This action had the potential of huge impact to the company and all of the people who were dedicated to this product design, development, launch, and support.  The owner’s decision had to be respected for its integrity but it also raised lots of questions regarding the future of these people.  There was no directive from the owner as to what these folks should do with their time.  They were not assigned to other projects or work.  Usually when a project is cancelled, the people working on it are reassigned or terminated.  One manager, in particular, had just hired two instructional designers/trainers to prepare and present the classes that new customers would need.  What were they all to do?

This manager had an autonomous approach to her career and work.  She was aware of the value that she could create for the company and so set out to create a result that would be beneficial to her new employer.  She was very aware of how to be an asset to an organization while continuing to provide her unique and autonomous value.  She discussed the situation with her new team and they concluded that they could design education programs for the other automated solutions that the company was offering without the benefit of training classes.  The team engaged some other employees and found that many customers did not install their automated solutions for 6 to 8 months after receiving their software because it was so difficult to install and actually integrate with their other automated products.  This presented a huge risk for the company because the uninstalled products could be cancelled at any time.  So the sales cycle was not actually complete until the product was installed, up and running, and demonstrating value to the customer.  Why not shorten the sales cycle by helping the customers install and integrate the automated solution?  Connecting the training classes to the sales cycle was sure to increase bottom line results as it decreased the risk of cancelled sales.

With this new plan, she proposed a strategy to keep herself and her hires employed while serving the customers at a higher level than they had been previously.  The new classes would earn new revenue for the company and there would also be savings in customer service costs since the representatives would not have to take as many calls to help the customers try to install and integrate the solutions on their own.

The company executives decided to take a chance on this new plan.  It paid off well, even allowing the company to form partnerships with other professional service firms that would ultimately become highly strategic customer referral sources.  All three customers, including owners, employees, and the automated solution users, were highly satisfied.  The training venture had worked out well.

With this knowledge, a highly competitive business owner decided to bid to purchase a competing, but also complementary, company.  During the due diligence period, the buyer directed his research staff to form relationships, department by department, to determine the real components of value of each department.  The teams were then asked to combine the components of value to propose a new structure that would maximize the value of the two companies when combined.  This new value would also help with pricing the purchase.  All seemed to be going well.  Employees of both firms were becoming friends.  They were building trust and were able to make some joint decisions based on the context that they were building by knowing the other companies’ strengths and weaknesses.  They were planning how they would work together effectively for the benefit of the combined companies.  The buyer had made a strategic alliance out of an acquisition.  The seller was very comfortable with the approach, the price as it was based in new value creation, and on the knowledge that his former employees would be treated as assets to the new company.  All agreed that the deal was well done!

“If everyone is thinking alike, then someone isn’t thinking.” (George Patton, World War II General)

Organizational leaders do not always reward thinking.  Work “within the box” is acceptable.  It is easy to manage.  But this paradigm points out the difference between managers and leaders.  Managers monitor work activity based on a set of dates and deliverables.  Leaders enable and encourage people to set their own dates and deliverables through a balance on independent and interdependent thinking.  21^st century organizations will not survive without that component of leadership.  The 21^st century environment provides too much diversity of thinking, mobility, and information to even attempt to contain work activity to a set of hard and fast dates and deliverables.  The job of today’s leaders is to engage, empower, and enable today’s workforce in thinking, which then must be rewarded as it adds value to the enterprise.

It is not enough to talk about engagement, empowerment, and enabling programs and policies, the support to think must be felt by the members of the organization.  Reinforcing the risk-takings necessary to demonstrate these new behaviors will ensure that these behaviors continue and will make those companies grow.  Leadership today requires no less than a formal strategy around thinking.

Sometime in the 1950s a group of actors created Tri-Star Productions, a new phenomenon in the industry of cinema. The established system had been focused on making and distributing the movies.  Vertical integration with distributors and movie houses and long term contracts with actors summed up the business model.  The big studios had controlled everything.  As charges of monopoly were filed, as television, big screen, and 3D effects rose in popularity, as movies started to grow in other countries, and as they started to reflect changes in societal norms in the US, general questioning of the establishment model emerged.  Independent movie companies and the notoriety of independent actors created an alternative to this model, challenging the established mode of the industry.  This allowed the independent actors to demand higher salaries and to even start their own studios.  They could sustain themselves without the big movie houses, such as MGM and Warner Brothers, and without their contracts.  This turn of events also made the actors responsible for their own destinies and successes.  In some cases they became partners with their old bosses.  The rules of engagement had changed.  Movie producers had a new relationship with the actors, their formerly contracted and owned assets, and they needed to manage differently to ensure the continuation of the movie industry.  Movies without actors would not work.

The evolving scenario in the world of cinema prompted its participants to develop new thinking.   The new thinking affected a shift in power for all involved. This was enabling for the individuals as well as for the studio organizations, but only as long as the culture of these organizations evolved concurrently with this new mode of thinking.  The leaders of these organizations had to understand the ripple effect and make adjustments to their management style.  Actors’ share of revenue was dramatically changed.  Actors now had opportunity to select roles carefully.  The studios had to nurture them in order to establish and maintain good relationships.  Because actors had new power to demand larger salaries, owners then had to develop different priorities in managing these independent assets.  The studio leaders needed to engage and work with the actors to identify and resource profitable projects, whereas in the establishment model, the leaders only concerned themselves with making and distributing movies.

A new sense of accountability entered the culture, with actors now negotiating salaries and roles in very competitive ways.  Actors now worked directly for themselves.  The leader’s job was to maintain high levels of productivity and quality, and maximize the expertise of the actors in identifying good projects, all while carefully managing finances.

21^st Century Workers

If we consider the knowledge worker of the 21^st century, we see certain elements of independence, mobility, and accountability which raise a new set of challenges for business owners and Human Resource professionals.  Because of today’s business need for growth, competitiveness, interconnectivity, and availability of information, workers and business leaders have a similar situation to that of the actors and studio leaders.  The workers’ new found mobility, independence, and empowerment have management implications, for sure.  Businesses also have evolving needs as today’s complexity requires people to contribute in more independent and integrated ways.  The complexity and speed of engagements today require that workers apply their expertise to a continuously changing world of events.  They must be able to think, analyze, and make decisions in relevant ways. This implies that they work as informed authorities in their areas of competence, integrating their thinking with others, and move on to the next project in a timely manner.  Daily operations and customer relationships must be everyone’s responsibility.  Leaders can only set parameters for aligning these efforts.  Detailed tracking and directing are not possible.  It is up to the individual worker to make good decisions and then adjust these decisions as integrated thinking with other experts takes place.

Business owners and leaders walk a fine line between fostering independent thinking and requiring accountability to help the enterprise sustain itself.  Creating an environment of transparent communication in which workers are encouraged to think and analyze in their areas of expertise and to contribute in ways that build value is the job of business owners.  They can do this with the help of their HR support staffs.

Just as the actors experienced, workers can be independent as long as they add value to the organizations that employ them.  These workers not only need to work in an environment that allows them to be independent, responsible, and accountable; they need the structure of knowing where the organization is going and what resources are available to get there.  They need the flexibility of an environment that encourages them to think: inside the box, outside the box, and even beyond, into other boxes.

New Rules of Engagement for Leaders

So, Human Resource leaders, you have a new call to action.  Your CEO and other leaders need your support in creating an environment in which the balance of order and of creativity is the ultimate goal.

Today’s leaders need a thinking strategy that is focused on three activities to recognize and enable the independence and interdependence of workers:

• Creating Readiness Sharing of enterprise direction, goals, and general information creates a sense of readiness by establishing a comprehensive and common knowledge of the business, engaging workers to make well-informed decisions.
• Developing Relevance Ensuring that workflow, including every business activity and connection, builds a collaborative environment in which people can see the relevance and value of their contributions, empowering workers to integrate their work with others and to understand internal and external customers’ needs.
• Ensuring Reinforcement Implementing a structure of rewards recognizes independent thinking and interdependent work, ensuring that everyone understands the values and behaviors, including risk-taking, that contribute to achieving enterprise objectives and goals.

Thinkers and Innovators

Creating a culture that engages and encourages independent thought is not easy.  Leaders and Human Resource executives need to routinely encourage workers to exercise the power of independence, the constraints of accountability, and to understand the interdependence necessary to work with others to ensure a successful enterprise.  These empowering initiatives ultimately enable workers to innovate.  Independent thinking and collaboration facilitates relationships with customers, both internal and external, that effectively direct new product and service development.

People who are empowered and expected to think do just that.  This cannot help but lead to innovative ideas that ensure the future of the enterprise.

Conclusion

Many circumstances led actors to become independent thinkers.  Many circumstances led to 21^st century business requirements and scenarios.  Just as the movie moguls had to adjust their operations to work with their more sophisticated workers, business leaders have to recognize the need for creating a culture that supports their workers, as well.  Behaviors and activities that recognize and support the new sophistications of independence and interdependence will encourage the innovation that will sustain the enterprise.  All stakeholders are recognized for their importance to long term success.

Do all of your stakeholders know how critical their thinking is to enterprise success?  Do you reward thinking in all directions?  Is risk-taking rewarded?  Do you have your thinking strategy in place?

Gen. George Patton was very insightful.  Well before the studio system or even today’s business environment evolved, he knew that the power of independent thinking was unparalleled when sparked and expected by a leader.  Needs change, so the work must change, and environments that support that work must accommodate as well.  The job of a leader is to ensure that the work environment supports the expert as an effective decision maker. In a culture of thinkers, the expert knows the goals, understands the dynamics of the business situation, feels rewarded for making decisions, and innovates regularly.

The Problem

A new subgroup within the Sales Department of a mid-sized Company had been formed to partner with a new market of Vendors who resell the Company software to the Vendors’ customers. The Vendors are large with huge customer bases, and significantly more software was being sold through these partnerships. Customers, however, were unhappy with their overall experience, and the customer satisfaction level plummeted to 5%.

Contributing Factors

Customer Service Personnel – The new partnerships, although good for revenue generation, required support from the other departments of the company. Customer Service employees did not understand the new requirements for supporting customers who were now using software that had been integrated through one of these new vendor partnerships. Customer Service had not been given the information necessary to help customers with the new configuration, and they grew uneasy and discontent. Since Customer Service leadership had not been involved in day-to-day Customer Service issues, but instead had been heavily involved in executive team-building and strategy development, they had only a peripheral awareness of the evolving discontent of either the customers or the Customer Service employees. This was the first time that the Company had been involved with another company in creating successful customer relationships.

Software Developers – The Software Developers were impatient with the Customer Service personnel’s continuous questions coupled with customers’ complaints. As Software Developers are consumed with technical responsibilities, they had no time to help the Customer Service representatives.

Customers - Since customers were now receiving their software through a different vendor configuration, the customers were confused as to how the software should work and who should help them make it work. Customers had timely compliance requirements and could not afford to be delayed in their software use. As the software was integrated to an end-user’s internal systems, switching would be difficult and costly, but not impossible. Unhappy customers represented a risk that should be eliminated. Also, since the Company is a market leader, there was concern that unhappy customers might taint the Company’s reputation for good quality and excellent support. Several competing companies had entered the market and were aggressively pursuing the Company’s market share. Customer satisfaction would have to be improved.

Company Culture - The culture of this Company was very nurturing and internally focused. Employees enjoyed many positive personal and working relationships. Each department was also internally focused, having its own culture, and operating as separate business. Everyone loved working for the Company, valuing its warm and friendly environment. It was therefore very difficult for management to declare that performance was a problem. Customer Service leadership continued to tell Customer Service representatives that they were doing a great job, as good as could have been expected. Leadership knew problems would have to be dealt with eventually, but not, they believed, at the expense of disturbing friendly internal relationships.

So who owned the problem — The Software Developers, the Customer Service division, or the Vendors?

Systems Analysis

Two premises come to mind to help solve this dilemma. The first premise is that all organizational activity is interdependent. These interdependencies are grounded in the diverse needs of the organizational stakeholders – the end-users, equity owners, and employees. Their needs define their expectations of each other; therefore, their interdependencies emerge. Lack of satisfaction occurs when interdependencies are not aligned among groups.

Employees seem to be the critical group in facilitating this alignment. Employees serve end-users’ and equity owners’ needs by delivering products and support while limited by owners’ allocated resources. They can balance these needs to satisfy both groups

The second premise is that employees can satisfy their customers’ needs (equity owners and end-users) only when their own needs have been met! Equity-owners must structure the organization to meet these needs.

The remainder of this discussion is focused on the identification and satisfaction of employee needs, as it is suggested that this satisfaction will ensure end-user and equity owner satisfaction.

Employee Satisfaction

The first initiative focused on preparing the employees to identify changes needed, using metrics to effect these changes. Benchmarking activities helped employees compare their Customer Service activities to those of other similar organizations. They discovered that at times the end-users tended to be unreasonable with their requests, but Customer Service representatives would comply because they thought they needed to ensure satisfaction. Once the employees had a better frame of reference for focusing their time to answer legitimate questions, they eliminated time spent on peripheral issues so they could move on to another end-user with a more urgent need. The employees also began to get an idea of what other organizations measured as performance indicators. Previously, there were no metrics in place. The employees were feeling more satisfaction due to their new knowledge and best practices of the Customer Service arena. It was gratifying to be part of a world that took such pride in its endeavors, sharing successes and problems for everyone’s information and learning.

The second initiative tackled the difficulties between Software Developers and the Customer Service representatives. They worked out a schedule for sharing critical technical information, each group needing information from the other. They agreed to a support schedule for answering technical questions, as well as education sessions for the Customer Service representatives. Also, Customer Service representatives shared information on end-user issues and questions, providing insights to the Software Developers. These joint sessions also addressed new vendor topics, including vendor information and workflows to help with new system installation, implementation, and operations. Customer Service representatives were now much more confident in their ability to support end-users.

A third initiative focused on the cultural aspects of the organization. Since the culture was so nurturing and supportive, all employees were engaged in the change initiative and then given the responsibility and accountability for actually making the changes. Employees were provided sufficient industry, company strategy, competitive, and technical information for decision-making. They also established an understanding of all customer/supplier relationships, both internal and external to the organization. Now the engaged employees could determine what changes they needed to make and create plans to implement them. These plans included a series of projects to complement each other and maximize the use of common resources for efficiency. Customer Service representatives now had complete control for managing customer satisfaction.

The next initiative focused on metrics. Targeted areas would include first-time call responses, time to resolve customer issues, and time spent in internal education sessions. Customer Service representatives defined what was important to measure.

The final initiative formalized the commitment to the changed environment. Now that the changes had been defined, an industry-standard program for planning, tracking, and making these changes was purchased and implemented. Customer Service representatives had a way to sustain their progress on hard-won initiatives.

Results

New Customer Service operations and interactions with other groups yielded customer ratings of 95% satisfaction. Employee engagement, empowerment, and structuring took two and one half years. All employees now had a new understanding of their own needs and those of other employees, new common objectives, metrics, and goals for customer service ratings. As the “real customers,” their satisfaction had improved. Recognizing the importance of employee satisfaction is a critical, if not the most critical, component of customer satisfaction. When employee needs are met, they are prepared to create organizational interdependencies that are aligned for the satisfaction of the equity owners and end-users. The “real customers” had been duly recognized.

Since it is currently understood that people are the most important asset of any organization, considering them primary customers would seem reasonable.  When employees feel engaged, valued, and satisfied, they are more likely to meet or even exceed end-user needs, which should then satisfy owners’ needs for performance.  With that straightforward approach, how can an organization not succeed to meet its goals?  There are not-so-small matters of responsibility and accountability that can unfortunately misalign this logical flow.  Senior managers are responsible for performance, usually, even when the delivery of that performance is beyond their sphere of influence and control.  They are often forced to solve this dilemma with command and control techniques, which further exacerbate the situation since they eliminate employee thinking and subsequent satisfaction.  When employees are not engaged and satisfied, they are not empowered to satisfy the end-users.

Command and Control versus Environmental Control

To alleviate this misalignment, command and control techniques can be replaced with a system of environmental control.  Environmental control engages and holds accountable all organizational members for decision-making at levels relevant and appropriate to their work and goals.  Expecting and requiring all contributors to set and meet performance goals in the context of the organization’s goals establishes environmental controls.  If members make decisions in their areas of expertise, they are more able to meet their own goals.  Then there is much more chance that the organization will meet owners’ performance goals.

Organizational Leaders

So how do leaders create this environment of control?  A collaborative structure for decision-making and integrated thinking must be defined.  This change can be managed through a three-step process: creating readiness, establishing relevance, and reinforcing and rewarding goal-oriented decisions.

Readiness

Readiness prepares all members with expectations and changes necessary to implement the collaborative structures, definitions of new working modes (teams, etc.), shared accountabilities and responsibilities, and supporting infrastructure.  Benchmarking with other organizations is very helpful.  It provides examples of others’ achievements and working modes.  Members must develop understanding and confidence that this new environment will serve them as they prepare to set their own goals and work requirements.

Relevance

Relevance requires that subject matter experts, i.e., all members in their own domains, plan and set their own goals and work plans in the context of the organization’s goals.  Executives, entity leaders, team leaders, and individuals are all responsible to set goals relevant to their domains.  Leaders ensure that all goals align for achieving organizational goals.

Reinforcement

Behaviors that are reinforced continue.  Therefore, it is essential that setting and achieving goals must be rewarded within the organization.  Members must perceive that their work is meaningful and is contributing to the corporate goals.

Summary

Of these three steps, readiness is the most critical.  Without readiness, the other two steps cannot happen.  Setting direction, organizational and cultural, focuses the members on expectations and relevant roles, and then challenges each member to contribute.  Once members understand and know exactly what performance results and behaviors are

associated with success, they can use their expertise to attain that success.  Knowing that they are respected and expected to deliver their own energy and expertise towards the established direction is empowering.

This system of environmental control establishes the expectation that all members will be entrepreneurial in their thinking.  They will look upon continuous change as a catalyst for innovation.  This is the ultimate environment and scenario for any organization.  This environment, while requiring the members to satisfy and/or even delight end-users, will actually satisfy and delight the real customers – the members of the organization.

A particularly successful and emerging software company is very focused on growth.  The leaders have a real passion for sharing the value that they bring to their customers and want all employees to share that passion.  Today’s knowledge economy certainly enables everyone to be thinking this way….or does it?  It seems as though everyone has access to multiple sources of data and information.  Each person can even access information regarding the complexity of products and how they bring value to the customer.  So why does it often seem as though employees have their own individual passions and hold those of their companies as secondary to their own needs?  Why are customers complaining about service?  And why didn’t the leaders know early-on that their second largest customer was about to drop the company and move to its closest competitor, who they know cannot match their quality levels?  Perhaps employees do not really understand how to connect their individual interests to those of the emerging and evolving company?  Perhaps they do not know how the company’s priorities are determined?  Or how they might contribute to refining that prioritization process?

Existing today in a knowledge economy is not a choice.  Data, information, and knowledge are all encompassing.  If you, as a business owner, expect and presume that your employees will use those resources to align all work to the purpose of your company, it is wise to set up an environment in which your expectations for business results are sure to be met.  A knowledge economy recognizes knowledge as the new currency.  Your company cannot ignore its importance and criticality to your success.

The knowledge economy also provides people with the ability to be mobile; to be connected to anywhere and anything; to compete with a global perspective; and to have unlimited access to resources, data, and information.  It also presents unending complexity as four generations of people with different perspectives work together, as well as the competition of the global presence of other companies.  Identifying, processing, and effectively acting on all of this is most assuredly overwhelming.  How can you help your employees cope with the complexities that the knowledge economy has thrust upon them and you?  This paper offers some suggestions for creating an environment to help turn these challenging situations into opportunities for growth for your business.

Being skilled in using knowledge and aligning to a common purpose are the two fundamental requirements for creating a knowledge work environment to support your employees as the assets that they are.

Knowledge Workers’ Skills

Let’s first consider the mindset of a knowledge worker.  Knowledge workers consider themselves as assets of the company.  They seek quality before quantity in customer delivery.  They continuously evaluate, learn, and innovate.  They are task/results oriented toward a common direction and goal.  Finally, they are autonomous in their efforts to achieve those results.

Asset thinking – People in the work force today must understand their strengths and interests in order to maximize their contributions to their companies.  Ultimately, leaders and employees must all recognize the asset that people create when they work together toward a common goal to create a return on investment for a company.  Assets are nurtured and developed to increase their value, as opposed to being considered the cost of doing business.

Quality before quantity – Quality is only relevant when you know what your customer considers good quality.  Knowing customer needs and preferences is a good start to being able to accommodate them.  Additionally, quality reigns over quantity when considering the balance of investment in providing better quality.  Why spend precious resources on more of something when your customer is satisfied with less?  Pursuing acceptable quality before quantity is a much better idea.

Continuous evaluation, learning, and innovation – Once you have built a solid customer relationship and they are actually working with you to define acceptable quality, you can further build that relationship to help you determine future needs for innovation.  Structured analysis of industry trends, your customers’ future needs, and how customers plan to sustain their businesses all present good opportunities for you to innovate.  Ideas for new products or services for current customers, new customers for current products and services, and new products and/or services for new customers will all come to mind through this analysis.

Task/results orientation –  Now that new ideas and innovations have been prioritized and made a part of your plan, it is time to engage employees in developing the knowledge, skills, and competencies that they need to be able to deliver on these innovations.  Focus on specific work to create and deliver these innovations creates a task and results orientation for employees.

Autonomy – Underlying all else is the ability of 21^st century knowledge workers to sustain themselves as the assets that they are through their deliberate and focused work on their own goals as they align to the organization within which they work.  This autonomy takes a strong and clear mindset on their individual value and the value that they create collectively.

Knowledge Work Environment

Now that we have defined knowledge worker skills, let’s consider how a business leader creates an environment that ensures organizational members will have these skills.

Asset thinking – Employees consider themselves assets if they are treated as such.  Do you reward activities that create value, as you would expect from an asset?  Is there a clear path to creating value and being recognized for doing so?

Quality before quantity – These concepts are very different and should be considered in the context of the desired end result.  Do all have a clear understanding of priorities and the quality versus quantity needs of customers as they buy your products and services?  Does everyone in the organization have the opportunity to get to know a customer and build a relationship to promote this understanding?

Continuous evaluation, learning, and innovation – Innovation happens as a systematic process when change is considered a catalyst to do something new and when people think analytically and synergistically.  Does everyone in your organization think in these ways as a routine?  Do you have structures to support thinking, evaluation, and learning as tools to innovate?  Is there continuous revisiting of the common direction and goals that all should be pursuing?  Do people have a system for identifying and qualifying/quantifying specific opportunities that present themselves?

Task/results orientation – All energy and activity should be focused on a specific task that leads to a business result.  Activity-based work does not necessarily create business results so it is important for all employees to consider the output of their activities.  If they are not contributing to the business results of the company, then they should refocus and work on activities that are relevant to a specific task toward the desired end in mind.  Do your employees spend time in activity-based work or on results-based work?  Providing incentives for this continuous evaluation, peer to peer, helps employees adjust and ensure task and results-oriented work at all times.  These adjustments should be routine as needs and requirements change.

Autonomy – Employees need a mindset of personal mastery and self-sufficiency to order to contribute to company goals in ways that are satisfying to their own direction and goals, as well.  Do you reward the people who confidently find ways to satisfy their own needs for growth as they create value for the company?  Do you provide support in determining employees’ individual strengths and goals for growth?  Do you help them connect these individual plans to your company’s plans?  Autonomous people recognize themselves as assets to their organizations and create value for those organizations accordingly.

Conclusion

Knowledge workers innovate and sustain their businesses as a matter of routine.  Recognizing the characteristics of knowledge workers and planning focused initiatives to develop and support those characteristics is the call to action in the 21^st century.  Knowledge work is the mode today.  It makes sense to create a platform for it to happen in a way that is aligned to your business needs for sustainability.

Is that the mode in your business today?  Do all of your employees understand and share your passion for creating value for your customers?

Knowledge work is happening today.  The question is whether your knowledge workers are focused on your business goals or on whatever captures their interest this day and the next.  There is so much potential for knowledge work to ensure the stability and sustainability of a company as it is so focused on innovation.  The risk of engaging in innovation that is not focused on your business goals is huge.  Help your employees be the knowledge workers who strive for the same results that you as a business owner are seeking.  You will not be sorry that you did!

Research

Drucker, Peter. Post-Capitalist Society.

Drucker, Peter.  Management Challenges for the 21^st Century.

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