Leaders to Leader

Hewlett-Packard Company co-founders David Packard and William Hewlett

Empowerment, delegation and team building need to have a proper environment where they can be nurtured, have the ability to grow and ultimately be ingrained into the corporate culture.

It is surprising how many companies launch training initiatives in these areas without obtaining management buy-in, and then wonder why they do not firmly take root.

The lessons from the practices the great leaders employed illustrates that if empowerment and team building strategies are ever going to work, they must be initiated, endorsed and fully supported by senior management. The great leaders clearly understood this and in many cases institutionalized these practices in their companies.

3M possesses a well-earned reputation for being a highly innovative company. During its early years, William McKnight focused on the development of unique and ingenious products and applications.

“After the development of masking tape, McKnight learned a crucial lesson about letting his engineers follow their instincts. He soon codified this lesson into a policy known as the 15% rule.

‘Encourage experimental doodling,’ he told his managers. ‘If you put fences around people, you get sheep. Give people the room they need.’

Still in place today, the rule lets 3M engineers spend up to 15% of their work time pursuing whatever project they like. Subsequent policies and programs—like Genesis Grants (an internal venture capital fund available to engineers whose ideas have been turned down by management) and the 25% rule (requiring that each division generate a quarter of its sales from products introduced within the past five years), which in 1993 became the 30% rule—furthered 3M’s climate of innovation.” [1]

Under the tutelage of David Packard and William Hewlett, Hewlett-Packard saw a number of innovative empowerment practices incorporated into its corporate culture. “David Packard and Bill Hewlett’s approach to management bequeathed many gifts to today’s managers and their teams.

‘Management by Objective,’ for example, empowered individuals to be creative problem-solvers. Not only does the process create an organic and self-sustaining kind of teamwork, but it prevents ‘diworsification’ for companies, which can stay focused on what they do best and what fits their core competencies.” [2]

Donald Kendall (PepsiCo) fashioned an environment that was known for hiring only the best people and fully supporting their jobs. “PepsiCo deeply believes that managers who act like owners, run lean, and get big results should get big rewards.

PepsiCo treats its managers extremely well. Top middle managers earn between $96,000 and $144,000 (1989) annually, not counting bonuses, stock options, and other perks. How does it justify this largess?

Says Roger Enrico: ‘Treating the people well who produce is cheaper than having a big bureaucracy following them around trying to keep down costs.’” [3]

Timothy Koogle (Yahoo) noted the unique environment Yahoo created to facilitate empowerment and improve decision-making.

He explained, “We get real clear about what we’re going to do – not necessarily how – so we’ve got a focused strategy. But then we drive decisions out to the organization and that’s real different from kind of past generations of business if you will, that were very hierarchical where most of the decisions had to flow up through the chain and flow all the way back down the chain.

Here we actually do distribute the decisions out to everyone who’s got authority to build great product and great service. But what it means is you’re making a lot of decisions in parallel and what that means is you can execute faster and that’s a real key in our environment because it’s growing real fast, changing all the time, and there is a lot of competition.” [4]

The great leaders provided their employees with the necessary tools to effectively harness their power, but more importantly, they created healthy environments where they could flourish.

As General Robert Woods (Sears) articulated,

“We put our faith in men, not systems. I like to let a man learn by making a few mistakes, as long as they don’t cost too much.” [5]

Related:

“Hire Character and Train Skills”

Attaining Organizational Results Requires Visionary Thinking and Planning on Multiple Levels

Leaders Succeed When Employees Are Successful

Focusing Employees on Common Goals

References:

1. Lukas Paul, 3M a Mining Company Built on a Mistake Stuck It Out Until a Young Man Came Along with Ideas About How to Tape Those Blunders Together as Innovations – Leading to Decades of Growth (Fortune Magazine, April 1, 2003)
2. Orfalea Paul, Helfert Lance, Lowe Atticus and Zatkowsky Dean, Inspirational Figures David Packard (West Coast Asset Management)
3. Dumaine Brian, Those Highflying Pepsico Managers (Fortune Magazine, April 10, 1989)
4. Gardner David and Gardner Tom, Fool Interview with Tim Koogle, Chairman and CEO of Yahoo! (Fool, April 18, 2000)
5. Retail Trade: The General’s General Store (Time Magazine, February 25, 1952)

Excerpt: Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Majorium Business Press, Stevens Point, WI 2011) Read a Free Chapter

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
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