Enduring business success – Good people practices help!
by: Human Capital - HR Magazine
During this year, all of us are going to read and hear a lot about IBM as the IT behemoth celebrates its centenary. This is fair, as the company is an astonishing case study of commercial success, industry dominance and technological innovation. There are much older companies that are still around but few as successful after hundred years of operation. While much of what is written about the company dwells, with merit, on successful adaptation to changes in the industry environment, and other strategic and technology initiatives it is important to underline the enlightened human resource orientation set in place by the first CEO Thomas J Watson Sr. Two famous incidents best capture the spirit of the man.
When Watson took over as CEO of the Computing-Tabulating-Recording Company (CTR), which later became IBM, he assembled and addressed all the sales staff. They expected to be informed of their targets but instead he began by asking them what they thought he should do since he was new to the business. After initial amusement and surprise the staff, which had never seen such frankness and humility from a senior executive, opened up and poured out their ideas and concerns, which were funneled into the plans for the company. Watson also told the sales staff that “Every supervisor must look upon himself as an assistant to the men below him, instead of looking at himself as the boss.” All this may seem commonplace today but remember all this was happening in1914, almost a hundred years ago. At that time business organizations unthinkingly adopted the command and control structure followed by the military. A transparent consultative/ participatory approach to management was truly revolutionary for those times.
Later, in 1915, addressing a large gathering of managers, Watson wrote down a whole lot of existing designations in the company on a sheet of paper held before the audience. These included titles like General Manager, Sales Manager, Sales Man, Service Man, Factory Manager, Factory Man, Office Manager etc. He then crossed out all the letters in all the titles just leaving ‘Man’ untouched.
He told them that “We are just men. Men standing together, shoulder to shoulder, all working for one common good.” This somewhat theatrical speech is now remembered as ‘The Man Proposition’. Watson continued to repeat this speech for the next forty-two years to constantly hammer in the point. He continued to do this even after handing over the reins to his successor. It is hard to come up with another example of such strong and consistent reinforcement of an HR theme by another Chief Executive. He continued to do all this inspite of peer disapproval. The Economist quotes the late Peter Drucker as saying “( Thomas J Watson Sr.) struck his contemporaries as a nut and a crank with his policy that ”People who perform are my partners”..”
The company continued to translate Watson’s people orientation and the Man Proposition into practice even at great short-term business risk. It held back from opening plants in Kentucky and North Carolina in the early-fifties unless it was allowed to practice full racial integration. The states relented over three years. It established equal pay for equal work for women as far back as 1935, and pensions for all employees in 1945. The attention to intensive training for equipping and developing people in all roles was another early practice. These were radical policies in those years and must have won undying loyalty and commitment from employees and their families. It is hard to put a dollar value to what all this contributed to the company’s business success but one can safely bet that it was significant.
The most reliable and unvarnished accounts of a company’s internal practices are those that come some years after the event. In that sense it would be inappropriate to comment on the quality of current people practices in the company but it does appear that the Man Proposition continues to hold sway. Maybe through technology-based adaptation to handle the size and dispersion of the workforce. One example could be the large-scale on-line brainstorming sessions conducted much like musical ‘jams’. Another could be the required internal certification programs backed by rich on-line learning and support infrastructure.
It is not prudent to look at one company however successful for enduring best practices n all areas. Critics, and company executives themselves, have extensively commented on miss-steps. And the 35000 odd employees let go in the early nineties may not take kindly to the Man Proposition. However it does stand up as a model for enlightened people practices: equal opportunity, gender-neutrality, participative management, internal service orientation, and focused employee development at the very least. HR managers can take heart and pitch for more of the same in their own companies: good people practices consistently championed by the leadership contribute to enduring business success.
(The company has been written about extensively. Interested readers have a long list of books and articles to choose from. Three favorites: “The Making of IBM: The Maverick and his Machine”- Kevin Maney; “Who Says Elephants Can’t Dance?”- Lou Gestner; HC “Supercorp”- Rosabeth Moss Kanter)
Written By: Gautam Brahma – A Management Consultant.