• Accelerating Projects by Encouraging Help

    This is an MIT Sloan Management Review article. Organizations often try to accelerate product introduction cycles by prioritizing project delivery. However, many projects have two characteristics that make optimal delivery times elusive: The projects tend to involve uncertainty (for example, they develop a new product function whose feasibility has not yet been established); and the workers have information about the status of their tasks that many don't share. Behavioral issues are as important in project timeliness as diligent planning. This article examines the difficulties of project planning and execution and describes a management innovation at Roto Frank, a German company that produces hardware for industrial and residential windows and doors. Roto, headquartered in Leinfelden-Echterdingen, Germany, has augmented its project control system with a formal help process that encourages workers to seek and provide mutual assistance. The authors found that Roto's help process achieved a measurable improvement in project cycle time without changing formal incentives or other management systems. Its success is based largely on two factors: establishing psychological safety and encouraging cooperative behavior among workers by emphasizing their interdependence. The authors argue that this help process has the potential to accelerate projects in many environments. In developing a project planning and monitoring system that encouraged project workers to reveal private information about their tasks, Roto did not rely on financial incentives. Indeed, the authors note that incentives don't need to be monetary or career focused; they can be social and geared toward building positive relationships. Without fears of being blamed for problems, workers were more inclined to call for help rather than procrastinating or passing latent issues on to the next project worker.
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  • Finding the Profit in Fairness

    Contrary to conventional wisdom, banking can be both fair and profitable--in fact, fairness can be a source of competitive advantage. The evidence for this claim comes from a segment of the financial services industry seldom associated with fairness: consumer credit. The reputation of this business--which encompasses credit cards, personal loans, payday advances, and so on--is so questionable that any claims of "fairness" are viewed by customers with extreme skepticism. But TeamBank, a subsidiary of the German Volksbanken Raiffeisenbanken banking group, has successfully developed a brand that transforms the fuzzy concept of fairness into a visible and credible set of product characteristics and operating processes. Overhauling its central offering, easyCredit, involved significant organizational change and the strength of mind to reject profitable products and features inconsistent with the company's core value: "We are an honorable merchant." Product developments included offering a 30-day customer retraction period, making repayment insurance optional rather than mandatory, eliminating the penalty on partial repayments, and even offering a "protection package" that would consider changes in a customer's circumstances, such as illness or loss of a job. TeamBank addressed concerns about the new strategy by providing extensive training to employees and partners and adopted an unusual catalytic device for values-driven innovation--a scale model town symbolizing the brand.
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  • How BMW Is Defusing the Demographic Time Bomb

    In June 2007, Nikolaus Bauer, the head of BMW's 2,500-employee power train plant in Dingolfing, Lower Bavaria, asked two of his production line managers, "How are we going to maintain our productivity as the workforce gets older and older?" BMW is not the only company with this concern. Corporate leaders, politicians, and labor economists in most developed nations are worried about the consequences of demographic change in their labor markets, which increasingly consist of older workers. Instead of turning to traditional approaches-firing older workers, forcing them into early retirement, or moving them to less physically demanding jobs-managers at the BMW plant let the workers themselves find a solution. The company staffed a production line with people who were, on average, 47 years old-reflecting the plant's projected demographic makeup in 2017. The workers on this pilot line, supported by senior management and technical experts, then developed and implemented 70 productivity-enhancing changes, such as managing health care and making small changes to the workplace environment. The total cost of the changes was just around 40,000 euros, but the result was a productivity increase of 7% in one year. BMW is now testing this worker-led approach in other types of plants in the United States, Germany, and Austria in order to develop standards for incorporation across the company's manufacturing organization. As global companies come to grips with the strategic challenges in the years ahead, they may find that the brainpower of their workforce is the most important differentiating factor.
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