Would you believe it was written nearly 35 years ago?
Read INC. for a while and you'll learn about companies that manage people in extraordinary ways. Harry Quadracci's Quad/Graphics Inc., for example, where manufacturing employees work three or four 12-hour days, often spend part of another day learning or teaching the printing business, and own 40% of the company's stock. Or W.L. Gore & Associates Inc., whose founder, the late Bill Gore, called all his workers "associates" and trusted them to develop their own job descriptions. Or Spring-field Remanufacturing Corp., where chief executive officer Jack Stack expects line employees to bone up on every aspect of the company's performance and propose ideas for improvement. Hit certain targets, Stack promises, and you'll get a bonus.
We're not talking fluff here. All three companies have enviable records, combining growth with healthy profitability. Which raises a nagging question: Where did these guys get their ideas? Is there some management text they've been following -- something the rest of us missed? Asking the CEOs themselves never has been much help; they read a little of this, a little of that, they'll tell you, and combine the book-learning with their own instinctive approaches to management. But pay no attention. There really is such a book; it just hasn't been at the top of many executives' reading lists, at least not since the year Joe DiMaggio married Marilyn Monroe. It's by Peter F. Drucker, and it's called The Practice of Management.
Practice, originally published in 1954 and now available in a Harper & Row paperback, is a seminal work that probes deeply into an array of tough management topics. What makes it required reading for aspiring Quadraccis and Gores, however, are a few chapters on managing people. It is here that Drucker lays out the principles of a well-managed company. Seeing those principles at work in the best-run businesses more than 30 years later is eerie -- as if Drucker wrote a manual for leading-edge management in the 1980s, then traveled backward in time to get it published.
Drucker's first accomplishment is to brush away a few persistent misconceptions -- as persistent today as when he was writing. If you're like most company owners, you expect "a fair day's labor for a fair day's pay." And you hope -- maybe you believe -- that your employees are "satisfied" with their jobs. In those two shibboleths, says Drucker, lie most of the typical company's people problems. Satisfied employees? Exactly what you don't want; you want people who are frequently dissatisfied and thereby driven to improve their performance. As for a fair day's work etc., the whole concept reeks of doing just what's expected and no more. Your company doesn't need timeservers, it needs workers who "willingly direct [their] efforts to the goals of the enterprise" -- who work, in other words, the way you do, looking to see what has to be done and then doing it.
You think such people are born, not made? Wrong, says Drucker; it's up to you to make them. Granted, you do have to hire good people. But that's only a starting point, as anyone who has watched promising hires go sour can attest. Even the best people work up to capacity only if they feel part of a worthwhile enterprise, with their contributions both recognized and valued.
How to create such a feeling? Three ways, says Drucker. First: demand high performance. Not minimum acceptable; not average; high. "Nothing gives [people] more pride of workmanship and accomplishment," he observes, and managers like Harry Quadracci know that it's true. At Quad/Graphics, INC. reported in October 1983, "performance is everything. . . . Quadracci and his managers impress upon their employees a pride of craftsmanship -- a respect for the presses, and exacting standards for the work they turn out." Quadracci himself teaches part of the "Introduction to Quad Technologies" course offered by the company's training program. The same high standards, Drucker points out, apply to management as well. If managers can't schedule work properly, if telephone systems don't function, workers get the message: no one really cares.
Second: pile on information. "The worker should be enabled to control, measure, and guide his own performance," writes Drucker. "He should know how he is doing without being told." At Springfield Remanufacturing (INC., August 1986), workers do. Detailed income statements are distributed and discussed. An electronic message board in the cafeteria flashes a constant stream of performance numbers. In CEO Jack Stack's scheme, the information is a tool that enables workers to come up with improvements -- which they do, regularly. "Why hire a guy and only use his brain to grind crankshafts?" asks Stack.
Third: encourage the development of a managerial vision. "The worker will assume responsibility for peak performance only . . . if he sees the enterprise as if he were a manager responsible, through his performance, for its success and survival." A pipe dream? At W. L. Gore, new employees may spend six weeks rotating through different parts of the firm. The result: "You get to see the whole picture. And you see that motivated individuals can get an awful lot accomplished at Gore."
What all this adds up to is a simple message: employees can and should be expected to act like owners, working as if the company depended on their efforts, doing whatever needs to be done. What you have to do is treat them as owners, giving them the tools ordinarily available to owners, such as information. Maybe, indeed, you need to provide them with ownership itself -- as Gore, Quadracci, and Stack have done, through extensive employee stock ownership plans.
In the past few years, the managerial approach of these three companies (and others like them) has made news. They have been written up as pioneers in magazines like this one. How curious to find that Peter Drucker wrote the book, so many years ago.