By James McCusker Business 101
The beginning of a new year is a great time to change things. In our personal lives, we call the changes New Year’s resolutions. In our businesses, we call them goals.
In both cases, we believe that the changes will make things better; make us better people, for example, or simply fitter people. In business, it’s pretty much the same thing, except that the changes involve other people in addition to yourself.
Other people, in fact, are the key to making successful changes in your business. One of the classic missteps you can make as entrepreneur or manager is to take on too much yourself. If we were to take a look at a sample of a company manager’s “Goals for 2013,” what we would notice is the predominance of personal goals, essentially New Year’s resolutions.
In most cases, real change for your business won’t come from your working another two or three hours a day “to do your job better.” The most likely changes from that regimen, in fact, will be to your health and your disposition.
To make real changes in a business, you have to involve other people. It’s your job to give structure and purpose to the work of your business, not to do it yourself.
When it comes to getting people to change, sometimes an indirect approach is more effective than a head-on collision with established patterns of behavior. There is probably no better example of this than Paul O’Neill’s experience as CEO of ALCOA.
O’Neill became chairman of ALCOA in 1987, when the aluminum industry giant was 101 years old and very, very sleepy. Its financial performance was disappointing and its workers seemed dispirited. “Lethargic” was the word that seemed to pop up in reports and discussions of the company.
O’Neill changed all that in a remarkably short period of time after he took over — but not by announcing new goals for profitability, return on investment, pricing or any other financial variable. He said that the company would be focused on just one goal: worker safety.
More than a few investors and Wall Street analysts thought that he had slipped his moorings, but he was serious and unwavering. He didn’t explain how his plan was going to affect investors, but did say that he wanted to make ALCOA the safest place to work in America.
O’Neill wanted workers to know that he was serious about this. He gave them his home telephone number and said to call him if there were safety issues that were not being taken care of. And when workers did call him, the problems were immediately addressed — in at least one instance during that very night, before the morning shift showed up for work.
O’Neill had no hesitation about calling up his managers in the middle of the night to fix a safety problem, or to fire those who knowingly left a safety problem unaddressed. This had two effects: It showed workers that the CEO was serious about safety — it wasn’t just “suit talk” — and it awakened managers, who realized that listening to the people who actually did the work was an important part of their job.
As safety issues were addressed, O’Neill’s home number didn’t ring as often. And when it did, the workers often wanted to talk about other things — efficiency, quality and customer service that would make ALCOA a better company.
ALCOA did become a better company and its “worst to first” story became something of a management legend as well as a sweet ride for investors.
The new CEO’s emphasis on safety, and his visible commitment to it, changed the organizational culture at ALCOA. Workers felt more valued and this had a positive effect on their motivation and energy. Management began to see their jobs as being more about responsibility and less about authority.
The lessons we can take from Paul O’Neill’s experience at ALCOA are these:
Financial data and other reports on a business tell a story; they aren’t the story themselves. It’s up to you to understand the story the numbers are telling you — and do something about it. O’Neill saw the safety record for what it was: a reflection of a complacent, ineffective management. He believed that turning around that situation would get the company back on track, and, as importantly, unless the management situation were fixed all other strategies would fail.
The goal was expressed in terms of day-to-day work, not financial ratios in which workers had little interest or personal stake.
The CEO’s commitment was visible, steadfast and personal.
If you want the goals for your business to be met this coming year, these three ideas will be a big help to you.
James McCusker is a Bothell economist, educator and small-business consultant. He can be reached at firstname.lastname@example.org.