Re-Introducing the Human Factor

Out of necessity to compete and survive, the combination of innovation and technology are two focal points for management. The challenge for management is to make things happen through people, leadership, culture, and the organizational mindset. And this does not mean that everything must be done quicker, faster and at lower costs. The real benchmark to ask is: Does it add value to an existing process?

The driver behind this mandate (creating value through innovation and technology) is the management of people. With so much emphasis on profitability, things like people and innovation often get crushed in the mad rush to re-engineer the business. Re-engineering views the business in terms of excess, asking the question: What can we eliminate? Innovation on the other hand views the business in terms of re-thinking, asking the question: Can we do this a better way? Whereas re-engineering places little emphasis on people, innovation relies heavily on people.

If the organization fails to support its people, then creative thinking and innovation becomes elusive. A good way to understand this concept is to simply flip the organizational pyramid upside down. The CEO, who typically sits on top of the pyramid, is now at the bottom, providing upward support to the VP's (Vice Presidents). The VP's provide support to upper level management, upper level management provides support to middle level management, and so on. The lower levels of the organization are now front and center at the top of the organizational pyramid, supporting customers who in turn drive the business.

In his book, Leadership is an Art , Max De Pree describes leadership as "liberating people to do what is required of them." Employees are viewed as customers and the role of the Manager is to serve employees, attempting to optimize productivity. This point is also made in the book, Stewardship: Choosing Service over Self Interest by Peter Brock. Brock describes managers and supervisors as servants to employees, no longer controlling employees, but finding out specific issues confronting the employee and working through these issues to empower and unleash the human factor within the organization.

A network of employee-owned initiatives now re-energizes the organization into an entrepreneurial culture. Employees not only assume responsibility for valuing creating projects, but they share in the benefits and rewards; i.e. they have a piece of the action. Once employees are in control, they naturally find better ways of doing things - this is the foundation behind innovation. Management can begin targeting innovation at critical business areas, such as customer service, production, and marketing. To further move the process along, technology can be deployed into the mix. It's worth noting that technology alone is not necessarily the answer. Once again, we can go back to our fundamental benchmark: Does it add value to what is currently taking place?

All of this requires considerable change on the part of management. In his book Managing by Measure , Mark T. Czarnecki offers the following observation:

"Actual change takes real participation, not just listening. It takes real emotion and understanding . . We can ask people to change, but when we fail to redesign structures and systems around them, a lot of old behavior gets reinforced and new behaviors go unrewarded. Pay systems, leadership styles, job boundaries, technology, polices; if these aren't also changed, they merely serve to pull people back to where they were before the change process started."

Changing human behavior requires that managers put emphasis on people. And as author Mark T. Czarnecki has pointed out, a lot of things have to happen for this to occur - right leadership, right culture, right reward systems, etc. Therefore, the real test is how the organization itself changes in meeting the needs of the employee. For many organizations that have endured several re-engineering programs, reintroducing the human factor may offer the most effective and sustainable approach to continuous innovation.

matt evans photo Written by: Matt H. Evans, CPA, CMA, CFM | Email: | Phone: 1-877-807-8756

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