Most managers and workers in today’s enterprises are cogs in obsolete machinery. They sometimes have a vague feeling that the machinery needs scrapping and replacing, but they do not know what to do about it. . . . We are in the early phase of a revolution that will fundamentally transform enterprises around the planet. The transformation is a paradigm shift of immense magnitude.
The Making of a Non-Conformist
I grew up the second of three children in a middle-class black family living in rural Virginia. My father owned a construction business and my mother worked as a secretary with the state government. In 1965, Virginia instituted a voluntary school desegregation policy. At age nine, I, along with my brother, were the only two black children to integrate the public elementary school system of Boydton, Virginia. While I scarcely met with angry mobs, water hoses or police dogs, I did notice an abrupt change in my station in life.
I had been one of the “good,” smart kids at the black school, but at the white school I was suddenly a loner to be avoided. My class was a harsh, hard and abrasive environment filled with tough country boys. I responded to the challenge by becoming tough, somewhat calloused and tuning out much of the harshness around me. Like the time my fourth grade teacher asked me not to sit with one white boy at lunch because it made him sick to eat with a black kid. I ignored her comment and sat with him the very next day.
I can’t say that the five years there traumatized me in the sense that I was in any pain and anguish. I simply toughened, as it became impossible for me to feel inferior to anybody. I was vaguely aware, at that age, that the black people around me felt apprehensive towards white people, but with what I was seeing, there wasn’t a thing intimidating about those trifling people. If I sensed people responding to me in a weird way, I concluded that there must be something wrong with them, and tuned them out.
I began to feel comfortable being different and going against the grain. I actually began to thrive on others teasing me for being a non-conformist. I began to question many norms, including the traditional rigid, factory school system, with its petty rules, boring mass production mode of teaching and focus on analysis. From the fourth to the twelfth grade I simply refused to participate. They wanted me to exchange my creativity and love of learning for obedience, grades and conformity, so of course, I paid them no heed.
After my elementary school experience, questioning authority and tradition or seeing from non-traditional paradigms was not an issue for me. The impulse to conform to mindless customs and rules rarely occurs to me. And the superior, intimidating white “bogeyman,” which was quite real to those who came before me, like my grandfather, was exposed as merely a laughable impostor.
It probably is also useful to mention the story of my paternal grandfather and great grandfather. In the year 1900 my grandfather was born to an unwed teenage couple. The boy was of Scottish descent, the girl was the grandchild of former slaves. The two married others and my grandfather lived with his mother. For some reason, however, his natural father took custody of him as a teenager. He lived with his father and his father’s family as the “yard boy,” but it’s clear that the father undertook to surreptitiously raise his son and guide him. The stereotypical qualities of Scottish descent, “thrift, industry and ingenuity” were apparent throughout my grandfather’s life. To this day, my wife says that the only ethnic stereotype she’s ever found to apply to me is the one about Scotsmen and their money. I do despise waste and wasted potential and this is a primary problem of Industrial Age wealth-creation.
The Work Journey Begins
At age 13, when I began to work as a laborer in my father’s construction company, I began to notice that something was wrong with work or people or both. Every summer day, for five years, I’d wake up with my dad at 4:30 AM in order to have enough time to go to the workers’ houses and wake them up. Throughout the workday, my dad spent his time forcefully directing, pointing, and showing people how to do things quickly and efficiently. Day after day, year after year, he showed the same things to the same people.
Those five years taught me a lot about hard work, challenge, pain, fun and life; I did a lot of thinking about work and workers. After all, I was a laborer and a laborer has a lot of free brain time. Why did we have to wake up adults each morning as though they were children? Why did my Dad have to keep telling them the same things over and over for years? Why was there no motivation, no drive, no passion, no life, and no engagement? Why were some of these men walking zombies? I witnessed the same malaise in the farm workers in the Virginia tobacco fields where I spent a couple of summers.
I thought that maybe “walking zombies” were just the type of people that are found in construction and farm work, or maybe it was something peculiar to black people, but my mother had told me many horror stories in state government. There was gross negligence and incompetence, people went weeks, months and years without doing any work at all.
Prior to working with my dad, I had acquired a solid understanding of the value of work from the seemingly endless list of chores that my mom had available for my brother, sister and me. I used to think she sat around all day trying to think of work for us to do. It provided me with an appreciation of work and reward. Working in my father’s business and performing my mother’s chores around the house provided a solid work foundation. It was the beginning of a wide variety of work experiences and the start of a journey of discovery.
On August 28, 1975, I went away to college, a black school in central Virginia. The first week of college was rough. Students had to get their college ID, meal tickets and books, as well as a host of other things. I decided to get my meal ticket first. The line was 50 yards long. It was 8:00 AM so I figured it would move fast. By 9:00 things were moving very slowly and by 10:30 I finally made it to the front of the line. The drowsy-eyed, officious clerk asked to see my college ID. I told him that I didn’t have it yet. With a ho-hum sigh, he said, “You’ll have to go to Foster Hall and get your ID before you can get a meal ticket.” From the way he said it, I could tell that he was sick of telling freshman idiots like me the same thing over and over. I wanted to ask him why they didn’t put up a big sign saying, “Lunch tickets dispensed only with ID. Obtain your ID first,” so that people would not waste two and a half hours standing in the wrong line. After all, it didn’t take a genius to figure out the effectiveness of a sign. I thought to myself, “Oh, no! Officious government workers!
Foster Hall was even worse. The ID’s were being produced on the top floor of a tall, old building with no air conditioning. It was August in Virginia, and when I opened the door to the fourth floor to see a line 70 yards long with people packed in the eight foot wide hallway, the temperature was 85 degrees. Two hours later it was 95 degrees. When I got to the front of the line, the student-workers moved as though they were in slow motion. They reminded me of the zombies in the movie Night of the Living Dead, as they moved in a sort of dazed state, distant and detached from the present, their work and me, the customer. They made no eye contact and seemed to look right through me, as though I wasn’t even there. While processing my ID they talked to other workers about personal issues, which slowed them down even further as the line grew longer. I had seen this “zombie-clerk syndrome” in employees before and many times since.
Throughout the week I faced many zombie-clerks and stood in many long, wrong lines, wasting a lot of time. Why was there such lack of intelligence in the system? Why were there no posted instructions? Why didn’t people care about their work? Why were these people dead? During the next four school years, I saw many more examples of these problems, with many people not doing their jobs. For example, in my four years there, ‘75 to ‘79, a relatively large percentage of my electronics class time was spent studying vacuum tubes. Why, in 1979, an era of PC’s and electronic chips, was anybody spending any time on vacuum tubes?
Teachers did the traditional factory-style, boring lectures, much of which was out of date and out of touch with the real world. Students put in as little effort as possible and cheated to get grades. The school continuously lowered its academic bar because the students would not even attempt to clear it.
Being a pole-vaulter, I understood clearing bars very well, but the four-year experience with my college coach did little to help my opinion about people and work. The head coach had recruited me to attend the school and pole vault. I quickly found that my coach was a talker, not a doer. He gave me the run-around for a couple of weeks about getting the pole vault equipment set up. I finally decided to do it myself. When I found the vaulting pit, it was torn, old, ragged and hard. I found some old poles, but none my size. I spoke to the coach about the equipment he’d promised me a year earlier, when he proposed that I attend the school. I got only slippery answers and more false promises. I figured that I had all I was going to get, so I knuckled down and began working with what I had.
Five months later I was in the hospital with a broken neck from a weird landing on the hard, old pit. This wasn’t so bad, since I had made the decision to use the pit, but coach didn’t call or visit me in the hospital. He had forgotten to list me on the track roster, so I wasn’t even insured by the team’s insurance policy.
I recovered with no permanent damage and successfully pole vaulted for three more years. In four years of pole vaulting, I received coaching advice on a total of five occasions. It was always the same advice. As I ran down the runway, planted the pole and began going up and over the bar, five times in four years I heard the words, “Over the bar,” come from across the track field.
Why wasn’t he doing his job? It wasn’t as though we pole-vaulters did not contribute to the team and his success. In our second year the three pole-vaulters won first, second and third places in the championship meet. We clinched the CIAA conference title for our track team. It was our coach’s first championship in his 25-year career. However we pole-vaulters languished for lack of coaching.
My second year into college, I started working for the Defense Department. The waste boggled my mind. When I walked into one of the many, many warehouses filled with people and goods, I saw desk after desk and row after row of what looked like hundreds of office workers. They were bored, half-asleep and half-alive. Many had nothing to do. Some had their heads propped on their arms on their desk. In the department where I worked, we spent a large percentage of our time repairing other employees’ personal property since there was not a lot of official work. We averaged two, maybe three hours of work per day, at a nice, slow pace. The rest of the time was spent debating, playing racquetball or working on personal property.
Note: The actual names of companies where I’ve worked have not been used in the remainder of this chapter, and instead fictitious names used, so as not to cause any harm to these institutions.
After two years working at the Defense Department, while still in school, I landed a job with Respect Computers Incorporated in the field engineering division. A year later, I accepted a permanent position as quality engineer at a Respect Computers manufacturing plant in New York State. This was the beginning of a twenty-year journey in Quality Improvement and organizational change.
Respect Computers was a tremendously empowering environment. In fact, out of all of the things I’ve done in life, the work at Respect Computers was the most enjoyable thing that I’ve ever done. At Respect Computers, I had the opportunity to experience firsthand the tremendous productive power of creative freedom and empowerment. I loved going to work. Workdays were the same as holidays or vacation days. I used to say I couldn’t believe they paid me to have that much fun.
Respect Computers was viewed by the world as probably the premier corporation in the world. It was the model for companies worldwide. Consultants wrote about it continuously. Only one of every one thousand applicants was hired. Wall Street loved it. It had been one of the most profitable corporations in the world for many years. It was consistently rated as the best place to work in the world.
Going into Respect Computers I thought, “these are some of the smartest people in the world. With their profit, growth and success, for sure I’ll see how work is done right. How else could they have gotten where they are?” Yes, they were some of the most intelligent people in the world, but this means little, given the state of the world of work.
I kept hearing the same recurring theme from many different people throughout the company. “How do we possibly make money?” The waste was so enormous that it was apparent to virtually everyone that something was gravely wrong. I worked six years at three different Respect Computers manufacturing plants and one field location. I interfaced with many Respect Computers locations nationwide and worldwide. The single biggest waste factor was the huge number of people who did nothing, added no value or even subtracted value. This showed up not only in wasted salaries but also in insane decisions that were being made regarding products, resources, customers and materials.
There was the lost $30,000 piece of test equipment that nobody cared about. There were customers who could not get a replacement printhead for their down printers and were told that it would take months to get replacements while replacements were available at the time. There were rooms full of scrap, hundreds of thousands of dollars worth, in Receiving Inspection, due to poor shipping containers and no corrective action. There were presentations where none of the product Quality Engineers knew what was going on with their product lines.
One department I was in had four engineers and a manager. The manager was completely out to lunch, never offering advice. There was no guidance, no coaching, no involvement, no direction, no nothing. For the year that I reported to him, I did not know of a single thing that he contributed or accomplished.
Regarding the other people in the department, one middle-aged engineer had a chip on his shoulder about work and was simply determined that he was not going to do any. And he didn’t. A second engineer was very timid and lost in the political maze of the company. The third engineer was the senior engineer in the department. He did nothing; he had no responsibility that I knew of. He had written a few procedures but hardly anyone ever looked at them. The department, as a whole, simply was missing in action. Although this was one of the worst departments I’d worked in at Respect Computers, it was not far from average. My personal estimate, at the time, was that Respect Computers could cut 75% of its workforce and not miss a beat. Seventeen years later Respect Computers had cut 50% of its workforce with profits higher than ever.
In addition to this, I was simply astonished at the number of goofs, buffoons and idiots there were in management. Respect Computers had a “Respect for the Individual” concept. They were so sensitive to the treatment of employees that they sacrificed competence for niceness. This was not all bad, but the negatives, particularly the bureaucratic method of implementation, far outweighed the positives.
The “Respect for the Individual” concept had been grossly distorted. There was so much freedom and “Respect for the Individual,” that if one did not want to work, one did not have to. It had become disrespectful to the individuals who did work. Work was shuffled around to the people who would work. Joe and Jane were getting the same pay, except Joe was working one hour per day and Jane was working fourteen. His presence cost the company money, while hers made money. Although there were always overworked “real workers” who would pick up some of the slack, most of the needed work simply didn’t get done and nobody cared. Respect Computers was making plenty of money; it was growing like a weed; customers were happy. Consultants wrote books about Respect Computers as though it was Valhalla. Who cared about the tremendous waste and wasted potential? The customer was, after all, happy and willing to pay for it. “If it ain’t broke don’t fix it,” was the attitude.
Then there were the self-interested shysters. As quality engineer, I worked on one printer that had a lot of quality problems. The production manager had his sights set on the fast track and had told me, privately, that he would do anything it took to get there. We were having functional problems with the printers as the quality inspectors tested them. This was bottlenecking production and holding up shipments. He called my second-level manager and requested relief. Without conferring with me on my product line, my second-level manager told the inspectors to stop checking the failing parameter. A couple of hours later, when I heard what had happened, I told them to start back-checking the parameter. Again behind my back, my second-level manager told them to discontinue the inspection. I found out later and called the field service department, notifying them of the situation. When confronted by field service, they both denied what they had done.
My time at Respect Computers was a period where I vented some rage. I was judgmental and quite angry at what I perceived as other people’s lackadaisical approach to work. I was in Quality Control, which requires one to judge others’ work. I was a bureaucrat in a position of power and able to do something about what I perceived as laziness.
I was a one-person terror, working 80 hours per week to build some accountability and responsibility into the system. To put it mildly, I kicked some butt. I played the game of controlling bureaucrat as well as it could be played. Though this effort was fun and yielded relatively good product quality results and many awards for myself, I now know it to have been a waste of time.
I was on a personal five-year plan when I started Respect Computers. Having given considerable thought to the concept of work while in college, I had concluded that being an employee simply was not for me. After all, one should work to live, and not live to work, right? At least as long as we see work as separate from living. Working as an employee one spends approximately 54% of one’s waking hours away from one’s family and passion, usually doing some passionless job where one’s reward does not reflect the value one adds. At the time I saw a clear division between working as an employee and living.
I had decided to work for five years, then move to the mountains, build a log cabin powered by a small-scale hydroelectric power plant, and build a family-centered life. A life in which the majority of my family’s needs were met through the passion and love of family as opposed to external lifeless bureaucracies and by zombie-clerk employees. I planned to home school my children considering my boring experience in the mass production factory school.
Though I basically perceived work as something done by an employee, deep down my values were grounded in a private work and a family-centered paradigm. My mother had been the only employee in the history of my family; with my father, grandparents and ancestors since abolition all making their living in their own businesses or farms.
Starting at Respect Computers on a $19,000 per year salary, in five years I had saved over $100,000. Everything was on track except I had missed one minor detail. I did not have a wife. I left Respect Computers and was off in my travel trailer, traveling the world, hang gliding, canoeing, wind surfing, scuba-diving and searching for a wife. I was like Cane, the Buddhist Priest, wandering, learning and discovering.
In 1986 while traveling, I read half of a book titled The Third Wave by a fellow named Alvin Toffler. It began to make sense out of my work experiences and my work values and began shifting my paradigm regarding what I had witnessed in work.
During my nomadic period, as I invested in stocks and mutual funds, I discovered just how distant and out of touch the real owners of corporations were. I tried to make mental connections between the $40,000 of Respect Computers stock I had just purchased and the fact that I actually owned a piece of Building 101 in Charlotte, North Carolina. I simply could make no connection in my mind between where I had worked, the people I knew, what they were doing and the stock certificates I was holding. It was simply not real to me.
As an investor, I was interested in what most investors and I consider to be long-term gain, six months to three years. Of course, by any real standard, the long-term well being of a company is much longer.
With the system of ownership in our wealth-creation system—corporate stock ownership, most owners could care less about the true long-term well being of the company. With the owners of the company giving little to no thought to the long-term well being of the company, one could hardly expect management, employees or anybody else to care very much. I can recall thinking about these companies as “ownerless enterprises.” In essence, nobody owns them. Employees own a paycheck and care about little more. Management owns a bigger paycheck, with some of them caring about the next quarter and the year-end results for their fragmented job. Management cares only as much as their personal interest is involved. The owners think of little more than a few months out or a few years at most.
When something goes grossly wrong which harms society enormously, usually nobody’s held responsible as the corporation files bankruptcy, vanishes into thin air and leaves the taxpayers holding the bag. I had discovered, as an investor, that the public corporation, the heart of our wealth-creation system, is, in essence, an ownerless system in which ultimately nobody is responsible and few people really care about its real health and well being.
In 1986, opportunity struck and I started a business. For a few years, I had been searching for a wife. I found it crazy that in Alvin Toffler’s Information Age, I was having such a hard time connecting with her. After all, the only thing that separated us was information. I’m here, she’s out there somewhere. I decided to start an on-line computerized personal ads system. The personal ads were different from those in newspapers because they were 600 words long and included photos. The computer could hold thousands of photo introductions and allow customers access indefinitely. I invested $50,000 in equipment and start-up cost. I quickly met my wife and we married, but business success was a lot tougher. I accepted a position at a defense contractor, Central Aircraft, while my wife and I operated the business.
After the empowerment of Respect Computers, the rigid bureaucracy and centralized control of Central Aircraft was like going from the freedom of hang gliding to the rigid regimentation of boot camp. At Respect Computers, there was a great deal of individual ownership, for those who desired it, due to less work fragmentation. Central Aircraft had work divided in smaller pieces. The work was controlled less by the individual than by management. It was less interesting, less real, less empowering and a lot less fun. Decisions were made as far towards the top of the organization as possible. Although Central Aircraft was more controlled and exhibited less tangible waste, the wasted potential was far greater.
Central Aircraft’s customers were paying a huge price in poor quality and high cost due to this waste and wasted potential. It didn’t much matter to Central Aircraft’s customers, because they were only other defense contractors who just passed the cost on to the defense department. The bureaus within the defense department didn’t mind because they’d simply pass it on to the taxpayer, and more spending by a given bureau meant a bigger budget next year for that bureau. This waste would possibly even mean a salary increase for the bureau manager because the more resources he managed the higher his salary.
The problem was that the people making wasteful decisions at all levels stood to lose little by perpetuating waste. It wasn’t their money and they didn’t own any significant piece of the company or bureau. If they owned stock in the company their contribution was so small that it did not effect their return on investment. In many cases the decision-makers even stood to gain from the waste. This applies to most companies, not just defense contractors.
With tightly controlled military specifications it was difficult to change things. It created an anti-change, status quo environment. With change, one risked attracting the attention of government auditors. On the other side, there was no positive benefit to the company or individual to counter this risk. The last thing a defense contractor wants is an auditor snooping around. It was, and still is, a system based upon stability. Seven years after the military adopted the concepts of Total Quality Management and continuous improvement, I have seen no real change away from stability.
Central Aircraft could not change because its customers, other defense contractors, could not change, and they could not change because of the defense department. Individuals like me could not make changes because the management was locked into the stability of the company. Nobody could change because everybody would have to change in order for one person to change; there simply was not enough in it for these ownerless bureaucrats to desire changing or improving.
At Central Aircraft work was boring, lifeless and tedious. People were clock-watchers. They had good ideas, but the company was simply not interested in any kind of improvement. The vast majority had given up and was just going through the motions, like all good zombie-clerks. Employees repeatedly said, “How can management be so dumb?” Management was in a position where they controlled and defined most things. Not being at the level of detail where the employees were, management simply lacked the information, perspective and time to control and define the details intelligently. On the other hand, management viewed employees as idiots in light of their poor participation.
Central Aircraft wanted to turn me into a zombie-clerk like those people I’d seen at the Defense Department warehouse with their heads propped on their desks. At Central Aircraft, I probably averaged a couple hours of work per day and that two hours, in my opinion, added no value. Central Aircraft was undoubtedly the most boring experience of my adult life. I did, however, learn a lot about the current state of work, people and bureaucracy while there.
I tried for a year to make change and improve productivity and quality. Eventually, it was verbally communicated to me though a conversation between my manager and his manager, the Director of Quality, that Central Aircraft was not interested in fixing anything which was “working,” regardless of the waste or poor quality of the work. I interviewed for a position with TOPS Printers Incorporated and was out of Central Aircraft within three weeks.
Central Aircraft not only desired zombie-clerks, but also would not tolerate anything else. The message I got, not in so many words, was that Central Aircraft did not want me to do anything, just show up promptly for work each day, go to and come back from lunch on time, and be there for eight hours. From their perspective, I was merely filling an affirmative action slot.
I began to see that the problem was larger than controlling managers or lazy employees. Individuals and organizations are locked into a mutual death dance of low productivity, low creativity, poor quality, poor communication and boredom. The Central Aircraft bureaucracy is interlocked with other defense contractors, the Military and FAA bureaucracies; the human resources bureaucracies, the union, environmental and other governmental bureaucracies; customer and supplier bureaucracies, and vice versa.
At the individual level, senior management is locked into middle management and employee inertia and vice-versa. Departments are locked into other departments and traditional ways of doing things, and the entire system is locked into gobs of regulations pertaining to affirmative action; harassment; family leave; “mil-specs,” worker compensation; COBRA; OSHA; the environment; SSI; state and federal taxes and on and on.
The entire system is stuck because our entire system works off of relationships of dependence and bare tolerance. It is the “G” word—gridlock! (Certainly not limited to Washington politics.) Gridlock, I discovered, is everywhere. I saw it at Respect Computers and at Central Aircraft and discovered more of it everywhere I went. Stability, which had been so good in an Industrial Age, had transformed into this grotesque gridlock. We were entering an era that required change, but were being held by the structure of stability that had got us where we were.
Like Respect Computers, the real waste again showed up in crazy, insane decisions that were being made regarding product, resources, customers and material. One example was Fiber Optic Mil-Spec-347, which we debated over for hundreds of hours because we could not simply call the person who wrote it in order to get clarification, since that might have drawn the attention of auditors. Now I understood why the military was paying thousands of dollars for a hammer. The enormous cost of military products is not so much due to fraud and abuse, as it was due to waste, rigid bureaucracy, gridlock and disengagement.
In the meantime, my home business was moving at a snail’s pace. I did well in companies, producing tremendous savings and productivity improvements for them, but couldn’t muster a profit out of a small “mom and pop operation.” How could companies be so stupid and tremendously wasteful in their decisions and actions but be successful? I was quite confused. The problem is that the lone entrepreneur lacks the supporting structure and momentum that an established company provides. As a manager once said, “cash flow and profit covers a multitude of sins.”
The lack of momentum presents the lone entrepreneur with a “Catch 22” situation. He needs the resources of an organization with momentum—the financial power that comes from the sale of current products. He needs the cash flow to cover the many mistakes and trail and error experimentation required. I was discovering why most entrepreneurs fail. There isn’t the momentum as in the established bureaucracy.
I was discovering that most new things fail and that it would be only through trial and error that I would get anything to work. I was learning this the hard way. Trial and error with limited capital was extremely time-consuming. We were implementing what worked and discarding what didn’t and it was taking forever. For years, I thirsted for a method to move faster, with limited dollar capital.
There was a bigger “Catch 22.” Companies were too rigid and gridlocked to produce the intelligence to meet customer’s rising expectations, and lone entrepreneurs lacked the momentum and power. I began dreaming about ways to combine the momentum and power of a large bureaucracy with the freedom, intelligence and agility of an entrepreneurial venture. This became my paradigm, the reality for which I searched. It was a dream out of the practical reality of profit and loss.
At TOPS Printers I found more of the same tops-down management and strong central control as in Central Aircraft. At least TOPS Printers sought improvement, but they wanted it dictated by the few people at the top because the workers and engineers were considered too stupid to solve problems.
TOPS Printers, more than any other of my employers demonstrated the “Catch 22” of our centrally controlled wealth-creation system. Unable to get employees to make the “right” decisions and do the “right” things, senior management made the employees’ decisions for them. This was flawed because they did not have sufficient time, detailed information or intelligence to do the job well. The distrust and contempt for the individual was a self-fulfilling prophecy. The combination of a strong command and control system and a view of people as incapable, stupid or a liability caused the workers to live up to that image and reinforce it. TOPS Printers had taken a group of intelligent people and made them stupid through their system of organization. This was not new; I’d seen it before and would see it again and again.
The following represents a typical example of the ineffectiveness of management-controlled decisions, not unique to TOPS Printers. On the X8000 program, management, at the Vice President level, decided that they needed to begin reviewing all engineering changes because the Manufacturing, Design and Quality Engineers, as well as the Production Planners were not competent enough to do the job properly.
Being the Quality Manager I happened to be present when one hot engineering change was being processed. The engineers, who all worked closely with the product line, took a couple of minutes to review thoroughly and sign-off the change. Quickly and efficiently, they made a good decision based upon all of the facts. Later, I was in a meeting with the Vice Presidents when the same change was delivered to them for their sign-off. It took more than an hour for them to sign the change. There was much misinformation, lack of information and confusion. They looked like stumbling clowns at a circus due to their ignorance of the details. In the end, the decision that they made was the right one, but it was a poor one due to their insufficient knowledge of the facts. They were too far from the action to be attempting to make detailed decisions.
What had happened at TOPS Printers was that management had taken ownership of activities that they deemed to be poorly performed. As they did this, workers more and more gave up ownership of their responsibilities. The more the workers pulled back, the more management said “I told you so, we can’t trust them, we must do this ourselves.” In the end, the workers at TOPS had fulfilled management’s belief that they were limited, incapable and stupid.
Over time, management divided jobs into very narrow slivers, allowing for maximum control from the top. Most people just accepted this division. I knew that there were other, more productive and enjoyable ways to divide work. From my empowerment experience at Respect Computers, I knew that work could be divided so that there was more ownership and fun. Although Respect Computers had its own problems with waste, Respect Computers’ empowering “Respect for the Individual” concept had shown me that there was another way to divide work.
With just one year of experience as an Associate Quality Engineer at Respect Computers many times I dreamt up concepts overnight and had them implemented by 10 AM the next day. Nine years later, as TOPS Printers Quality Plant Manager, it would take me six months to implement one of the same successful concepts. It now took political maneuvering, strategic planning and great effort. Although these hypotheses were not proven before implementation at Respect Computers, by the time I was attempting to implement them at TOPS they were proven concepts that won me numerous awards.
As TOPS Quality Manager, I had less real authority than I did as a Respect Computer associate engineer. At TOPS Printers, I had a nine-year track record of success with 25 people reporting to me. At Respect Computers, I had zero people reporting to me, with one year of experience and no track record. The difference in authority came from the way work was divided. At Respect Computers, I was the product quality engineer for the 3268 printer and had responsibility for quality on the product for the entire process. I was free to do whatever I wanted as long as I got results.
At TOPS Printers, on the P9000 printer, no one person had full responsibility for the entire product from supplier to customer. A couple of people in the quality department had responsibility for suppliers; one had line support and another field support. Not only that, but no single quality department had ownership for the whole product, quality support was housed in several different departments.
The only people who had vision over the total product line were at the Vice Presidential level. I guess this is where the term “super-vision” comes from. In divided, ownerless work, the person seeing from the higher vantage point has better vision over the entire system. Respect Computers had discontinued the position of supervisor decades ago. At Respect Computers, each quality engineer had “super-vision” over its entire product line and was therefore his own supervisor. It was clear to me that ownership and control had everything to do with how work was divided; the more narrow the division, the less ownership was possible.
What I usually said at TOPS Printers was, “There is only one quality engineer here, the vice-president. The rest of us are just quality clerks.” Again, I was trapped by another company that wanted no more than a zombie-clerk.
TOPS Printers began to reveal something very new to me. I began to discover that the personalities, insecurities and weaknesses of the individuals in central control were limiting factors to wealth-creation. Their beliefs about people’s ignorance and limited capabilities were something in their heads, not reality. These beliefs caused people to become what those in control expected. A person in central authority limits others by his incorrect beliefs, mis-perceptions, insecurities and weaknesses. Today, I believe that many of these beliefs about others were a reflection of beliefs about themselves—their insecurities, weaknesses and fears.
This limiting aspect of management worked for an Industrial Age because the knowledge and intelligence of the organization was not as important in an Industrial Age. Management’s job was controlling and limiting the intelligence of an organization. Like Respect Computers and Central Aircraft, waste and wasted potential again showed up in stupid decisions that were being made regarding product, resources, customers and material. For example, I witnessed a situation in which ten inspectors spent a full year sorting out irrelevant cosmetic “imperfections” on the X8000 printer, “imperfections” that would not have mattered or even been noticed by a customer.
Back at CheckMate, I was still seeking a way to move faster in my business. Many people, who desired forming partnerships, approached me, many of these requiring some kind of shared ownership of my business. I did not want to give away a piece of my company and the freedom that went with it, nor did I want joint ownership. Partnering would have helped me leverage resources and move faster by having more people investing their own time into the project. I would not have been paying hard tangible dollars for every minute of work. However, I felt that the trade-off wasn’t worth it.
I was continuously contrasting being an owner by night against being an employee by day. Looking back upon it, I was learning more about work by experiencing the stark contrast between the two than anything else I could have done. The waste in bureaucracies was so plain to see. I wanted that momentum and those resources in my business so badly I could taste it.
As I continued my journey I went to work for another company, Insecure Molding. By now, I was quite skeptical about what I would find at any company. I knew that something was gravely wrong with our entire work system.
While at Insecure Molding, I worked on selling a Statistical Process Control program to senior management. Statistical Process Control is simply a tracking program that lets one know that a manufacturing process has changed and could produce defects. The advantage of SPC over traditional Quality Control inspections is that Statistical Process Control lets you know ahead of time that defects will be produced. Traditional inspection is an after-the-fact system. After defects are produced, they are impossible to catch and sort out. What is produced is what will ship to customers regardless of after-the-fact inspections. The difference in Statistical Process Control or traditional inspection is the same as driving your car with or without a gas gauge. With one you know when you are getting low and will run out; without one, it’s a blind guessing game. It’s one of the concepts that caused the Japanese to excel at the global quality movement. Even though Statistical Process Control has been around since 1922, in all of my visits to different companies around the country and world, I can count on one hand the number of companies that really use it.
At Insecure Molding, with our Statistical Process Control charts, we were quickly able to determine when a manufacturing process had changed and defects would be produced. Hours ahead, we were able to detect when defects would be produced. The quality control department had a detection-based quality control program that missed many defects. At best, it would catch some defects hours after they had been produced.
Even when the quality department caught defects, the production operation rarely sorted out all of the rejects, or even cared. I kept a running log of all of the incidents and repeatedly provided management with copies of this report. The Production Superintendent flatly told me that Statistical Process Control would never be implemented there. “The president had started the company and built it into a 60 million dollar company without Statistical Process Control and he does not need it now,” he said. Many people told me that the President ran the company, and following his lead and his ideas was what was important.
The Production Superintendent was right. I could hardly believe what I was experiencing. A business owner, “entrepreneur” was not interested in profitability and growth unless it was his idea. We had conducted experiments and there was solid, real data showing actual improvement. Scrap could be cut by huge amounts, quality would be increased significantly, customers would be happier and profitability increased. But all I was getting was indifference.
I learned, here, that there are many reasons why people are in business. Some of these reasons have to do more with satisfying some internal personal insecurity, weakness or need than making a profit or satisfying customers. I learned that even though a company is privately owned, that does not mean it is going to be profit-driven based upon logic, data, facts, intuition or anything else.
I was learning that insecurities (and we all have them) and the limited perspectives of individuals in central control were primary factors limiting the creation of wealth. The higher up in the organization, the more magnified the individual’s weakness becomes throughout the organization.
I began to see that one person having authority over another lessens the organization’s vision, intelligence and capability. Since we all have insecurities and very limited perspectives, I began to doubt the entire concept of employment and hierarchy. I began to question the employee-management system of control. I was wondering if the management of people had become an impractical means to create wealth in Alvin Toffler’s Information Age.
In my own business, I began trying to remove myself more and more from blocking others, but had no easy answers and little success. I some how knew that, more than anything else, in order to thrive in the Information Age, a system of organization was needed which made everyone an engaged owner and leader. We needed a system that removed any position that would limit the worker’s capability or motivation.
Through a lot of political maneuvering, eventually I was able to implement Statistical Process Control in another Insecure Molding plant a few miles away. I was able to get a Total Quality Management program kicked off companywide. On one part for one product alone, in three months we reduced scrap by $500,000 per year with Statistical Process Control by reducing the defect rate from 15% to 3%. Insecure Molding had hired a new Vice President of Manufacturing, Phil Taylor. We worked in the one plant to implement SPC and some other programs, and within one quarter, the plant was operating in the black, leading the company’s profits for the quarter. The Total Quality Management program produced $2,000,000 in the first year, but it died because it did not have the president’s support. Seeing that quality improvement was a losing cause at Insecure Molding, I left the company.
Although there were people in Insecure Molding with more SPC experience than I had, they would not even attempt to implement it. I have seen this in every company for which I’ve worked. People had the answers to many problems but were not willing to risk their jobs by going against the grain. They would not fight the politics or the bureaucracy. On the other hand, why should they? After all, there was and still is nothing in it for them. Most people realize that they are being paid a flat salary or wage simply to do what they are told—not to do what the believe in.
We eventually hired a few employees. One, Tracy Teaford, was creative, bright and inventive. After my experience with Respect Computers, I was a heart and soul believer in empowerment, and had an empowerment philosophy within the company. Tracy thrived in this environment. I had started the business with the goal of maintaining a very low cost, affordable service for all to use. Tracy came up with the idea of significantly increasing prices. She believed the fee for membership should have been $195, rather than the $35 we were charging.
Our sales showed that we probably needed to increase prices to become profitable. We began to experiment with increased prices, trying $45. We were risking a lot of money since it took weeks to see the results. The initial responses did not seem to be good. However, we knew from history that the initial responses were not reliable. We got nervous and directed Tracy to lower the price, but she was certain that we should hold out. Her intuition told her that raising prices was the right action to take. We still told her no. Against our directive she maintained the higher price. We found out a week later and were furious. We explained that it was our money being risked, not hers.
We thrashed her for this “insubordination,” just as any good authoritarian bureaucrats would. We lowered prices to the original setting. There wasn’t enough data to tell if the price increase worked. Tracy eventually left our employ. At some point, we did eventually increase prices. We tried $45, then $55, then $75, $99, $150, settling at $195. We found that the $195 had a perceived value in line with what the customer was actually getting.
At $35 customers had under-valued and under-utilized their membership. We also found that $195 was the perfect balance for sales rate and profitability. At $35 we got 20% of the people who received sales packages to join. At $195 we got 9%. If we sent out 400 sales packages in a week at $35 we grossed $2800 and at $195 we grossed $7000. It was the difference between profit and loss.
Tracy was right, but I hadn’t trusted her intuition. “In God we trust; all others bring data” was, and is, the creed of the controlling bureaucrat. It was not her money being risked. My central control of decisions cost me a lot. Perhaps it cost me that business. What if there was an organizing system, within CheckMate, which allowed Tracy to invest some of her money into her decisions? She could use intuition and she would share in the gain or loss. This would have been a win/win situation for all. Instead we all lost.
Tracy had experienced the same disempowerment that all other employees routinely experience. I had tried empowerment in an inherently disempowering organizing structure. It was sham empowerment, just as it is in every other company and bureaucracy.
I went on to work at several more companies, large, medium and small. I saw more of what I’d seen many times before. To date, I have worked in or with companies in the automotive and computer industries, defense, cosmetics, nuclear, aerospace, farming, construction, machining, plastics, rubber and retail. I have worked in government, dating services and with the stock market. I have worked in the U.S., Japan and Mexico, and with many people and companies around the world. I had worked with most of the fad management programs of the past twenty years.
I worked as consultant, manager, engineer, writer, supervisor, business owner, production worker, and maintenance technician. In my business I’d done it all from customer service, to accounting, marketing, sales, production to company president. I had seen a very broad and detailed spectrum of work and wealth-creation from many perspectives and the common theme never changed; waste, wasted potential, little real change and lots of veneer hype.
I had discovered the status of work and wealth-creation to be in very poor condition from virtually all perspectives. It is one of relative weakness, gridlock, dependence, apathy, frustration, waste and enormous wasted potential.
Σ Artificial Laws of the School: In The Seven Habits of Highly Effective People Stephen Covey speaks of laws of the school verses the laws of the farm. The laws of the school are artificial and manipulative. They are based upon veneer surface appearance. One can cram for tests and get high grades without learning anything. One can present statistics in a way to show a preferred reality. One can present a surface picture showing that an outstanding job is being done when in reality one is just a slick sales person presenting fragments of reality. “We want to put on a good front.” The laws of the farm are natural and substantive. Either you plant your crops in time or they do not yield results. You reap what you sow. There is no way to whitewash the results or cram for the test at the end. Our Industrial Age wealth-creation institutions work primarily upon the weak laws of the school. This includes schools, companies, Representative Democracy, politics, courts, government agencies and far more. In our weak world of work, appearance counts far more than reality and veneer far more than substance. Organizations look great on the surface with profits, growth, nice buildings and accelerating careers. However, just beneath the surface lies the rot and discussing stench of dysfunctional systems, wasted potential, horrible injustices, pathetic insecure dictators and brain dead wealth creators.
Σ Gridlocked Free Market: Free markets are supposed to squeeze out waste, inefficiencies and weaknesses. They are not working because they are locked in by the mutual death dance of low productivity, low creativity, poor quality, poor communication and boredom. The control and stability of the centrally controlled organization has mutated into a death grip on wealth-creation. Virtually all that defines a company, including politics, self-interest, factional fighting, bureaucracy, employees, apathy, central control and more contributes to this death grip.
The people at the micro level have the solutions to problems but do not or cannot contribute those solutions. Each day, nationwide and worldwide, the answers to hundreds of billions of problems, as well as potential for answers and opportunities, lie idle in employees’ heads. This condition equates to hundreds of billions of dollars in waste, and trillions in wasted potential. In a society of deficits as large as ours, where the primary wealth creator is knowledge, this is simply intolerable. With our norm of gridlock, things change only when they have to. Patience is the primary virtue which customers, suppliers, employees, managers and all stakeholders must have to survive within the system. Patience with road blocks, patience with the rigid hierarchy, patience with management ineptitude, patience with poor quality and service, patience with waste, employee incompetence and on and on.
Σ Entitlements: The vast majority of people have a sense of entitlement; employees, welfare recipients, subsidized farmers, artists or managers receiving subsidized government training. People feel entitled to get what they’ve always got regardless of contribution or conditions. “I should be paid just for showing up for work.” “The organization and society owes me something.” “I should get raises each year regardless of performance and market conditions.” Seniority is one of the most sacred entitlements. In our entitlements-based system of work personal responsibility and contribution means little.
Σ Dependent Victims: We are stuck in a system of gridlock where most people, from CEO’s to the front-line workers, feel like helpless, dependent victims being swept along by a raging current. We have a system of Mass Victimization because employment is a system based upon relationships of dependence as will be explained in more detail later.
Σ Fictitious Wealth-Creation and the Lack of Passion: There has been a common thread wherever I’ve gone. Most people are disengaged from their work, going through the motions with little passion, little love and, therefore, little life. Most people start out with passion but the system of red tape, central authority and gridlock beats it out of them. The fictitious laws of the school wear them down. People evolve to one of many types: some put on a good show, get good results on paper, add little value, and climb the ladder; some people simply don’t care; others are angry and frustrated; some are dogmatic believers in authoritarian control; most have simply given up. (They work for a paycheck and do what they are told.) In general, companies and employees are going through the motions, with no companies even coming close to their potential.
Σ Alignment: There is poor alignment throughout our wealth-creation system. People’s interests, in many cases, run counter to the bureaucracy and the other stakeholders; alignment being the degree to which all stakeholders’ interests directly coincide and are in harmony—customers, investors, suppliers, partners, co-workers. (Naisbitt, Aburdene, 1985, p24-26)
Σ Pseudo Free Market: With the free market of the Industrial Age we have not focused on the win/win of meeting customer needs. Instead we focus on the win/lose of beating the competition at meeting customer needs; being just a notch better than the competition regardless of what customers want; regardless of the waste; regardless of the wasted potential; regardless of our systemic and collective social deficits. Our progress is therefore slow and retarded. Organizations are not focused on what is possible with their resources nor the reduction of waste and wasted potential. There are huge deficits between customers’ expectations and quality delivered but there is no problem since there is no threat from other slow-moving bureaucratic competitors.
Σ System of Limited Personal Growth: Instead of a system that inherently encourages the growth of individuals, the present system of ownerlessness, supervision and regulation structurally inhibits the growth of the individual and personal responsibility. Like a child under the supervision of an overly protective, micro-managing parent, the child’s growth is stunted. The result is immaturity and low emotional intelligence.
Σ Wealth Limiting Bureaucrats: People in central positions of authority are today halting the driving forces of the free market, holding back advances and limiting wealth-creation in the name of stability and control. Bureaucrats today are preventing the free market from advancing.
Σ Stifled Employees: In survey after survey, the majority of people working as employees say: 1) They do not like their job. 2) Their job utilizes only 10 to 20% of their potential. 3) They would rather be doing something else.
Σ Frustrated Individuals: Company after company desires no more from their employees than “zombie clerks.” In fact, they demand that employees be no more. Where there is passion, it is driven out. Where there is creativity it is stultified. Where there is diversity, it is forced to conform. Where there is growth, it is stunted. Where there is challenge, it is restrained. Where there is thinking, it is lobotomized. Where there is risk, it is avoided. Where there is relative stagnation, it is embraced. As the Japanese say, “The nail that sticks up shall be pounded down.”
Σ Continuous Improvement: The past decade has seen continuous improvement within bureaucracies as managers try to move these organizations beyond their natural limits. As documented in book after book, as well as throughout this book, we witness one failing or mildly successful fad management program appear, nudge the paradigm, make some improvement, then disappear. Employees have become fatigued with the “program of the month” meandering. Managers void of vision grope in the dark from one program to another. Though meandering has increased organizational effectiveness in the past two decades, we have only tapped the smallest fraction of the available potential. “Even a blind hog gets an acorn once in a while.” Employees and customers still are not getting their needs met. Most employees still dislike their work. And most bureaucracies are still grossly ineffective at tapping the potential at their disposal. With Continuous Improvement we are attempting to cross a chasm in small steps. Alone, and void of vision, it is a bankrupted long-term policy. Short term, however, managers look great while killing the goose that lays the golden eggs.
Σ Zombie Clerk Employees: As one senior employee recently said after years of progressive fad programs and a new one that was targeted to make him productive, “I haven’t worked in twenty years and I’m not about to start now.” Though fads show the direction of change they have barely scratched the surface of the wasted potential in companies.
Somewhere in my journey, I discovered the problem. It was neither government workers, construction workers nor bureaucrats. Nor was it company presidents or lazy employees. All of these were symptoms of deeper problems.
The problem was, and is, our entire system of organizing work and wealth-creation. Our system of organizing work, at its core, is based upon ownerless representation, divided work, authoritarianism, bureaucracy, subordination, low intelligence, and standardized compensation. It is based upon impersonal relationships of dependence, mistrust, adversarialism and misalignment. Underlying all of this it is a system of control based upon fear.
The very foundation and structure is based upon control by a few brains and therefore low intelligence. The system, one of “tolerable bondage,” is based inherently upon disempowerment and idea suppression.
At its core bureaucracies are organizing systems with extremely limited perspectives. Work is fragmented into specialized departments, jobs, divisions and titles, where no one understands the whole. Then through adversarialism we fight for and try to get each other to understand our fragmented perspectives. The present system is simply not geared for a knowledge era of diverse idea generation. It is not geared for the wealth production of an Information Age.
What I continually heard through the 1980’s was “Customers are content, companies are growing and profitable, people are being employed, taxes are being paid, boom times are here So what if there is waste and wasted potential? If it ain’t broke, don’t fix it.” Though today we finally recognize the need for change, most of us do not yet see the extent of change required. In the 1990’s I continually heard, we are continuously improving ahead of the competition. So what if customers needs are not quite met or employee potential is stifled—who cares? As long as we stay ahead of the competition at meeting our customer’s needs and, therefore, profit grows each year, so what?
I’ll tell you so what! The competitive paradigm is dead, that’s what! What happens to your organization when new types of organizations appear focused strictly on customer’s needs with the primary purpose of helping others? They are so highly focused on customers’ needs that they do not even see or care about competition. In fact, competition does not exist from their perspective. What happens when their workers, who are intelligent business owners, collaborate to meet people’s needs with high levels of synergy, creativity, speed and customization? What happens as teams and individuals tap near genius levels of potential daily while working to help others? Will anyone be buying your inferior products at higher prices made by your brain dead employees? Will you have time to grow your employees into collaborative business owners? Will you as an employee have the time to develop the thinking, partnering, leadership and collaborating skills required to feed your family in the new economy?
Breakpoints happen very fast. Most plantation owners never recovered their leadership positions in society as they were forced through breakpoint to the Industrial Revolution. And most on the Agrarian side of the shift felt great pain, as their entire civilization was lost.
As you read this, millions of individuals are connecting and building the foundation and infrastructure for a new way of working through an infant Information Superhighway. Millions are doing the healing work required to collaborate and synergize with others. What are you and your organization doing? Are you merely playing at progressive wealth-creation and personal growth? Are you in denial regarding your personal and organizational progress? Do your “laws of the school” graphs and numbers look great but deep down you know of the waste and wasted potential lurking beneath the surface?
Copyright 2000 by Barry Carter
About Barry Carter.