Top-of-the-House

Are We Ready for Self-Management?

Posted on Sep 1, 2006 in Top-of-the-House by Jeffrey Summers 0 Comments

In the early 1990s, Taco Bell’s management was faced with a dilemma. It wanted to create thousands of new locations, including stores and kiosks, at which its line of Mexican-themed products could be sold. At the same time, it was experiencing a shortage of capable managers in a fast-food industry known for low-paying management jobs. One part of the solution was to create fewer, higher-paying management positions. The other was to train thousands of entry-level workers at its stores to manage themselves. This enabled Taco Bell to assign one manager to several stores and to increase the “span of control” for area managers from ten or so units to several times that many.

Under the “self-management” initiative, employees were trained and given new technology to enable them to hire, train, and supervise their new colleagues; manage the day-to-day inventory of the store; handle the resulting receipts; and deal with personnel problems themselves under the supervision of a “floating” manager responsible for several such stores. They received above-market pay, partially in the form of performance incentives. The result? More highly energized workers, better cost control, higher customer satisfaction, and new ideas for organizing work. One self-managed team, for example, developed a program called “aces in your places,” in which team members assumed jobs they wanted to learn during slack business hours, then took their “battle stations” to achieve maximum capacity (up to 50 percent higher) during rush hours.

This is an extreme example of the creation of “work teams” that has provided an answer to the “assembly line” philosophy of work. Such teams are designed to provide greater variety and responsibility for frontline workers given the responsibility to assemble and deliver a complete product, sub-assembly, or service. It characterizes what James O’Toole and Edward E. Lawler III in their new book, The New American Workplace, would regard as a “high involvement” workplace in which employees are treated as assets rather than just expenses. They contrast, for example, the high wage, high benefits, and high involvement policies of Costco with those of Wal-Mart. Both organizations, of course, have been highly successful. (One might argue that Wal-Mart has achieved high involvement through less expensive methods including the creation of a strong culture.) But the authors maintain that the Costco model not only is more attractive for workers but also creates fewer social costs for such things as medical expenses.

What would seem to be a “win-win” answer to the scarcity of good managers and the predominance of low-involvement entry-level jobs nevertheless raises some questions. Are sufficient numbers of entry-level employees ready for self-management, especially if it requires the application of new technologies to help them perform jobs such as interviewing and hiring new team members or ordering supplies and managing inventories? More important, is management ready for this? After all, it flies in the face of traditional command and control management practices. And in many cases it will require the development and use of new management information systems in which many organizations may be unwilling or unable to invest. What do you think?

To read more:

James O’Toole and Edward E. Lawler III, The New American Workplace (New York: Palgrave Macmillan, 2006).

Source: http://hbswk.hbs.edu/item/5507.html