What do you think of this PBI* for a 21st Century Business?
*PBI=Partially-Baked Idea
First, two necessary conditions in the social environment:
The workplace has proved itself incapable of providing adequate health care and retirement plans for its workers. This is particularly the case with small and start-up companies, who lack the advantage of large employee pools. The result is a damping of creativity in the marketplace. People are less likely to engage in risk-taking and innovation when they must do without adequate health care and retirement financing in order to do so.
The ACA is a small step toward this end, but universal health care and a fully funded government retirement system would result in the creation of many new small businesses in new areas such as green technology, precisely where they will answer the emerging needs of society.
A model for a company in the coming age:
The company will be worker-owned. You will earn increasing shares in the company as a function of factors such as the number of years you are employed in that company. If you leave the company for any reason, you may hold your shares until your death. However, when you die, the company will give your estate a fair cash settlement for your shares and the remaining workers will retain ownership of the company. This is necessary in order to keep ownership from spreading out among people who have no vital interest in the company.
Not all workers will have an equal share in the company. For example, it might be expected that the entrepreneur who starts the company will retain a larger share of ownership than the other employees. Also, shares in the company may be differentially assigned on the basis of the type of work done. Each worker will receive wages or salary commensurate with their job responsibilities, and in addition each will receive a share of the profits commensurate with the number of shares they hold. Thus every worker will have a stake in making the company more profitable in the long run. Governance of the company will be by a board elected by the workers. Each company will specify the details of the governing structure in its charter, as appropriate to the particular needs of that company. As a general principle, the governing board ought to include representatives from its suppliers and its customers.
After World War II, W. Edwards Deming, an American expert in production processes, went to Japan and taught them the management system that they then used to beat the rest of the world in the marketplace for a couple of generations. I believe that his methods can be modified readily to suit the circumstances of an employee-owned company. Here are the basic 14 points he taught:
1. Create constancy of purpose and continual improvement – long term planning must replace short term reaction
2. Adopt the new philosophy – by management and workers alike.
3. Do not depend on quality inspection – build quality into the product and process
4. Choose quality suppliers over low cost suppliers – to minimize variation in raw materials and supply.
5. Improve constantly – to reduce variation in all aspects e.g. planning, production, and service.
6. Training on the job – for workers and management, to reduce variation in how job is done.
7. Leadership not supervision – to get people to do a better job, not just meet targets.
8. Eliminate fear – encourage two-way communication, encourage employees to work in the organization’s interest.
9. Break down internal barriers – department’s in an organization are “internal customers” to each other and must work together.
10. Eliminate slogans (exhortations) – processes make mistakes not people. Management harassment of workers will create bad relations if no effort made to improve processes.
11. Eliminate numerical targets – management by objectives (targets) encourages low quality.
12. Remover barriers to worker satisfaction – including annual appraisals
13. Encourage self improvement and education for all
14. Everyone is responsible for continual improvement in quality and productivity – particularly top management
