There Must Be a Better Way, Part II

So, you've come back for more, eh? Cool.

Last week we outlined how the vast majority of organizations on the planet systematically suck enthusiasm, creativity, commitment and passion out of far too many people at work. While likely unintentional, the lingering effects of the Henry Ford-influenced management model have been profound. Think we've come a long way from the days when assembly lines were all the rage? If so, why do most companies still:

1. Assign everyone to a 'caste'
2. Place everyone in a specific, highly-structured 'box'
3. Limit independence and creativity by overly-defining the job
4. Teach what's permissible and especially what's not
5. Promote 'sameness' -- where nearly everyone is treated the same regardless of performance
6. Redefine 'personal growth' and 'advancement', and
7. Distribute rewards without sufficient transparency or connection to contribution?

The answer? I think it's two-fold:

1. Most find it easier to control than to trust. Indeed, why are there so many managers and supervisors? Do we really need to be watched as much as we are? In the old days -- the days when assembly lines were comprised of people new to cities and new to the 'modern' workforce -- sure. Someone had to teach these people how to work in the machine age. Someone had to teach them how to do their job exactly the same way each and every time. Keep in mind that it was our Henry Ford who asked, "Why is it that whenever I ask for a pair of hands, a brain comes attached?"

Creativity and individual expression were simply not part of the deal.

But now? Now, I believe it's a need to control. The need to ensure order and predictability. The need to contain. The need for compliance. Which translates quickly into a lack of trust. Because, indeed, we watch carefully those we don't trust. And, apparently, most companies place little trust in their people. For, truth be known, even managers are supervised.

And they wonder why we don't show greater commitment, a stronger sense of ownership to the organization and its mission.

Want to manage something? Great. Manage a budget. Manage a project. Manage a facility. But don't manage people. Because here's the truth: Humans do not like to be managed or controlled. We don't perform well when we're closely managed. Turns out we've got this thing for freedom, for independence. A rather strong thing, as a matter of fact, as evidenced by the holiday we celebrated this week in the States.

Until we break this need to control, most of us are doomed to a workplace where trust is weak or, worse, non-existent. And, in turn, most organizations are doomed to under-performance.

2. Sadly, we don't know any better. Another reason why most organizations are clear descendants of the Henry Ford model of management is that we simply don't have viable alternatives. Sad, but true. It's been 100 years or so since Henry created his assembly line-style of management. In that time, what other management models have been developed? Sure, Toyota's approach to innovation and product quality is one. Google's is another. But aside from a small handful of innovators, we're left with the out-dated, hierarchical, top-down, control-oriented management system that brought us to the dance.

There must be a better way.

I think there is.

Whole Foods is a great place to start. A company that might offer insights into what's possible. A company different on the outside and, importantly, on the inside.

How about this for different (radically different when compared to other food retailers): At Whole Foods, it's all about the team. Each of Whole Foods' 270+ stores in North America and the U.K. is organized around eight or so teams, responsible for everything from produce to check out. Teams are responsible for product selection, pricing, in-store promotion, ordering and staffing. Not someone in corporate headquarters or the store manager, but each team. Teams are also responsible for profitability. In short, each team runs a business.

Wait, there's more. New associates are assigned to a team, but only temporarily. After a four-week probation period, team members vote on the individual. A two-thirds vote of approval is required to earn a full-time role on the team. Teams can also vote members off the team for poor performance. The same process is also in place at Whole Foods' corporate headquarters in Austin, Texas.

And how about this: Each team is also highly accountable for results. Every four weeks, the company provides data on profit per labor hour for every team in every store. Teams exceeding a set threshold earn a bonus delivered in the next paycheck. And the data for every team in every store is available to everyone. Nothing like competition to keep the juices flowing, so to speak.

And this: Trust is so important at Whole Foods that it shares key data openly with all 56,000+ associates. For example, compensation information is available to everyone in the company, as is most data typically kept close to the vest, like: team sales, product costs, daily store performance and profitability, just to name a few.

Let that sink in for a moment. Compensation data and key company performance metrics are available to everyone in Whole Foods. Clearly, Whole Foods gets it: You can't keep secrets and expect people to trust you.

Sound like where you work?

As Whole Foods co-founder and CEO John Mackey puts it:

We don't have lots of rules that are handed down from headquarters in Austin. We have lots of self-examination going on. Peer pressure substitutes for bureaucracy. Peer pressure enlists loyalty in ways that bureaucracy doesn't.

And that's only part of what makes the Whole Foods approach to management so different and the company so very successful. Indeed, Whole Foods is this country's fastest growing and most profitable food retailer when profit per square foot is considered (a standard in the industry). The company has also been good to its investors: Since its IPO in 1992, the company's stock has risen by nearly 3,000% which, to say the least, is far above their competitors' stock performance.

A team-driven approach, with each team truly leading a business. Peers hiring and firing peers. Aggressive use of performance data to drive internal competition and profitability. A strong results orientation, with bonuses linked to performance and paid immediately following that performance. An 'open book' to even the most sensitive information. Oh, and did I mention that executive pay at Whole Foods is capped at 19 times the company average (in most Fortune 500 companies that multiplier is an astounding 400) and that, at last count, 93% of the company's stock options were granted to non-executives?

The fastest growing, most profitable food retailer in the country. A different approach to managing a company. Think those two things are related? Of course you do. Visit a Whole Foods store. You'll see the difference.

Next week: What a 21st century organization might look like.

Happy birthday, America.