You want to build a great company? What you'll need, says Robert H. Waterman Jr. in his new book, The Renewal Factor, is the ability to renew -- to manage and adapt to change, to "survive the shocks and prosper from the forces that decimate [your] competition." From my perspective -- I ran a service company, People Express Airlines Inc., that implemented, however imperfectly, most of what Waterman recommends in this book -- his argument is brilliant, inspiring, and frustrating. Inspiring, because his findings are rock solid, right on. Frustrating, because agreeing on the objectives Waterman sets out in no way guarantees that you'll be able to implement them.
When you boil it down, Waterman's book is about people. Granted, his eight principles of renewal touch on topics as diverse as corporate strategy and information systems. But the central organizing theme is the same throughout, namely that any successful business builds its main competitive strategy around its people. The chapter on information systems, for instance, shows how cost data, earnings reports, and so on can be used to support managers and workers rather than to control them. The chapter on "empowerment" describes companies in which employees' concerns are treated with the same respect as the customers' or the shareholders'. An example: when Steelcase Inc., the office-equipment company, introduces new machinery, "the company will not bend metal on [it] . . . until the operator has reviewed the design, suggested necessary engineering changes, and finally approved the machine that he or she will be running. When the equipment is delivered, it comes with a brass plate inscribed with the operator's name." As a result, Steelcase doesn't have many labor problems over automation.
Not that Waterman is offering any quick fixes... Companies and managers have to spend years training and retraining their people; they won't see the benefit overnight, or even next year. They have to have the courage to make that investment every quarter, and to delay the "gratification" of the bottom line.
Waterman, in short, portrays a kind of leadership that goes profoundly beyond telling people what to do and making sure they do it. That's an inspiring, hopeful message, filled with respect for the wrongly maligned American worker, and I think he's right that this is what our best companies practice. The roughly 40 companies he studied, all of them at or near the top of their industries by rate of return and so forth, share this common vision. That list is a powerful answer to the people who claim their isn't any support for Waterman's findings.
Waterman, however, glides too easily over the backbreaking, heartrending task of implementing this vision. These ideas are a tough sell for the managers out there who have to deal with the runny noses and bloody arms of the workaday world, and he's too quick to assume we're all going to march into the future behind these banners. The "steps for getting there" listed at the end of each chapter, for example, are short and uninspired. Waterman seems tentative and uneasy with the messy process of implementation.
In these matters, I speak from my experience at People Express. Our whole organizational structure was built around such directional or objective-oriented concepts as commitment, teamwork, and trust. We asked our people to adopt the company's objectives as their own. We asked them to work in both staff and line functions, to work in teams, and to share responsibility for implementing the objectives. We made sure, through profit sharing and stock ownership, among other communications programs, that they would think of the airline as their own, and that they would share in its success. We committed resources to teaching, training, coaching, and helping people better understand the direction and what was necessary to get there.
For all that, some people questioned some or all of our objectives. I had pilots say, "Don, we know you want us to share responsibility with the flight attendants. But hey -- on my flights I just tell 'em what to do." Even if, over time, you do get widespread agreement on objectives, as we did, you still have to design a powerful, self-reinforcing process to get consistent, creative implementation. Take a simple matter like keeping the ticketing areas spotless. How do you get people to come in early and clean up, automatically and consistently? How do you keep tray tables free from coffee stains, make sure everyone's uniform is spotless, and get planes refueled on schedule? These are a few small problems, as straightforward as you can get -- ant yet no airline I know of has solved them with consistency.
Waterman's book is inspiring -- perhaps too much so. It is elegant in its simplicity. It is powerfully persuasive. And therein lies the danger. My experience is that many managers will not understand the degree of difficulty involved in implementing these ideas. If they are so sound, then they should go down easily, right? Wrong. The danger then is that people will all too quickly dismiss this brilliant work as a piece of utterly romantic, unrealistic stuff. Our experience is that it is profoundly, creatively productive material that requires great, even heroic commitment, or it is easily lost to the strong forces of conservative bureaucracy.
* The Renewal Factor, by Robert H. Waterman Jr. (hardcover [HC], Bantam, 1987, $19.95)