limited in creativity and initiative.

* Easily Transferable Technology

The motivation to adopt the new innovative organization is that there is no refuge from the impact of the global economy, even at the local level. Anyone can now easily access new technology. Rapid communications allow new technologies to be transferred quickly anywhere in the world. A golf shirt can be designed in California, manufactured in Taiwan, embroidered in Canada, processed, and then distributed from the original plant back in California. This can be done faster, cheaper, with more flexibility, and with higher quality than if it were all done in the California location.

Past and Future

The following chart shows some of the concepts of the new organization. The new ways of managing and organizing have created new terms such as empowerment, networks, right-sizing, horizontal, bottoms-up, and self-managing teams. The new organizations also emphasize quality, with employees at all levels focused on increased customer satisfaction.

Behavior technology, which is the practical application of behavior science, has provided many of the answers to the factors that shape the new organization. The following illustrates some of these applications:

Back to the Problem and Solution

* Management Layers

In traditional command and control organizations, decision making and implementation are separated, with top management making decisions, middle managers transmitting and coordinating, and workers implementing. Companies can no longer afford layers of management and staff functions that are used primarily to communicate and control directives from the top. However, the expediency of merely cutting out middle management but maintaining the bureaucratic command and control model is short-sighted - a dangerous shortcut which by itself could lead to disaster.

In the traditional organization, standardized procedures and inflexible roles and responsibilities result in slow responses to changing customer needs and new technologies. Narrowly defined tasks restrict creativity and do not tap the employee's total potential. In traditional structures, operation departments tend to have rigidly defined tasks, the equipment is specialized and inflexible, there are many management levels, and design is separate from manufacturing.

* Innovative Management

In contrast, today's innovative management organizations have self-managing teams that perform traditional staff functions. Self-managing work teams are responsible for planning, hiring, and handling capital appropriation requests. Elected facilitators lead teams on a regular basis to solve problems, share knowledge, and plan changes to continuously improve performance. Cross-functional committees of representatives of self-managing teams meet weekly to address policy issues, such as long-range production planning, organization development, and safety. Computer-based equipment assists in providing flexibility and timeliness. Plant and team performance information is available on an hour-by-hour basis. These changes results in cost reductions, fewer customer complaints, reduced delivery cycles, increased responsiveness to customer needs, and improved employer satisfaction. The ultimate outcome is long-term profit potential and a more stable workforce.

Of course, this change takes time, energy, and management commitment to the training and development of each employee. This process is a Gestalt of looking at each part, integrating them, and showing the relationships between the parts until the whole is indeed greater than the sum of the parts.

* One Baldrige Award-Winning Company's Experience

An example of this change process is Motorola, a company we consulted with for 10 years in developing people and assisting in implementing change. This process contributed to their eventual selection as one of the first three recipients of the Malcolm Baldrige National Quality Award. The change was not easy. The impetus came from the top, with the Chairperson of the Board mandating that this would be a participative management organization where the brains of all the employees would be fully utilized and decisions would no longer be left to the few. It was important to note that this approach did not mean the abdication of management, but that leadership would include input from all levels in decision making.

At first there was fear of change, fear for job security, and fear of the unknown. There was an unwillingness to share knowledge and a concern over group decision making versus individual decision making. There was initial acceptance, rejection, and challenge by the "believers" and the "unbelievers." As the external consultants, we provided a variety of inputs. A Purposeful Verbal Communication workshop was held at several different levels and departments. Then, Teambuilding and Group Procedures seminars and workshops were conducted along with a Management of Time seminar and a Stress and Distress Management workshop. We were then involved in training over 1,250 supervisory, middle management, senior management, engineers and other technical professionals in a week-long Effective Management workshop over a six-year period.

At first, the workshop was ridiculed and called "Rips' Charm School," but eventually it became respected, and a waiting list developed. One of the workshop's strengths was its cross-cultural diversity, as participants came from Europe, Asia, Mexico and Canada. The workshops with diversity were more powerful than ones with homogeneous groups. One of the best results of the one-week workshop was the infusion of a new, common organizational language along with the company goals and vision. At the same time, a Strategic Planning for Implementing Change workshop was conducted for senior management, and three-, six- and nine-month plans were put into action. One-day orientation seminars were conducted for every department on the new participative management approach and its implementation. Mentoring and coaching was also provided for department, division, and group level management and executives upon request. Out placement was provided for those employees not desiring to participate in the new organizational and behavioral changes. Personal and career counseling was also provided. The family was incorporated by providing company-sponsored evening seminars on changing values and the new organizational model. At the same time, departments and divisions were assessed for any blockages and indications of positive participative management. Departments were then assisted in solving any problems and were given appropriate recognition for demonstrated results illustrating the effect of the positive participative management.

A doctoral dissertation (Nienstedt) was written on the effects of the Effective Management workshop. Control groups were set up to determine the effect of the type and length of training. One group was provided with only lecture and discussion seminars, one with materials to read but no formal instruction, and one was a placebo group with no information or involvement. The results showed at least a one-year staying power of the workshop. The workshop was built around experiential discovery learning, self-awareness, corporate sharing, teambuilding, feedback and behavioral skills development.

* Continuous Training

The dominant type of education in Motorola was engineering. However, because engineers are smart and well-educated, we believed if a good case for the behavioral sciences could be presented to them, they would catch on quickly and buy into the idea of applied behavior technology. During the years Motorola was implementing the new management approach, there were continuous training improvement changes. Effectiveness was constantly measured, with emphasis on excellence, quality, participation performance process, and customer service. There were the two steps forward and the one step back. Initially, there was a disbelief that a zero defect production goal could be reached. When the first zero defect occurred, there was concern about rewarding the team for fear it might not occur again and that this was only a myth. Eventually, Motorola took out a full page ad in the Wall Street Journal reporting on their thousands of zero defect products. Of course, this success took a long-term visionary, dedicated, and focused commitment on the part of the top leadership of the company.

This is an example of the challenges Motorola faced in order to meet the changes of the global economy. Although we were only a small part of the total change process as external consultants, the behavior technology applications were permanently infused into the organization. Motorola's visionary leadership had the persistence and guts to stand up and make this a whole new way of doing business. Hundreds of people worked to change the management style and organizational structure. The long-term measurable results of their persistence were quality products and customer satisfaction, along with increased global market share and stockholder equity value. The national and international recognition given to Motorola was well earned and well deserved.

New Innovative Management Approach

* Vision and Mission

The following is a snapshot of the new innovative organization. The first component in the picture is vision. Vision refers to ensuring that everyone in the organization has a clear, shared sense of purpose. Vision also includes the company values of quality products and quality service. Some key elements in achieving vision are conscientious teamwork, solution thinking, and risk taking. The company's vision also includes seeing what it wants and staying focused to get it. The mission is how the company is going to fulfill the vision. This includes the goals, the quality processes, systems, meeting customer requirements, the development and utilization of all workforce talents, and a reasonable profit and return on investment. Each division and department has their own mission, and these must all fit the total company's vision.

* Innovative Design

What this new operational design approach requires, at reasonable cost and risk, is a simultaneous combination of intense bottom-up operating unit redesign and gradual top-down cultural shaping initiatives. Self-managing teams and inter-team networks are formed. This requires that members possess the behavior technology skills and information access to make creative and appropriate contributions while being given time and incentives to think creatively.

People support what they help to create. For this reason, it is important to draw on cross-sections of people in the organization to redesign their own workplace. Allow them to create their own balance between customer needs, equipment capabilities, financial returns, and self-managing teams. Quality of worklife improvement is important for improving and maintaining employee self-esteem.

There are limits on the individual's freedom, but these broader empowerment limits allow the team or individual greater opportunity to improve performance with greater self-esteem. In this new organization, everyone is expected to take advantage of opportunities, such as training and personal development, to better manage their work flow, and to be willing to be accountable for their actions.

The new approach has well designed vertical organizational hierarchy, but it tends to be more horizontal and flexible than the usual structure. Cross-functional design and continual redesign characterize the more flexible organizational structure.

* Customer Emphasis

The new structure allows for more responsiveness to customers and their changing needs. Customers are seen as part of the team. If you are not dealing directly with the end-user customer, then you are dealing with your internal customer, who then may deal directly with the end-user. For example, to start, you should ask your internal or end-user customers for feedback. This information is then processed and put into effect by the appropriate production or service team with upper management knowledge and approval. A continuous customer feedback loop should then be built and maintained in each self-managed team. Closer ties with the customer are a fresh source of input and can provide critical information for continuous product and service improvement.

* Measurement of Progress

Progress is measured according to team performance objectives. Within and across functional areas, there is an awareness of looking for new solutions to daily and long-term problems. The self-managing team is seeking opportunities in such areas as quality product and service delivery, new variety, customization, convenience, and timeliness. Quality process and quality product with zero defects while fulfilling customer requirements is the major measurement outcome goal. The popular, easily administered and understood statistical methods -- from the SPC of Deming, and others of Juran through Ishikawa and Taguchi -- are being used for quality control.

* Leadership Development in Behavior Technology

Development and training of leadership is accomplished early in the program so leaders can lay out a systematic plan of gradual change and overcome existing misconceptions. Once traditional thinking is overcome, specific actions can accelerate change. In a high-performing organization, these senior managers will lead this change process, simultaneously blending top-down and bottom-up initiatives.

New behavior technologies that have to be learned or at least up-dated and implemented for maximum utilization of a company's number one resource -- people include: successive approximation in behavior change; intermittent reinforcement; extinction of behavior, stages and ages of needs; task-analysis-people orientations; individual differences in thinking, behaving and action styles; purposeful control and understanding through verbal communications; effective career development; new self-esteem and self-worth knowledge; effective power orientations; understanding and facilitation of group dynamics and team building; corrective coaching/counseling; improving creative thinking; expectation effects; improved negotiation methods; selection and development for retention; as well as perception, feedback and rewards.

* Team and Individual Accountability

People are held responsible in these team-based organizations through two levels of accountability that emerge, the individual and the team. Individual accountability within a team is self-managing. Teams can clearly distinguish between the performers and the non-performers. Peer pressure is one of the greatest motivators. Incentives based on self-managed team performance are also strong motivators and provide relevant measures of accountability. New high-tech multi-rater assessment tools also have been specifically developed for this purpose. Also, through assessment tools, blockages within a group can be traced to their source, such as the individual, team, leader or organization. This participatory decision process assists in eliminating the "we" and "they" blame, since "we" are "they".

* New Decision Making Process

Behavior is quite different within the organization. Employees will look to managers for guidance on major policy, strategy, and resource allocation decisions but will act on their own to improve performance on a day-to-day basis. On policy and strategy, the self-managing teams provide input, but the final approvals must come from senior management. Participatory leadership does not mean abdication of management. Through training and experience, people learn which types of decisions benefit from group problem solving and consensus decision making and which do not. Behavior technology research has shown that team decision making is usually superior to decisions made by the individual.

Beginning the New Innovative Approach

There are several elements to look at when an organization begins the new change. First, the company is not starting from scratch, and there probably are several different management experiments functioning at various levels within the organization. The place to start is to renew the organization's vision to ensure that the shared sense of purpose is clear and compelling to the entire organization. Make certain the mission spells out the winning formula -- skills, strategy, shared values, quality products, and customer concerns -- that will result in global and local competitive advantage. Also, ensure that the mission spells out the set of actions that will make the winning formula a reality. And finally, make certain the mission is referred to explicitly or implicitly in key decisions. If not, your mission needs work. Everything in the new organization and behavior technology areas will follow a continuous refinement of the mission and rededication to the vision.

These combined components are the powerful new approach for improving quality performance, remaining competitive, improving market share, and maintaining quality customer service and employee satisfaction. Human capital is the number one resource for the '90s. The '90s will move quickly into the new millennium with a global economy and a multi-national, culturally diverse approach to management. The universities which have traditionally provided management and executive education and training are too slow to change curriculum and course contents. Government and educational institutions are too bogged down with multi-layered hierarchies to expedite change. Therefore, the burden and exhilarating opportunity lie with the current leadership in business and industry -- from the privately held entrepreneurial company to the global, culturally diversified organization to meet the new challenges of change. Even with the Fiddler on the Roof, tradition, tradition must give way to change.

Comparison of the Traditional and the New Organization and Behavior Technology


Production and Cost Focus Company Purpose and Goals Command and Control Management Line and Staff Policies and Procedures Compliance Middle Management Levels Vertical/Static Management by Objectives Problems Identified by Reports Controlled by Cost Accounting Production Competition Narrowly Defined Tasks Inflexible Roles Training Gross Changes Design and Manufacturing Separate Boardroom Corporate Goals Periodic Goal Setting Specific Targets and Directives Pay Scales and Benefits Training for Specific Job High-Tech New Product Emphasis Corporate Production and Profit Targets


Customer Requirements and Service Focus Shared Sense of Purpose and Vision Vision and Value Driven Participative Leadership Self-Managing and Inter-Team Networks Empowerment of Associates and Employees

Flexible & Horizontal Organizational Structures Team Defined Performance Objectives Rapid Electronic Communications Individual & Team Authority and Accountability Quality and Customer Satisfaction Competition Flexible and Adaptable Changing Roles Continuous Development for Changing Roles Subtle, Incremental, Segmented Changes Cross-Functional Committees Networking Corporate and Personal Goals Intertwined Continuous Performance Improvement Business Objectives and Shared Values Total Quality of Work Life Whole Person Training and Development Behavior Technology & Process Emphasis Profit From Total Quality and Customer Goals

In addition to an academic career, Robert Ripley has 30 years of experience as a consultant and educator for companies ranging from start-ups to multinational giants; Marie Ripley, who is also an architect and builder, has over 20 years experience consulting for business and government agencies.


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In addition to an academic career, Robert Ripley has 30 years of experience as a consultant and educator for companies ranging from start-ups to multinational giants; Marie Ripley, who is also an architect and builder, has over 20 years experience consulting for business and government agencies.
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Author:Ripley, Robert E.; Ripley, Marie J.
Publication:SAM Advanced Management Journal
Date:Sep 22, 1992
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