The rewards of increasing employee autonomy in manufacturing
Downtime” is a word manufacturing owners want to avoid. They explore every possible avenue of quality, safety, efficiency and innovative solutions to remain relevant and running.
For years, one major challenge to their success has been the search for skilled talent. But with skilled talent comes another challenge: retention.
Smart and experienced people are mobile. They can work anywhere. What sets one manufacturer apart from another? Studies of employee engagement tell us that beyond competitive salary and benefits and trusted leaders, great employees want a feeling of camaraderie and autonomy.
Great employees want to lead.
Greg Kaupp wants to help manufacturers and distributors find that sweet spot in lean and cell-based processes that empowers employees even more. Based on the books Tribal Leadership by Dave Logan, John King and Halee Fischer-Wright, and Holacracy by Brian J. Robertson, Kaupp was inspired to apply his years of experience in accounting and enterprise resource planning solutions to people.
“I always felt there were better ways to do things. I wanted the opportunity to explore, experiment and implement improvements that prior management was not open to do,” says Kaupp. (Sound like an entrepreneur to you?)
Kaupp’s career trajectory mirrors that desire. He left his position as a CPA at Arthur Anderson to become controller of a public company where he discovered the emerging world of enterprise resource solutions — the software systems used by manufacturers. He then became a project manager for a value-added reseller (VAR) and later part of the roll-up of seven VARs for a private equity firm. By 2002, Kaupp started his own firm with two partners called ArcherPoint Inc. Today, this Minnesota entrepreneur leads a $20 million company with offices across North America and a fairly new office in Chennai, India, as a Gold Certified Value Added Reseller for Microsoft Dynamics NAV.
ArcherPoint also has a very successful internship program in collaboration with the University of Minnesota’s Carlson School of Management.
Being a virtual organization requires a different management dynamic, admits Kaupp. He lives and works in Minnesota, but ArcherPoint’s global headquarters are in Atlanta, Georgia. In order to avoid a backlog and deliver service immediately, ArcherPoint needs an agile workforce. It has employees rather than many independent contractors and operates on an assumption of permission to serve the customer.
“In a hierarchical structure, no one is assumed to have permission to do anything unless permission is granted. We have shifted to a distributed authority and flat organizational structure to serve customers faster and more effectively.”
Before allowing any employee to shut down a plant or lead a project from start to finish, however, the model has to be tested. ArcherPoint launched pilot programs to test, learn and adapt before rolling the model out to every location. What they discovered was really powerful.
“Decisions were no longer based on position or title but made by roles with a defined purpose and accountability,” Kaupp says. “We found that all employees stepped up their energy, creativity and ideas in ways they never could have in the past. Communication has significantly improved. Individual responsibility and accountability, too.”
ArcherPoint took the Holacracy style one step further and began restructuring to an ESOP in 2015. “I wanted our employees to benefit from our success going forward,” Kaupp says.
Because many of ArcherPoint’s customers are manufacturers and distributors, Kaupp sees an opportunity to apply the Holacracy style of management to those companies. It is already happening in distribution companies like Zappos (now owned by Amazon) where immediate response to the customer is paramount to compete in the world of online retail.
“Employees who do what they are told typically do not offer higher ideas or energy to the success of a company,” Kaupp says. “But it doesn’t mean they don’t have ideas or energy.”
Is it time to let your employees lead? You might be surprised what a little entrepreneurial spirit could bring to the table.