Tuesday, December 2, 2008

Democratic business translates to saving lives!

The following is an evaluation of two companies in the same town in one of the most dangerous industries in the U.S.--sewer and water pipe manufacturing.

Guess which one is run democratically and which one is not:

J.R. McWane founded McWane Co. in 1921. John Eagan founded ACIPCO in 1905. McWane's employee turn-over rate is near 100% per year. ACIPCOs turn-over is less than half a percent per year. To deal with high turnover rates, McWane hires ex-convicts. Contrastingly, 10,000 people recently applied for 100 positions at ACIPCO. McWane's management style is called "disciplined management practices". ACIPCOs management style is simply stated, "What if it applied to me? Is it fair?" Over the past seven years, nine McWane employees have been killed and atleast 4,600 have been injured. ACIPCO ranks sixth on Fortune's 100 best companies to work for. McWane's production philosophy is "REDUCE MAN HOURS PER TON". ACIPCOs production philosophy is, "If we can't do it safely, we don't do it." McWane was sited for more than 400 safety violations between 1995 & 2000. ACIPCO was sited 10 times. The McWane family is one of the richest and most secretive families in the South. Collectively the employees of ACIPCO own the entire ACIPCO company.

In 1920, when John Eagan announced that ACIPCO would operate on "The Golden Rule", the president of the company quit--his name was J.R. McWane.

(Statistics taken from PBS Frontline: Dangerous Business)
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How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.