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Creating a Culture of Empowerment Fosters the Flexibility to Change J O H N R . S C H U L T Z Agility—being able to rapidly adapt to disruptive forces and competitive challenges—is the goal of many enterprises. Traditional organizational cul- tures that cling to hierarchical norms and beliefs, however, can impede adaptation to change. By building a culture of empowerment in which work- ers at all levels can evaluate methods and operations in light of customer needs, functional deficiencies, and market forces—and propose solutions to the problems they identify—organizational leaders can foster the flexibility that is essential to respond to and even anticipate the ever-fluctuating demands of the marketplace. C ⃝ 2014 Wiley Periodicals, Inc.

Change in business enterprises is often a willful act, top-down and project oriented, driven by con- sultants and managers who control the critical as- pects of implementation. When empowerment is undervalued and snubbed in favor of traditional change management practices, the results can be devastating, as the family-owned firm described here discovered.

Business for a small manufacturer of vehicle seat- ing used primarily in agriculture and construction equipment was stalling. Sales had leveled off, rev- enues dipped slightly, and dividends were declining. Feeling pressure from both competitors and non- management stockholders who were family mem- bers, the company sought to improve performance by engaging a consulting firm.

After interviewing management and staff, study- ing strategic goals and planning practices, review-

ing marketing and advertising approaches, and ex- amining the organizational structure, the consultant made several recommendations. These included a new vision statement that would be driven by a sin- gle company-wide metric, and a revised incentive plan for the sales department that increased rewards and bonuses. Using the consulting firm’s services and input, the company president developed a new prin- cipal purpose and supporting metric. The theme was “Winning Customers’ Hearts and Minds,” and the goal was a 15 percent increase in sales revenue.

The company kicked off the program with a cam- paign that included a rousing speech by the president exhorting everyone in every department to beat the competition and win one for the home team. This was going to be a no-holds-barred fight to gain new customers. Sales requests were to be given the high- est priority and immediate attention.

Within weeks, orders started to roll in, but most were for customized seating products and styles that required additional engineering and develop- ment time. Nevertheless, salespeople made promises based on the notion that existing products could be readily modified by changing materials and adapting features from products that had been exclusively de- signed for other customers.

Lifted by the enthusiastic sendoff and trying their best to be winners, the employees scrambled to keep up the pace. Because of customization requirements, however, many new parts had to be sourced. The purchasing department soon became overwhelmed

C ⃝ 2 0 1 4 W i l e y P e r i o d i c a l s , I n c . P u b l i s h e d o n l i n e i n W i l e y O n l i n e L i b r a r y ( w i l e y o n l i n e l i b r a r y. c o m )

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with finding supplementary resources. In addition, manufacturing had to quickly adapt fixtures and tools, add assemblers, and initiate training to accom- modate new and differing products.

Within months, production schedules began getting out of hand, but the sales department tried to stay true to original promises by maneuvering behind the scenes to expedite orders. After complaining to his cousin, the president, about the lack of coopera- tion, the vice president of sales became personally involved with problem solving. Each day, he pressed design engineers, purchasing agents, manufacturing engineers, and shop floor workers for answers and commitments, bypassing his peers at every level.

Despite the frenzied pace, products did reach cus- tomers, but often days late and only after overtime hours had been spent on the effort. Sales increased, but so did complaints, the number of returned goods, and other expenses, including customer- and vendor-related problem solving. The net effect was a decrease in revenue. This led to executive meetings with a lot of blaming and finger pointing.

Not wanting to admit defeat, the company’s pres- ident set a new target and initiated a new cam- paign for improvement. Frustrated and exhausted from the first go-round, the workforce, supervisors, and some executive-level managers began to express their doubts. Viewing the effort as a lost cause, the company’s personnel quickly lost enthusiasm.

Because of complaints and customer pressure, compromises were made so manufacturing could accommodate smaller production runs, improve changeover times, better manage a wider range of inventory, more effectively control the supply chain, and improve outgoing quality. The time taken to sort out problems eroded customer confidence, how- ever, and even though improvements ultimately were made, the company’s reputation suffered signifi- cantly. Because of the company’s paternalistic cul- ture and lack of empowerment, operations did not

become suitably nimble. This led to other missed op- portunities, and making up lost ground proved diffi- cult. Within three years, an investment firm bought the company, while family members held to their tra- ditional convictions and brooded over the inability to remain competitive.

Culture is the force that guides people in their in- teractions with one another and with those beyond their group. Every organization exhibits a culture.

The Role of Culture

Culture is the display of collective behavior, influ- enced by a set of shared norms, values, and beliefs. The mental pathways that facilitate the development of these traditions are the same as those that nurture spiritual convictions. They enable people to work together, even when they have no other bond out- side the workplace. Group acceptance, however, is based on adherence to unwritten and unspoken rit- uals that are mastered by engaging with other mem- bers. Through this process, individual loyalties and capabilities are assessed, and a culture in which ev- eryone understands his or her position and level of contribution is formed.

Culture is the force that guides people in their in- teractions with one another and with those beyond their group. Every organization exhibits a culture. Departments within an organization also have a cul- ture. Anytime people work together for an extended period of time, a culture is formed. Any system that is being considered for modification has a culture. The divergent work groups that operate within the system also have a culture. Their demeanor, how they relate to one another, and how they confront issues and resolve them are a reflection of culture. System change is contingent on individual change. Therefore, a well-designed change does not guarantee system improvement unless stakeholder

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needs and feelings are considered and accommo- dated.

Since culture has such a significant impact on individual actions and how people accomplish work, when planning for change there is often an overwhelming temptation to fiddle with cultural attributes—values, norms, and beliefs. Culture is created and shaped by a cascade of influences, how- ever. The qualities displayed are a product of many complex actions, which cannot be easily manipu- lated. Anyone considering how to make upgrades permanent should not try to reshape cultural at- tributes. Instead, the focus should be on the mecha- nisms that drive their formation and influence mod- ifications in their expression. It is important to develop helpful human resource practices regard- ing hiring, employee development, promotion, dis- cipline, and termination. It is also essential to create an infrastructure that will facilitate the new way for doing work, and clarify performance standards so work groups know how outcomes will be measured.

Striving for Lasting Change

Any alteration in work methods will affect people’s feelings concerning technical, emotional, and polit- ical issues. Even when the existing course of action is shown to be flawed and difficult, stakeholders are used to it. Over time, they may even have figured out how to compensate for gaps and inefficiencies. The helpful routines that work groups have developed to cope with existing operations provide a sense of comfort and stability. Moreover, individuals build mental models about who they were and what they are able to do under the current conditions for get- ting work done. When serviceable practices are men- aced by “improvement,” people can become fearful and defensive. Both managers and work groups, an- ticipating the disruption and frustration that comes with change, can become grousing skeptics who re- sist proposed modifications by working to maintain the status quo. Therefore, when making upgrades, it is essential to not only address the technical aspects

of change, but also to deal with the behavioral issues that inevitably arise—the cultural aspects of change.

When stakeholder needs are not considered and their participation is not actively engaged, well-intended solutions rarely find the traction needed to imple- ment the necessary changes.

Transformation methods often entail a programmed approach that is consultant driven and public rela- tions based, making use of speeches, videos, posters, and other calls for reform that make the case for a move in a new direction. Then projects are started that systematically try to alter the organization’s cul- ture. This regimented, matter-of-fact process places control in the hands of a small group having vast power: a team usually led by a low-level staff exec- utive from human resources or strategic planning, who reports directly to the consultant. Even when well intentioned and suitably defined, improvement projects often bog down in the latter stages or fail to achieve objectives because people who are supposed to implement them have not been given the opportu- nity to develop the essential skills they need to do so. Frustrated by repeated appeals for progress, work- ers begin to lose their enthusiasm.

At the same time, change agents and managers are frequently baffled by the reluctance of coworkers and stakeholders to make the requested adjust- ments. They may react in ways that appear as brooding, quarreling, or nagging. Overall, the en- vironment is marked by a reduction in cooperation, a loss in output, and sometimes even outright expressions of hostility. Nevertheless, change agents and their sponsors often shrug these behaviors off, chalking them up to the notion that “people natu- rally resist change.” These advocates for transfor- mation typically press on, forcing change on system operators who have been friends and colleagues and who, in turn, rebel. When stakeholder needs are not

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considered and their participation is not actively engaged, well-intended solutions rarely find the traction needed to implement the necessary changes.

People do not typically resist change; they resist the pain, the threats, and loss of control that can come from it. They resist even good ideas when they are forced into practice with overbearing tactics. To be successful, communications, empowerment, and problem- solving strategies must properly consider the human relations consequences of using assertive techniques.

Changes that are driven by programs that are pri- marily top-down and focused on metrics using money and bonuses as incentives can lead to dis- tortions that disenfranchise customers. In the end, the conflicts that arise may ultimately collapse a business’s reputation because the focus shifts from serving customers and cooperating with other stake- holders to preserving the system for rewards.

To be successful, a change effort should be driven by intrinsic motivators—things that tug at people’s sense of equity and feelings of service or accomplish- ment. Activities that lead to the creation of goods or services that will meet or exceed client or customer expectations will serve to motivate workers’ partici- pation. Employees can readily empathize with satis- fied customers because they want and expect reliable products and attentive service for themselves. In ad- dition, people feel a sense of satisfaction, the joy of accomplishment, and often generosity toward some- one else with whom they have an association or be- cause something of value was given—a sincere and best effort.

Winning is for the athletic field. Serving customers is the job of business. If that is done, financial returns—an extrinsic reward—will follow. Unlike compliant obedience from people who are afraid of losing their jobs, lasting change is driven by motiva- tors that pull at people’s feelings, sense of identity, and purpose.

Empowering Workers to Embrace Change

Since organizations require a means of coordination and control in order to be effective, hierarchies natu- rally develop. Such management mechanisms, how- ever, tend to be bound by habits and power struc- tures that are subject to bureaucratic inertia and do not readily accommodate ever-changing environ- mental pressures. Success in a global marketplace requires a capacity for flexibility and continual re- newal.

Empowerment implies that employees throughout the organization have the authority to do whatever is necessary to meet requirements and satisfy cus- tomers and are trusted to make the best choices without having to wait for approval from manage- ment. It is a process of power sharing.

Creating an environment that fosters those capac- ities requires an operating system that empowers many change agents and frees those at the top to lead—to set direction, enable, and inspire. This does not mean creating a cadre of rogue workers who can tackle causes unaligned with the organization’s overall purpose and strategic goals. It means that the power to act—based on having quantifiable in- formation and being close to the location where a need is discovered—is embedded at the individual decision-making level. It is about the ability to act with confidence because skills have been developed through training and experience and ensuring that the organization’s best interests will be looked after in the long run.

Empowerment implies that employees throughout the organization have the authority to do whatever is necessary to meet requirements and satisfy cus- tomers and are trusted to make the best choices without having to wait for approval from manage- ment. It is a process of power sharing. In this con- text, authority for getting something done is divided

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between a work group and its supervisors. In such a relationship, team members are granted authority to make changes and accept responsibility for decisions related to their actions. Empowerment requires that those in charge be willing to share authority, and that those who are empowered be willing to accept the challenges that come with their new authority. Three components sustain empowerment and must be maintained to make it work:

● Defined direction. This provides the boundaries for action. Definitions include desired outcomes, measures for results, and any other information that clarifies the deliverables.

● Freedom to make choices. Guided by a clear def- inition of authority and responsibility, this allows the work group to choose methods for achiev- ing results and applying skills to complete the job without being second-guessed.

● Sufficient support to complete assignments. This means providing the resources necessary to get the job done, including essential equipment, ma- terials, information, staff, and training. In addi- tion, this suggests that those in management and leadership positions become mentors, collabora- tors, and partners in the process of improving outcomes.

Empowerment Is Built on Trust

Power sharing implies that decisions made by a work group should not be reversed without the workers’ advice and input. A relationship of this na- ture facilitates collective learning and supports the group’s position by sending a message of respect. Restrained oversight allows work groups to resolve issues and address the consequences of their actions.

To support empowerment and advance the process of self-direction:

● Make sure there is a clear purpose and unambigu- ous direction.

● Assure skills are sufficient by providing training so people are capable of operating in the prevailing environment.

● Be willing to place responsibility for the funda- mental details of getting what needs to be done in the hands of process operators and their infor- mal leaders who display the will and capability to complete all appointed activities.

● Assure that decisions by work groups are not reversed without member consultation and consent.

● Provide a mechanism for addressing injustices and political clout to deal with power structures that may undercut the work group’s ability to freely engage in assigned activities.

A continual approach to change involves both prob- lem solving and decision making. The problem- solving process usually produces options, and decision-making cuts away alternatives in order to find the best solution. Although there is a tendency to see individuals at the top of an organization as influential and able to unravel tough issues, prob- lem solving and the ability to make good decisions should be the job of people at all levels. Success- ful organizations are those in which problems are resolved as difficulties arise, and at the location where the trouble first occurred. Nevertheless, the organization’s leaders are going to be judged on their ability to keep the enterprise out of harm’s way and on the capacity of operational units to remain effective and efficient. This requires solv- ing problems expediently and making improvements that keep customers, clients, and other constituents satisfied.

Ideally, power is shared and organizational units have equal opportunity to acquire resources and work jointly on critical issues so the organiza- tion’s work gets done in a way that is in the best interest of customers and stakeholders. In this case, power is communally held because no single unit or individual controls all the oppor- tunities or critical activities. As environmental

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realities change, however, organizational contingen- cies often change, thus providing an opening to ex- pand influence and enlarge boundaries. Such situa- tional prospects and corresponding tactical maneu- vers can have several implications for the facilitation of power sharing. There are several steps orga- nizational leaders can take to safeguard power equity.

Identify, Communicate, and Assure Equal Access to a

Common Set of Values. These are principles that the organization considers the right way for getting work done. These values are standards for indi- vidual conduct during interactions with others in- side and outside the organization. The ethical and moral underpinning for behavior, values reflect the organization’s culture, are usually built through communal interaction, and are reinforced by mu- tual selection, transfer, and conscious application. Identify values held in common by organizational members and use these as a focal point for devel- oping organizational goals. Create and continually reinforce a clear enabling organizational purpose that people can rally around as a common focal point.

Routinely Review Goals and Plans, and Update Them

as Contingencies Change. Develop an open process for creating and reviewing goals and accompany- ing plans. Track progress and make revisions as or- ganizational and environmental conditions change. Make the information used in decision making avail- able throughout the organization, and involve those with relevant experience and expertise, regardless of their place in the organization. Create an en- vironment of mutual dependency and trust where people feel they can make mistakes, ask for help, get assistance, and recover without being penal- ized. Let everyone know where the organization is heading and the reasons for perusing specific goals. When goals and plans are jointly created, ownership

and personal accountability will underpin ongoing activities.

Create and continually reinforce a clear enabling or- ganizational purpose that people can rally around as a common focal point.

Create a User-Friendly Management Information System.

This should be the means by which administrative data are transmitted to all levels in the organiza- tion for decision making. Management information systems typically contain records related to finance, marketing, production, and other operations that need specific data to plan, coordinate, control, and time critical efforts. The system should allow every- one to receive the same information so that they can draw similar conclusions based on the available evidence.

Assure Lateral Communication Is Open and Accurate.

Flowing across the chain of command and typi- cally built on personal relationships, this commu- nication can be enhanced by creating boundary- spanning roles, such as committees, task forces, and cross-functional teams. Monitor the grapevine and challenge inaccurate information with facts that are introduced back into the system using informal op- eratives. Create an official news source or online bul- letin board that maintains a neutral tone, but also al- low and encourage worker-run bulletin boards and newsletters that present contrasting viewpoints.

Use Written Rules, Policies, and Procedures. Create rules and procedures designed to handle routine events so work groups and managers can take ac- tion without unnecessary deliberation and act in a timely fashion. When developing best practices or standard ways for operating, make sure documen- tation is simple yet sufficient enough to create uni- formity without repressing creativity and ingenu- ity. Overregulation is not the objective; freedom to

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operate in a consistent manner is. This is a deli- cate balance that may require some trial-and-error refinements.

To be successful, improvement activities should in- clude practices that reduce resistance and anchor the proposed improvement so problems encountered early in the process do not crop up again.

Develop a Sense of Community. In such an environ- ment, individuals feel recognized and cared about, and a shared sense of responsibility for the organi- zation’s overall well-being is balanced by considera- tion for personal needs and boundaries.

Set the Right Example Through Behavior and Actions.

Organizational leaders should avoid displaying priv- ileged, guarded, or contrary behavior. Mixed mes- sages are not easily explained. Actions that avoid exposure to discomfort or obscure lack of sincerity set an example that can raise resistance and discour- age risk taking. Aware of their vulnerability, staff members may opt for defensive strategies that can prevent further participation and learning. Do not say one thing and then do another. Be aggressive in calling other executives and managers to task when they fail to follow the established rules, policies, and values.

Addressing the Need to Anchor Improvement

The urge to push new ideas upon the enterprise can be tempting, but doing so can undercut the transfor- mation effort. Modifications that pay as much at- tention to human relations as they do to financial returns will have a much better chance of being ac- cepted. People experiencing change are less likely to feel intimidated when they can understand and an- ticipate how alterations may affect their work and ability to contribute. A well-thought-out and jointly considered approach is more likely to be viewed as achievable and acceptable. To be successful, im- provement activities should include practices that re-

duce resistance and anchor the proposed improve- ment so problems encountered early in the process do not crop up again. Consideration and purpose- ful action are essential for a successful conclusion. Among the points to keep in mind:

● System issues are not resolved until changes are successfully implemented. Unless that happens, the essential process will remain the same.

● Stakeholder values and self-image, not just pro- cess operating structures, will be affected by in- stallation activities.

● Stakeholder needs and feelings will require con- sideration and accommodation in order to make alterations permanent, because system change is contingent on individual change.

● Individual change is multistepped and depends on a person’s ability to make coping adjustments.

● Transformation activities that are inclusive, em- powering, and sequenced so they assist coping stand a greater chance of being accepted and pro- ducing a permanent solution.

The difficult job of shifting attitudes becomes much easier when a set of clearly defined actions is used to alter the organization’s traditions. Improvement can bring uncertainty and frustration for people ex- periencing it. But when the new way of doing work is planned and administered in a way that addresses anxiety among the workforce, it can create a sense of excitement and growth.

The following steps, outlined in Exhibit 1 on page 48, focus on sustaining improvement and anchoring change that bridge the gap between op- portunity and solution implementation. Each step introduces actions that can be taken to ease the transition from a discovered need to integrated res- olution, and proposes an organized response that facilitates discovery, problem resolution, and im- plementation guided by a set of well-thought-out and self-managed activities. These activities can be managed by individual workgroups in collaboration with supervisors and managers.

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Exhibit 1. Actions to Sustain Improvement and Anchor Change

Activity 1: Create Awareness

Activity 2: Make a Plan

Activity 3: Modify and Improve

Activity 4: Standardize and Sustain

1. Explain the need for change or improvement.

2. Communicate a unifying purpose.

3. Identify formal and informal networks and ensure their participation.

1. Create a plan for action. 2. Create the opportunity for

small but meaningful gains.

1. Empower people to take action.

2. Manage resistance to change or improvement.

1. Complete the restructuring of daily activities.

2. Continue to monitor and reinforce improvements.

Activity 1: Create Awareness. Define why improve- ment is needed and then cut through compla- cency so system stakeholders understand why it is necessary to move in a new direction. Start by benchmarking shortcomings against competi- tors or leaders in the market. Document and dis- play information about complaints—data related to production failures, such as rejects, scrap, re- work, or loss of process control. In addition, ques- tion waste that is the result of complexity, bu- reaucracy, overproduction, excess inventory, trans- portation, waiting time, or unnecessary motion. Ex- pose excess spending, and the inappropriate use of resources.

Develop a central theme that people can rally around and create a sense of urgency so that those affected by the change are ready to take a chance on something different. First, understand what the workforce believes is true, and develop a tacti- cal approach to change that does not undercut closely held values. Throughout the process, keep the workforce informed through memos, bulletin board postings, e-mails, and meetings. Make sure the voices of diverse workgroups are heard and that these individuals have an active role in enabling the transition. Include informal leaders—those who are not part of the official supervisory structure but have standing and whom others look to for guidance—and involve them in the decision-making process.

Activity 2: Make a Plan. Create a map for getting from the current situation to the desired end con- dition. Do not move ahead without first deciding what should be done and in what order. Determine constraints, decide on specific action steps, assign re- sponsibility, and estimate completion dates. If the change is complex, think about breaking the plan into smaller chunks so progress is visible and readily measurable against anticipated due dates. Let every- one know what to expect and when activities should be completed so people are willing to take risks, can look forward to manageable small steps, and ulti- mately experience success.

Activity 3: Modify and Improve. Give work groups the authority to make changes to their work process and accept responsibility for decisions related to their actions. Empower the people who work in the process—for example, frontline employees—to make the necessary improvements. Provide direc- tion by establishing boundaries for action, and define what the expected outcome should be. Allow intervening workgroups freedom to choose how work will be handled and grant latitude to alter pro- cesses without second-guessing or micromanaging the effort.

Support the work being done by making sure that there are sufficient resources and that everyone is ad- equately trained to operate in the new environment. In addition, look for and accommodate resistance

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to improvement. Understand how work groups may react to change and develop strategies to help those who are fearful or uncertain make the transition. Significant pushback may be a sign that something was missed or concerns were not adequately han- dled. Do not move ahead without finding out why people are unhappy, and let them develop a suitable workaround.

Provide direction by establishing boundaries for ac- tion, and define what the expected outcome should be. Allow intervening workgroups freedom to choose.

Activity 4: Standardize and Sustain. Finish shifting or- ganizational structures and work methods, includ- ing communication networks, so the new way of functioning becomes fully operational. Build new connections and complete the restructuring of daily activities. Document the new process by upgrading policies, procedures, and work instructions. Keep people involved and on track, maintain faithful- ness to purpose, and coordinate and integrate un- finished activities. Provide for self-determination— that is, allow people to identify and seize opportu- nities where new skills and behaviors can be tried out and then modified to accommodate changed work structures. Develop methods for monitoring and measuring the process so ongoing effectiveness can be assessed. If outputs or behaviors fall below expectations, initiate problem solving where peo- ple using their own initiative can correct and im- prove errant processes. Finally, acknowledge and celebrate the hard work and accomplishment of all involved.

The Payoff: Being Continually Adaptive

Empowered workers who are able to respond to changing conditions by using their own initiative can truly make a business nimble. These people pos- sess vital organizational knowledge, have built solid

relationships, and have established their credibil- ity. Because of their insider know-how, they will be the ones to identify the need for change—and often the first to anticipate threats and appreciate opportunities—and have the passion to make things happen. They know that satisfied customers are the foundation for building an enterprise’s reputation. They are not a group of outsiders who sweep in to do a study, convince the workforce that some- thing must be done, and force a proposed solution on work units by cajoling them or threatening dire consequences.

Businesses that foster empowerment know that sat- isfied customers are the direct result of self-assured and capable employees who are experienced prob- lem solvers. FedEx, for example, has found a di- rect statistical relationship between employee and customer satisfaction: A drop in employee satis- faction survey scores will produce a drop in cus- tomer satisfaction about two months later. Haskett, Sasser, and Schlesinger of Harvard University ob- served similar correlations in their research on op- erations in industries ranging from communications to fast food. If employees were satisfied with their working conditions and jobs, they stayed with the company, becoming more familiar with customers and their needs; had the opportunity to correct er- rors; and crafted outcomes that produced higher quality and increased productivity (Evans & Dean, 2003).

People who are empowered, intrinsically motivated, and self-confident because they are well trained and supported will beat the pants off others who have been compelled or coaxed to do what needs to be done. Empowerment builds a culture in which work- ers at all levels willingly confront problems and successfully adapt to change. In such an environ- ment, they understand that fulfilled customers be- come repeat customers and that their own lives are enriched when they are instrumental in delivering that satisfaction.

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Reference

Evans, J. R., & Dean, J. W. (2003). Total quality: Man- agement, organization, and strategy (3rd ed.). Mason, OH: Thomson/South-Western.

John R. Schultz is an independent management consultant based in West Bend, Wisconsin. For 20 years, he taught man- agement and supervisory development courses in the Wiscon- sin Technical College System, and was a program director at Madison Area Technical College, overseeing an Advanced

Technical Certificate program in quality management. Prior to teaching, he had 25 years of experience as a consultant, technical services manager, and product development engi- neer. In addition to writing articles on performance improve- ment and system change, Schultz is the author of Making It All Work: A Pocket Guide to Sustain Improvement and An- chor Change (Routledge, 2011) and Four-Cornered Leader- ship: A Framework for Making Decisions (CRC Press, 2013). He has done doctoral study in adult education, and holds a master of science degree in management and undergraduate degrees with a focus on industrial management and organiza- tional behavior. He can be reached at [email protected].

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