The fundamental shift from a single-minded focus on making money to a broader focus on the values that will sustain an organization over time is an essential component of the ongoing
reinvention of management and the transition to
customer capitalism. The empowerment of self-organizing teams focused on meeting the needs of customers and buyers plays a key role. Paradoxically, a tight focus on understanding and meeting the needs of customers and buyers ends up
making more money for the company.
I talked recently with Carol Sanford about how companies are making this happen and her exciting new book,
The Responsible Business: Reimagining Sustainability and Success (Jossey-Bass, 2011).
Steve: You have worked with teams that have no supervision, which you call “buyer node teams”. What are they?
Carol: Buyer node teams are champions for a set of customers or consumers. In a responsible business, every person is a member of a buyer node team in addition to their regular functional role— including the CEO. Every team is cross-functional and multi-level. No team is task focused, functionally aligned, or goal focused. Every team is buyer-focused and responsible for the buyer’s success in the buyer’s endeavors.
Buyer node teams meet roughly twice a month to develop strategies, plan for execution of them, and reflect on progress and learning. Execution is deployed across the organization quickly because there are team members everywhere who understand what’s needed when a new pursuit is launched.
For example, DuPont of Canada Peroxide has teams that follow particular markets. In one case, the team that follows the forestry business helped invent a new bleaching process that is much friendly to watersheds and also produces paper with better printing characteristics. They also collaborated in the development of a new variety of tree that makes soil healthier as it grows trees and, because they grows quickly, shortens time to market.
Steve: What’s different about the way buyer node teams think and work?
Carol: Championing buyers—advocating back into your own business for them—builds what I call external considering. For example, a business’s champion teams use only those measures that assess the effects and effectiveness for the customer buyer at the point when they use the business’s product or service. They do not measure internally or report on internal production “successes,” such as the number of cases shipped or “happy customer” surveys based on meeting customer expectations. This is too low a level of aspiration for The Responsible Business..
Instead, champion teams become the research and development teams for improving the lives and work of customers and consumers in all of their functions.. Colgate, Europe set up cross-functional teams that were responsible for the success of mom-and-pop stores that carried Colgate brands. Success for these teams was measured in terms of their ability to deliver profits and innovativeness on a very small scale. Colgate established another team to champion big-box stores like Carrefour. They create results for each that they would not even think to ask for and went beyond the usually way of enchanting them.
In all of their decisions they were considering the effects of their work on what was external to their businesses rather than on what was internal. As part of their work they also accounted for their effects on co-creators (their own workers and the workers and businesses of their suppliers), Earth, communities and the larger society, and all of their investors (including shareholders and Colgate’s effect on taxpayer monies).
Steve: How does work get determined in this kind of team system?
Carol: Teams define their own work and ways of working based on the idea that they are each to improve the process every time they work. In general, teams do not adopt fixed standards and procedures except for matters like safety. In those cases, they create them only for set time periods or limit them with sunset clauses.
Every individual also develops what I call a promise beyond ableness (PBA) to contribute something unique to their championed buyer that is also in pursuit and support of the company’s business strategy. They gain alignment on their promised efforts with all other affected players, both inside and outside the company. These promises require individuals to go beyond their current capabilities, develop plans to grow themselves as a people and professionals, and engage a team to work with them on assessing their progress.
This is all self-directed. It includes no performance appraisal processes uniformly directed by management or human resources. People make much higher demands on themselves when they create and deliver on a PBA than they do when their work is delegated or assigned. PBAs grow a company’s capability rapidly because they grow all of its people rapidly and continuously in service of strategy and stakeholder success. With a PBA plan, no one is ever “outside” the process of taking on something that contributes uniquely. The PBA approach calls for enabling in conjunction with empowering all stakeholders.
Steve: Do champion teams and PBAs rely on rewards and incentives to increase motivation?
Carol: All PBAs are self-generated. Motivation is 100 percent intrinsic. There are no rewards, recognition, or incentives from management or any other outsider. Pay is increased based on a plan, when a promise beyond ableness has been fully accomplished and when assessment shows that it has enriched stakeholders’ lives and Life as a whole. Assessments also include improvements in earnings, margins, and cash flow for the business.
Teams create self-initiated celebrations when they reach benchmarks or targets achievements, or when individual team members do with a PBA. They bring their celebrations to the entire system and share their success stories in the process. No one is ever separated out as “employee of the month” or “salesperson for the quarter” or by any other recognition that ignores the team nature of all accomplishments. No incentives are provided except the intrinsic ones people experience in contributing to the successes of stakeholders.
In this way appreciation becomes increasingly immediate and authentic. People don’t nominate a few among them for recognition later; instead they find ways to acknowledge their appreciation for one another as it arises. More often than in traditional work systems, recognition is unrelated to function and directed “upward” in the organization.
Steve: What’s key to making this system work?
Carol: Individuals, teams, and organizations must build capability continuously. This is not the same as continuous training, although usually PBAs does including some training, it is based on extensive education in science, technology, human behavior, and sometimes leave for higher education. Businesses conduct business-wide monthly or bi-monthly sessions to build both critical thinking skills and the ability of individuals to manage themselves. Everyone learns to be responsible for their professional capability and to make themselves accountable for higher and/or more complex pursuits. They also learn to manage personal interactions and growth for the sake of improving the effectiveness of teamwork and stakeholder effectiveness.
Steve: How does this way of working relate to The Responsible Business?
Carol: In two ways. First, humans have a strong basic nature to exercise personal agency. To be fully realized, they have to learn to see themselves as part of a system and recognize how they are affected by and causing effects on the system and others within it, as they exercise agency. The processes I have developed here channel and grow the capacity for human agency. They also give people a living-systems context, which allows them to become increasingly aware and responsible for the effects they initiate. As they develop their own unique capabilities, they become more innovative and contributory. Being part of a buyer node team tends to compels a person to grow. This connection to a system context, and desire to contribute to it, is the essential foundation of a responsibility as a concept.
The second way is related to democracy and capitalism. Capitalism works well in conjunction with our drive for personal agency, the desire to exercise will and change things as we do so. Without an understanding of how systems work and a systems-based practice of external considering, the drive for agency can become greed and capitalism loses its highest potential, which is to grow the wealth and well-being of all Life.
In addition, democracy flourishes when citizens are able to think critically and choose good leaders and ways of governing. External considering makes us aware that, in the end, we are all one planet, one living being, and one Life. We cannot keep making the kind of tradeoff that happen when we do not exercise critical thinking in running our democracy. We won’t sustain Life and self-governance if we do. We must develop Purposeful Capitalism and a Thoughtful Democracy.
Work systems based on buyer node teams build that kind of capacity and understanding. Many of the stories in The Responsible Business demonstrate ways that people take the ableness they develop at work home to their families and communities. Colgate employees helped build the New South Africa’s ability to govern, many of them leading Mandela’s new township councils. Kingsford Charcoal built strong local economies and pervasive literacy with the same processes that created innovative offerings and took their business global.
Responsibility means including all stakeholders from the beginning, not assuming that you will be ready and capable of giving back after profits have been gathered and distributed.
Source
http://blogs.forbes.com/
