How does "Scanlon" differ from "Good Management"?

"Participation and Consultative Management...I need only mention the Scanlon Plan as the outstanding embodiment of these ideas in practice."
Douglas McGregor

Many excellent companies that are exploring the Scanlon Principles of Management are interested in understanding the unique philosophy in the search for improved productivity and profitability through increased employee involvement and fulfillment.

"The Scanlon Plan constitutes a contribution to the art of management of first importance..."
Slichter, Healy and Livernash

"There is no unique opportunity in management; only the daily need to watch things run. There is no critical responsibility in management; only the requirement to make it to tomorrow.

"Management is all about coping with common opportunities and mundane responsibilities. Leadership is all about realizing the unique chance to change and accepting the once-in-a-lifetime opportunity to lead and the critical responsibility for enabling the members to achieve change."
Carl Frost

What is "Good Management"?

There is no universal definition of what constitutes "good management." Managers with extremely different styles and methods are often considered "good" in the business press. "Management" as an area of study is a fairly recent phenomena having been a part of business school curricula for less than 50 years.

However, that said, a consensus is starting to form that good management is both task- and people-focused. It involves a set of skills that enables an organization to achieve success (complete tasks) by maximizing the use of all resources including human resources.

To complicate the question further, there is a difference between "management" and "leadership." Leadership is about vision and helping people adapt and change. Some focus on Management and others on Leadership.

Scanlon as "Good Management"

When Joe Scanlon discovered the power of participation and cooperation, many did not consider it good management. In fact, early adopters of the philosophy were often ridiculed by other business managers. It is a tribute to Scanlon's genius that today many managers share information, involve employees, create equity systems and encourage continuous learning. More and more of the business world is finally coming to the conclusion that good management is Scanlon management.

Scanlon as "Leadership"

Scanlon Leaders like Carl Frost, John Donnelly, D.J. Hugh and Max DePree have contributed greatly to the development of Leadership theory. Leadership is an Art and Leadership Jazz are best selling Leadership books. They are about Scanlon Leadership or "servant leadership." Scanlon Leaders believe that leadership is an opportunity to serve others and to help others adapt and change. This is still a very rare concept of business and is a major difference between Scanlon organizations and more typical business organizations.

Scanlon as an "Open Source" Philosophy

Today computer software users are torn between two different software philosophies. Many users buy software from organizations like Microsoft where the source code is proprietary. Other users prefer "open-source" software where the software is essentially owned by the public. Anyone can contribute to the development of the open source software as long as certain basic rules are followed.

Scanlon is an open-source philosophy. Joe never copyrighted or trademarked his work. Other Gainsharing systems like Improshare are trademarked. Other Management systems are often developed and promoted by consultants. Scanlon philosophy is a collection of ideas created and refined by the users.

This means that Scanlon is more flexible and costs less to implement than most other management and leadership systems. It also means that there is no universal "Scanlon" but many variations. It means that Scanlon Consultants are not the owners of Scanlon, but valued resources to help implement a Scanlon process.

Scanlon as Philosophy and Systems

From the very beginning Scanlon has been a philosophy about both people and systems that enable the philosophy to succeed. Suggestion systems, adhoc committees, plans, equity structures, roadmap change processes, etc. are as much a part of Scanlon as is Theory Y and the Scanlon Principles. Very few other philosophies are as well developed as Scanlon and very few philosophies have effective systems linked to them like Scanlon. This is a major difference between Scanlon and "good management" and "good leadership."

Scanlon as Personal, Professional and Organizational Development

Scanlon encourages development on all three levels. No other management or leadership philosophy provides development on all three levels for all employees.


Scanlon has been tested, while most

Management/Leadership/Change Philosophies are not tested

Scanlon has been extensively researched. Many good management philosophies, for example, Stephen Covey's 7 Habits of Effective Leaders, have not faced the same research scrutiny. Many poor philosophies, like Reengineering, become hot topics only to be disproved over time. In study after study, independent researchers have documented the effectiveness of the Scanlon approach.

The Scanlon Leadership Network

Since most management and leadership systems are proprietary, users must pay large fees to learn the system and they are dependent on the owners of the system for support. Scanlon users created the Scanlon Leadership Network as a nonprofit association to provide support. The Network is member-led and within the limits of nonprofit law, member-owned. Members are able to pool resources to develop new products and services and are able to collect and share best practices. They are able to adapt and change the philosophy and systems as they see fit.

Some organizations are able on their own to develop and maintain excellent management and leadership systems. However, most business organizations lack the time and resources to do this. The Network allows an organization to create its own unique management and leadership system while "standing on the shoulders" of truly great business leaders. It provides a vehicle for excellent organizations to learn from other excellent organizations. The Network is a major difference between Scanlon and other management/leadership philosophies.

Questions to Ponder

In your mind, what is the difference between good management and Scanlon?
In your mind, what is good Leadership and how does it differ from Scanlon Leadership?
What resources do you use to improve your management and leadership skills?
How is the Network the same or different from other resources you use?

Scanlon February 2005 E-zine

Greetings!

In this E-Zine we feature articles on how Scanlon is making a difference at the Philadelphia Fire Department, Smith Dairy and National Manufacturing. We introduce you to an exciting opportunity to become a Certified Greenbelt Six Sigma expert without leaving home and we share a new study of the Culture Scanlon Leaders are creating in their organizations.

Philadelphia Fire Department Prepares For The Future With Scanlon's Hoshin Quick Start



The Philadelphia Fire Department is the latest organization to use Hoshin Quick Start as it focuses on training new firefighters and achieving a more participative leadership style during a period of change and transition.

Newly appointed Philadelphia Fire Commissioner Lloyd Ayers contacted the Scanlon Leadership Network with the hopes of improving the department's leadership style and addressing obstacles such as imminent large-scale retirement and training new hires. When Commissioner Ayers asked for help implementing Scanlon's Hoshin Quick Start, he was connected to Scanlon consultant, Pete Hovde, one of the original developers of the Hoshin Quick Start program.

"Ironically, because the Department has been so successful in its fire prevention campaigns, it's harder to train firefighters because there are fewer fires to give them the practical experience," said Hovde. "Hoshin planning is all about continuous improvement and connection and alignment of objectives throughout a company," he added. "It's a constant review." Hovde is currently working with the Fire Department to identify obstacles and implement solutions to challenges such as preparing new hires. Since 9/11, the organization has felt the need to be even more equipped to handle the unexpected.

Hoshin helps link Key Measures of a manager with the objectives of the next higher level of management, and tracks an organization's progress toward the set goals and objectives at frequent intervals. These tools are then used as the basis of supportive reviews to identify and remove obstacles to achieving these goals.

Hovde and Commissioner Ayers first used SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) to identify the Philadelphia Fire Department's objectives and determine where they are now compared to where they'd like to be in the future.

"It's interesting to witness the culture of a fire department," said Hovde. "This is a natural organization to implement Hoshin because there's a great sense that everyone watches out for each other. By being so tight-knit they're conducive to this participative process," he added. Hovde especially recommends Hoshin Quick Start, which was developed for Scanlon members, to organizations in the midst of substantial change and restructuring.

"Hoshin aligns beautifully with the Scanlon principles because it's a participative process in and of itself," said Hovde.

Scanlon Leaders Create Customer Focused Innovative Cultures



According to a recent Q analysis performed in conjunction with the Scanlon Leadership Network and Hay Group, Scanlon members' corporate cultures value customer responsiveness and innovation. The results identify two paths that are leading member companies toward these ideals.
"By factor analyzing data, the Q analysis clearly shows three distinct cultural paradigms, including where Scanlon members currently are and two possibilities for where they may be headed," said Charles Davis, who conducted the Q analysis and serves as Professor of Communication and Design at Ryerson University in Toronto, Ontario, Canada. "The results are really very interesting and will prove to be a useful resource for leadership teams because in order to understand a cultural transformation, corporations need to first recognize that they are undergoing one and then need to manage that cultural evolution accordingly."

The Q analysis utilized the results of Hay Group's Targeted Culture Modeling process, which ranks 56 attributes on a bell curve according to an individual's personal definition of the company's current and desired corporate cultures. Davis compared each company's current (as is) and target (to be) cultures and charted the final data within four quadrants: refrain (behaviors or values that are present in the organization but should not exist), maintain (behaviors or values that currently exist and should continue), abstain (behaviors and values that are not present and should not be introduced), and obtain (behaviors and values that are not present in the organization but should be introduced).

Scanlon members proved to have similar current cultures and cultural characteristics. "This is significant because the Network and its principles foster an experience that is shared by all Scanlon companies," Davis added.

The results of the Q analysis show that the similarities do not end there. Once the target culture results were factor analyzed, they showed that Scanlon members are moving in two directions but each path places a strong emphasis on customer responsiveness and innovation.

"There is a deliberate process of change within organizations," said Davis. "Before a company can create incentives that reward the right kind of behavior, employees need to understand what kind of behavior is desired. Scanlon members can utilize these two distinct paths to determine specific business values and subsequent steps to move forward."

Identified by the Hay Group, work culture model one is a gainsharing culture that values decentralized decision-making and multiple incremental improvements - representing a shift toward what Hay has called a "network" culture. Work culture model two, identified by the Q analysis, values customer orientation, unified coordination and flexibility, and may represent an evolution toward what Hay has called a "time-based" culture.

Charles Davis has more than twenty years of professional experience in Canada and internationally in innovation policy and management. He is the author or co-author of more than 100 scientific publications and reports and has received numerous research grants from federal and international agencies as well as private firms.

Scanlon Offers Six Sigma Certification Online



The Scanlon Leadership Network is now offering an online version of the Six Sigma Green Belt Certification training program through Quality Technology Company. The eight-week "GB_WEB" classes (pronounced "Jib-Web"), allow students increased flexibility at a reduced cost by conducting sessions primarily through the Internet.

"The Six Sigma methodology consists of measurements and tools that help individuals and companies achieve both personal and corporate objectives," said Praveen Gupta, President, Quality Technology Company, and author of The Six Sigma Performance Handbook: A Statistical Guide to Optimizing Results. "The Green Belt Internet training lets students attend online classes for shorter durations while they work on their own schedule, but still gives them access to guidance and support from an instructor," he added. With the debut of GB_WEB students are now able to access the training from home or the office.

The Green Belt training is a simplified version of Quality Technology's Black Belt training program aimed at employees of all experience levels.

"We make the Green Belts as proficient as the Black Belts by including a hands-on project as part of the training," said Gupta. As Green Belt students learn comprehensive problem-solving techniques, they will still receive the advanced practical knowledge, but won't need the same statistical background or experience with the Six Sigma formulas. "People shouldn't be afraid of the jargon and the numbers," added Gupta.

The program starts March 9th and is available for both members and for those who are not members of the Scanlon Leadership Network. Those interested in becoming a Six-Sigma Greenbelt should contact the Scanlon Leadership Network for registration information at (517) 332-8927.

Snowstorms No Barrier For Smith Dairy

A winter storm dumping more than two feet of snow on Ohio the week before Christmas proved that nothing can stop Smith Dairy. Despite leaking water lines and a lack of electricity and heat at home, employees at the Orrville, Ohio company went beyond the call of duty to deliver dairy products by way of snow-covered routes, work 28-hour shifts and pick up coworkers who were unable to make it to work in their own vehicles.

"These snowstorms gave many of us new visions of what a white Christmas is like," said Smith Dairy President Steve Schmid. "I'd like to thank all of our employees for taking care of our customers," he added.

The worst snow affected Richmond with 24 inches falling in 28 hours. Only a dozen people made it to the plant and several were there only because they had spent the night sleeping in the receiving room or fleet maintenance garage. Although some employees were stuck at home, Mike Miley, Branch Manager at Orrville's Marion plant, picked them up and drove them to work. Without power at the Columbus branch, Robert Bonham, Bill Mealick and Rod Robinson had to load trucks in the dark.

Although Smith has been in line philosophically with the Scanlon principles for years, the family-owned independent dairy implemented its Scanlon Plan, Quality Using Education, Suggestions and Teamwork (QUEST), in 2001.

Many Delivery Service Representatives (DSRs) also faced severe driving conditions. DSR Rob Trivette parked for more than 12 hours on route 70 in the Dayton area while people in vehicles around him were so hungry they asked him if there was anything they could eat in his truck. He returned to the Orrville plant 39 hours later after finishing his deliveries. Brad Watson, another DSR transporting products to Richmond, worked for more than 28 hours.

"This underscores what we've always said about our associates," said Schmid. "They are our most valuable asset here at Smith Dairy."

As I See It - Jann Cruz



Jann Cruz, Hanger Line Coordinator/Trucker at National Manufacturing Company in Sterling, IL, became involved with the company's Scanlon Plan, Help Improve National's Growth Everyday (HINGE), two years ago. Jann volunteered for a leadership role with HINGE because she wanted to share her ideas and help others implement theirs.

"I believe that we all have better jobs here at National since we started the HINGE program in 2002," said Jann, who serves as an Area Work Team facilitator. "With the Scanlon Plan in place we have better ways to get our ideas out there," she added. National's HINGE program is organized with Area Work Teams comprised of facilitators, communicators and secretaries along with all other employees as team members. "My job is to work on making sure that if it's going to save the company money, we get it done."

The HINGE mission is to help employees 'get better at doing the job right and doing the right job.' For Jann, the program is about making ideas happen, not just thinking about them.

"At National all four Scanlon principles - Identity, Participation, Equity and Competence - benefit the customers and improve our company as a whole," said Jann. "Without participation we wouldn't be able to influence decisions. Now I feel that we have a responsibility to improve the company," she added.

Although some National employees were leery in the beginning, said Jann, most were ready to take action and make things better.

"By following the key Scanlon principles we are able to educate ourselves, exercise opportunity and responsibility, solve problems and become increasingly more qualified to meet the needs of customers, investors and employees," said Jann. "The best part is that we can all participate at some level."

As I See It - Robert Ybarra



Robert Ybarra, Merchandising Manager and HINGE Committee Leader at National Manufacturing Company in Sterling, IL, began working at the company in 1994. For more than a year and a half Robert has served on National's HINGE (Help Improve National's Growth Everyday) Committee, National's Scanlon Plan, which was implemented in 2002.

"We have a strong influence in increasing success here at National," said Robert. "What I enjoy most about being a part of HINGE is how we're all able to share ideas that help us meet customer needs, improve processes and empower ourselves through training," he added. "The Scanlon Plan helps us perform our jobs more completely.

"It's very rewarding to be able to contribute in participative management," said Robert. As one of 17 members of the HINGE Committee, which is comprised of both office and plant personnel, Robert meets monthly with others to review employee suggestions and identify National's strengths and weaknesses.

"Through the HINGE program management lets us know how well we're performing against the company's strategic objectives," said Robert. "By knowing our measures, we understand how we can improve.

"I feel like I'm part of a culture that is working toward the same goal," he said. "With HINGE I have a sense of direction and I know that I can voice my opinion," he added. Across the board, said Robert, other employees agree. "It boils down to participation," he said. "Those who engage in HINGE truly benefit."