High Commitment High Performance

How to Build A Resilient Organization for Sustained Advantage

Michael Beer

• Publisher: Jossey-Bass
• Year: 2009
• Print ISBN: 9780787972288
• eBook ISBN: 9780470486887
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

How to create the high-performance, high-commitment organization

Integrating knowledge from strategic management, performance management, and organization design, strategic human resource expert and Harvard Business School Professor Michael Beer outlines what the high-commitment, high-performance organization looks like and provides practitioners with the transformation process to help them get there. Starting with leaders who have the right values, Beer shows how to weave together a complete system that includes top-to-bottom communication, organization design, HR policies, and leadership transformation process, and outlines what practitioners must do in HR, structure, systems, goals, culture, and strategy to create high-performance organizations.

CHAPTER ONE
INTRODUCTION

My professional quest to study and build high commitment, high performance (HCHP) organizations began over forty years ago. Shortly after I joined Corning Glass Works (now Corning Inc.) in its corporate human resource department as a newly minted PhD in organizational psychology, I received a call from the plant manager of Corning’s newest plant in Medfield, Massachusetts. He had read Douglas McGregor’s The Human Side of Enterprise and wanted help in applying McGregor’s ideas about participative management.¹ He aspired to develop a climate that would inspire commitment to the plant’s unique mission—developing high-quality instruments for medical use. These demands required a different approach to managing people, he believed. Could I help?

I didn’t have to think twice. My recently completed dissertation had been inspired by Douglas McGregor’s arguments for participative Theory Y management and Abraham Maslow’s view that people had high-order needs for achievement and self-actualization. Both thinkers believed that people could be motivated by organizations that engaged and stimulated people to realize their higher-order needs.² Working at the Medfield plant would be an opportunity to find out if an organization could truly be transformed to incorporate these ideas. I knew of one model for the kind of organization I had in mind—Non-Linear Systems, a small privately owned manufacturer of voltmeters in California that had been founded as a high-commitment organization by its owner.³ But there existed no real road map for how this transformation could occur. My imagination sparked, I took my first of many trips to the plant.⁴

What emerged from this work was an eclectic approach to organization development, one that integrated multiple theories and perspectives in a practical way. After three years, the Medfield plant’s approach to management had changed significantly, and so had the commitment of its employees.⁵ Inspired by Frederick Hertzberg’s ideas about the importance of work itself in motivating employees, we tore down assembly lines and gave employees the task of assembling an instrument in full, including the responsibility for ensuring that it met quality standards (except for auditing on a statistical basis).⁶ The plant manager and his team participated in numerous workshops on how participative management could be applied in the plant.

Through day-to-day discussions with individuals on how to cope with numerous challenges that the plant faced, managers and engineers began to rethink their approach to management. For example, a manufacturing engineer, concerned about the lack of response from employees to his plan for changing the department’s layout to incorporate new equipment, was advised to try again, this time explaining what prompted the need to change the layout and then asking for employee concerns and ideas. When employees responded with real and useful contributions, suggestions that this engineer had never imagined they were capable of making, he became a convert to the new philosophy of management. As other managers experienced similarly startling experiences, they began to transform their management philosophy and practices. Shop floor workers were encouraged to give tours to people working in other departments of the plant. Management soon discovered that these department tours, originally motivated by the desire to educate and build relationships, surfaced a number of significant manufacturing process problems previously hidden by the “walls” between departments. The result was an employee-led quality improvement process. Physicians were invited to make presentations about how test results were used in patient care to impress upon employees the importance of quality. Monthly sales and operating profits were posted on bulletin boards to develop an identity with the goals of the plant—a practice that the corporate control function quickly ordered to be stopped, rigidly believing that profit information needed to be kept proprietary lest employees share it with others to the company’s disadvantage.

At the end of three years, employees at the Medfield plant had become an HCHP organization. Medfield workers developed high commitment to the mission of the plant and, combined with their growing skills, performance exceeded the division management’s highest expectations. It was the most rapid start-up management had seen, not only in terms of operating margins, but also in customer and employee satisfaction.

Employee commitment manifested itself in several ways—positive attitudes reflected in employee surveys, low turnover, and, perhaps most graphically, by employee response to management’s decision to loosen previously met quality standards. When employees spoke up and demanded to know why, management quickly realized that they could not make changes in standards without losing employee commitment. Consequently, management communicated extensively about the rationale behind the decision, thus alleviating employee concerns. High commitment, management learned, could not be retained unless they gave employees a voice in key decisions. Before long, Corning’s top management began to talk about the “Medfield experiment” as a potential model and made sure to further Corning’s reputation by talking to the business press, who were only too happy to write up Corning’s success.

High-Commitment Manufacturing Plants

Some three years after the experiment at Medfield began, I received a call from managers at General Foods’ Topeka, Kansas, dog food plant. Would I come out and share with them our experience at Medfield? Under the guidance of Richard Walton, later to become my colleague at Harvard and a key figure in the development of high-commitment manufacturing plants in several companies, the Topeka plant launched a much larger and more ambitious effort to create an HCHP system.

Spurred by Japanese competition in the late 1970s and 1980s, these early experiments, and others like them in numerous other companies, began to catch fire and spread. For example, General Motors collaborated with the United Automobile Workers (UAW) to launch a bold and visionary effort to incorporate high commitment, high performance ideas at its Saturn subsidiary, where the union president became an ex-officio member of the senior team. Goodyear Tire developed a systematic and long-term effort to transform all of its one hundred worldwide manufacturing plants into HCHP organizations. (This latter effort was led by senior management and was part of the company’s organizational strategy to revitalize the company and compete in an increasingly difficult industry.) Similar efforts were launched at Cummins Engine, Procter & Gamble, and TRW, among others.⁷

In Europe, principally Scandinavia, a tradition of industrial democracy was leading practically minded academics to experiment with application of employee participation and job design in manufacturing settings. These innovations were motivated by efforts to counter the alienation so apparent in many traditional manufacturing plants where turnover and absenteeism were high, employees checked their brains at the door, and quality and productivity were low. The principles of scientific management, developed by Frederick Taylor, had spawned a work environment designed and controlled by engineers and supervisors that prevented workers’ knowledge and needs from being incorporated. The purpose of innovations in these experimental plants was to shift from control to commitment as the dominant principle of management.⁸

Although most of the plant-level innovations were quite successful, they were not easily sustained or spread to other facilities of the corporation. In some cases, innovation disappeared as organizations confronted unanticipated technological or business changes that caused some in top management to move to a control mode; some corporate labor relations functionaries felt threatened by the new approaches; and some control-oriented leaders transferred into innovative plants were uncomfortable and unskilled in managing high-commitment organizations.⁹ In other companies, the innovations remained isolated and did not spread to the rest of the organization. For example, General Motors had a number of successful high-commitment manufacturing plants, but these never impacted the practices of the company as a whole.

Failures to spread and sustain innovations in HCHP raise many questions about how a large-scale, multi-unit corporate transformation might be accomplished successfully, questions that I will address in the book.

Innovations at the Business Unit Level

Are high commitment and high performance principles that are successful in a manufacturing environment applicable to the strategic problems facing senior managers at the business unit and corporate levels? In the mid-1960s there were few if any planned change experiments that would answer this question. My own answer began to take shape when a new general manager of Corning’s Electronic Products Division approached me for help after he had heard about the Medfield experiment. His division was underperforming and had significant morale and commitment problems.¹⁰

As my diagnosis of the division proceeded, it became clear that many of the ideas applied at Medfield also applied to management work, but that a whole set of new ideas about strategy, organization design, and management processes had to be incorporated. Although managers and professionals in the Electronic Product Division (EPD) had engaging and challenging jobs (unlike at Medfield), the division’s performance suffered from a set of problems I also observed at Medfield: poor teamwork between key functions. In this case, revenues and profits suffered because EPD’s functional departments, particularly marketing, manufacturing, and product development, were not coordinating their efforts to develop new cost-effective products. There was no shortage of commitment in EPD. The problem was that each manager was committed to his own functional department’s goals rather than to the overall strategy and mission of the business unit. The consequence was an inability to respond to an increasingly competitive environment.

I learned that these problems had multiple root causes. A shi...

Table of contents

• Cover
• Table of Contents
• MORE PRAISE FOR HIGH COMMITMENT, HIGH PERFORMANCE
• Title
• Copyright
• Dedication
• PREFACE
• CHAPTER ONE: INTRODUCTION
• PART ONE: THE HIGH COMMITMENT, HIGH PERFORMANCE ORGANIZATION
• PART TWO: WHAT STANDS IN THE WAY
• PART THREE: LEADERSHIP AND LEARNING CHANGE LEVERS
• PART FOUR: ORGANIZATION DESIGN CHANGE LEVERS
• PART FIVE: TRANSFORMING THE ORGANIZATION
• END NOTES
• ACKNOWLEDGMENTS
• INDEX
• THE AUTHOR
• End User License Agreement