Rich Teerlink is the former CEO of Harley-Davidson spoke on People Driven Execution, based on his new book, More than a Motorcycle: The Leadership Journey at Harley-Davidson (with Lee Ozley).
If you ever get the chance to hear Teerlink speak, go do it, even if you aren't particularly interested in motorcycles. He has an off-beat style, and he tells a great story about how Harley-Davidson went from being a laughingstock in the early 1980's to the high performing "lifestyle company" that it is today.
He credits most of this turnaround with how Harley-Davidson treated its employees and its customers. In his talk he made reference to a graph (never displayed) that suggests employee moral (or involvement) and customer satisfaction have a direct impact on the bottom line of the company. In his talk he said something to the effect of "If you have happy employees and happy customers, profitability will take care of itself." He told the story of how Harley-Davidson went about making happy employees and happy customer, peppered with wonderful stories and examples.
With respect to happy employees, he talked about the familiar idea that simply giving people (the right) information changes their behavior.
Teerlink reflected a comment that one of the blogs in business panelists made: Make your employees passionate about what they are doing. Passionate people want to be there. They will take risks because they recognize there is always room for improvement. At the panel a few weeks ago, someone talked about giving blogs to passionate people within your organization and amazing things would happen.
He talked about that "our people are the most important asset" mantra of many business leaders. Teerlink's complaint with this is that he doesn't believe most business leaders really believe this. "When was the last time you went surfing with an employee?" he asks. Yes, people are the only sustainable competitive advantage of any business. And until they are passionate about what they are doing, they are not your competitive advantage, no matter how many times you say it. Interestingly, Curt Rosengren agrees
The real rocket ride comes with employees who get so much energy out of the work they do that they can't help but function at peak performance. Engaged employees have been proven to increase profits, productivity, employee happiness and retention, and customer satisfaction.
What is the role of leaders in an organization of passionate people? Teerlink says that leaders are responsible for the "operating environment." They set the tone of the business. Leaders do not need to be wise, problem solvers, or even responsible for results. Leaders need to show their people how it is to be done (a theme for the conference).
In this vein, Teerlink discussed how they transfromed and flattened the organizational structure. They discovered that they had to model the new behavior in the executive suite just as much as they ask them to do this on the shop floor. He drew his "org chart" as a Venn Diagram of intersecting responsibilities that anyone could fill. At the executive level these are Create Demand, Produce Product, Provide Support. In the shop, people know what needs to get done and manage the work together (no foreman). When people are unavailable, they look to themselves for those who have been crosstrained in the necessary skills. The organization chart is about "getting the right people together at the right time to do the right work right."
Also in the area of the passionate employee, Teerlink mentioned the idea of the Personal Quality System. The individual must be responsible for their own operating system, just as leadership are responsible for the operating system of the organization. The individual must have the capability to look at themselves and know that they are doing the right thing. Wow. This plays right into my thinking around personal effectiveness and beyond. Continuous, personal improvement.
Leadership is all about human intervention. Benchmarking fails because the leaders don't think in benchmarkes. They look at what other do and give due consideration to whether that idea or that process might work in their business. Then they customize and modify, based on the operating environment in their business. There are no cookie cutter solutions, and Teerlink nearly refused to answer some audience questions that went this direction.
Fear is a huge problem in organizations. Harley-Davidson believes it has done so well because it is doing the right thing by driving out fear. This is obvious, again in conversations about blogging, but in many other areas too. What if I say the wrong thing?
Teerlink quoted a bunch of people and worked their ideas into his discussion. Here are a few:
Eric Hoffer: "In times of change learners inherit the earth; while the learned find themselves beautifully equipped to deal with a world that no longer exists."
Noel Tichy: "Everyone teaches, everyone learns, and everyone gets smarter every day."
DePree: "Leaders, by their actions, establish the sense of justice (fairness) in the organization."