Wednesday, August 12, 2009

Another Example of Employee Engagement

Lean practitioners are looking for new ways to engage employees to freely challenge status quo in a systematic manner to build highly flexible and innovative organizations. A recent article in the Wall Street Journal highlights the story of how The Bank of New Zealand unshackled employees after 148 years.

In most languages, “control” is the first synonym for the word “manage.” Control is about spotting and correcting deviations from pre-defined standards; thus to control one must first constrain. Standards, policies and rules are important—no organization can exist or survive without them.

The problem is that traditionally management’s role is to regulate power. They are often incentivized to increase control to maintain job security. In lean organization we strive to manage at the level closet to the product as possible. The challenge is to provide the information, knowledge, and structure to support this level of decision making and empowerment.

So what started out as a simple conservation between a frustrated employee and a manager planted a seed for change. The manager turned the frustrated rant from an employee around by asking the employee “What they would do different?” That little question established employee empowerment. Once others in the company heard of the successful efforts in this bank the flood gates opened. There were many others who wanted to make improvements but created new challenges for the corporation.

While store managers were moving quickly to exploit their newfound freedom, there were many at head office who were fretting about the loss of control. While many of the objections were more political than practical, some were well-grounded and soon led to policy adjustments. What everyone learned,” says Blair, “is that when you treat people like adults, they act like adults.”

There are two important components to The Bank of New Zealand success. The first is creating team-based incentives linked to performance and customer satisfaction metrics. The second component is availability and access to data which gives a clear picture of their financial performance.

At BNZ, store employees have the incentives, the data, and the freedom that are typical of a small business owner. As a result, most regard themselves as more than mere clock-punchers; they’re folks who have a real stake in a real business—and they run it as if it was their own.

Are employees in your organization empowered to make decisions as if the company was their own? If not consider the incentives and data you use to evoke participation and improvement. Learn to encourage employees who bring opportunities for improvement to your attention to also bring a countermeasure. Then follow-up to ensure the countermeasure is implemented and effective.


  1. I read this article, this article very informative and interesting..I refer you blog to many of my friends as well.
    Thanks for sharing knowledge..

  2. Thanks. It is an older article but nonetheless still a great example of employee engagement.