Editor’s note: The regular author of “Lean Culture” occasionally invites colleagues to share their insights in order to explore different points of view. Here, Terence T. Burton, president of The Center for Excellence in Operations, shares his perspectives on employee engagement and empowerment in supply chain organizations.
Better employee engagement and empowerment remain a mirage for many organizations. Most executives are committed intellectually to these goals; however, on a day-to-day basis, these professionals tend to push cultural niceties further down the list of immediate priorities. Plus, too often businesses ripple through cycles of engagement and empowerment that turn out to be unsustainable.
Why does this happen? Frequently, decision makers are drawn to short-term, numbers-focused management — often at the expense of developing a true success-enabling culture. What these leaders don’t seem to understand is that culture is an unsteady state and always transforming — positively or negatively — through both deliberate and unintentional means.
Engagement is the strong emotional connection that people share related to the organization, its mission and goals, and the daily work and journey. Engaged employees take charge and strive to do things right the first time without being asked. They are empowered to make decisions about the way work is accomplished in order to achieve goals and objectives.
Engagement also involves talent and skill development, coaching and mentoring to nurture the right set of cultural behaviors and actions, and professional growth through continued exposure to a variety of learning and development experiences. In other words, leaders give authority to employees who are ready and willing to assume power and ownership for decision-making.
Engagement seems so simple and logical, but it is very challenging to achieve and sustain. Creating winning cultural environments requires structured means and deliberate actions. Consciously demonstrating best-practice leadership behaviors and instilling these attributes in others are essential. Generally, supply chain management organizations achieve five levels of engagement from a maturity model perspective.
- No engagement: Employees are stuck in firefighting or personal survival mode. Engagement is simply following the orders of those superiors who are yelling the loudest. Critical supply chain processes break down as people replace basic disciplines with reactionary behaviors, which often have serious, negative effects on upstream and downstream operations. The business likely is facing numerous past-due orders, poor delivery performance, daily emotional hot list meetings, overloaded operations, premium freight fees, expediting, serious mismatches in supply and demand, excess inventory, and many other wastes.
- Local engagement: Employees are educated about the basics of empowerment, open communication, problem escalation and resolution, and direct involvement in decision-making within their localized areas. Managers and supervisors take mentoring, coaching and development roles and also learn from their employees. Examples might include members of a buyer-planner team each updating the enterprise resources planning parameters for their assigned parts or a sales and operations planning team determining how to streamline monthly routines.
- Cross-functional engagement: Employees are assembled and assigned to work in temporary cross-functional teams on more complex issues that involve a large segment of a value stream. All members bring the right sets of skills to the team from their different functional areas. Collectively, the team follows a formal, structured problem-solving process and uses smart methodologies to solve problems. Here, one might see a team assigned to reduce complexity in supply chain planning and execution or to resolve a major field quality or reliability issue. When the problem is solved, the team is disbanded, and sustainability is passed on to process owners.
- Customer-focused engagement: Associates are organized and aligned to a customer, group of customers, families or lines of business. These pods include permanently assigned representatives from critical functional areas, such as sales, Customer Relations, manufacturing, supply chain, purchasing and finance, who interface directly with external customers and function independently and autonomously as a business within a business. These teams remain intact and manage the total daily order fulfillment cycle directly with customers from order to invoice. The groups operate autonomously across multiple value streams with some degree of executive involvement.
- Holacracy-powered engagement: This is a newer and more advanced form of engagement, which is emerging in popularity. It is innovative, autonomous self-management through which employees naturally morph in and out of formal structures in order to align and get things done. This model works best in distributed supply chain organizations where success is highly dependent on the behaviors, choices and actions of employees — often remote workers. This requires talented people with well-defined engagement and empowerment practices directly at customer touch points. Although holacracy-powered engagement is in its infancy, it seems like it can fit very well with supply chain management, particularly related to operations continuity, speed, creativity, innovation, perfection, increased bandwidth, performance enhancements, the customer experience, professional growth and more.
Why engagement matters
Although it is difficult to calculate the return on investment of employee engagement, unleashing the total brainpower of everyone at an organization no doubt has its advantages. When this is achieved, the company becomes a happy, professionally fulfilling and financially rewarding place to work, and loyalty, commitment, trust, mutual respect, dignity, professional courtesy and other cultural attributes are off the charts.
The proof is in the superior performance of best-in-class supply chain organizations that have embraced engagement as a cultural standard and code of conduct. At such companies,
- the supply chain value proposition is congruent, well aligned and crystal clear
- there exists a strong, shared loyalty and mutual investment where the business and its employees continuously develop and win
- everyone is naturally giving it their all and is meticulously and totally focused on supply chain excellence
- employee safety and security are top priorities
- the organization consistently achieves superior operating and financial performance
- productivity is up to 70 percent higher
- employee turnover is as much as 70 percent lower
- customer loyalty and satisfaction are as much as 85 percent higher
- revenue growth through innovation and new markets or new products is at double-digit levels.
It’s a pretty simple concept: Happy organizations have happy employees, happy customers, happy suppliers and happy investors — and this eventually trickles down to all stakeholders. Strong, adaptive leadership is essential to staying on the right course for this massive undertaking. It’s time to achieve engagement and empowerment mastery within the supply chain excellence equation. Supply chain management leaders should be responsible for more than defining and executing supply chain strategies and plans; they must build loyal, sustainable, customer-focused, high-performance businesses through fully functioning human engagement and empowerment.
Terence T. Burton is president of The Center for Excellence in Operations, a management consulting firm specializing in strategic and operations improvement. He may be contacted at email@example.com.
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