| Leading Companies Online Magazine
The Art of Knowing What You Don’t Know
By Anthony I. Mathews, Beyster Institute Staff
  Whenever I am given encouragement on any matter, I am reminded of a story I once heard about the great behavioral psychologist, B.F. Skinner. Purportedly, he was giving a lecture on behavior modification one afternoon when he was subtly moved out of the lecture room and into the hall by his students, who were smiling en masse whenever he moved toward the door and looking away or frowning whenever he moved further into the room. I try to keep that in mind whenever I sense encouragement coming my way.
Nevertheless, some of you seem to think the dimensions of an employee ownership culture that I started discussing last month have enough significance that we ought to take the discussion a bit further, so what the heck …if I end up in the hall, I’ll just go for a sandwich.
Information, autonomy, opportunity and respect — as you may recall — are what we suggested as the building blocks of successful employee-owned companies now and in the future. Of course, those words are easy to write and even easier to accept, but so what? What do they really mean in the day-to-day life of your employee-owned company and its employee owners.
Let’s start with information …
Information is the most basic building block in any culture. In fact, one could argue that the nature of a culture is most easily defined by the unique information the members of that culture share with each other and generally not with others. Employee ownership is no exception. Seen as a culture, successful employee ownership rests on a common (and somewhat rare) conviction that collective capitalism is a critical element in creating business success. At the same time, employee ownership culture is particularly dependent on the free flow of all sorts of information to function.
Does this mean that an employee-owned company must publish all its financials, its income statements, and balance sheets? How about payroll information? Actual age and weight of the executive group? Does it mean there will be no secrets?
It could, I suppose, but it seems more likely that the important information to support an effective employee ownership culture is much more than a collection of facts. Facts such as the above, by themselves, won’t automatically change how anyone feels or acts from day to day. Understood in the context of the choices people are making, these facts may become information, but without that context, they remain only data. Unless you are a CPA (or even if you are), the data mentioned is probably not information the way we mean it.
A little closer to home, earnings forecasts and strategic plans represent the high-level vision about where a company is going. Clearly, if everyone in an employee-owned company is to pull together toward a successful future, everyone should understand that direction and support it (and, probably, have input on it). But for most people in the day-to-day operation of a company, that information alone makes little difference in what they do. Why? Because the connection between vision and daily tasks is not always obvious, or even visible. We need something more. We need information that ties together our individual immediate choices and our joint long-term results. Then we have a foundation for choices an individual can make that will affect the whole.
For example, cost analyses our consultant performed last year are data. Information is knowing that, of all the parts I am responsible to make, gidgets generate a one percent profit margin, but widgets generate 3.5 percent. Data such as our corporate financial statement give me a big-picture view of how profitable we are, but information that profitability ranges from one percent to 3.5 percent, depending on how I set up the machine and how carefully I manage its operation, tells me what to do and when I’ve succeeded.
When it comes to business literacy, getting beyond mere data is one of the hardest — and most interesting — challenges. Figuring out what information is appropriate and useful isn’t always intuitively obvious. Perhaps the useful information at your company is not financial numbers at all. Maybe the best information on its health is the number of trucks leaving the warehouse each day, times their percentage of capacity, minus the number of returned orders. Not only does that tell us what’s going on, it tells us what to do — fill more trucks with a higher percentage of capacity, and do it carefully, so that the products don’t come back.
So, the message in this issue is this: Think about information. It’s not just the facts. It is more a matter of how those facts can be affected, and by whom, to improve outcomes? Arm your employee owners with this kind of information and you position them to really make a difference.
And, I think, that’s where autonomy comes into the mix. Without the authority (or even the responsibility) to use information, it seems to me it will remain just a collection of facts – random notes on paper. Properly assembled, though, those random notes can make beautiful music.
But, what do I know?
©2006. The Beyster Institute and its authors and their entities. All rights reserved.
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