An interview with Max Hand
Interview by: James Nelson
Max Hand is the Chief Financial Officer of Chirurgiae, a private sector healthcare service provider at the forefront of changes in the UK’s National Health Service.
Previously, he spent 18 years as a principal with the consulting firm A.T. Kearney, where he led projects in organizational restructuring, turnarounds, and quality management. His clients included British Aerospace, BP, Bahrain Telecom and the UK’s Defence Logistics Agency.
Organizations are under attack from within and without. Externally, increasing competition, a quickening in the pace of change and increasingly discerning customers are demanding efficiency, creativity and responsiveness. Internally, many employees are demanding their work should have more meaning. They seek more participation, openness and fulfilment.
It is striking how many people pursue lives outside work which are full of achievement and responsibility, for example, through voluntary work, coaching a kids’ football team, or simply an absorbing hobby. Yet at work, their motivation and search for achievement and fulfilment often vanish. It’s as though they leave their commitment and enthusiasm at the office door or factory gate. Listlessness and indifference take over.
This is the challenge of empowerment. In the past, it was enough to insist people did what management told them, and no more. Yesterday’s workers may have been resigned to this role, but today’s employees are demanding more.
What is at the heart of the concept of workplace empowerment?
It is human nature for people to want to feel they can make a difference to the success of the enterprise in which they work, and feel their participation and skills are valued. Many want to be able to make decisions, devise solutions to workplace problems, exercise their initiative, and be held accountable for results.
Empowerment is the mix of practices and behaviours which support and encourage people throughout the organization in realizing these ambitions. Just because people may not be considered “management material” it does not mean they can’t take responsibility for their actions, behaviours and performance at work.
Empowerment comes ultimately from changing the role and behaviour of management. The “traditional” way of managing concentrates on the control and direction of people and the maintenance of discipline. “If you give them an inch, they’ll take a mile,” was the response of hard-line managers to any suggestion of workforce empowerment.
A drawback of the traditional approach has people concentrating on doing what they are told in order to keep their manager happy. Acting in the customer’s best interest, making improvements or producing high quality work may be sacrificed in pursuit of doing what their manager directs. When the direction is unclear people guess what their manager wants rather than use their own judgement, or they are paralyzed for fear of the consequences of making a mistake. They lack the confidence to act independently, to be creative or to take decisions without recourse to their manager.
To empower, managers have to trust that their people’s motivation is no different from their own. For people to commit themselves to greater ownership of the work they do, they must be able to trust their managers, and feel able to exercise initiative without fear of recrimination.
Specifically, what key characteristics would you expect to find in an empowered workforce?
That could be a long list, but some of the key characteristics I’d expect to find include:
- A strong sense of direction and purpose, shared by staff.
- Well-understood values and beliefs, explicitly or implicitly stated, forming the basis for management behaviour.
- A focus on customers, processes and improvement techniques, so people can concentrate on adding value and pleasing customers.
- Proactive learning, problem solving and innovation at all levels.
- A high degree of trust in each other, in management, and in other functions and departments.
- People who are highly motivated, and who possess a great sense of self-worth and achievement.
- Managers who listen, encourage, develop and help their people.
Apart from greater self-fulfilment for employees, what key operational benefits can a company expect to gain from this?
Empowerment may sound like a fine, uplifting principle whose advocates assume the moral high ground. But although concepts such as involvement, enthusiasm, responsibility and self-fulfilment stir the heart, managers are entitled to ask what empowerment does to costs and profits. I see the tangible benefits of empowerment falling into three broad areas:
- Better customer service.
- Continuous improvement in every aspect of the organization’s operations.
- More effective business processes.
Better customer service. Every point of contact a customer has with an organization is an opportunity to satisfy a requirement, to delight or disappoint. Points of contact include products and services in the conventional sense, but they also include other interactions. For example, the way problems are handled, the impression gained when walking into reception, or the degree to which promotional literature provides the information one wants.
Delighting experiences get an organization talked about. Delighted customers tell their friends and neighbours, even other businesses. But the difference between delight and disappointment can be very fine. Most delight experiences happen because an employee understands the customer’s problem, and is empowered to act in the customer’s best interests. They are secure in the knowledge they have the support of the whole organization and in their own capability to make the right decision.
Fundamental to empowerment is understanding that it’s the front-line people who are in control of customer perceptions, not managers. People at the front-line are closer to what people want now, to their problems and concerns, and to changing patterns of demand in the marketplace. Empowerment means giving responsibility to those closest to the problem, to harness their creativity and commitment to ever-improving standards of customer service, efficiency and effectiveness.
Continuous improvement. Continuous improvement means harnessing the talents of everyone in an organization in a ceaseless quest for ever-improving standards. It relies on employee participation. The greater the participation, the more ideas are generated, the more enthusiasm is created, the greater the rewards to the business.
Only a few years ago, the argument of many in the west was that the Japanese start with innate cultural advantages which explain such differences as well-educated and compliant staff, an inclination to teamwork which starts with schooling and a tradition of life-time employment, etc. But a large number of European organizations are getting levels of participation and commitment matching those of the Japanese, disproving arguments based on national characteristics and culture.
Empowerment and business processes. Conventional organizational structures are heavily segmented by function. Each function has an assigned set of duties. When completed the outputs are passed to the next function. Responsibility starts and ends at each functional boundary.
Lines of reporting are mostly vertical, so communication across the organization tends to be distorted, or never reach the destination. But the key business processes delivering value to the external customer are horizontal. They require the coordinated involvement of several functions to provide quality service which delights. So, conventional structures are often inappropriate in a business climate demanding creativity, flexibility and responsiveness.
In an empowered organization, work is structured around groups of people, often in self-directed teams, which drive and operate the key business processes delivering value to the customer. The structure is fluid, responding as the customer demands change. Learning and innovation are continuous. Teams are held together by shared objectives and common values. They work cooperatively and harmoniously to deliver high quality customer service at the lowest cost. In such companies, when people are frustrated by the actions of others, the response is not recrimination. Instead, they work together to overcome the problem or at least to reach a working compromise which optimizes the benefit to the business overall.
If the benefits of an empowered workforce are so clear, why is empowerment so difficult to achieve?
We can observe several broad types of barriers. If a company is considering empowerment this can help them anticipate problems. If they already have an initiative under way, this may help explain difficulties they are experiencing.
Fear. Empowerment means people take the initiative to make improvements and deliver good service, rather than leaving it to someone else. This involves risks, of poor judgements or doing things others think are their responsibility. In an environment where people are fearful of the consequences, or the disapproval of others, risk taking will not happen and empowerment will not occur.
“One argument is that fear can be a good thing, keeping people on their toes. I disagree, because fear generates mistrust, divisiveness and defensive behaviour and builds a passive and conforming workforce.”
Fear, in any form, undermines the commitment, motivation and confidence of people in work. It is at the heart of meetings which skirt issues rather than confront them head on. It’s the reason people will not raise issues despite glaring effects on customer service, waste or product quality. Fear means people keep things to themselves and hide problems to avoid recrimination. It results in middle managers holding a lid on problems so senior managers only get to hear the news they want to hear.
In spite of fear, most organizations operate satisfactorily. But fear is like an undercurrent, sapping motivation and creating unnecessary diversions. It is rarely obvious, but its existence constrains individuals and groups from realizing their full potential. One argument is that fear can be a good thing, keeping people on their toes. I disagree, because fear generates mistrust, divisiveness and defensive behaviour and builds a passive and conforming workforce. In contrast, an empowered workforce is active, enthusiastic and involved.
Management symbols and systems. Critical to empowerment is the design of management systems to align individual aspirations with those of the organization. People judge by what they see, not what they are told. Often, the messages given out by managers, the way they exercise authority, the legends and anecdotes they use, and their symbols of rank do not reflect the change of attitudes sought. The reasons people get promoted, the way recognition is given for good work, the criteria by which one individual’s rewards are set higher than another’s are potent symbols of management’s values and beliefs. But while managers may say one thing, their symbols sometimes tell a very different story.
Arbitrary performance targets can destroy teamwork and cooperation between functions because managers focus on the results required, sometimes at the expense of customer needs, or even plain common sense. This reduces communication and participation, not allowing groups to work together towards the organization’s common objectives.
Organization structures. The organization structure itself can be a mechanism reinforcing disempowerment. Control structures are characterized by strong functional boundaries, rigid hierarchies and job specifications which demarcate authority and responsibility. A control structure implicitly assumes management’s role is to tell people what to do, and then make sure they do it. People who work in such a structure fall into the habit of checking with those above them about the acceptability of their intended decisions and actions. Managers link their role and status to the authority levels and responsibilities vested in their post, enforcing a rigidity difficult for the concept of empowerment to challenge.
Management distrust. Some managers distrust the motivation of employees. They believe if their people are allowed freedom to exercise initiative, they will not act responsibly or in the best interest of the business. Evidence shows that all people, staff and managers, will behave responsibly and in the interests of the organization if their aspirations are aligned with its needs. In an empowered organization, creating this alignment is a key role of managers.
Managers get cold feet. Empowerment can be a Pandora’s box. Once opened, the conflicts, problems and issues which may have been suppressed by management’s style and structures will become visible. Life for managers becomes much more complex. Their patience and tolerance are tested, so they can be tempted to slam down the lid.
Lack of time and resources. Breaking down the barriers takes time. To win people’s involvement and commitment, they need time to discuss and debate how the concepts apply to them. It requires dialogue with colleagues and managers and time to consider the issues. If an organization is not prepared to commit this time, don’t start, because it will merely frustrate people.
What does introducing empowerment entail?
You cannot simply “empower” people, they have to want to be empowered. But why should they? What reason is there for employees to assume responsibilities for decision-making traditionally the preserve of management? Life is surely safer keeping one’s head down. And besides, managers get paid for making decisions.
For their part, managers, especially middle managers, may question whether people are capable of taking advantage of the increased responsibility available to them. They may fear confusion over where responsibilities will lie, and see empowerment as inviting chaos and anarchy. Or they may interpret empowerment for the workforce as disempowerment for them. They will wonder whether the status and power they have spent a career striving for is now to be relinquished on the latest management fad.
Often, there is widespread appreciation within an organization of the need to change. But this is more than matched by a lack of understanding of what needs to change, and how to bring the changes about. Insecurity, uncertainty and a lack of harmony become more common feelings than commitment and confidence in the change process.
In any organization, there is a typical distribution of people. There are a small number of life’s natural enthusiasts who will embrace change without qualms. They are usually balanced by the cynics who have seen it all before. They will never be won over, even by the most inspiring vision. The remainder can change. One kind of change process will secure their commitment – another will alienate them.
What key leadership tasks does this require?
The task for leaders is to provide clarity of management thinking, a sense of direction and a commitment to action, followed by an active role in making the changes happen. Inspiration and appeal are prerequisites in winning commitment and cooperation. Change is impossible if the need for change is not understood. Without a vision of a better future, there is no incentive for change.
The challenge for leadership is to define what the vision is, how the organization is going to get there, and to provide visible examples of the behaviours expected. Otherwise, employees will quickly become cynical and disbelieving.
“The challenge is often greatest for middle managers. In some organizations they find themselves sandwiched between top management’s desire for change and a workforce fearful and reluctant to change.”
The vision serves as a stake in the ground. It’s a target to aim at, but, on its own it is mere rhetoric, good intentions and fine ideals. The process of sharing the vision is designed to create a clarity of management thinking, a sense of direction and a commitment to action. In order to discover what else must be done, one must ask the question, “Why is the organization not empowered now?” The probable answer will be that management has used its authority to deny staff the opportunity to take responsibility.
In almost all cases, the key to empowerment lies with management. They must make the first moves by providing direction, begin behaving in new ways and give responsibility to those below them so they feel confident in accepting the new responsibilities offered. The reality is that empowerment has to flow down the organization from the top.
The challenge is often greatest for middle managers. In some organizations they find themselves sandwiched between top management’s desire for change and a workforce fearful and reluctant to change. Some, faced with the idea of releasing the limited power they have, become anxious and insecure.
What are the characteristics of an empowering manager?
A good starting point in changing behaviour is to develop a role model of how an empowering manager behaves. The intention is not to produce “clones”, but rather to describe what the organization is seeking to achieve. Empowering managers:
- coach their people to develop their capabilities;
- practice good communication, downwards, upwards and across the organization structure, and listen to their staff’s concerns and aspirations;
- are conscious of their own behaviour and the need for consistency of words and actions;
- practice the principles of continuous improvement, coaching and encouraging their staff to do likewise;
- break down barriers obstructing people’s commitment, involvement and pride in their work;
- bring the organization’s vision to life by relating it directly to people’s activities; and
- provide feedback, encouragement and recognition.
Can you summarize the critical success factors for effective empowerment?
There is no easy route to empowerment. A company which tries to pick and choose the bits it feels most comfortable with, or tries a shortcut, will probably fail. Key to success is a compelling, distinctive and memorable vision. Without this the destination is not clear and cannot be communicated.
Next is behaviour. Management behaviour must accord with the vision, otherwise employees will quickly spot the hypocrisy and cynicism will set in. The commitment needs to be sustained, particularly when the going gets tough and short-term pressures may test management’s constancy of purpose to the limit. Finally, there must be an action plan to chart the direction, set goals and establish measures of success. Otherwise you won’t know how you are doing.
Some leaders will find the challenge of empowerment impossible to reconcile with strongly held beliefs in management as a command and control mechanism. But empowerment represents a revolution in working relationships between people. The extent to which their individual and collective talents can be liberated and focused in a common direction represents a great opportunity, one that is worth striving for.