THIS IS AN ERA OF RAPID CHANGE, increased uncertainty, volatile economics, and constant adaptation. Those employees and organisations that gain an advantage flourish, while those that lag behind find themselves unemployed or bankrupt. So what steps can an individual or organisation take to reduce the threat of extinction? Simply, a focus on productivity through bottom-up, intra-company cultural change.
Or to put it more simply, ‘x10’.
X10ing is the idea of constantly searching, identifying, and analysing opportunities that can result in a return on investment (ROI) of over 10 times. The expression ‘x10’ was first coined by Dr. Michael Hewitt-Gleeson, and was published in ‘The x10 Memeplex – Multiply your Business by 10’. Hewitt-Gleeson’s belief is simple, “Bottom-up innovation creates ten times the value of top-down”.
Top down cultures are prevalent in many societies, but it is particularly common in China where a high Power-Distance Index (PDI) results in little delegation and even less feedback from subordinates who are exposed to a ‘command and control’ management style. However, those companies in China that have broken the mould benefit greatly from bottom up innovation.
Hewitt-Gleeson says that we should think of employees as “paid thinkers”, since these employees are already on the payroll and so it makes financial sense to use them as the source of innovation, kaizen, and incremental and strategic change.
[quote style=”boxed” float=”left”]…we should think of employees as “paid thinkers”, since these employees are already on the payroll…[/quote]
One of the main supporters of this approach was Jack Welch, CEO of General Electric (GE) from 1981 to 2001. Jack was introduced to the x10 concept in 1984, when Hewitt-Gleeson spoke at a management meeting for GE. An invitation to ride in Welch’s private jet followed, and soon after GE launched the x10 management training program.
In 1984, GE and its competitors were focusing on ‘quality’. The company was a 30 billion dollar business, but American firms were losing market share and profits to the Japanese, who practiced new business implementations and generated new ideas. American firms were suffering partly because they were all reading the same books, and therefore saw improvements in the same way.
Jack (and ultimately GE) indoctrinated into GE the culture that each business unit was under utilising its brainpower by a factor of 10. The new goal was ambitious: turn a 30 billion dollar company into a 300 billion dollar company. And by 1998, Welch did just that.
[quote style=”boxed” float=”right”]…turn a 30 billion dollar company into a 300 billion dollar company. And by 1998, Welch did just that.[/quote]
“We have to shun the traditional incremental growth strategy and grow by the quantum leap”, said Welch, as he switched the company from a product driven company, focused on market share, to a customer driven company based on profit share.
x10ing your Organisation
So, what does this mean for you, your department, your company, and your stakeholders? X10ing your organisation is about creating new habits with your employees; habits that are connected to buy-in, efficiency and synergy.
The ClarkMorgan Insights interview titled “Chinese say ‘no’ by inaction, not words” says it all. Gaining buy-in from staff takes more than just sending a memo, or updating the company handbook – it takes a concerted effort by more than just the C-level leadership. Otherwise nothing is achieved, fast.
In his Harvard Business Review article titled ‘Leading Change: Why Transformation Efforts Fail’, John Kotter highlights that organisations must create a “powerful enough guiding coalition” which could consist of as few as five and as many as 50. Regardless of the number, the coalition must have a shared commitment for change, and be able to engage the entire organisation.
But engaging the employees can be the biggest battle, especially in China, where engagement is one of the lowest in the world. A 2009 and 2012 comparative survey by Gallup showed that while engagement levels of Chinese aged 14 and older had increased, it was still only 6%. Furthermore, 26% of Chinese in 2012 were actively disengaged. So before any multiplication of productivity can occur, a focus on improving employee engagement is a must for any organisation – no matter where they are located.
Go to any department store in China and you’ll see an abundance of shop assistants. Unfortunately, this doesn’t make the experience any more efficient. Instead, the process of looking, selecting and finally buying a product can require three or more people. This might be a great strategy to reduce national unemployment, but it does little to improve profitability.
And this overlap of responsibilities and repetition of the same task is where a lot of the x10 efficiency can be gained. However, the problem of identifying the inefficiencies is harder to identify than a shop floor, since many companies’ departments are compartmentalised, both physically through the use of cubicles and floors, as well as virtually, through non-complementary software and jargon.
And then there’s the belief that ‘working hard’ is the same as ‘diligence’. In fact, the opposite can be true, since jobs can become over complicated, and bureaucracy increased in order to create the illusion that a role is important to the entire organisation. You need only compare the banking experience between the highly efficient Hong Kong, and banks in the mainland of China. Seating for customers is non-existent in Hong Kong branches of HSBC, while at the Bank of China in Shanghai rows of seats occupy more than two-thirds of the branch. This is not HSBC’s effort to cut costs, but rather a direct correlation to the waiting times experienced by both sets of customers.
[quote style=”boxed” float=”right”]Building efficiencies within your organisation can be as simple as a asking for recommendations from staff.[/quote]
Building efficiencies within your organisation can be as simple as a asking for recommendations from staff. At an Australian assembly line, workers used air drills to insert screws. A bucket of screws was located at each work station, and the worker picked the screws up one by one to assemble components. But because the gloves worn failed to provide the dexterity and tactile sensitivity needed, workers dropped dozens of screws each hour in their quest to quickly perform their job. So many screws ended up on the floor that sweeping up the screws and returning them to the buckets was a full time job.
And then one employee made the recommendation – change the gloves. When the company provided workers gloves that improved their ability to grip and handle the screws, process efficiency improved and workers produced more parts. Fewer screws were dropped and the worker who previously swept the floor was assigned a more productive – and enjoyable – job. What’s more, nobody lost their job.
So where do these efficiencies originate from? This is where Hewitt-Gleeson’s bottom-up approach is critical, since this is where synergies can best be identified. Of course it also helps for senior management to ‘walk the floor’. JetBlue, a US airline, regularly has senior executives help out on their airlines. Even Ed Barnes, the airline’s CFO has been seen serving customers on flights and helping collect rubbish prior to landing. Of course, this special attention could be linked to an incident in 2010 when a JetBlue flight attendant quit his job in style by announcing on the intercom of his imminent departure, before grabbing two beers and using the evacuation slide to exit the plane.
Walking the floor is one method that is highly recommended. The other technique is to encourage a culture of synergy between staff. A yearly award that praises synergy and cross departmental meetings are two ideas to encourage synergy. Another is the use of software, such as Yammer.com, that allows for the creation of virtual communities within an organisation. Informal cross departmental project teams can be created, questions can be asked, and successes (and failures) can be shared. Yammer has proved so successful that it was bought by Microsoft in 2012 for 1.2 billion dollars in cash!
Of course there are many ways to search, identify, and analyse opportunities to improve the process of your organisation. The best companies, and training companies for that matter, do it all the time! Start with increasing your staff’s engagement, highlight that improvements in efficiency are not punished with job losses, and create an environment of synergy.
And have every staff member read this article. That will help with your bottom-up approach, and save you time explaining what the heck ‘x10’ is!