Wednesday, April 22, 2009

Redefining roles at the operations value level.

"The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don't play together, the club won't be worth a dime."-- Babe Ruth

Managing at the operations value level today involves three fundamental tasks: first, making the organization’s vision operational; second, consistently delivering timely, error-free products and services; and third, making decisions based on what’s right for the customer and for the organization as a whole.

Converting to teams means a shift in the balance of power. Tommye Joe Davis, who managed a Levi-Strauss sewing plant in Murphy, North Carolina, believed that clarity about the organization’s vision, not the control of higher level managers and developers, would best guide successful front-line operators. The Murphy plant cross-trained teams of workers to perform 36 tasks instead of one or two, and the teams participated fully in running the plant, from organizing supplies to setting production goals. They also set personnel policy, and as a result, the Levi policy manual at that location shrunk from 700 pages to 50.

“You can’t lead by just barking orders,” noted Davis. “I used to say, ‘You do this, you do that.’ I learned to say ‘How do you want to do this?’... But it only worked if we all had the same picture in our head of what we were trying to do.”

Overcontrol kills invention, learning and commitment and inhibits agility and flexibility. In traditional organizations, managers tell employees how to do their jobs and allow them to make decisions only when they feel certain the employees will make the same decisions the managers would make. But in many of today’s most successful organizations, managing occurs “after the fact,” allowing operators to risk making mistakes because, in the long run, they’ll learn and make more right rather than wrong decisions.

Few people understand a job better than the person doing it everyday. To be successful in their new roles, managers throughout the organization have to embrace alternative forms of control, trading in certainty for speed by giving others the guidelines and freedom to act as they see fit. Nimbleness is the only sure way to maintain control in a fast changing environment.

Cigna, the giant property and casualty insurer has transformed its procedure for developing group policies for corporate customers with the help of teams supported by artificial intelligence. The old method, still standard practice for many insurers, had been to send each proposal through ten or more departments sequentially - sales, underwriting, policy service, claims, and so on. Each department would revise the proposal in the light of its own responsibility, information, nomenclature, and schedules. The inevitable result: confusion, and delay. Now, teams made up of representatives from each department assemble new policies with the help of a system programmed with insurance knowledge. Flexible and disciplined, this system can call up, correlate and display descriptions of all existing insurance coverages and options. The teams construct policies from alternatives the system suggests and the system distributes the proposal electronically throughout the corporation for the necessary approvals. Proposals are finished faster, conform better to customers’ needs, yet cost less because they reuse work that's already been done.

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