responsible for every aspect of a company’s operations. Do they really believe this will make the organizations behave more ethically? I do not believe there is credible evidence that this is true. What I do know is that it will drain the joy from those deep in the organization who have the satisfaction each day of knowing that they have responsibility for making their part of the business more productive and successful—and more ethical.
Service suppliers: For years it seemed as if every banker, insurance company representative, coal supplier, and anyone else who wanted to sell AES services of some kind called my office for an appointment. They hoped to persuade me or the CFO or some other central officer that they should get a large chunk of AES’s business. This seemingly benign process can easily result in central purchasing of services for plants all over the world.
Over time, I realized that I needed to get out of the middle of these supplier relationships. The people at our various business units and on business-development teams knew far better than I what they needed and who could best supply it. I restricted my involvement to telling suppliers that we would love to pursue the possibility of using their services and products—and then directing them to the appropriate AES people.
The acquisition of knowledge and expertise: One important goal at AES was acquiring knowledge that could be applied to our business. If not approached carefully, this, too, is a process that can be a force for centralization. When people at AES learned things important to the company’s success, we had a tendency to put them in charge of the area or department where this knowledge would be most essential. Our logic was simple: People usually feel comfortable making decisions about subject matter that’s familiar to them. They also enjoy having people turn to them for their newly acquired expertise. The downside is that their colleagues have a tendency to stop learning and instead become dependent on them, often deferring to them for decisions. This creates its own kind of centralization, not at company headquarters but at the plants themselves, which have the ultimate responsibility for making work fun.
Ordinary workers need independence and a feeling of control if they are going to show initiative and risk failure.
Tom Tribone told me of an analysis of several years of operating data at an ARCO chemical plant where he had worked as a young engineer. Operating performance was significantly better on weekends, when supervisors and other leaders and engineers were not in the plant. His conclusion was that staff technicians were more engaged and reacted more quickly to problems without bosses looking over their shoulders. When supervisors were in the plant, the technicians tended to wait for them to manage the situation.
Another illustration of this point came from the people who were building a new porch on our home. When I asked them for a progress report, they replied, “Depends on how much time the boss spends here. We get the job done faster when he is away. No one waits around for him to tell us what’s next. We don’t wait for him to solve the problems. We don’t expect him to anticipate when we are going to need more supplies.”
People become passive under the control of bosses. Ordinary workers need independence and a feeling of control if they are going to take on responsibility, show initiative, and be willing to risk failure. Putting one’s talents on the line is essential to creating a healthy and fun workplace.
Boards of directors: I tread lightly in this arena for fear of being misinterpreted. My board was responsible by law for what happened inside the company just as I and other officers were. It was not particularly difficult for AES officers to rely on plant technicians or business development people to make decisions regarding environmental compliance, capital investments, or the plant reserve fund. We knew these people, worked with them every day, and trusted their judgment.
It is much more difficult for part-time board members to defer to employees. Chances are that the board members have not even met them, let alone know them well enough to have confidence in their decisions. The natural tendency is for board members to want a senior officer or plant manager to make important decisions. They argue that society and shareholders hold them responsible for the performance of the company.
It is a good argument, but only up to a point. Senior leaders and board members are responsible, but they cannot possibly approve—or even keep track of—every decision the company makes. If the board insists that top management make 200 decisions it ordinarily wouldn’t make, that still means tens of thousands of decisions are made elsewhere in the organization. We bear the same responsibility for these decisions as we would for the 200 we made. If we delegated these 200 decisions to people deeper in the organization, who are probably better equipped to make them anyway, it wouldn’t reduce our liability or our chances of being sued. It would, however, make a huge difference to the people away from headquarters who experience the joy of playing an important role and knowing that the company trusts their judgment.
Paternalism: On my first visit to Uganda in 1999, my host took me to the source of the Nile and then to the site on the river where we were planning a new hydro facility. Our third stop was a huge sugar cane plantation owned and operated by my host’s family. We drove around the expansive fields where hundreds of people were working. When we passed an area of small, dilapidated housing units, he told me that these were provided free to the workers. He was particularly enthusiastic when we visited a building that served both as school and medical facility. “We provide free schooling and medical care. We have whole families who have been with us for years.” “How much do you pay the workers?” I asked. “Enough,” was the reply. “They don’t really need much. They are well taken care of on the plantation.” My host was very proud of what his family, one of the most respected in Uganda, had accomplished. “What do you think?” he asked, eager to get my reaction. “This is one of the most depressing places I have ever been,” I said with only a little hyperbole. “By Ugandan standards, you are taking great care of these people, but they are not allowed to grow up and become independent adults.”
This experience reminded me of the Tennessee Ernie Ford lyric: “You load 16 tons, what do you get? Another day older and deeper in debt. St. Peter, don’t you call me ’cause I can’t go, I owe my soul to the company store.” Paternalism, whether practiced on a Ugandan sugar cane plantation, in Appalachian coal mines, or in a modern American corporation, is far from dead. Managers around the world still feel the need to take care of workers. On a superficial level, it is an admirable response. But paternalism takes on a different cast when examined more closely. It leaves people in a state of child-like dependence. It prevents workers from taking control of their work and lives. They are never in a position to take risks or make decisions, and so never develop to their full potential. In the end, paternalism kills any chance of joy at work.
When AES purchased a hydro plant in Hunan province, China, we were disturbed by the plight of the workers. Health care and education were substandard. I was pulled in the direction of doing something to help these people. Most of us have a compassionate impulse that prompts us to say: “We need to intervene.” Sometimes we respond to the needs of employees by providing health care or by promising job security, higher pay, training programs, or child care. These are all “nice” things to do.
While we need to respond to the problems of our employees, we shouldn’t do so for the sake of being “nice” or “good.” Don’t be afraid to try new approaches that give them control over how they want to live their lives. Instead of providing houses and schooling, pay them enough so they make choices about what’s important to them and their families. Resist the temptation to guarantee jobs for life. Treating employees like children is not in their best interest, nor does it serve the goals of an organization.
The lack of freedom may be the single most debilitating and demoralizing factor in the workplace today.
In earlier days, total concentration on production in factories and on farms was the primary reason that people hated their work. Today, the
