Taco Bell: Empower the Little Guys
The Idea: Provide entry-level employees with the tools and incentives to handle more responsibility with minimal supervision.
The Problem: In the early 1990s, Taco Bell wanted to open thousands of new restaurants but didn’t have enough managers for each location.
The Solution: It trained entry-level employees to become their own managers, as described in the book, The Ownership Quotient: Putting the Service Profit Chain to Work for Unbeatable Competitive Advantage published by Harvard Business Press. Taco Bell empowered these teams to open and close their branches, to hire other team members, and to implement ideas for running the store more efficiently. Naturally, it paid these folks more. After trying out the program in a select group of stores, Taco Bell found that the locations run by self-managed teams boasted higher profitability and better customer satisfaction than those with on-site managers.
Dorian Drake International: Open-Book Management
The Idea: Let employees know how the company is performing so that they see how their job helps the business as a whole.
The Problem: The export-management company was running out of ideas to increase efficiency.
The Solution: Managers began sharing company financial information with employees in 2002 and let them see where they could help.
According to a Wall Street Journal article, the results were fast and tangible. The year that the program went into effect, employees noticed that some departments were receiving discounts from vendors that other departments were not receiving. The employees spoke up, and the company negotiated those discounts across the firm. This open-book practice led to other unforeseen benefits. For example, workers began booking less-expensive travel accommodations (perhaps because their peers could see what they were spending) and became more diligent about following up with clients with outstanding bills. In that first year, Dorian Drake turned a $500,000 loss into a $200,000 profit — with no increase in sales.
Ritz Carlton: Let the Employees Fix It
The Idea: Give employees the authority to fix many customer-service problems promptly themselves.
The Problem: Waiting for managerial authorization to spend money to fix customer-service problems was only making unhappy customers unhappier.
The Solution: The Ritz-Carlton chain of hotels permits its associates to spend up to $2,000 to address customer problems without consulting management. In one case, described in Supervision in the Hospitality Industry: Applied Human Resources, the hotel’s laundry service accidentally burned a bridesmaid’s dress while ironing it. The concierge decided to remedy the situation by taking the guest to a nearby Versace store and buying her a dress on her own credit card. Initiatives like this one dissuade supervisors from micromanaging, which in turn allows the hotel chain to maintain a top level of customer service while keeping employee turnover far lower than that at rivals.
SimulScribe: De-structure the Workday
The Idea: Let employees set their own hours and chose where they work so that they can be as productive as possible.
The Problem: The voice-mail transcription technology company needed to keep costs low since it was running on funding from angel investors.
The Solution: SimulScribe’s 10 employees are free to work whenever and wherever they want, as long as they meet set goals. Fail to meet those goals, says CEO James Siminoff, and you’re out. The results-driven approach is simple, direct, and effective. He says that his team, which is scattered across the country, loves the flexibility, and it has the benefit of keeping Siminoff’s costs really low.
Skyline Construction: Let Them Name Their Own Pay
The Idea: Employees at the San Francisco general contractor chose their compensation structure from within a set range.
The Problem: Costs were rising too fast, so the CEO gathered a team to figure out ways to bring them down.
The Solution: In 2007, Skyline Construction Inc. asked a handful of employees to choose their own salaries within a $25,000 range, according to a Wall Street Journal article. Those who picked salaries at the lower end of the spectrum had a chance to earn larger year-end bonuses, depending on whether they met or exceeded certain goals. If Skyline didn’t generate an operating profit, it would pay no bonuses. At the end of the year, employees received their bonuses and reported that the bonus possibility did motivate them. Top execs said the system let them cut costs up front while fostering a spirited entrepreneurial culture.
More on BNET:
