BUSINESS

This is how leaders are born!

By Kevin & Jackie Freiberg
April 12, 2005 10:51 IST

When someone is thinking like an owner, he or she will ask: "Since this is my business, how will I sell this product?" Or, "Would I request this piece of equipment for my department? How should I treat my employees?"

Owners step out from behind titles and job descriptions to act on behalf of the customer and the company. You never hear them say, "It's not my job." They never throw problems over functional walls ("Let me transfer you to...") or make excuses.

Part I: How to succeed in business

Owners focus on the business results of their actions, no matter who is watching; non-owners focus on how they're perceived by the chain of command.

Owners have the guts to ask the tough questions. They understand the consequences of complacency, and they aren't afraid to challenge the status quo with the mantra, "How can we make it better?"

Preoccupied with their own security, non-owners gravitate toward the predictable and less disruptive. Owners disregard functional boundaries to consider what's good for the company as a whole.

Non-owners engage in tribalism and turf protection. Owners bend, stretch or even break rules that don't serve the customer. Non-owners live by the letter of the law even if it is flat-out contrary to common sense. Owners treat the company, well, as if they own it.

Earlier, we started a list to get you thinking about what it takes to inspire an ownership mentality within your organisation. This time we build on that list and offer more ways to turn up the volume on ownership.

Reward intelligent failure

Engendering a spirit of ownership means helping people get over their fear of failure and hesitancy to assume responsibility. People are often reluctant to "step out" or assume responsibility for their honest failures until they are assured that it is safe to do so.

Despite your entreaties to initiate projects, take risks, speak their minds and confront the boss, employees still fear that doing so could jeopardise their jobs. In this area, one thing is certain: People will not overcome that fear until they witness someone rewarded publicly for an intelligent failure.

When you explain to your employees that failure is often the forerunner to success, they must trust that you will treat them accordingly.

Empower the true experts - those closest to the action

When the State of California asked the airlines to use ground equipment powered by electricity instead of gasoline, two of Southwest's maintenance mechanics in Phoenix, Arizona, Rick Denny and John Garamman, sprang into action.

They discovered that a new electric tug -- equipment that pushes the plane away from the gate -- cost $160,000. NASA engineers said they could convert each tug from gas to electric for $90,000, offsetting the price of replacing the equipment. Still not content, Denny and Garamman figured out how to do it themselves for $27,000, a savings of $133,000 per tug.

If the airline were to implement the conversion at all of its 58 locations across the US -- which it later did -- the company would save $45 million.

The true experts in any organisation are those closest to the point of action. They know where the waste and redundancy occurs, they know where maligned processes break down and hinder them from doing their jobs and they know where the opportunities for improvement and growth exist. More often than not, the further away from the "trenches" that decisions are made, the worse the quality of those decisions.

Publicise the payroll

Once a year, Whole Foods conducts a survey that probes employee attitudes (note, they are not measuring satisfaction). This is a no-holds-barred exercise that measures employees' confidence in team leaders, store leaders and regional leaders.

It asks about fears, frustrations and whether or not they believe the company is adhering to its values. Brutally honest stuff -- the results of which, you guessed it, become public information.

Ready for the capper? Whole Foods even posts everyone's salaries. This policy is undeniably radical. But in a democracy, openness is strength. The policy banishes the destructive whispers and rumours about who makes what.

Every store has a book that lists the previous year's salary and bonus for all employees. And the trust-building payoff is substantial.

Surprisingly, most employees don't spend much time studying the salary book. Once the novelty wears off, and people discover that the cashier in the next aisle makes roughly what they make, they get on with their jobs.

Of course, Whole Foods' approach to sharing information is not for the faint at heart. If you're going to create a no-secrets policy you'd better have the guts to talk straight.

Make strategy clear to all

Ownership requires the faith and confidence of both employers and employees. As a leader, you must feel confident that when the decisive moment comes, those who have assumed ownership will exercise common sense and good judgement, which is far more likely if the company's strategy has been made abundantly clear to everyone.

Teaching your strategy should focus on helping people make the right choice among many.

One way of assuring that is to ask your employees to define what trade-offs are worth making in any particular situation. Encourage them to think about what makes the company unique.

If they must make a trade-off, finding the right one will be easier if they have a clear understanding of what the company stands for, where it is going, and its reason for being.

If strategy gives people autonomy within clearly established boundaries, then the company's purpose, vision and values define those boundaries. Though some would argue that boundaries limit creativity, anarchy is not our aim.

Any owner-employee must be able to answer these questions: What business are we in? Why do we exist? What makes us unique? Providing direction doesn't restrain people's energies. In fact, such guidelines give people the freedom to act.

Once people understand the strategy, they become empowered, knowing that their actions, in line with that strategy, will be highly valued and considered legitimate and productive by those who share the strategy.

Great breakthroughs and extraordinary acts of service usually happen out on the radical fringe of a clearly defined boundary. When boundaries are fuzzy, people get nervous.

They tend to cautiously gravitate toward the centre of the playing field, where things are safe. When this happens innovation goes out the door, inertia sets in, and it's business as usual.

Kevin and Jackie Freiberg are co-authors of the award winning NUTS! and GUTS!
Kevin & Jackie Freiberg
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