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Text File | 1992-10-19 | 10.0 KB | 213 lines

                                                                                BUSINESS, Page 42

THE WORKPLACE 

Is Mr. Nice Guy Back?


With worker morale shredded by layoffs, some managers are trying
kinder, gentler ways to restore competitiveness to American
industry

By JOHN GREENWALD -- Reported by William McWhirter/Chicago


    "Good management is largely a matter of love. Or if you
are uncomfortable with that word, call it caring."

    -- James Autry, Love and Profit


    What's that again? Love? Caring? But how can the Age of
Aquarius be descending upon corporate America, flooding
boardrooms with 1960s-era flower children, when retail chains
are closing hundreds of outlets and major firms laying off
thousands of employees?

    At last look, tough-guy tactics were in vogue and such
crash courses in killer management as Winning Through
Intimidation and Leadership Secrets of Attila the Hun were
required reading in the executive suite. The practitioners were
effective in at least one respect: their massive layoffs, often
executed with the finesse of a Marine drill instructor, have
left the atmosphere at many firms thick with hostility. "I feel
like I'm walking along a geological fault line within U.S.
companies," says Robert Rosen, author of a recent book, The
Healthy Company. "There is more frustration and tension between
employers and their employees than I've ever seen. Mutual
cynicism and mistrust seem to be at an all-time high."

    Into this breach comes a new breed of management experts
and executives. In a spate of books with such titles as Love
and Profit and A Great Place to Work, these experts are pulling
in the horns and preaching a gospel of full worker
participation in running companies. Such thinking has already
won converts at the likes of Ford, Goodyear and General
Electric. The books stress cooperation over conflict. "To
compete in the marketplace, workers and management must
collaborate," declares Charles Garfield, who describes his view
in Second to None. "It is in these collaborations that human
ingenuity and creativity are best realized."

    This apparent New Age emphasis on teamwork and trust is
really a homecoming for theories that U.S. companies
cold-shouldered -- and Japanese managers embraced -- when
American social scientists first proposed them in the 1950s and
'60s as a key to creating high-quality products. After all,
executives reasoned then, U.S. firms already dominated the world
using top-down management. "These ideas are coming back now
because of the quality movement here," says B. Joseph White,
dean of the University of Michigan business school. "U.S. senior
managers have decided they have got to catch up." That has
helped make "empowerment" a buzz word for the '90s.

    As a result, some companies are experimenting with
employee groups ranging from the now familiar quality circles
that discuss specific problems to self-managing teams that
design and build entire products. "The typical company has put
its foot in the water," says Edward Lawler, a management
professor at the University of Southern California business
school, who estimates that more than 80% of FORTUNE's top 1,000
firms have at least token employee participation. He adds,
however, that few firms have installed such programs on a
systematic, company-wide basis.

    One big reason for the experimentation is the need to tap
the skills and ideas of employees who have survived the
elimination of 6 million jobs since 1983, many of them held by
middle managers. "You can't run a military-style organization
if you've fired all the top sergeants," says Audrey Freedman,
management counselor for the Conference Board business research
group. "You have to find ways to rely on the initiative and
morale of your workers." Concurs Walter Scott, a management
professor at Northwestern University's Kellogg business school:
"Companies that have just cut back without empowering people are
destined for even more problems."

    One manager who is emblematic of this shift in approach is
GE chairman John Welch. Known in the '80s as "Neutron Jack" for
zapping 100,000 employees -- 25% of the company's work force --
Welch now stresses the importance of teamwork. Says he: "To get
every worker to have a new idea every day is the route to
winning in the '90s."

    To help bring good ideas to life, GE holds "work-out"
sessions in which groups of workers and managers spend three
days in shirt-sleeve meetings on anything from gripes to pitches
for new products. The high point comes on the third day, when
employees pepper their bosses with scores of suggestions that
the brow-mopping managers must accept or reject on the spot.
Most turn out to be keepers. In a session at an aircraft-engine
plant last September, one team pitched a plan that cut the time
needed to produce a jet-combustion part nearly 90%. And an
electrician proposed a design for an aluminum reflector that has
cut the plant's light bill in half. Over two years, the grueling
workouts have spawned dozens of innovations, ranging from
improved light-bulb packaging to the elimination of reams of
paperwork.

    Conrail, one of the largest U.S. freight lines, turned to
its remaining employees for help after slashing its payroll
from 70,000 jobs to 28,000 over the past decade. Chairman James
Hagen authorized workers to assemble problem-solving teams on
their own initiative. One such group met with an irate steel
shipper last spring and quickly found ways to reduce the error
rate on the customer's bills to a manageable 3% from an
exasperating 14%. The team's ultimate goal: total accuracy on
all 56,000 bills that Conrail sends the steel firm each year.

    Empowering workers has paid dividends for tiremaker
Goodyear, which was burdened by $3.7 billion of debt and pinched
by depressed sales to the auto industry when new chairman
Stanley Gault arrived last June. Gault, who had revitalized the
housewares firm Rubbermaid, swiftly assembled teams to complete
work on languishing new products and opened his door to
complaints and suggestions. Since Gault became chairman,
Goodyear has rolled out flashy new tires like its deep-grooved
Aquatred model, which helps prevent hydroplaning -- skidding on
water. "The teams at Goodyear are now telling the boss how to
run things," boasts Gault. "And I must say, I'm not doing a
half-bad job because of it."

    Many teams break down the barriers that traditionally
divide and isolate departments from one another. In Second to
None, author Garfield describes how Michigan-based Steelcase,
the world's largest maker of office furniture, overcame these
barriers by building a corporate development center to bring
together more than 400 teams to design products and work on
special projects. "There are no separate departments for
different functions anymore," says retired Steelcase chief
executive Frank Merlotti. "We tried to remove anything that got
in the way of people communicating, discussing ideas. We wanted
to get rid of this top-down thing."

    Autry, the retired president of Meredith Corp.'s magazine
group, whose titles include Ladies' Home Journal and Better
Homes and Gardens, cultivated the cooperation he describes in
Love and Profit. To develop new titles, Meredith encourages
employees to pursue their pet ideas for future magazines after
hours. Workers who have come up with promising concepts have
been permitted to write, edit and manage their offspring. The
strategy has led to new titles like Wood magazine, which has
grown to a circulation of 600,000 among weekend hobbyists since
it was launched in 1984.

    At oil giant Mobil, field crews make decisions on when and
where to drill that were once the preserve of management. Mobil
also consults with its workers on such strategic questions as
which plants to keep and which to sell.

    All this is not to say the millennium is at hand. The idea
of teamwork still often goes against the grain of U.S.
industry, which has traditionally stressed top-down control.
"The resistance to these and even more profound changes will be
fierce," says Garfield. "Old-line managers will fear losing
their centrality." Concurs the University of Michigan's White:
"U.S. firms are getting much better at teamwork, but it's not
really natural for us. It involves learning a lot of new skills
and attitudes."

    Even firms that have enthusiastically endorsed worker
participation can backslide. Ford used more than 700 employee
suggestions in its Taurus, which became the hot American car of
the decade after it appeared in 1986. But management waited five
years to bring out a new version that amounted only to a modest
restyling, by which time such Japanese firms as Honda and Toyota
had rolled out all-new rival cars. "An awful lot of people give
an awful lot of lip service to teamwork," says former Ford
chairman Donald Petersen, who retired in 1990 and describes his
tenure in his book A Better Idea. "But the moment they find
themselves in difficulty," Petersen adds, "they revert to form."

    Some skeptical managers see power sharing as little more
than the latest B-school fad. "Motivating people has been the
name of the game forever,'' says Robert Malott, chairman of the
executive committee of FMC, the Chicago-based munitions and
chemicals maker. "What's new about that? But I think
sequestering everyone in a group-therapy session with
touchie-feelie urgings to motivate each other is nonsense."

    Not so, say other executives. The trust that some
companies now place in their workers represents "a need to find
new ways to set standards, motivate perform ance and improve
organizational effectiveness," says Rex Adams, Mobil's vice
president for administration. "It means maintaining flexibility
across the entire work force, building morale at a time of
economic stagnation and fostering teamwork when individuals feel
more alone and at risk than ever before." Put another way,
teamwork and caring can pay healthy dividends in the constrained
1990s and beyond.