THE MANAGING COLLECTIVE

an essay by Mr. Hugh Aaron

I desperately needed ideas. The company’s progress was stalled due in large part to a slowing economy. But it was also due to a certain apathy (even within myself), and a hardening of our ways that had developed during the previous decade.

It would have been easy to pay a management consultant to tell us what to do. It would also have been defeatist. After all, I owed what success I had to applying my own resources. And I already had well-paid managers in place who knew the company better than anyone else. But I’d never asked them to look beyond their own bailiwicks or sought their opinion of what was wrong or encouraged their suggestions on what to do about it. Right under my nose were the most qualified consultants I would ever find.

We met every weekday morning in my office between eight and nine, before the phones starting ringing. Seven members of our small company (now with fewer than a hundred employees) were steady attendees: the vice president of production, the first-shift supervisor, the technical director, the office manager, the sales manager, a rotating production worker who participated for a week, and I. If a salesman or the visiting manager of our satellite plant happened to be in the office, he was also invited.

Our purpose was to develop new ideas and let them fly no matter how ridiculous they sounded. Everyone had a turn to speak and if what he or she had to say wasn’t completed within the hour, it was carried over to the next morning.

Though presiding, I maintained a low profile and let the other members of the group argue their thoughts freely. I might ask a question here and there or toss out a problem I’d been wrestling with. But it was not management by consensus; no vote was taken. I reserved the authority to decide which idea was worth trying. Everyone understood that I, as majority stockholder, had the most to gain or lose.

My first task was to break their habit of restricting their thinking to their own jobs — a natural and regrettable result imposed on us by the organizational structure. Traditionally, only the CEO sees the “big picture” and is the one who makes the big decisions. I wanted everyone to be a figurative CEO, to be in my shoes. Although each individual in the group had different and well-defined responsibilities, all had to put aside any claim to expertise or superiority and accept both criticism and ideas that concerned their departments. We were all equal during the meeting and every opinion was respected, but outside the meeting we reverted to operating within the clearly established lines of responsibility, which could not be crossed.

The unpredictable member of the group was the rotating worker. That person might be a young woman from the office staff or a tough old hand from production. Many workers, unaccustomed to membership in the inner sanctum and feeling intimidated sitting with the brass, initially only listened. But with encouragement, by their second or third turn the timidity disappeared.

From these people came the practical, down-to-earth solutions that startled us by their insight: re-using our plastics waste to clean machines between runs, and hiring two of our workers who had once been in the cleaning business to replace our unsatisfactory cleaning service. Their moonlighting added to their income, and their quality job pleased their coworkers.

Some workers begged off attending our meetings, saying they had nothing to contribute and had no wish to hear the problems. But they couldn’t avoid hearing them. Walking through the plant I’d overhear discussions on what went on at our meetings. Most worker members, proud of their participation, were quick to spread the word to all corners of the company.

The range of ideas that flowed from these meetings was enormous, from hiring and firing people to changing banks to devising compensation plans to seeking new markets to establishing long-range goals and ways to achieve them. The collective dealt with virtually every aspect of running the business, culminating in incentive plans for all levels of the company (except top management) that ultimately eliminated most of our structural problems.

After two years, the meetings degenerated into spurious discussions and boring recitals of petty complaints better dealt with at a lower level. Thus the group contained within itself the elements of its own demise. Owing to the collective, the company reached a new and prosperous stage of life. But an indicator of the collective’s effectiveness was that it eliminated itself. Problems had been its raison d’etre; without them, it had no reason to exist.

About the Author: A graduate of the University of Chicago, Mr. Arron has had 18 of his articles published by The Wall Street Journal. He was CEO of his own manufacturing business for 20 years before selling it to write full-time.

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