of drudgery seems as pervasive as it did 200 years ago.
Most of today’s start-up companies begin with a flexible, human-centered approach. This often includes many decision makers, a flat organizational structure, and a collegial environment. Information is shared, relationships are trusting, and management systems are almost nonexistent. In the early days of AES, I was lulled into feeling that living our shared values and principles was going to be easy. “Wait until you grow up,” warned more experienced leaders. “This will not work when you are bigger and substantial changes are inevitable.” They understood that most new workplaces soon become more concerned about improving efficiency and making profits than about creating a more fun and humane environment.
Bureaucratic behavior remains the heart and soul of most work environments. Important decisions are still made at the top. The rest of the leaders and employees are left out of the process or, at best, are asked only for their suggestions. President Clinton once told me about a relatively minor matter that was neatly summed up on a single piece of paper. It contained 22 signatures of people “signing off” on the issue before the president made the final decision.
Most employees in large organizations seldom see, meet, or know the CEO or other senior managers. Countless AES people approached me over the years to say that they were grateful to have spent time talking with me. “I never met the plant manager of the company I used to work for,” was a refrain I heard on almost every trip I took around the company. In effect, they were telling me, “in the other company I wasn’t important, and in this company I am important.” Most employees in large organizations have about as much contact with senior leaders as Collin Doherty did.
Frederick Taylor is given credit for the new era of “scientific management.” He disappointed his wealthy Philadelphia family by going to work in a steelworks, which he found shockingly inefficient. Taylor then became an early version of a management consultant. He timed how long it took workers to perform tasks and rearranged factory equipment to speed the production process. His ideas about improving efficiency swept the country in the first 30 years of the 20th century. While his research led to some useful innovations, his approach reinforced the idea that people are like machines in a manufacturing process. Unfortunately, this view of workers has not changed much in the intervening years. Just listen to the cold, quantitative analyses of people in the workplace articulated by organizational and strategic gurus today.
Even the current emphasis on “training” is demeaning. “Let’s see. I train horses and dogs, and I toilet-train children.” There are, of course, cases in which people need training to master higher specialized functions. But the main image that comes to mind is opening the top of a person’s head and pouring data inside it, much as you would pour oil in a machine or install software in a computer.
Education broadens our experience and understanding. Training confines a person by teaching narrow skills. But you would never know it’s a blind alley from the way it’s described by management and HR departments. They sell employees on the idea that training is a way to advance their careers. It would be better, I believe, to substitute education for training. Education allows people to seek out information that they consider important—and that has the potential to transform their working lives.
Two centuries after Collin Doherty, company finances remain a mystery to all but a few. In companies with thousands of employees, fewer than 50 to 100 people may have access to important financial information, and even fewer have a substantial say over how funds are used. This is true in most governments, corporations, not-for-profit groups, and educational institutions.
While time clocks aren’t found as frequently as they were in the past, most lower-level employees still punch in, metaphorically at least. One of my associates used to work at a law firm where she was made to “understand” that she should be in by 8:30 a.m., even though her boss did not have such a rule for himself and her work was only marginally related to the time of day. In most organizations there might as well be a sign on the wall that says, THE MACHINES START AT 8 A.M., AND YOU ARE ONE OF THEM.
The ever proliferating staff offices do not have direct responsibility for producing a product or offering a service. As one cynical line person once said to me, “staff offices do nothing but keep me from producing what I am supposed to produce.” In their “support” and “coordination” roles, these staff offices often take power and control from people with line responsibilities. Their control of vital information and their usurpation of functions once performed across organizations have made staff offices a major contributor to the humdrum routines of so many working people today.
As noted earlier, the greatest obstacle to worker satisfaction is management’s craving for status and power. But there are other powerful forces within most organizations that push them toward centralization, putting almost all important decisions in the hands of managers, supervisors, officers, and owners. These forces include:
Information and data-gathering technology: John Naisbitt’s book Megatrends suggested that technologies like the Internet would help decentralize organizations, make them more democratic, and give power to more employees. Is this true? Is the Internet making the workplace more fun? It is too early to give a definitive answer. It is clear, however, that the same technology that can allow people to make decisions in a decentralized manner also can be used in the opposite way—to centralize everything.
One of my vice presidents invited me into his office not long after we started operating our first power plant in Houston. On his desk he had a computer that had the control panel for the plant. “Dennis, I can essentially watch and control the operations from here. I can get one for you as well, and we can add all the new plants as they go commercial.” I told him not to bother and suggested he get rid of his as well. This kind of centralization can have a major negative effect on the workplace. It reinforces the idea that plant employees are automatons who have little or no control over the way they work or how their plant is organized and operated. It seems straight out of Orwell’s 1984.
More often than not, lower-ranking people are closer to the problem and better positioned to come up with a solution.
Top-down responses to mistakes and problems: Ken Woodcock was AES’s first full-time business development person and probably our most effective one. Early in the company’s history he came to the monthly business review meeting with a problem. A competitor seemed to be following him from place to place making pitches to potential customers within two weeks of Ken’s visit. Someone suggested that the problem was the internal newsletter that we published monthly to keep everyone at AES informed about what we were doing and what companies we might be interested in acquiring. It was showing up on a competitor’s bulletin board. The obvious solution was to have Ken be a little less specific. One senior person, however, was adamant that the entire letter be reviewed by me before it went out. No one objected to the new policy. Within minutes of leaving the meeting, I realized that we had taken a decision away from the people responsible for our newsletter.
It was a minor issue, but it alerted me to the inadvertent ways we undermine decentralization when someone makes a mistake or a problem arises. There is an intrinsic organizational assumption that mistakes or problems could be avoided if high-ranking people made all the decisions. But more often than not, lower-ranking people are closer to the problem and better positioned to come up with a solution, especially if they seek advice from their colleagues. The tendency to turn to top executives was most pronounced when our stock plummeted in 1992 and again in 2001-02. When the share price turned south, many board members pushed for centralization, which seemed to provide reassurance that the business was being run in a conventional and “safe” way.
Government regulation: The Sarbanes-Oxley Act of 2002, which requires CEOs and CFOs to certify financial results, will have a similar effect of centralizing decisions and making the consequences of work less important and meaningful
