Da Vinci TT100 Business Innovation Awards Programme: Learning from the Winners

LEARNING FROM THE WINNERS

PREAMBLE

In an attempt to encourage your company to enter the 2016 Da Vinci TT100 Business Innovation Awards Programme we have gone through our records and put together a series of anecdotes which describe some of the initiatives which organisations have put in place to ensure their long-term sustainability.

As a preface to these anecdotes it is appropriate to reflect on the significant ruling emanating from the Constitutional Court in the case of Nkosana Makate vs Vodacom.  This case places in the spotlight a deep concern that within South African organisations there is limited appreciation of how best to manage their key resource, namely their people.  This observation must be seen in direct contrast to the common philosophical approach adopted by companies in Germany and other countries where it is commonplace that formal processes are in place to adequately recognise and reward employees who, through their own tenacity and ingenuity, have come up with new concepts which have enhanced the market share and profitability of their companies. The court ruling brings to the fore a need for a rethink as to how we, as South Africans, handle similar situations in our own organisations?

One of the unique facets of winning companies in the Technology Top 100 awards programme are the innovative ways in which they continue to encourage and stimulate the involvement of their employees. The following anecdotes provide some interesting reading as to what can be achieved in small, medium and large organisations, where there is a firm belief by management that they can create an environment which provides for a win-win situation where they have a happy workforce, and in so doing the company continues to thrive.

In all the anecdotes, the underlying common denominator is a senior executive team which has a unique approach to managing their people. In many respects this approach moves away from the notion of punishing people for failure, to one in which there is a predominant mind-set of "catching people doing something right".

When it comes to failure it is interesting to note that the approach is to encourage employees to share their view as to why a failure occurred and in so doing create an environment where "learning to failures" is seen to be a positive approach resulting in a far more cohesive environment. All the stories are South African stories and many of them are completely unique.

As South Africans, when reading these stories one can take courage in knowing that in all the gloom and doom there are unique individuals, who in spite of obstacles are able to drive their organisations to greater success. We hope that you will find some of these anecdotes of interest and be persuaded to test some of these ideas within your own organisation.

 SET UP A COMPANY FOR THEM

One small company which was totally reliant on three young key individuals who had developed unique expertise in programming, microelectronics and manufacturing came to the realisation that if one of these individuals were to leave, the company would be under severe pressure to find adequate replacements. All three individuals were young, dynamic, fiercely independent and ambitious.  Fortunately, management realised that the calibre of these individuals was such that they would, in the near term, want to go out and establish their own organisations. In an anticipatory move, management approached the individuals and offered each of them their own company. The organisation employed the services of a professional team and developed three independent companies where each of the individuals were given a 50% stake together with a guaranteed offtake from the mother company.

The outcome of this move was particularly significant in as much as not only did they retain their key personnel through the ownership of their own company, but these individuals were even more energised to improve their offerings to the mother company.

EMAIL TUESDAY

A middle -sized company on reviewing the email system realised that a large percentage of outgoing emails were intercompany communications. They realised that the email system had become an inhibitor of face-to-face interaction and as a result management believed that the company was losing out on the potential of employees working effectively as a team.

On agreement with their employees, the company decided to ban all internal email communication every Tuesday. The rationale was for staff members to get off their seats and go and consult with their colleagues rather than sending emails. Whilst there was initial reluctance on the part of staff, after a few weeks it was agreed that the ban had resulted in significant benefits for the organisation.

By effectively ‘forcing’ members of staff to have personal interaction with their colleagues a whole new dispensation emanated. Discussions led to the generation of new ideas and more importantly the overall spirit in the organisation was lifted. Management recognised that the ambience of the organisation moved from one where there was minimal interaction to one in which colleagues started to look forward to coming to work on a Tuesday!

A GROCERY STORE AT THE END OF THE PASSAGE

This is a story of a high-tech company which decided that at any one time there were only a handful of key personnel who had to be on the premises during working hours. These included people operating the switchboard, security, financial and administration personnel.

The bulk of their employees were highly skilled young programmers.  The company entered into an agreement with these employees where each one was allocated a task and an agreed upon deadline for the task to be completed. The agreement stated that the deliverable could be achieved at their own time and as such there was no need for them to adhere to formal office hours. This newfound freedom enabled employees to schedule their lives in a way in which they were able to balance their work and private lives in the far more effective way. The company soon found that employees were opting to come to work at odd hours throughout the day and night. In order to make the lives of these employees as comfortable as possible a fully stocked mini grocery store was positioned at the end of each passageway of the four-storey building. The store was stocked with an array of foodstuffs and beverages which was selected by the employees. The only restriction placed on the use of the grocery store was that alcohol could only be consumed after 5 PM in the evening. When assessing the costs of this initiative against increased productivity there was no doubt that such a move created a mutually beneficial situation.

SELF-DIRECTED WORK TEAMS

The concept of self-directed work teams was fashionable in the 1990s and after many unsuccessful attempts in South Africa the concept soon lost popularity. There was however one company who persisted with the concept and found great traction with their workforce.  This multi-million Rand manufacturing organisation had contracts to manufacture automotive components for both local and international consumption. The pressures on quality and delivery schedules were extreme with the organisation having to compete with major international organisations offering similar services. Key to the effectiveness of the organisation was being price competitive, alongside the need to produce components which had to meet exacting performance and quality standards.

With increasing competition there was a need to find more innovative ways to cut down manufacturing times and costs. Whilst management adopted standard productivity processes it soon became apparent that they were running out of ideas. One day in a general discussion, one executive asked the question as to whether there had been any consultation on the shop floor? Surely he questioned, these are the people who are engaged on a daily basis with manufacturing these components and maybe, just maybe they see their day-to-day operations from an entirely different perspective?

The first move was to call together the staff on the shop floor and to request them to think about their day-to-day routine and to identify whether in fact they might have ideas which would short-circuit some of the manufacturing times without any compromise on quality? This was the first time that any major discussion had been initiated with the shop floor workers on a companywide basis. The following week management engaged with the workforce and found that there were numerous ideas as to how productivity could be improved. Management soon realised that these people were thinking about the processes way beyond anything they had come up with.

Of interest was a response from some of the work teams that productivity improvements should not only be focused on the manufacturing process itself, but also on their own colleagues, some of whom were not pulling their weight. They complained about people coming late to work, and in some cases the attitude of other co-workers towards the work environment was poor, whilst in other cases there was a need for additional training so that improvements could be achieved.

As management digested the input from the workforce they came to realise that here were people who had a genuine desire to see the company achieve its output targets and thereby ensure that they, as employees, will continue to have a job.  Management was also somewhat taken aback by the open way in which discussions around the performance of their colleagues took place. This led to the realisation that the company was endowed with a highly responsible group of shop floor workers who defied the normal perception.

After reflecting on the exposure, management decided to enter into formal negotiations with the workforce. The end result was a handing over total control of the shop floor to the workers. Management entered into a formal contractual agreement in which quotas for delivery of finished components were negotiated to be delivered on a weekly basis. Management effectively extracted itself from the shop floor and left the management of the production facility to the workers. A series of self-directed work teams were established each with a specific role to play in terms of the final finished product.

The upshot of this move was that management agreed not to enter the shop floor environment without specific permission from the coordinating group and further, management handed over all responsibility for hiring, firing and disciplining staff. The worker committee put up naming and shaming boards around the shop floor where if individuals persistently came late to work their name was displayed prominently on the board. The flexibility of the arrangement was such that the work teams would schedule their working times to give themselves long weekends.  The productivity improvements were significant.  The company was able to land even more lucrative international contracts.  In one case the company signed a 5-year supply agreement with a guaranteed fixed price for the duration of the contract.  Through the co-operation of the workforce they were able to meet all the conditions of the contract.

The project was entirely successful due to the open-mindedness of management and the willingness on the part of the workforce to engage in a completely new dispensation. Sadly, when the company was sold the new owners could not see their way clear to retaining this "informal management system".

MY BEST HEAD-HUNTERS

The CEO of a high-tech company who requires people with specialist electronic engineering skills became very disillusioned with the service he received from the professional placement companies.  He hit on an idea to use his exiting staff to headhunt new staff on behalf of the company.  His argument was based on the notion that his current specialist team would have their own network of friends and ex-university colleagues. 

So he called in his team and came to an arrangement with them based on them exploring their network and identifying likely prospects.  He went further and got them to do the first round interview with the specific objective of seeing how the prospect would fit into what was a very close-knit team.  The team would then present the CEO with a short list.

The deal was that if the prospect was offered employment and performed well and stayed with the company for more than a year, the CEO would pay the internal ‘head-hunter’ the same that he would pay a professional placement agency. 

The process has been highly successful.

LEARNING WHILST EARNING

The whole issue of staff development and training to meet new demands within an organisation is complex and requires specialist people in the human resources team to design and execute such programmes.  The concept of a Corporate University is now well established in many global organisations.  Here, companies either set up their own ‘university’ or enter into a formal partnership with a provider who can tailor offerings to meet the specific requirements of the company. In South Africa, Corporate Universities have in the main been unsuccessful.  There are a number of reasons for this, including the limited ability of most South African Universities to customise offerings to meet the specific requirements of the business.  The problem lies with the limited flexibility that universities have in changing course materials and even more concerning is the lack of academics who have sufficient business experience to stand up in front of people who are at the cutting edge of day-to-day business realities. 

One large listed entity in South Africa saw the need to establish their own Corporate University not only to meet the growing needs to upgrade the skills of their employees, but also to use the entity as part of their attraction and retention strategy. 

So, they entered into a formal partnership with the Da Vinci Institute with the specific objective of having a totally integrated suite of offerings which could lead to formal accredited qualifications.  Employees are now able to access the in-house ‘university’ and obtain credits leading to undergraduate and post-graduate qualifications.  The programmes on offer are tailored to meet the needs of all employees from the executive level downwards. 

Key to the design of the offerings are integration, in which the service provider is able to develop courses which meet the specific needs of the business.  The success is based on an active partnership in which the company and the service provider co-design and co-deliver the programmes. 

The cherry on the top is how the employees who are on the programmes are assessed.  This is achieved through the delivery of a post-module assignment where the employee is required to demonstrate their ability to use their newly acquired skills to solve a work-place problem.  Managers who take the programme seriously are now finding a whole new resource base for the development of new ideas and concepts.  The ultimate proof of success is to measure the bottom line impact which the new ideas have on the company’s performance.  In some divisions the company has reported huge Return on Investments (ROIs) and in many cases this amounts to several multiples of the cost of the training itself.  Further, the company found that the Corporate University had a demonstrable impact on their recruitment and retention strategy. 

GO TO THE PEOPLE

There is a salutary lesson for all companies from the teachings of Loa Tzu 600 BC-531 BC who made the fundamental observation of the power of bringing your people closer to the heart of the organisation.  "Go to the people. Live with them. Learn from them. Love them. Start with what they know. Build with what they have.  But with the best leaders, when the work is done, the task accomplished, the people will say "we have done this ourselves" -

This is a profound observation and one which a few Technology Top 100 Companies have put into practice.  The idea is to recognise that you have within your organisation a range of people at different levels.  Many of them are well versed with some of the day-to-day challenges facing the organisation.  These forward looking organisations no longer take their executives away for a 3-day strategy planning process, rather, they have come to realise that if you include a cross-section of all people in the organisation and engage in a strategic planning process a number of significant spinoffs come to the fore.

Firstly, they have come to realise the reach input that they get from these employees who under normal circumstances are never included in high-level planning processes.  Secondly, and more profoundly, they have found that the psychological impact of having people at these levels being consulted by the executive has major impact within the organisation.  All of a sudden there is a realisation that these people’s opinions are important to the wellbeing of the organisation and a direct consequence of this is that there is total buy-in from the employees.  They take joint ownership of the new strategy.

One manufacturing company has a regular Friday morning meeting with all the people on the shop floor.  The scene is all about sharing ideas and letting the employees know what the challenges are and what the expectations of their customers are.  It is an informal process but has been very powerful in gaining support.

CONCLUSION

These anecdotes are great examples of ‘the power of people’. They reflect a move away from a top-down approach, so prevalent in many companies, to a bottom-up approach in action. Companies that are rigidly holding on to outdated practices, are probably doing so from a fear-perspective, especially fear to lose control of the company and the direction it should take. However, by empowering their people, the ROI for the different companies have proved to be significant. Once companies realise that their staff are their most important asset, rather than a labour force that needs to be managed, productivity and motivation soar.

Prof R Marcus, from The Collaboratory, on behalf of TT100

June 2016

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