“Employee Motivation: A Powerful New Model”

Nitin Nohria, Boris Groysberg, and Linda Eling-Lee

Harvard Business Review

July-August 2008, pp. 78-84

This article discusses a taxonomy of basic human emotional needs that are considered to be a product of our common evolutionary heredity:

• The drive to acquire (obtain scarce goods, including intangibles such as social status)—"The drive to acquire tends to be relative (we always compare what we have with what others possess) and insatiable (we always want more)"
• The drive to bond (form connections with individuals and groups)—At work, people care both about their local cohort and the larger organization
• The drive to comprehend (satisfy our curiosity and master the world around us)—“In the workplace, the drive to comprehend accounts for the desire to make a meaningful contribution”
• The drive to defend (protect against external threats and promote justice)—This is one of the reasons that people resist change at work

The authors recently conducted two studies to try to understand what actions management can take to satisfy the four drives and increase their employees’ overall motivation. In these studies, they used four measures related to motivation:

• Engagement
• Satisfaction
• Commitment
• Intention to quit

Both studies showed that an organization’s ability to meet the four fundamental drives explains about 60% of variance on the four motivational indicators. Previous models have only been able to explain 30% of the variance. It was also found that fulfilling certain drives has more influence on some measures than others do. However, the best results were obtained by fulfilling all four goals in concert. Certain organizational levers and actions were also found to most effectively affect each of the four drives.

For the drive to acquire, the primary lever is the Reward System. Actions include:

• Sharply differentiating good performers from average and poor performers
• Tying rewards clearly to performance
• Paying as well as your competitors

For the drive to bond, the primary lever is the Organizational Culture. Actions include:

• Fostering mutual reliance and friendship among coworkers
• Valuing collaboration and teamwork
• Encouraging sharing of best practices

For the drive to comprehend, the primary lever is Job Design. Actions include:

• Designing jobs that have distinct and important roles in the organization
• Designing jobs that are meaningful and foster a sense of contribution to the organization

For the drive to defend, the primary levers are Performance Management and Resource-Allocation Processes. Actions include:

• Increasing the transparency of all processes
• Emphasizing the fairness of processes
• Building trust by being just and transparent in granting rewards, assignments, and other forms of recognition

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“Embrace Change, Don't Deny It”

Preston Smith

Research-Technology Management

July 2008, pp. 34-40

Changes during the new product development process are generally seen as harbingers of cost overruns, defects, and schedule delays. This article proposes a set of tools and approaches (largely from observations of agile software development projects) that can accommodate flexible change without undue disruption of the new product development process.

Some general applicable principles are:

• There is value in making the product modular so that change can be contained inside the module
• A key to flexibility is in delaying decisions
• Small, close-knit teams do best at managing the heavy, highly responsive communication needs of a project subject to unrelenting change
• There is great value in building and maintaining options to be available in case something happens

The tools and approaches recommended (though admitted to be not equally applicable in all cases) in the article are:

• Continually monitor customers—This is important for flexible product development because it gives developers the opportunity to anticipate or recognize changes. It is especially important to connect developers to lead users.
• Fence in change—This recommendation is to divide the product into modules to isolate areas of suspected needed design change.
• Try things out—Experimentation “allows you to test alternatives, to broaden the design space in case change occurs, and to see how robust your design is against change.”
• Explore the design space—Toyota uses set-based design to “define the initial feasible space and proceed to impose constraints, for instance constraints on the design due to manufacturability, cost, weight, or physics.”
• Build strong teams—Research indicates that “the factors associated with people far outweigh the others, so devoting effort toward improving how the team works is likely to pay far bigger dividends than investments anywhere else.”
• Make decisions at the last responsible moment—This involves a “proactive process of identifying when the decision must be made and scheduling it, then proceeding to collect information to help make a better decision when its last responsible moment arrives.”
• Plan piecemeal and constantly consider risk—Two suggestions are: rolling-wave planning “in which you plan the next segment in detail and leave the rest of the project planned only at the top level” and loose-tight planning “in which you alternate periods of tight planning and control with more relaxed periods in which to regroup.”
• Maintain flexibility in upper levels of process—Software developers have learned to standardize in lower levels of a process but leave flexibility in “how you assemble the basic activities.”

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“Unleash the Power of Lean Accounting”

Jan Brosnahan

Journal of Accountancy

July 2008, pp. 60-64

Although many companies have pursued lean manufacturing in recent years, most of them have still kept traditional accounting and measurement tools in place. This article describes how Watlow Electric Manufacturing Co. implemented the concepts of lean accounting.

The implementation steps taken were:

• Identifying the main value streams of the company—These included demand creation value streams, new product and business development streams, and order fulfillment value streams.
• Mapping out the key metrics that the company would use to monitor the achievement of the company’s main strategies—A set of metrics were identified at the enterprise level and cascaded down the organizational levels. They also identified frequency of the measurements.
• Employees were organized into 3 or 4 value streams per site, with more than 90% of employees assigned to value stream teams—Metric workbooks and supporting financial statements were developed.
• The chart-of-accounts structure was changed from maintaining costs by traditional departments to a few value stream groupings.
• Labor and overhead rates were zeroed out from the system, and they stopped collecting labor and overhead variance information—The old approach provided information too late to be useful, and it was replaced by “very visual live hourly and daily operator-generated reporting that is reviewed and acted upon daily by the value stream team.”
• Material costs were split out from other COS conversion costs—A memo line was also used in internal financial statements to increase visibility of inventory purchases.

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“Service Blueprinting: A Practical Technique for Service Innovation”

Mary Jo Bitner, Amy Ostrom, and Felicia Morgan

California Management Review

Spring 2008, pp. 66-94

Despite the significance of service organizations (and the fact that all organizations have a service component), service processes are currently less well documented and understood. The authors of this article state that “Those companies that approach customer experience management with a clear vision of the design and development process are more likely to achieve improved customer and organizational outcomes. Service blueprints allow all members of the organization to visualize an entire service and its underlying support processes, providing common ground from which critical points of customer contact, physical evidence, and other key functional and emotional experience clues can be orchestrated.”

Service blueprints are similar to other process maps, but they are not as formal or complex. The components of service blueprints are:

• Customer actions—The actions of the customers are critical to service blueprints, and they are usually laid out first so that all other activities can be seen as supporting the value proposition for the customer
• Onstage/visible contact employee actions—This is typically where customer “moments of truth” happen
• Backstage/invisible contact employee actions—These include activities that contact employees do to prepare to serve customers
• Support processes—These include actions of non-contact employees that need to happen for the service to be delivered
• Physical evidence—These are all the “tangibles” that “customers are exposed to that can influence their quality perceptions”

The article provides concrete examples of service blueprinting and provides the following guidelines:

• Decide on the company’s service or service process to be blueprinted, and the objective
• Determine who should be involved in the blueprinting process
• Modify the blueprinting process as appropriate
• Map the service as it happens most of the time
• Note disagreements to capture learning
• Be sure customers remain the focus
• Track insights that emerge for future action
• Develop recommendations and future actions based on blueprinting goals
• If desired, create final blueprints for use within the organization

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“Cells Keep Spindles Turning”

Jim Lorincz

Manufacturing Engineering

June 2008, pp. 69-80

The author of this article says that manufacturing cells are attractive to lean manufacturers because of the benefits to schedule variety, flexible operations, process simplification, and set-up time reduction.

The basic building blocks of manufacturing cells are identified as:

• Single-function machines, such as VMCs and HMCs, multiple-function multitasking mill-turns, and four- and five–axis machining centers among others
• Pallet pull systems, rotary and linear, that are easily integrated onto machines and between machines
• Tooling systems sufficient to support the redundancy required of untended machining and integral probing systems to monitor tools and keep cells up and running
• CNC control and software that manages scheduling and captures data for quality and other purposes

The article also includes numerous concrete examples of how companies applied these basic building blocks to improve their manufacturing processes.

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Developing Under CMMI

John McNeil

GP Operational Excellence

Many organizations are using Carnegie Mellon’s Capability Maturity Model – Integrated (CMMI) for product development, particularly in government contracting work. Preston Smith advocates a broad rethinking of the usual approaches and priorities in Product Development, many of which are fully compatible with CMMI. We are exploring many of these same options with our clients; some as adjuncts to long-standing improvement efforts and some as the result of the current waves of change that Preston Smith observes are influencing development.

• Continually monitor customers—Under CMMI, customer and other stakeholder needs are explicitly solicited (Requirements Development), exploded into product and service needs, and monitored through the life of a development program (Requirements Management). At critical points the actual work products are Verified and Validated against those stakeholder needs.
• Fence in change—CMMI encourages the fencing off of development segments in two ways. The first is by advocating rigorous Configuration Management. This sets concrete baselines that lock in the meshing of modules or subassemblies at specific points along the development path. The second is by a specific focus on monitoring the interfaces between work products in the Product Integration area.
• Try things out—CMMI’s Technical Solutions area has three specific goals, the first of which is to establish alternative solutions and selection criteria and then select the best component solutions. The Measurement and Analysis area covers measuring the outcomes of this and other activities. Of course trials and experimentation should never be conducted at the risk of customer-specified quality and CMMI’s Process and Product Quality Assurance area assures that customer quality is maintained.
• Explore the design space—The second specific goal of the Technical Solution area is to develop the design, establish technical data packages and work diligently on interfaces between components, between the design and users and between the design and the environment. The Risk Management area requires us to consider the impact of scenarios on the desired stakeholder outcomes.
• Build strong teams—Organizational Training is the CMMI area that refers most directly to team building, but the areas of Project Planning and Integrated Program Management also refer strongly to strong, well-informed teams.
• Make decisions at the last responsible moment—Decision making is a critical component of CMMI. The Decision Analysis and Resolution area does not directly counsel the deferment of decisions, but it provides a robust toolkit that can facilitate this approach. In practice, some of the longer decision times in any project are those concerning external suppliers or make-buy decisions, and CMMI addresses those in the Supplier Agreement and Management area.
• Plan piecemeal and constantly consider risk—CMMI does not encourage partial plans. However it acknowledges that plans shift and change with circumstances, so the baselining facet of the Configuration Management area and the requirements management practice of the Requirements Management area are very robust. Risk itself warrants the entire Risk (and opportunity) Management area.
• Maintain flexibility in upper levels of process—Under CMMI, ongoing project success is managed under Program Monitoring and Control. But flexibility comes from robust methods and so the Organizational Process Definition area of CMMI ensures that a usable set of work assets is available for flexible adaptation, and the Organizational Process Focus area ensures that they are improved continuously.

Part of the reason that Preston Smith’s ideas meld so well with CMMI is that both concepts have their roots in software development. But both transcend that base to provide value for all product and service development. We are certainly embracing these changes and our clients’ customers agree.

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