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The teams either voted among themselves or discussed the matter until they had a consensus.
“Democracy” felt so much better than having decisions imposed by the corporate home office, or the plant manager, or a member of the plant manager’s staff, or the team leader.
giving people the opportunity from time to time to make an important decision or take an action individually , just as a player does in a team sport. Gradually, most important decisions in the plants and in the home office were made in this manner.
it required leaders to give up their traditional right to make important decisions.
Before any decision can be made on any company matter, the decision maker must seek advice.
I introduced the “advice process.” It is a very simple, although often controversial, concept. It takes the “suggestion box” management approach of the 1970s and ’80s and turns it upside down. Instead of the boss getting advice and suggestions from people below, the decision maker—who is almost always not an official leader—seeks advice from leaders and from peers.
The advice process is my answer to the age-old organizational dilemma of how to embrace the rights and needs of the individual, while simultaneously ensuring the successful functioning of the team, community, or company. I observed that Japanese companies tended to emphasize the group and consensus, while American culture pushed rugged individualism. I believe the advice process strikes a better balance. It leaves the final decisions to individuals, but it forces them to weigh the needs and wishes of the community.
Five important things happen when the advice process is used by an individual before making a decision or taking action: First, it draws the people whose advice is sought into the question at hand. They learn about the issues and become knowledgeable critics
Second, asking for advice is an act of humility,
Third, making decisions is on-the-job education.
Fourth, chances of reaching the best decision are greater than under conventional top-down approaches.
Fifth, the process is just plain fun for the decision maker because it mirrors the joy found in playing team sports.
The amount of fun in an organization is largely a function of the number of individuals allowed to make decisions.
we learn best when we discuss our work with others, make decisions that matter, and find out from others whether what we did was right or wrong.
Our experience is that the typical restructured organization can accomplish twice as much with half the number of people than currently work there.
it is crucial to limit the number of people in the home office, central staff, and senior executive offices.
Most senior executives seem to believe that God or the board created them to make all the important decisions. But every decision made at headquarters takes away responsibility from people elsewhere in the organization and reduces the number of people who feel they are making an effective contribution to the organization.
As CEO, I tried to limit myself to one significant decision a year
Thousands of decisions that would have been made by leaders were spread among thousands of other AES employees.
While having too many general managers at the center of the organization is a significant problem, the proliferation of staff offices, composed of specialists carrying out narrow functions, is an even bigger enemy of fun in the workplace.
Human resources is one of my least favorite. AES did away with its HR department six months after we started staffing our first plant.
If the central staff is believed to be very competent, operating leaders and their subordinates have a tendency to become passive, to stop learning about important aspects of the business, and to stop linking the success of the company with the success of their teams.
There is no question in my mind that large organizations would be better places to work if they eliminated most groups organized around special functions and integrated those functions into operating groups.
experts can sometimes be integrated into the all-purpose teams. When this happens, they quickly learn what the “real world” is like and become much more effective in teaching and applying their specialties.
People should spend 80% of their time on their primary roles and devote the other 20% to participating on task forces, giving advice, learning new skills, and working on special projects.
Organization-wide task forces can handle many of the jobs usually assigned to central staff groups.
80-20 rule. I thought that AES people should spend 80 percent of their time on their primary roles and devote the other 20 percent to participating on task forces, giving advice, learning new skills, and working on special projects not necessarily related to their primary responsibility.
Task forces help people see work as a voluntary act, something they choose to do rather than something they have to do. My goal was to have everyone in the company feel like a volunteer. Volunteers are typically enthusiastic, energetic, and effective.
I have always favored using semi-permanent task forces even in crucial roles like safety, environment, and especially financial auditing.
the task force leaders must have enough expertise to educate the generalists on their teams, or they must know where to find that special knowledge outside the company.
A person with a servant’s heart is dedicated to serving others and bringing out the best in them.
Unfortunately, people like Roger Naill and Barry Sharp, who have servants’ hearts along with brilliant business skills, are in short supply.
Most vibrant organizations following the philosophy I am advocating have a small number of people who do not meet the standards of the company. To varying degrees, they tend to be a drag on the organization and its teams. Leaders should try to steer them to other workplaces that are more in line with their talents and temperaments. In the end, both the organization and the individual are better off after an amicable parting of the ways.
One day, in a moment of reflection, Block imagined calling his wife into his office at home. “Sit down, honey. It’s time for your annual review.” The absurdity of this imaginary session prompted him to change his mind about reviews. He realized that the relationship between supervisor and subordinate should be closer to a partnership of equals.
“Try using lots of statistics. Statistics are good,” was their sincere and very concerned reply. If you have ever listened to a Chinese leader’s speech, you will realize how widespread this simple advice must be.
I do not recommend using stock-price changes, either up or down, as a significant measure of performance, even economic performance. Stock price puts far too much emphasis on one stakeholder—the shareholder—and is driven by external factors that have little to do with internal economic performance. Its use leads to poor decisions by people who work in the organization, and, as I will argue later, it distorts the real purpose of a company and discourages a more balanced approach to measuring success.
Cash flow, income, and balance sheets are more reliable economic measures, but even these can be presented in a way that blurs the overall performance of a company.
Financial performance was tracked using Securities and Exchange Commission standards and generally accepted accounting principles. Even before going public in 1991, the company adopted accounting and financial reporting standards that conformed to those used by publicly traded companies. In addition to independent audits by a major public accounting firm, AES organized task forces to do internal audits.
Judging performance on our values and principles was more subjective and required greater creativity.
Because our values were so central to the way we did business, we had to come up with a tool for evaluating our employees.
we gradually learned that most important information was contained in individual comments.
Firing is appropriate when people do not accept responsibility for transgressions and refuse to ask forgiveness.
Holding people accountable requires enormous humility. There are more questions than answers, and many gray areas require Solomon-like wisdom to navigate. For too long, organizations have confused accountability with controls. As Lebow and Spitzer point out, “The more you try to control people, the less responsible and accountable they become.”
If the workplace is miserable, the people who work there are likely to push for extra pay to compensate for the drudgery they have to endure.
Max De Pree’s admonition that leaders should introduce employees as the “people I serve.”
Few embrace the central organizational principles I advocate in this book, especially giving up power.
Leaders serve an organization rather than control it.
My notion of leadership does not require a John Wayne or a General Patton or a Jack Welch to swagger on to the scene and save the day.
The systems guru Edward Deming once said that a leader’s job is to drive fear out of the organization so that employees will feel comfortable making decisions on their own. Most leaders of large companies do not make driving out fear a high priority.
Today, there is almost too much focus on leadership, mainly because it is widely thought to be the key to economic success.
