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Independents Report: Empowered to succeed

Developing teamwork within a family business is easier said than done. In a perfect world, both family members and employees monitor not only what they get out of their jobs in terms of satisfaction and financial benefits, but also what they as individuals contribute to the company's overall goals and success. Call it an interpersonal balance sheet. And while money is an important asset, what's proved to be most valuable is job equity.

In what ways can owners enhance equity for their associates, help them to work cohesively, and take more ownership in their jobs? According to Dr. John Eldred, president of Ambler, Pa.-based Transition One Associates, a smart approach is to implement self-managing work teams, which, by allowing workers to perform autonomously, give them a sense of belonging and more control over their careers.

"Typically, family-owned businesses have a distinct advantage when it comes to developing teamwork within their organizations," Eldred says. "I call it 'goal confluence,' meaning that everyone's goals in the family are flowing in the same direction, and collectively all want the business to prosper. When genuine, that sense of togetherness, which is oftentimes developed behind the scenes through 'off the clock' family gatherings and phone calls, generally sets the tone for all other associates.

"While family unity lays the groundwork," Eldred says, "the touchstone of a true team system is to utilize the talents of all associates, including family members. When talents are not recognized or used appropriately, the level of teamwork and confidence in the owners diminishes."

He explains: "Let's say that a supermarket employs an associate who's extraordinarily talented in the area of public relations, but the budget doesn't allow for the position. Realizing that the PR position could benefit the company, but overwhelmed by potential conflict among family members or managers who are comfortable with the status quo, the owner decides not to jump the hurdle. Perhaps the position would pay for itself; perhaps it wouldn't. Unfortunately no one will ever know, because the owner is too caught up in accommodation rather than acceleration."

Eldred, who is recognized nationwide as a leader in organizational behavior, feels that the business community often misunderstands the idea of team systems. "The concept is not just about relationships and making people feel good," he says. "It's about creating efficiencies, structuring work and power, and empowering people to do what they know how to do. Work teams ultimately make the basic management decisions."

He adds, "It may take a couple of years to develop an effective team system, but when it takes off, the results are unbelievable."

Eldred offers the following advice for putting a team system in place:

•Establish a payment-for-knowledge compensation system. Challenge employees to learn as much as they can as rapidly as possible. "Set up a hierarchy based on levels of competence, and pay accordingly," Eldred says. "When an associate is hired and tests out of required skills, reward them for their knowledge and advance them immediately to the pay level for which they're qualified."

•Improve hiring. During the interview process, team candidates must participate in a series of exercises over the period of a weekend, including personality tests and team-building events. Observed in the process are the following:

1. Willingness and interest in learning.

2. Ability to work cooperatively with others.

3. Resilience—the ability to bounce back from challenges and difficult situations.

4. Ability to manage stress—team members are subject to more responsibilities and challenges.

"Improved hiring results in smarter, more responsible employees who need fewer layers of supervision," Eldred says. "The more we hire smart people and empower them to manage themselves, the more efficiency we achieve."

•Develop a written gain-sharing program. Once the team system is launched and operating effectively, a bonus system is established that rewards teams monthly for gains in efficiency. Typically, a portion of the gain is set aside for a "rainy day fund," and the balance is shared equally between the company and the work force. "The 50/50 split is recommended so as not to create an elite group within the organization," Eldred says.

•Introduce an ESOP or stock ownership program. "Stock ownership gets people to feel more connected to the company and to each other," Eldred says. "While the stock may or may not have voting power, it conveys in spirit that everyone is a player."

What challenges stifle the team approach? "Managing the politics of such a system can be monumental," Eldred says. "People, including senior managers, don't like change. Because old-timers often feel threatened by a new approach, team systems require us to consciously manage up to get buy-in from senior-level execs."

Additionally, team systems require more trust. "Workers and labor unions must understand that this process is not about eliminating jobs, but rather creating better long-term job prospects and enhancing profitability," Eldred says. "Today's labor unions are selectively embracing the concept."

Leadership also plays a significant role. "The real issue for leaders is understanding how comfortable you are with what you don't know," Eldred says. "Everything you need to know to be successful is usually right there in the room, in the minds of the employees. When a leader's self-image tells him that he's supposed to know everything, the team system won't work."

He adds: "A good leader inspires, informs, educates, and influences by being the best questioner in the room. He or she gets people to focus and discover the things that they're good at. The most important question a leader should ask is, 'How would you like me to manage you?' What's really being said is that in designing this relationship, you, the employee, get to be the co-author. There's no better way to enhance trust, confidence, and chances of long-term success."

Independent Retailing editor Jane Olszeski Tortola can be reached at [email protected].
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