Faced with declining produce quality, a demoralized workforce, and an “everyone-for-themselves” leadership culture, Allan Mulally had a daunting task before him when he joined Ford in late 2006.  Rather than just tinker around the edges and win quick victories, CEO Mulally set a clear, longevity-focused goal—to build a profitable, sustainable business.  To achieve this goal, he instituted some standard turnaround practices.  He improved efficiency by matching vehicle production to customers’ buying patterns, and by simplifying the brand portfolio and organizational structure. 

Importantly, CEO Mulally also initiated a dramatic culture change aimed at driving commitment and accountability.  This culture change began with the elimination of all corporate-level meetings except two.  The senior team held weekly Business Plan Review sessions to report progress—and problems—in achieving specific goals.  Additionally, Special-Attention Reviews were held as needed to conduct in-depth explorations of roadblocks and opportunities.  Whereas past culture prevented executives from openly identifying performance problems, now these problems are aired at senior-level meetings, making it possible to find and institute solutions more rapidly. 

A key part of Mulally’s culture change was a leveling of leadership, including more available access to the Chief Executive Officer.  From personally responding to emails to eating in the company cafeteria (instead of the executive dining room), CEO Mulally brought executive leadership into more direct relationship with the organization’s rank and file. In these direct exchanges, valuable input from the frontlines was gleaned more frequently and quickly.  Having senior leaders listen, in turn, increased the engagement, commitment and accountability of the workforce as a whole.  

Too many senior leaders try to change business performance through cost cutting and organizational restructuring.  While these measures often are necessary, they typically are insufficient means of generating breakthrough changes in organizational or human performance—the key antecedents of business performance. 

Only by changing hindering behaviors can real breakthrough gains be made. And changing behaviors necessitates culture change, since organizational behavior—the collective behavior of the enterprise—is governed (normalized and reinforced) by organizational culture. 

To experience vicariously a business transformation, I recommend that you read American Icon: Alan Mulally and the Fight to Save Ford Motor Company by Bryce G. Hoffman.  To begin your own business transformation, identify the performance-hindering behaviors in your company or business unit, and then start planning steps for a change to a more performance-enhancing organizational culture.  

© Susan L. Koen, Ph.D. — All Rights Reserved.

Leadership is most important when times are tough, as they are today.  And positive, optimistic, forward-leaning leadership is what’s required in these times.  To be effective, leaders have to move us through our fears and anxieties, so our innovative and productive capacities can flourish again.   

Leading starts with painting possibilities.  Effective leaders help us access our more hopeful and reasoned thoughts and actions, showing us there’s a better alternative to our survival-focused fears.   

Fear is a basic human emotion.  It fires up the amygdala in our limbic system, an evolutionarily primitive brain structure located at the top of our brainstem.  This part of our brain cannot reason, cannot envision, and cannot create.  This “lizard brain” can only react, in an instinctive “fight or flight” mode. 

Turning a paralyzed ship of state or a fear-dominated business toward a productive direction requires possibility leadership.  It requires leaders who can move a group of people, however large, from using our limbic brains to using our pre-frontal cortex – the part of the brain where we literally can manage our fears and begin working towards a positive future-oriented goal.   

The pre-frontal cortex or “executive brain” modulates our emotions and turns sensory input into organized thoughts and long-term goals and strategies.  Top-down processing in the pre-frontal cortex establishes the goals and intentions for our actions, and communicates “the plan” along our neural pathways, channeling our emotions and behaviors towards the selected tasks or actions.  

To get one person or one million people moving in the same direction, leaders have to activate our executive brain and tamp down our lizard brain.  That’s why strong, effective leadership starts with painting possibilities in both actionable terms and positive emotional terms.  

© 2012, Susan L. Koen, Ph.D. – All Rights Reserved.

Still, Operations and HR Directors, as well as Training Managers, need to ask this question: Is there sufficient value in knowledge-centered training when the real goal is to change workforce behavior, whether the behavior of managers or front-line employees? 

Just think about it for a minute.  If you know that five hours of sleep in a 35-hour period equates, in performance terms, to being legally drunk (specifically, a Blood Alcohol Content [BAC] of .10), then are you more likely or less likely to try and get by on such little sleep?  Or, will you stop your practice of short sleeping only after you have an accident driving home from work after a long day and short sleep the previous night?  

New knowledge opens us up to consider changes in our behavior.  However, empirical data show that new knowledge is a necessary but insufficient tool for generating sustained behavior change.  In fact, there are Six Steps for Sustaining Behavior Change, and this multi-step process makes it clear that knowledge-centered training alone cannot get the job done. 

Changing behavior also requires the choice of a viable alternative behavior, along with the opportunity to test and personally configure that viable substitute action.  For example, if you learn that caffeine consumed close to bedtime disturbs the quality of your night-time sleep, then you have just one piece of the puzzle.  You still need an alternative way of addressing the decline in energy you experience in the late afternoon, if caffeinated-beverages are no longer an effective choice.  And, you need to test that alternative behavior in real time to prove to yourself that it works.  Otherwise, you’ll keep doing what you’re doing now, and rationalize that “I’m different; I don’t have that problem you’re talking about.” 

And, for behavior change to be sustained over time, a change in mindset typically is required as well.  For example, if you think that fatigue is just a personal nuisance, then you are unlikely to expend a lot of effort to address it.  But, if your world view is challenged effectively, so that you now understand how your personal fatigue puts you, your children, your co-workers, your company and possibly even society at risk (in high-impact jobs), then you have the necessary cognitive and emotional motivation to sustain your needed change in behavior, and not fall back on bad habits. 

I’ve been using personal behavior examples, but the same key ingredients—new knowledge, challenged mindsets, self-motivation, viable alternative behaviors and testing/customizing opportunities—also are needed for sustaining change in organizational behavior.  For example, a company with a history of high overtime usage will not change that practice until key leaders have their mindsets about the economics of overtime successfully challenged.  Before a change will occur, they also have to know the full consequences of their current practice (e.g., the impact of overtime on productivity and safety), and they have to have tested alternative solutions available for them to implement. 

For more data and insights on the importance of behavior-centered training, rather than knowledge-centered training for generating and sustaining individual and organizational behavior change—including a detailed explanation of the Six Steps for Sustaining Behavior Change—read my company’s White Paper, The Value of Behavior-Centered Training for Driving Sustainable Performance. 

Download the White Paper now.

Also, if you want to experience effective behavior-centered training, take the Course, Managing Workplace Fatigue for SAFR DayWork™, at the educational portal, RoundTheClock eLearning™.

© 2012, Susan L. Koen, Ph.D. – All Rights Reserved.

Social capital needs to be factored into a business’s asset valuation, just like human capital.  As first defined by sociologist James Coleman, social capital is the ability of people to work together for common purposes.  In a highly-networked, interdependent economy like the global marketplace, an organization’s capability to generate and sustain such social capital has measurable advantages.  

For one, organizational agility depends on spontaneous sociability,a special subset of social capital.  Spontaneous sociability is the capacity to form new associations easily and to cooperate within them (Fukuyama, 1995).  As critical as this capability obviously is for organizational flexibility and for effective collaboration within and between organizations, insufficient attention is given to building social capital in our business enterprises. 

The first step in optimizing the social capital in your company is trust building.  Trust is confidence and assured reliance on the character, ability and/or truth of someone or something.  The fastest way to establish mutual trust—the company’s trust of its employees and their trust of the company—is to establish a common set of ethical norms and to ensure that everyone acts in accordance with those norms at every turn, including during hard times. 

When shared norms are operating and trust is established, companies have the easy and quick cooperation of their entire workforce.  They can innovate organizationally to match market conditions, flexing people’s time and assignments as needed.  And, they can operate more efficiently as well.  Doing business costs less with high social capital, because there are fewer transaction costs required to achieve needed organizational agility. 

A high-trust enterprise can organize more flexibly and achieve greater productivity, because power and responsibility are entrusted to the people on the front lines, whether they are making products or delivering services to customers or both.  This very point is best illustrated by the Toyota Production System, the original model for Lean Manufacturing.  The Toyota System was designed to eliminate buffers from manufacturing processes and generate more output per unit of capital.  It was predicated on a high-trust organization. 

When implemented as originally designed, every employee on the line is trusted with the power to stop the entire production line if s/he sees a quality or safety problem.  And, they also are given the responsibility to fix the problem at its source.  In turn, the front-line workforce repays the trust they receive by delivering higher productivity in the form of more output per unit of capital.  Moreover, rework costs are eliminated, delivering greater efficiency and higher customer satisfaction. 

It may sound utopian, but full-value Lean Manufacturing—not just kaizen exercises—is a documented reality in high-trust enterprises like Toyota and P&G.  A study by MIT explained very clearly why the Toyota System works so efficiently when more traditional manufacturing models don’t.  The study concluded: 

Workers respond only when there exists some sense of reciprocal obligation [trust], a sense that management actually values skilled workers, … and is willing to delegate responsibility to them.  Merely changing the organization chart to show ‘teams’ and introducing kaizen to find ways to improve production processes are unlikely to make much difference on a sustained basis.  (1991)  

High-trust organizations, and their built-in capacity for agility and resulting efficiency, are priceless in today’s fiercely competitive climate.  Yet, despite their value, high-trust organizations are not the norm.  That’s because trust has to be earned continuously.  It has to be embedded in organizational culture. And, it has to be the underpinning of both the messaging and the behaviors of all organizational leaders, both formal (positional) and informal.  In other words, trust building is hard work.  Just because it’s hard to do, however, doesn’t mean it shouldn’t be done or isn’t worth doing.  Any organization striving for agility and efficiency eventually has to undertake trust building across the enterprise. 

© 2012, Susan L. Koen, Ph.D. – All Rights Reserved.

The Matrix Leadership Model has helped to break down the rigid hierarchy of the Pyramid Model, but it has not de-linked leadership from positional authority.  Adaptive Leadership™ talks about separating the functions of leadership and authority, but it does so for the purpose of change management — “mobilizing individuals and companies to build their adaptive capacity to handle changing environments.”  To date, there has not been a leadership model that is decoupled from positional authority and focuses on the full range of organizational capabilities required today.

Four forces currently operating in the workplace are demanding a new broad-based model of leadership.  These are the: 

• Always-On World of Global Business
• Rise of Mobile & Remote Work
• Demands of the Millennial Generation
• Social Networking & the Emerging Power of People

All of these forces are interacting to push power away from the few, and into the hands of the many.  That’s not a bad thing, though, especially if your company is trying to build a high level of employee engagement.

Engagement is sustained through opportunities to make decisions and make a contribution, both manifestations of applied power.  And, given that engaged employees are 20% to 43% more productive, 5 times less likely to have a safety incident, and are correlated with higher customer satisfaction scores, a 19% higher operating income and a 10% higher share price, employee engagement should be every company’s core aim. 

Asynchronous Leadership powers employee engagement.  Asynchronous Leadership—a model I developed from my 28 years of consulting with Global 50 to Fortune 1000 companies—is anchored in the belief that leadership is a capacity this is not necessarily aligned with positional authority.  Rather, it is a potentiality inherent in all human beings, not just a select few.  Leadership capabilities have to be awakened and nurtured within the entire workforce, though, for them to manifest fully and be aligned for positive, mission-focused outcomes. 

Unlike centralized-power Leadership Models, the distributed-power Model of Asynchronous Leadership has four explicit goals: 

• Generate Total Employee Engagement;
• Foster Ethical, Empowered Responsibility across the Organization;
• Ensure Speed of Action; and
• Enable Organizational Agility & Innovation. 

Such critical organizational capabilities don’t just happen by accident or even by applying extrinsic rewards to drive desired behaviors.  And you don’t automatically have Asynchronous Leadership just because you have front-line work teams.  You have to implement an Asynchronous Leadership System that has the express purpose of powering these four essential 21^st-century capabilities. 

If you’re interested in learning more about the Asynchronous Leadership Model, sign up for the publication announcement of my eBook, Asynchronous Leadership: How to Power Engagement, Speed, Innovation and Organizational Agility. 

You also can go to my company’s eLearning portal and View an archived copy of a recent webinar I presented for HR.com, entitled Fostering Engagement and Leadership: Two Sides of the Same Coin.  This complimentary webcast focuses on the direct fit between Asynchronous Leadership and Total Employee Engagement. 

© 2012, Susan L. Koen, Ph.D. – All Rights Reserved.

This safety focus has produced significantly lower injury rates in the total recordable cases of non-fatal occupational injuries.  The latest data from the Bureau of Labor Statistics (BLS) shows a decline in annual incidence rates for recordable injuries in 2010 to the lowest level since 2003.  Across the private sector as a whole, the annual number of lost-time cases also decreased 3% in 2010 compared to 2009.

But what about severe occupational injuries and catastrophic accidents, like fatalities and explosions in the workplace?

Well, despite the billions spent, these safety rates have not gotten better.  The BLS has reported the following statistics for 2010, the most recent year for aggregate data:

• In oil and gas extraction, fatal work injuries increased 56% from 2009 to 2010 and 25% from 2003 to 2010.
• Fatal work injuries increased 112% in all other private industries in 2010 vs. 2009 and are up 18% compared to 2003.
• Across private industry, work-related fatalities resulting from fires doubled in 2010 from 2009, reaching the highest count since 2003.
• For the private sector as a whole, the number of fatal work injuries resulting from explosions rose 65% in 2010 compared to 2009.
• Mining machine operators, industrial machinery maintenance workers, and airline pilots and flight engineers were among the top 10 occupations for fatal work.

Why are serious accidents and injuries still rampant in modern workplaces when billions are spent on safety every year?

From my 28 years in the field, I can pinpoint two reasons:

1. Insufficient attention has been given to the underlying root cause of workforce errors and resulting severe injuries and accidents in today’ Always-On World — sleep deprivation (also called cognitive fatigue).
2. The systemic root causes of sleep deprivation have not been addressed in the design of operational defenses for high-risk workplaces and occupations.

To understand the benefits of personal fatigue management training for your whole workforce, contact RoundTheClock Resources for a free two-week review of the interactive SAFR Individuals™ Course, Managing Workplace Fatigue.

Also, to learn more about the costly business risks caused by human fatigue in the workplace, take the Self-Directed Course, Understanding Workplace Fatigue Risks, available at RoundTheClock eLearning™.

 © 2012, Susan L. Koen, Ph.D. – All Rights Reserved

Even within industrial plants in developed countries, most workers spend their days monitoring and applying data from statistical process control systems or automated logistics systems, rather than performing physical labor.  Planes fly themselves while pilots monitor gauges, and nurses rely more and more on patient monitoring systems to tell them when to take action.

These changes in the nature of work, from active, physical tasks to more passive mental and cognitive tasks, place greater demands on our brains and minds than at any other time in human history. 

So, it is vital to ask:

Are we well-positioned to sustain high levels of performance in cognitive and mental tasks? 

Are our brains firing on all cylinders, interpreting sensory input accurately and processing thoughts quickly? 

Are our minds able to exercise our perceptive powers and memories, and reason effectively?

Data on the state of our brains and minds today is not encouraging. 

• A 2011 survey conducted for the National Sleep Foundation found that 48% of adults in the U. S. report having high anxiety levels, resulting in elevated mental fatigue. 
• Nearly two-thirds (61%) experience a sleep problem every night and wake up feeling un-refreshed. 
• Additionally, 52% have driven in a drowsy state between once per week to once per month. 
• And, it’s no wonder that our brains and minds are foggy.  A plurality (41%) of Americans report they sleep less per weeknight than the 7-8 hours recommended for optimal brain and mind functionality.

The primary reason for the poor quantity and quality of daily sleep and rest is “active communications technology use in the hour before trying to sleep”, especially among Generation Y’ers (42%). 

In other words, the cell phones and laptops that dominate life in the global, mobile, Always-On World are the primary sources of our sleepless nights.  And, our short sleep durations result in a decreased ability to pay attention, consolidate and apply stored knowledge, and remember new information—all of which are essential capabilities for knowledge-centered work.

Watch this complimentary Webcast

Workplace Fatigue: The Science and Solutions Framework

In this presentation, I answer these three key questions that organizational leaders must consider as the impact of human fatigue continues to escalate, challenging productivity and employee engagement:

1. Why is there a prevalence of fatigue in workplaces today?
2. Are workplace fatigue risks a serious barrier to Sustainable Performance?
3. Is fatigue risk mitigation a Best Practice for businesses today?

 To learn more about the business risks created by mental fatigue and sleep deprivation—also called cognitive fatigue—you also will benefit by taking the self-directed course, Understanding Workplace Fatigue Risks, available at RoundTheClock eLearning™.    

 © 2012, Susan L. Koen, Ph.D. – All Rights Reserved.

Yet, how many of you have experienced the creeping anxiety and irritation of waiting too long to be served, or even to have your order taken at a restaurant? Are you becoming more impatient about waiting time in a restaurant? Isn’t that part of the reason that fast food sales have been increasing for years? Well, the company E la Carte is banking on your desire for a more time-driven restaurant experience. Their business model puts computer tablets in restaurants so patrons can order for themselves, and then play computer games while they wait. Through tablet technology, they are addressing customers’ desire for speed, convenience and control. They also are borrowing a page from Disney, a company that learned at their theme parks to keep customers in motion, making progress, in order to tamp down their waiting anxiety while in long lines.

And, according to E la Carte’s website, their Time Strategy concept for restaurants is working. Service is faster, by 7 minutes, yielding more table turns for the restaurant and less lost time for customers. But it’s actually the other performance metrics that are the most impressive—a 10% increase in sales, 85% customer return, and 9x more customer loyalty sign-ups than restaurants without their tablet technology. These results prove that delivering time to people in an Always-On World—an asset whose value keeps rising, even if it’s just 7 more minutes—is a sound business strategy.

© 2012, Susan L. Koen, Ph.D. – All Rights Reserved.

Does your enterprise provide the workforce, or managers for that matter, sufficient time for learning, intelligence-gathering and analysis, and innovation design? From my experience in the field, most companies still rely solely on their engineers, scientists or other technical classes to be their innovators. Additionally, far too many companies in the U.S. still train on the fly and devote too little time to developing the future-centered technical and behavioral capabilities of their employees. They look to front-line workers mostly for immediate productivity, with little real appreciation for the future value-added, innovative potential of this core workforce.

The primary reason seems to be an accounting mindset, which pervades business, rather than an investment mindset. Unlike hard assets, most financial ledgers place all front-line workers’ [direct labor] time costs, including training and continuous improvement time, in the expense column. There is no opportunity for long-term amortization of employee time spent in capability building or innovation generation, like there is for new equipment. And, little real ROI data are collected to prove that training dollars or process improvement team involvement are investments in business success. Consequently, few companies ever structure regular learning and engagement time into their front-line employees’ work schedules, adopting instead an ad hoc approach to capability building. And then they wonder why the workforce is largely disengaged!

The two exceptions to this ad hoc practice that I have witnessed directly in my long career have been Hewlett-Packard and P&G, two of the most successful companies in the U.S. To illustrate the power of valuing employee learning and innovation enough to design it into work time, let’s review the case of HP’s Vancouver Division in the early 1990s. Hewlett-Packard first started manufacturing the ink-jet printer on a large scale in its Vancouver, Washington plant. When they ramped up production, I helped the Plant implement a 5-crew shift system for 1,200 workers that enabled every crew to have off-line time in their weekly work schedule. This time was used for a combination of skills training, team development, continuous process improvement activities and wellness and safety training, like fatigue management classes.

During the time period that HP Vancouver deployed structured off-line time for all production workers, the climate survey results for their wage workforce were the most positive of any group in the company, including its engineers. The Plant produced 250,000 more printers per year than planned volumes, which meant that employee productivity more than paid for the structured off-line time in their work schedule. Moreover, the Division captured early market dominance over its fierce rival, Canon, and had growing profitability despite rapidly-dropping product prices. While highly-successful for five years, unfortunately, the rush to off-shoring and outsourcing eventually defeated this effective work system design.

Still, the lessons learned are clear: enterprises today need structured learning and engagement time for their front-line workers now more than ever. U.S. companies are competing with enterprises in places like Singapore, Finland and Germany who have devoted time and resources to building their workforces’ ongoing technical mastery, critical-thinking capability and resilience capacity. These countries, and their enterprises are making long-term investments in learning and engagement time to maximize the future productivity and innovativeness of their workforces. In Singapore, for example, both political and business leaders continuously ask themselves, “What do we need to do to thrive in this world today and tomorrow” [from That Used To Be Us], and one of their core findings is increased learning time at every level of society—from school children to workers to executives.

Structured learning and engagement time can be achieved in a number of ways. Before the right structure can be selected, though, business leaders must operationally embrace the fact that sustained peak performance is predicated on more than current productivity levels. Operational excellence in general and sustained peak performance in particular depend on continuous workforce learning, development, involvement, and innovation. When enterprise leaders adopt this strategic mindset, they will make the investment in structured engagement time for front-line employees so they can add future value while also ensuring current performance success.

© 2011, Susan L. Koen, Ph.D. – All Rights Reserved.

Unlike the traditional concept of labor as an expense to be controlled, this forward-leaning approach means that our workforce is prized, protected, maintained and grown as much as possible. Rather than paying minimally and slashing quickly, operating with people as a business asset means investing in and nurturing them so they continuously add value to the enterprise.

To really begin walking our talk about people as our most important asset, we need to start applying the principles of asset management to our management of people. Asset management is a systematic process of operating, monitoring, maintaining and upgrading assets so the greatest return is achieved. This asset approach starts from the premise that there is value present, and that such value can be (and should be) optimized. Success in extracting that value over time requires disciplined, principles-based management.

The five specific principles of asset management that I strongly believe are applicable to workforce assets as well are:
   Select Best Quality for Price  
   Protect, not Exhaust
   Grow, not Stagnate
   Manage for Maximum Life Cycle
   Measure Performance and Make Adjustment When Needed
These five principles easily could serve as an enterprise HR strategy framework.

With this framework in place we would actually, not just rhetorically, operate our enterprises with people as our greatest asset. And, we would begin to assiduously document the value that people are adding to brand value, pricing potential, customer loyalty and other direct contributors to top-line and bottom-line success. If we truly treat people as a strategic asset—mindfully checking our policies, processes and behavior towards the workforce against the five principles of asset management—then, we will achieve the reality of people being the intangible long-term asset of the enterprise—the very definition of capital assets in Webster’s Dictionary!

© 2011, Susan L. Koen, Ph.D. – All Rights Reserved.