Welcome to this month's Joy at Work Journal where the focus is on rule #4: Eliminate management, organization charts, job descriptions, and hourly wages. I explain in detail what I mean by eliminating management in the book but here are my key points: --No official organization charts; no job descriptions except those that say “Do whatever it takes” or ones written by the employee. --No company-wide job descriptions. Every person is considered unique and must build a job around his or her unique skills and passions. --There is only one category of employee within the organization. There are no separate management people. --Leaders are mentors, coaches, teachers, helpers, and cheerleaders--not "managers" of people. When we started to change the AES compensation policy, only 10 percent of our people worldwide were paid a salary. The other 90 percent received hourly wages and overtime. By the time I left in 2002, over 90 percent of 40,000 people in 31 countries were paid a salary, just like the company’s leaders. It was a giant step in breaking down barriers between management and labor and in bringing us together as AES business people. It was a revolution in our workplace—and one of my proudest accomplishments. I hope my book will help you revolutionize your own workplace. Dennis Bakke www.DennisBakke.com
"Most of what we call management consists of making it difficult for people to get their work done."
--Peter Drucker
Tributes to Peter Drucker (1909-2005)> Peter Drucker inspired millions of leaders through his writing, teaching, and consulting. The following sites have more information on his life and work: - Drucker Archives - Drucker Foundation Tribute Dennis Bakke on NPR> Dr. Moira Gunn, host of NPR's TechNation, speaks with Dennis about why he believes people can have fun at work. Listen to the NPR interview What Every Business Person Should Know About the Brain> Ethix Magazine recently interviewed Dr. John Medina, the renowned molecular biologist, about how the brain functions at work. Dr. Medina's research supports the principles in Joy at Work. Medina says, "In creating the right environment, you have to give people not only the feeling of control but the fact of control, so that there is a strong sense that they can have control over aversive stimuli and so far as it's possible, control over a given situation. I think that's the magic of the conversation with Dennis Bakke. As a leader, everywhere he could, this guy was just ceding his territory! The magic that he created worked, because he was allowing people in the organization to have control." Ethix interview with Dr. Medina Dennis Bakke to Speak in Arlington, VA on 12/9> Let your friends in the greater Washington, DC area know that Dennis Bakke will be speaking and signing books at the Arlington Chamber of Commerce meeting on Friday, December 9 at 11:30am (Sheraton National Hotel). Register for the Event Executive Summary> Want to tell your co-workers about Joy at Work? Send them the synopsis of Joy at Work online for an overview of the key concepts. Executive Summary
 Note: Visit the Water Cooler Wisdom page to download all the PDF's of Bakke's Top 10.
1. When given the opportunity to use our ability to reason, make decisions, and take responsibility for our actions, we experience joy at work. 2. The purpose of business is not to maximize profits for shareholders but to steward our resources to serve the world in an economically sustainable way. 3. Attempt to create the most fun workplace in the history of the world. 4. Eliminate management, organization charts, job descriptions, and hourly wages. 5. Fairness means treating everybody differently. 6. Principles and values must guide all decisions. 7. Put other stakeholders (shareholders, customers, suppliers, etc.) equal to or above yourself. 8. Everyone must get advice before making a decision. If you don’t seek advice, “you’re fired.” 9. A “good” decision should make all the stakeholders unhappy because no individual or group got all they wanted. 10. Lead with passion, humility, and love.
Dennis Bakke breaks down #4: Eliminate management, organization charts, job descriptions, and hourly wages
What if you did away with job descriptions, manuals, and organizational charts? What if you eliminated management, and the hourly wage? These are revolutionary concepts with revolutionary outcomes. Decisions would be decentralized, and decisions would be fun. Most working people are boxed in by job descriptions and corporate hierarchies and have little opportunity to make decisions on their own. They act as “control” systems that limit each person’s ability to make decisions. Research shows that when employees feel like tightly controlled robots, with no opportunity to make decisions or take action on their own, productivity and performance decline. Yet, there is ample evidence that a joy-filled workplace, one that allows people the freedom to make decisions, actually improves financial performance. --D.W.B. -------------------------------------------------
FREE DOWNLOAD - Water Cooler Wisdom - Rule #4 printable 8.5 x 11 pdf document
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Want to start a dialogue in your office about what fairness means? Download the PDF and stick it up where it will be seen.
E-mail your questions to askdennis@dennisbakke.com
How do the principles of Joy at Work apply in an emergency situation such as FEMA after Hurricane Katrina? One thing Michael Brown said was he couldn't get any "command and control" and his replacement seemed to do just fine. What made the difference? In Joy at Work (see page 191), I have a few paragraphs on how to handle emergencies. I think most emergencies (like war, fires in plants and probably the early phase of a hurricane disaster) require a suspension of some of the Joy principles. These situations often require fast, precise and coordinated actions. A leader becomes a commander and the rest of us become doers. For a short period of time we must sacrifice our humanness and become machines. There is not time for individual thinking, advice giving and getting or decentralized decisions. I suggest we choose leaders in such cases who are not likely to be the leaders when the emergency is over so everyone knows this is temporary. I had a plant manager who always choose one of his subordinates to lead during emergencies and not himself so people would know that when the emergency was over, Joy at Work life would return.
Mr. Bakke, when you were CEO of AES did you and the board ever consider taking the company private? Had AES been a privately held company it would not have had to worry about a restive market made up mostly of speculators who are not really owners and certainly are not interested in the long-term health of the company. We never seriously considered it. This is probably because we loved having access to the capital and because we really didn’t have to compromise our principles as a public company. At the time we went public in 1990, I became convinced that we could live according to our most important values, including our primary purpose to serve the world’s need for electricity in an economically sustainable manner, and still be a strong public company. I still believe that. We did not have to compromise our values when shareholder value decreased, especially since it happened to every company in our sector. Our Board was not pushed by some outside force to make changes. No outsider was trying to take over the company or force changes. Our Board reacted to the sector down turn and AES financial problems as it felt best. I disagreed with some of the changes the Board made but not their authority to make such changes. Public shareholders views are always considered by any corporate board, but they are only one of many voices and interests that need to be heard.
Does your company have any sort of Equal Employment Opportunity (EEO) Diversity Program or Process that you used? Within my organization we're looking for companies that we may Benchmark our EEO Diversity Program against. Can you help?
I don’t really like making diversity a goal or a shared value of the organization. In the case of AES, justice was the shared value that demanded that we not wrongly discriminate against any person that we hired, developed or promoted. Diversity seems like a strange goal to me. Do you really think diversity is an end to be pursued? Thus, we did not have a special program to promote diversity. We emphasized justice in everything we did. Having said that, diversity just happens if your shared values are correct. With no special program other than a shared value of justice, AES became one of the most diverse companies in history with only 8 percent of its people speaking English as a first language. At one point, 10% of AES vice presidents were Pakistani. Except in Kazakhstan, AES did not have as many women in leadership as some of us would have wished. At the time, however, few women chose power plant jobs, including power plant engineering positions, from where most of our leadership people came.
My question is regarding sharing profits with our employees. Even though we have been in business since 2004, we are now seeing profits sticking to the bottom line. As an open book, team-based company, our desire as owners is to share the profits. Do you have a recommendation on how to structure a bonus pool, payout structure that rewards employees for their performance and level of responsibility without doing harm to our fledgling company? Thank you for your wise counsel in advance.
Yes, I have some advice. Do share profits with folks throughout the company. Everyone who contributes positively to making a profit should share in the profits after outside shareholders receive a reasonable return. Do not set up a program that promises a certain amount or percentage of profits or set amount of money for a given level of individual performance. Again, I believe that gain sharing, bonuses or profit sharing are primarily justice issues, not an “incentive” payments. In other words, the reason to pay a bonus is because it is the just thing to do. It is fair and right to let people participate in the bounty of what they have produced. It is not primarily to make the person work harder or make them more productive. Hence, I suggest you not try to create some “fair” distribution of profits to be distributed at the end of the year. Instead, wait until 1) the profits are made and 2) the people have completed the work. If a bonus is not an “incentive” to do something in the future, but rather a reward for something a person has already done, it is perfectly reasonable to decide after the fact what the bonus will be. You will make many fewer mistakes (e.g overpaying some people and under paying others or sharing profits when no profits exist) by doing it after the work is complete and the financial situation is known. Promises to employees based on mathematical formulas that supposedly predict the future are almost always wrong and are very unnecessary if you believe as I do that bonuses and other similar payments are not to be incentives but are to reward past work. I agree with your philosophy; and I want to know HOW to put it into REALITY. How do you make/let/show management see that not all jobs need to be 8:00 a.m. - 5:00 a.m./ 5 days a week? I see so much waste in these hours (30 minute breaks, coming in late, leaving RIGHT at the strike of 5:00 p.m., etc.).
There is no simple way to change an organization like the one you have described. Your words imply that your organization is split between “management “ and “workers”. That has been the primary enemy of joy at work for hundreds of years.Start by making it mandatory that every person, “management” and “others”, read Joy at Work. Start some discussion groups, including “management” people, about the implications of this strange way of viewing the workplace.
Start doing “random acts of responsibility.” For example, com to work on the weekend once in awhile and at 6:30 in the morning to take care of something that needed doing. Sometimes stay until 8 pm. Have the non-management people start doing stuff that is not assigned, but needs to be done. Start acting like owners and managers. Eventually, an enlightened manager will become a leader and start treating you like you are a real person with a brain and a desire to make good stuff happen. In other words, to get bosses to stop treating you like a worker, you need to stop acting like a worker and start thinking and acting like an owner. If it doesn’t work, find a new place that will treat you like a thinking human being capable of making decisions and taking responsibility for the results.  Contact Us:
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