Wednesday, July 9, 2008

Money & Business

USN Current Issue

No Ideas? You're Not Alone

If you're in a group, you'll have a better shot at being creative

By Justin Ewers
Posted 6/10/07
Page 2 of 3

Tapping into employee creativity takes more than money: It requires a new way of thinking about management—one that is often hard for those at the top to accept. "Most managers aren't willing to give up enough autonomy," says Sawyer, author of Group Genius: The Creative Power of Collaboration. He points to Semco, a Brazilian manufacturer of devices from marine pumps to commercial dishwashers, as an example of a managerial paradigm shift. Until 1980, Semco was a traditional company, with a top-down management structure and a shelf full of binders with procedures for any situation. The only problem: It was on the verge of bankruptcy.

Checking Gore-Tex fabric at W. L. Gore & Associates, an organizationally "flat" workplace
JEFFREY MACMILLAN FOR USN&WR

Then Ricardo Semler, the son of the company's founder, took over as CEO. Semler tossed the binders, fired most of his senior managers, and handed the reins to the company's employees. "It was like taking an improvisational jazz ensemble and ramping it up to the organizational level," Sawyer says. Small groups now run the company with near-total autonomy. Large, 300-worker factories have been split into smaller, 100-worker units. The move initially caused inefficiencies and higher costs but eventually allowed low-level innovation to flourish. Empowered factory-line workers, it turns out, really do know how to do their jobs better. Inventory backlogs have eased, product lines have expanded, and sales have jumped. "That's not a lack of structure; that's just a lack of structure imposed from above," Semler has said. After the company's reorganization, revenues climbed from $4 million to $212 million. Semler held a party in 2003 to celebrate the 10th anniversary of the last time he says he made a decision. Semco is "a radical rethinking of the organization," Sawyer writes, "and most companies aren't willing to go there just yet."

Glide path. Some are, though. W. L. Gore & Associates, the Delaware-based developer of Gore-Tex and Glide dental floss, has been widely praised for creating a collaborative atmosphere. Since its founding in 1958, the company has been organizationally "flat." There's no chain of command. Employees are referred to as "associates" and hired into evolving work areas, not specific jobs. They are guided by "sponsors," not bosses. Workers, not managers, choose product areas that fit their skills. Small task forces organize as issues arise, work to solve them, then disband. To prevent bureaucratic creep, Gore tries to erect a new building any time a work group exceeds 200 people. It's a system designed to breed meritocracy and self-sufficiency. "Your team is your boss, because you don't want to let them down," as one employee puts it.

This environment has allowed ad hoc teams room to flourish—and to create most of Gore's most lucrative innovations. Three employees familiar with the company's Ride-On bike cables wondered if the same technology—a wire encased in a thin coat of plastic—could be used on guitar strings. Without the guidance of senior managers, the associates came up with the Elixir guitar string. Released in 1997, it quickly became a top seller.

When a full organizational makeover isn't possible, smaller dabs of collaboration are always an option. British Petroleum, for example, has redesigned its Houston office around espresso bar "nodes": To get anywhere in the building, employees have to pass through these central hubs, forcing disparate groups of workers to interact with one another. At Cisco Systems, the networking giant, senior managers have begun allowing non-salespeople to talk to customers, something that was frowned upon for years. When engineers hear complaints directly from customers, the thinking goes, they're likely to generate new ideas. Open-source software and wikis, the newest form of Web-enabled collaboration, are being used by groups ranging from would-be authors generating book ideas to the more than 1,400 developers who created Nicholas Negroponte's $100 laptop, a rugged, bare-bones computer for use in educating children in developing countries. "You simply couldn't do some of these things any other way," says Ogle, author of Smart World: Breakthrough Creativity and the New Science of Ideas. "The knowledge economy is morphing into the creative economy. This is where your big competitive edge is going to be."

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