I said that we really want to go from thinking about our people as just headcount to organizational capacity to thinking about how they actually get stuff done, how our organization carries out the task that needs to do so. Broadly, there are two approaches to turning a bunch of people into the capacity of the organization has to get stuff done. The first approach that I want to talk about is what sometimes is described as scientific management or Taylorism. It's called Taylorism after a guy, Frederick Winslow Taylor, who's one of the pioneers who is actually as why I'm filming this in Philadelphia, where I'm based he was actually a local expert. The idea of Taylorism is a scientific idea, because when it comes to getting work done, he was very much focused actually on manufacturing. There's one correct way to do each task. There is a most efficient way to turn the bolt. There is the most efficient way to shuffle coal and all of those sorts of things. His idea was we can be most effective if we figure out every job that has to be done, what's the most efficient way to do it? Then get people to carry that out. The core to this idea was this idea that thinking and doing needed to be performed by different people. There were the brains, the managers, the engineers, who would figure out exactly how tasks should be done. Then we would hire a bunch of people who were there just to do these tasks. We designed these beautiful processes. The way we get organizational capacity is by getting people to exactly follow those processes. Like I said, this was something that was really came out around the turn of the 20th century. As we're starting to see this large-scale manufacturing factories. How do we do that? But you see a lot of this still in services. If you think about McDonald's, one of the things that really known for is taking every job carefully breaking it down into a number of steps that everybody should follow, so everything gets done exactly right. If you think about your average call center. Exactly the same thing where people are following just a script of kind of responses that they're supposed to have. You think about warehouses where people follow carefully prescribe rules. There are lots of different ways in which we still see this idea of I just create the process, tell people to follow it, and that's how you get stuff done in the organization. There's a lot to be said for this approach. I think there are three advantages in particular. First of all, it should be efficient. If we are able to correctly identify the processes that allow people to do things most effectively, then they're going to be quicker. Even down to I think UPS, they know exactly which finger they ought to have their key on to enable them to get in, start the engine quickest when they're getting into the truck. If we can get everybody doing the right thing, there should be more efficient. A related thing is it creates consistency. Again, if you think about McDonald's, Starbucks, one of these big chains. One of the big selling points is no matter where you are in the world, you know exactly what it is you're getting, when you walk into one of their stores. Well, how do you know exactly what you're getting? Because they're going to follow exactly the same processes so like consistency is nice as well. Certainly more controversial one, is this deskilling. We don't need such skilled workers doing it. They don't need to know how to do the job because we're going to tell them exactly how to do it, then the skills of our workforce is less important. Why is that an advantage? That sounds bad. Well, maybe an advantage to the organization because if we don't need skilled workers, we can hire people who are lower paid. That drives down our wage bill. It also enables us to integrate people more rapidly. We don't need to train them in detail in all sorts of aspects of the work. We just need to tell them, here's the process, just do it. Turns out that idea of being able to move rapidly integrate new hires might be quite important when it comes to these Tayloristic processes, because one of the challenges with Taylorism tends to be, it's really disengaging. It's a little bit soul destroying. The idea is you are treating your workforce as cogs in a big machine. Just do exactly as you're told. No, don't think, just do it. When you tell people that they tend not to be super excited. You're going to have high attrition. People are not going to be super motivated. There's a risk they even stop following the process. I think one of the reasons why people worry about Taylorism is just, it can be so demotivating, they're just getting people to do what they're told. It can be a challenge. There can be other problems as well. One is dealing with exceptions. There might be one best way to do everything, but what happens when a situation comes up with the process hasn't thought about, so particularly in customer facing industry. Every customer has a different issue. Every customer has a different problem, something you haven't thought about. If you're requiring your people just to stick to the script, how you actually manage those processes becomes very hard. We've probably all had this experience of dealing with customer service representatives. They've got the script. Their script doesn't actually cover the situation that we're in. So we're talking past each other because it's not clear how within these carefully defined processes, they're going to be able to deal with our issues. Then the third one is about learning and innovation. This is questioning these processes. How do we get better? In the Taylorism approach the way that we get better is somebody sitting up in an office, has a brainwave. Let's just reorganize this process. That might work. But what we're not doing is bringing in a lot of information from the frontline that people are actually following these processes day by day and saying this works, this doesn't work. There's no mechanism for them to improve those processes. It can be hard to get better in a world where everybody is just following the same process day after day after day. If Taylorism is one way that we can turn headcount into organizational capacity. We can go from a bunch of people to having the right tasks being done. What's another approach? The other approach is what I'm going to describe here as a partnership approach. Sources sometimes described as a high performance work system. Actually like Taylorism, it really emerged from manufacturing. Taylorism was big in the middle of the 20th century. Now as we moved into these mass production techniques, these ideas of having workers follow the same processes, very popular. By the end of the 20th century though towards the '80s and '90s, people were really running up against the limits. On the one hand, you had this 30 disaffected workforce that didn't like doing these things. On the other hand, companies in America, were beginning to understand that there were other organizations, particularly in Japan and Germany, that were doing manufacturing, though, able to deliver goods with much higher productivity, a much higher quality then it was possible using the Taylorism process. You've seen a lot of experimentation about how do we do these things differently. Even within the US using different companies taking a different approach. Within the automotive sector where a lot of this started. The Saturn plant ended up being much more productive. There was the Nummi plant as well, both in GM, instill new code. Various companies really took a very different approach. What is the basis of this alternative approach? It's really built around employee empowerment. We go from a world of the separation of thinking and doing where the big brains create the processes, and they expect the workers in frontline employees to follow them [inaudible] frontline employees are really involved in designing and improving the processes is so they help to own the processes. They are expected to have discretion to be able to make decisions themselves, handle exceptions, and all of those things. Much more of the decision-making and thinking sits with the frontline employees. As part of doing that, also, there's much more effort to align the employees with the organizational goals. When it was the case, the employees just had to follow orders. We didn't really care what they thought or what they felt. Just follow orders. When they have discretion, they need a much better understanding of what we're trying to achieve and they need to be able to buy into it. Ultimately, in this world, organizational capacity is not just about people and process, it's also about getting underneath that headcount and understanding what are the skills of our people and how engaged are they? As those skills go up and that engagement goes up, that drives up and increases our capacity as well. What are the advantages of this system? In many ways at the mirror image of the Taylorism system. The Taylorism system is scientific management ended up being deeply demotivating, alienating. In principle, the partnership approach, because it's focusing on empowering people and because we really pay attention to ensuring that commitment, we get more enthusiastic workforce. We're more flexible because frontline workers are able to make decisions. They can deal with problems as they arrive. Because they actually own these processes, they're more able to innovate. As they have ideas about what can improve, as they see some of the problems with the processes that they're being asked to implement. They can actually start to change them, so we continue to learn and get better through bottom-up innovation. Obviously, there are costs too. Again come at the mirror image of the Taylor's workforce. When we're thinking about scientific management, people are cogs and cogs are interchangeable. If this one breaks I'll just get another one. When we're thinking about this partnership approach, I'm partnering with my workforce. They have skills that are valuable to me. Their attitudes are valuable to me. If one of them goes, it's not so easy to replace him. Become more reliant on them. I have to invest in them, there needs to be more trust between each of us. But what I'm going to talk about the rest of this module is when organizations are able to achieve this general performance is far greater.
