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Secrets of a successful company

April 13, 2005 08:57 IST

Employees must feel a personal stake in the enterprise's success before they can be expected to step up to the plate. Gutsy leaders work hard to unleash their people's ingenuity, pride and passion, and it doesn't happen overnight.

They experiment with programmes, make their share of mistakes, fine-tune systems, and replicate what works. What remains constant is an unyielding commitment to giving everyone in the organisation power and responsibility.

Going back, we started a list of things you can do to engender a spirit of ownership and personal accountability in your organisation. Here we'd like to finish that list -- at least for the time being.

Part I: How to succeed in business
Part II: This is how leaders are born!

Embrace the mantra: if you see a problem you own it

You don't hide behind policies and rules or regulations. You never let "I don't have authority" become an excuse. This concept should be embedded in your culture, and an integral element of how work is done.

We don't mean that those who identify the problem are necessarily responsible for solving it, but they are obligated to marshal the appropriate resources to insure that it is addressed.

Establish an ironclad rule that under no circumstances does anyone ignore or walk away from a problem, regardless of whose area it falls in.

Sweat the small stuff -- everything counts

What if every butcher in the meat department of a grocery store knew the costs of discarded Styrofoam trays at the end of the year? What if every bagger at the checkout counter knew the cost of grocery bags?

Perhaps they would pay attention to things they would otherwise consider trivial or unimportant. When employees start thinking this way, there's no telling what can happen in your organisation.

Creating this level of shared interest requires that your people know the facts and understand that hundreds or thousands of little things add up to big numbers at the end of the year.

Insist on accountability

How's this for gutsy? An auto dealership gives you a 100 per cent guarantee that if it doesn't fix your car right the first time, it will fix it again, then refund all your money. We screwed up, so here's your money back!

It's audacious, and only one of many things that differentiate Planet Honda from every other dealership out there. Tim Ciasulli, president and CEO, insists on his service technicians' accountability because he is passionate about the dealership's accountability to its customers.

Through interviews and focus groups, Ciasulli and his team learned that bringing the car back a second time for the same repair is at the top of a customer's list of complaints.

As Ciasulli told us, "It's a complete waste of time, and time is money." Planet Honda repairs 30,000 vehicles a year; these days, less than 1 per cent of them return because the car wasn't fixed right the first time.

When Ciasulli offered this radical guarantee to customers, he was raising the performance standards for technicians. Planet Honda openly posts weekly "fix it right" charts detailing the record of each mechanic.

A technician who doesn't fix a vehicle right the first time doesn't get paid to fix it the second time.

Since that could cost up to $500 in lost pay for a mechanic who messes up overhauling a transmission, you can imagine the resistance from the technicians' union. But Ciasulli convinced the union that he wanted to enhance his technicians' skill levels and pay rate by building an "A" shop.

This meant accelerating the usual time it took for a technician to achieve the highest level of certification. While it ordinarily takes a mechanic seven to eight years to move from a "C" to an "A" rating, at Planet Honda, it now takes three.

Ciasulli's strategy has made the union happy because its technicians are moving into higher-paying jobs faster, the dealership has increased productivity and a more flexible service operation, and the customers couldn't be happier with a guarantee they can't get anywhere else.

Jettison class mentality

Nowhere are our class divisions more apparent than in the corporate arena. They are the antithesis of the meritocracy that every successful enterprise must strive to be. Relying on stereotypes to form opinions of others reflects a lazy intellect that can't be bothered thinking about each person as an individual.

When you pigeonhole someone based on your view of his or her job description, salary or education, you limit that person's ability to contribute to your company.

Inevitably, you will stifle that individual's imagination, initiative, sense of responsibility, and most important, his or her investment in the organisation.

Leaders who are serious about leveraging the knowledge of every person in the enterprise must be adamant about confronting these ingrained views. People who are oppressed under a class system psychologically check out and become order takers and robots.

This is the antithesis to ownership and accountability. If you want people to become engaged in making the business better, seeing problems and owning them, they've got to feel important.

For instance, when an airline assumes that an 18-year-old ramp agent loading bags on the tarmac is too young, indifferent, or uneducated to read a financial statement, it is trapped in a class mentality. This view is destructive in three ways.

First, it strips the worker of dignity and lowers morale. It's another way of ensuring that power resides at the top and that the gap of inequality between people remains wide.

Second, it steals talent from the organisation by not capitalising on people's knowledge. In the most basic terms, the company pays for insight it never receives, and deprives itself, in this case, of a young person's potential. If you're playing to win, every mind must be fully engaged.

Finally, such discrimination crushes entrepreneurial spirit -- and not only that of the specific person involved. The organisation will suffer because no senior management knows or can do everything. Stereotypical assumptions about class kill everything you're working toward, including profits.

Celebrate your heroes

The most important resources you have are your people's excitement and enthusiasm. Unfortunately, they are also the most perishable. With this in mind, Southwest's leaders devote their own time and energy to nourishing the entrepreneurial spirit.

Primarily, they do this by recognising heroes and telling their stories in the company newsletter, or starring them in videos that are distributed company-wide.

For instance: The mechanic who changed a tyre on a landing gear in six minutes so that a plane could fly on time; the provisioning person who spent his own time designing an ice chest for the trucks that decreases melting and reduces the amount of ice a station needs by 45 per cent; the flight attendant who brought a distressed, elderly passenger home with her for the evening, then made sure she was on another flight the next day; the sky cap who parked a late customer's car, so he could make his flight.

These are examples of ordinary people doing extraordinary things to better the business. They show what it means to act like an owner of the company.

Their implicit message is, "this is the standard we're trying to uphold." And often they inspire people to become heroes in their own jobs, from which a culture of ownership emerges.

What do you do when people act heroically in your organisation? Do you publicise it? Given the right culture, getting people to act extraordinarily is not the challenge; making sure that these stories are captured and shared immediately is the hard part.

It works so well at Southwest because people can rely on the fact that if they send a story to employee communications or the executive offices, it will be broadcast far and wide the next day.

Kevin and Jackie Freiberg are co-authors of NUTS! and GUTS!

Kevin & Jackie Freiberg