There has been a lot of discussion going on about whether the workers at General Motors and Chrysler will become the owners of their respective employers and about the kind of impact that this ownership stake will have on the future of the two car manufacturers.
Without decentralizing the management structure and decision-making processes, simply turning the employees into shareholders at GM and Chrysler will have minimal impact on rectifying the core problems and overcoming the obstacles that have crippled these companies. It is not enough for employees to hold ownership stakes if their employers still function as top-down hierarchical bureaucracies.
Remaining innovative and competitive in today’s rapidly changing environment depends on a highly engaged and motivated workforce. Employees can only break free from the confines of bureaucracy if they are able to act and feel like owners in the day-to-day management of the company.
Employees will not feel like motivated owners until they are aware of the company’s goals and the ongoing progress towards those goals. Financial and operational data should be shared freely among all employees. In today’s information age, there is no reason to keep secrets and for executives to hoard information, even with regards to “sensitive” information like salary data.
Employees, especially those closest to the customers, need to have the power to make quick decisions autonomously, without having to wait for approvals to trickle down the management hierarchy. Team-based, bottom-up decision making should replace the command-and-control, top-down structure that was so successful at stifling innovation, common sense, and competitiveness at GM and Chrysler.
In order for these companies to stand a chance at surviving the current crisis, General Motors and Chrysler must not limit their innovative turnaround efforts to their product and operational strategies. They must also adopt cutting edge and creative solutions for transforming their organizational processes and culture.