Everybody Matters: The Extraordinary Power of Caring for Your People Like Family

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9780241975404: Everybody Matters: The Extraordinary Power of Caring for Your People Like Family

In 1997, Bob Chapman and Barry-Wehmiller pioneered a dramatically different approach to leadership that creates off-the-charts morale, loyalty, creativity, and business performance. They utterly rejected the idea that employees are simply functions to be moved around, "managed" with carrots and sticks, or discarded at will. Instead, their company, Barry-Wehmiller, manifested the reality that every single person matters, just like in a family―and that understanding of how employees should be thought of and treated has remained the bedrock of their company’s success. Chapman and his coauthor Raj Sisodia show how any organization can enact this type of leadership, providing clear steps to transform your own workplace, whether you lead two people or two hundred thousand.

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About the Author:

Bob Chapman is the CEO of the St. Louis, Missouri based Barry-Wehmiller, a $2.4 billion global manufacturing business. He became the senior executive of this private company in 1975 at age thirty when the eighty-year-old business had $20 million in revenue, outdated technology, and a very weak financial position. Despite the obstacles, Chapman applied a unique blend of strategy and culture over the next forty years and lead Barry-Wehmiller through more than eighty successful acquisitions.

Steve Menasche is a conservatory trained actor and musician (Brooklyn College Conservatory and American Conservatory Theater) that has toured the world with West Side Story, Jesus Christ Superstar and The American Folk Theatre. As a voice actor, he has been the guy next door voice for numerous national radio and television campaigns, including Proactive, Arbys, Countywide, Shaklee and Lexus.

Excerpt. © Reprinted by permission. All rights reserved.:

Foreword

“Our people matter,” says nearly every CEO on the face of the planet. “Without our people,” so the logic goes, “we would not achieve our goals.”

Rare are the leaders of organizations who will tell you that their people don’t matter. However, there is a big difference between understanding the value of the people inside an organization and actually making decisions that consider their needs. It’s like saying, “my kids are my priority,” but always putting work first. What kind of family dynamic or relationship with our kids do we think results?

The same is true in business. When we say our people matter but we don’t actually care for them, it can shatter trust and create a culture of paranoia, cynicism, and self-interest. This is not some highfalutin management theory—it’s biology. We are social animals and we respond to the environments we’re in. Good people put in a bad environment are capable of doing bad things. People who may have done bad things, put in a good environment, are capable of becoming remarkable, trustworthy, and valuable members of an organization. This is why leadership matters. Leaders set the culture. Leaders are responsible for overseeing the environment in which people are asked to work . . . and the people will act in accordance with that culture.

Culture equals values plus behavior, as my friend Lt. Gen. George Flynn, USMC (ret.) says. If an organization has a strong and clearly stated set of values and the people act in accordance with those values, then the culture will be strong. If, however, the values are ill-defined, constantly changing, or the people aren’t held accountable to or incentivized to uphold those values, then the culture will be weak. It’s no good putting “honesty” or “integrity” on the wall if we aren’t willing to confront people who consistently fail to uphold those values, regardless of their performance. Failure to do so sends a message to everyone else in the organization—“it doesn’t matter if you’re dishonest or act with questionable integrity, as long as you make your numbers.” The result is a culture of people who will drive for short-term results while systematically dismantling any sense of trust and cooperation. It’s just the way people react to the environment they are in. And without trust and cooperation, innovation suffers, productivity lags, and consistent, long-term success never really materializes. The worst-case scenarios often end in crimes being committed, sleight-of-hand accounting practices, or serious ethics violations. But the more familiar scenarios include office politics, gossip, paranoia, and stress.

I admit I am an idealist. I understand that it is a lot easier for me to say and write things like “put your people first” than it is to actually put it into practice. Financial pressures, pressure from the competition, pressure from the board, the media, Wall Street, internal politics, ego . . . the list goes on . . . all factor into why sometimes well-meaning leaders of organizations don’t (or can’t, as some say) care about their people like human beings instead of managing them like assets.

That’s why Bob Chapman matters.

If you ask Bob what his company does, he will tell you, “We build great people who do extraordinary things.” If you ask him how he measures his results, he will tell you, “We measure success by the way we touch the lives of people.” It all sounds rather fluffy and mushy. But for the fact that he means it—and it works. Because if you ask Bob what fuels his company, only then will he talk about the financials. And on that level, the amount of fuel Chapman’s companies are able to produce would be the envy of most CEOs.

When I first met Bob, he told me he was building a company that looked like what I talk about. Again, I’m an idealist. I believe it’s important to strive for the things I speak and write about . . . achieving it is an entirely different thing. And so I told Bob, the very first time we met, “I want to see it.” And see it I did!

We crossed the country visiting various offices and factories and in all cases Bob let me wander around and talk to whomever I wanted. I was free to ask any questions. He stayed out of all the meetings and he wasn’t with us when we took the factory tours. And what I saw was nothing short of astounding. I saw people come to tears when talking about how much they loved their jobs. I heard stories of people who used to hate going to work, who didn’t trust management, who now love going to work and see management as their partners.

I saw safe, clean factories, not because of some management-imposed safety or cleanliness program. The factories were safe and the machines well looked after because the people who worked there cared about their equipment and each other. I could go on and on . . . but it’s probably better if you read the book.

I’ve since taken others to see Barry-Wehmiller’s offices and factories, and the results are always the same. People are blown away by what Chapman has created. As for me? I can no longer be accused of being an idealist if what I imagine exists in reality.

It begs the question, if what I talk and write about can exist in reality, if every C-level executive acknowledges the importance and value of people, why is Bob Chapman and Barry-Wehmiller the exception rather than the rule? The reason, once again, is pressure. Though nearly every CEO on the planet talks about the importance of doing things for the long term and the value of long-term results, an uncomfortably high number don’t seem to run their companies that way. Forget about ten- or twenty-year plans, the quarter or the year is king. Even if a five-year plan exits, odds are it gets changed or abandoned within those five years. It’s hard to make a strong argument to defend the way so many leaders of organizations conduct business today.

Though a lot of leaders talk about this stuff, in Everybody Matters you will see what happens when you actually do it. You will learn what happens when leaders care about the lives of the people inside the company as if they were family, Truly Human Leadership, as Bob Chapman calls it. You will also learn about the remarkable power unleashed when leadership is aligned with a long-term vision. That single ability is what allows for the patience to do the right thing. That combined with a desire to do right by the people is what makes companies great. And I think we need a few more great companies in the world today.

Prologue

| A Passion for People |

“It was definitely a low point in my life,” recalled Ken Coppens. As a laid-off production worker for Paper Converting Machine Company (PCMC) in Green Bay, Wisconsin, with a wife and young son, Ken was resorting to whatever legal means he could find to make ends meet. It was game day at Lambeau Field. Midway into the third quarter, Ken, dressed in layers, grabbed two black heavy-duty trash bags and began the three-block walk from his house to the stadium. With any luck, Packers fans would have left behind enough recyclable cans to fill both bags. On good days, he sometimes gathered enough to buy diapers for his son and gas for the car.

As he approached the stadium, Ken pulled his hat down further and kept his head low. Green Bay is a small town. Getting laid off was not only financially devastating but emotionally demoralizing as well. His shattered sense of self couldn’t handle the additional blow of someone recognizing him.

When Ken went to work in the machine shop of PCMC in February 1980, he figured he was set for life. The company, which built machines for the world’s biggest tissue suppliers, was considered by everybody in Green Bay to be one of the best places to work. For Ken it meant a several-dollar-an-hour raise from his mechanic’s wages. In fact, in his early years with PCMC, Ken remembers that several paychecks would often pile up atop his dresser, eventually to be cashed when he needed the money. But it was about more than just a good wage. Ken could see that, in a company of this size and stature, there was a lot of opportunity for a smart, enterprising, hardworking guy like him. As a parts delivery person, he was a low man on the totem pole then, but he knew there were many ways to move up. He was confident that a job at PCMC meant he had a secure future.

A year and a half later, Ken was laid off for the first time. His wife was due to deliver their first child any day. “I remember the dread I felt. I had a baby on the way and a wife who had to take unpaid leave from her job to go on bed rest because of premature labor. Our savings were pretty well depleted. How would I replace my income? How would I provide for my new child? The sense of dread and feelings of uncertainty were awful.” Four days later, his son was born. “I had really strong feelings of failure and inadequacy, with some periods of depression. We had bought a house but had to sell it and lost all of our down payment money. It was really difficult.” Eventually Ken was called back to work, but other layoffs would follow. In fact, in Ken’s first six years at PCMC, he never worked longer than eighteen months at a stretch.

In those days PCMC’s business was subject to wild swings. The company would receive large orders from customers, then hit a period when it had no work at all. When there was no work, the company laid off low-seniority union members like Ken, as well as engineers and office staff, to cut costs. There was little predictability as to when a layoff might happen. Once Ken found himself working overtime on a Saturday, only to learn on Tuesday that he was being laid off again.

Executive jobs were never touched, and those who held them barely felt the impact of the ups and downs of the business. For people like Ken, those ups and downs often meant financial devastation. There was no way for low-seniority employees to plan for a layoff since there was little communication from the company about when one would happen and how long it might last. If Ken left PCMC, he’d give up the good wages and his chance to grow in seniority in the union. And getting hired by another company during a layoff was next to impossible as many of the other local employers required workers to sign an agreement saying they wouldn’t return to PCMC when the downturn was over. It was both a financial and an emotional roller coaster.

PCMC’s manufacturing director, Gerry Hickey, was experiencing his own emotional roller coaster. His natural tendency was to be a supportive and trusting leader who gave his team lots of encouragement and helped them solve their problems, but he also gave them plenty of space and freedom to do their jobs. He viewed the people he led as friends. As business pressures mounted, he was given repeated and clear directives to micromanage all activities, including what people were doing on a minute-to-minute basis. This mandate to micromanage took him back to a dark point in his career when at an annual review his supervisor told him explicitly to be tougher on his people, stating, “You need to be a jerk to them. You need to let them know who the boss is!”

Part of Gerry’s role was scouting locations outside the United States where the company could move their parts production facilities. His passport was peppered with stamps from countries from Mexico to Poland to China. In essence, Gerry’s job was to eliminate jobs in Green Bay and take opportunities away from his friends. With every trip, Gerry felt more demoralized. But he knew that if he stepped aside, his replacement might not do everything that he tried to do for his team of employees. He felt trapped in a sinking ship.

The culture at PCMC grew ever more toxic. The atmosphere was one of fear, insecurity, and distrust. Ken recalls once being asked by company leaders to monitor a friend of his who had just been laid off as she packed up her personal belongings. They wanted to make sure she didn’t steal anything on the way out. It made him sick to his stomach. He, like most everyone else, came to work each day wondering if more bad news was imminent. “PCMC had brought in a consulting group to help them decide what to do. They said, ‘Here are the people you need to let go to right-size the business.’ Right-size was the big term at that time. I was a team leader then, and some of my team members were let go without my prior knowledge. There was a day that we refer to as Black Friday. I was walking past my leader’s office and one of the people on my team was there, in tears. I had feelings of inadequacy and a sense of failure because I hadn’t been told she was being let go. In all, three of my team members were let go that day. I ended up having to go over to their cubicles to console them, help them pack their things and then carry them down to their cars. I felt absolutely terrible.”

This story about Ken and Gerry and their company follows a sadly familiar pattern. PCMC had been a market leader but had lost market share to aggressive foreign competition. In its final year as a family-owned business, PCMC lost $25 million on $200 million in revenue. It faced deep uncertainty about the future, experiencing many of the challenges confronting other US-based manufacturing businesses. It responded to its financial difficulties with traditional management tactics like frequent restructurings and layoffs, but succeeded only in exacerbating its problems, damaging its culture, and destroying morale. Fear and distrust were rampant. A corrosive “us vs. them” mentality pervaded the company: union vs. nonunion, office vs. shop, management vs. workers.

Ken recalls what happened when he moved into a nonunion job. “I was offered an opportunity in manufacturing engineering at PCMC. To use the terminology of the day, I was ‘jumping the fence,’ going out of the union. The position offered a little bit of hope, an opportunity for some education and growth. But psychologically, it was very difficult because I lost some friends; they stopped talking to me because I was no longer in the union. When I went into the shop to ask questions and get information, some people refused to talk to me.” Ken had come to realize that many of his friends saw the union as their foundation, the floor they stood on, their rock. “But I saw the union as a ceiling. There was nothing you could really do to control your own destiny; you were simply a number. No matter how hard I worked, what types of improvements I tried to make, I could never get above a certain grade level that was preassigned.”

PCMC moved production of one price-challenged product line to Brazil to access the lower labor costs there. But even that wasn’t enough for its largest customer, who laid down an ultimatum: Move primary production to China within three years or we will pull our business from PCMC. The family that had owned PCMC for over eighty years didn’t know how to deal with the mounting challenges and essentially gave up. The company had lost money five out of the previous seven years; the outlook for the future of hundreds of team members was bleak.

The solution to their problems wasn’t in China, though. It was right in front of their eyes. As Ken recalls, “We knew the b...

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