Tuesday, May 24, 2005

Trust your Staff

I have always believed we should have complete trust in staff at the front end of the organisation.

I remember reading the extract below from Liberation Management in the mid 1990's and shouting to myself words to the effect;

"EUREKA!! - at last we are going to see staff shown the respect they deserve - we can trust them - it does work - look at this company – it really works!!"

Sadly, 10 years later, the company Ovation Marketing is probably still the exception rather than the rule.

Most large organisations do not allow staff to sign their own traveling expenses without a counter signature from the next-in-line manager.

This is particularly true I suspect in government organisations that are
audit obsessed.

We all know that many managers sign travel claim forms without really knowing -for a fact - they are signing an accurate claim from the member of staff.

The signature is simply a 'cover my back' process designed to protect public money but in fact it does nothing of the kind.

The evidence from Ovation after 18 months of ‘freeing up’ the process was that travel expenses went down 70%

The stark reality is that we are all more responsible when given responsibility.

It would be interesting to hear views on this one ... here is the story anyway.... I love this!

Extract from:

“Liberation Management” (1992)
Tom Peters

Pages 462/463

The Boss Will Not Approve Travel

Don't show any purchase orders to Ralph S. Heath III. He just might set them on fire. The president of Ovation Marketing, Inc. in La Crosse (Wisconsin) already has done that once, and the message apparently has been burned into the minds of his employees.

Purchases and travel budgets had to be approved by middle management and Heath until the end of last year. Then Heath issued an order. Employees were told to approve their own expenses. Heath found out it was easier to issue the order than make it work. A couple of weeks later, he was still being swamped with purchase orders. “They weren't quite comfortable with the new responsibility,” he recalled. “ So I decided it was time for a meeting”

He explained again that requisitions were now an individual responsibility. Then he set fire to his stack of purchase orders. The demonstration was effective. He hasn't received a purchase order since. The change has been effective in more important areas, too. Six months after the beginning of the experiment, Heath has found:

· Ovation's travel expenses are down 70 percent
· Entertainment expenses have dropped 39 percent
· Car mileage costs have declined 46 percent
· Office supply expenses were reduced by 18 percent

Better yet Ovation's business is up 16 percent in this same period, compared with the first half of 1990.

“It's an interesting phenomenon,” Heath said “We clearly demonstrated that by giving control to the associates, they are actually more careful with spending than I was because now it's their responsibility.” Heath added that Ovation Marketing, which was founded in 1978, uses the same concept in generating its advertising programs. Individuals charged with designing a creative marketing program are responsible for the final product, not middle management or Heath.

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