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NATIONAL WORKFORCE ASSISTANCE COLLABORATIVE
Work Restructuring Briefing Paper
DEFINITION
Work restructuring refers to a wide variety of changes in the
way work is organized, planned, managed, and carried out in order to
simultaneously achieve improvements in quality, productivity, speed,
customer satisfaction, and employee satisfaction. Work
restructuring applies equally to the changes in managerial and
non-managerial work. Restructured work --the new model of work --
leads to a shift in the basic unit of work from "task " to
"process." Employees in the new model move from performing assigned
tasks to process ownership, where each person is responsible on a
daily basis for maintaining and improving the performance of his or
her work process. Everyone becomes owners of their processes or
sub-processes.
The restructured workplace is characterized by strong customer
focus, reduced status differences between managers and non-managers,
and the presence of systems that provide power, knowledge,
information, and rewards to process and sub-process owners. This
empowers process owners and provides the tools and encouragement
needed to maintain and improve their processes. As a result, there
is a reduced need for supervision in the traditional sense, however
the need for continuous learning -- the source of continuous
improvement -- is increased. Therefore, the role of supervisor as
"controller" is replaced by the role of supervisor as coach and
trainer.
Frequently, restructured workplaces are organized into
self-managing teams around work processes. Some examples of work
restructuring, currently referred to as reengineering, involve
utilizing information technology to radically redesign work
activities in order to achieve breakthrough levels of performance
improvement. The shift from task to process changes the roles of
everyone, from CEO to floorsweeper.
MARKET STRATEGY
Work restructuring is being led by larger organizations. It is
frequently being pushed on suppliers as a condition for keeping the
business of these large customers. The larger the supplier, the
more "help" they get from the customer to restructure their
workplaces. Smaller suppliers must fend for themselves. Small to
mid-sized businesses lack the money, time, and expertise to carry
out work restructuring activities on their own, and they are least
able to afford consulting assistance.
The primary mechanisms for communicating to small and mid-sized
businesses are:
* Customers to Suppliers. Customers use contract language,
orientation days, courses for suppliers, and audits of suppliers
to communicate their expectations and to provide assistance.
* Associations. Associations communicate through journals,
newsletters, conferences and workshops, and local chapter
meetings.
* Educational Institutions. Educational institutions
(universities, community colleges, etc.) run both credit and
non-credit courses, and promote outreach to businesses through
extension services located in both engineering and business
schools. Increasingly, state universities, especially
land-grant universities, have outreach organizations that
provide free or low cost technical assistance to small and mid
sized firms.
* State Government Economic Development Offices. The focus on
economic development in states has shifted from luring new
smokestacks to retaining and growing existing businesses. State
economic development offices typically have a range of programs
(e.g. financing, training, assessments, etc.) to assist small to
mid-sized businesses. An apparent trend is for the Department
of Economic Development (Department of Commerce in some states)
to attempt to coordinate the efforts of multiple service
providers into integrated regional networks that are more
readily accessible by small businesses. Maryland provides one
example of this.
* Chambers of Commerce. Increasingly, chambers, in an effort to
keep members and to generate revenue, are providing work
restructuring services to members. National and state chambers
are assisting local chambers in these efforts through program
support and development.
* At the present time, the supply of services is growing faster
than the demand. However, there is some question as to whether
there is a sufficient supply of competent, customized services
for small businesses. There may be an emerging shakeout of low
quality service suppliers --many are laid off Fortune 1,000
employees. If this occurs, the future demand may outstrip the
supply.
PRODUCTS AND SERVICES
The primary products and services in this area are consulting
support, courses, materials (e.g. books, videos, audio tapes,
software, etc.), and conferences. Some examples of services are the
CEO total quality networks and the total quality director networks
being run by the Maryland Center for Quality and Productivity, and
the quality councils run for large firms by the Conference Board.
Primary service providers for work restructuring include:
* Trade associations;
* Quality and productivity centers (many are based in universities
or community colleges);
* Companies that have launched consulting operations (e.g., IBM,
Motorola, 3-M, etc.);
* Consultants;
* Chambers of commerce;
* Research and training organizations (Goal/QPC, etc.);
* University or community college based extension programs;
* Community total quality organizations (e.g., Erie Pennsylvania;
Philadelphia, Pennsylvania; Madison, Wisconsin; etc.); and
* Unions.
Mechanisms for communicating with service providers include:
* Networks (e.g., Inter-American Network of Quality and
Productivity Centers (NQPC), Modernization Forum, NACFAM,
National Association of Manufacturing and Technology Assistance
Centers (NAMTAC), etc. Note: The technology oriented
manufacturing organizations have limited experience and
credibility with respect to the strategic and social aspects of
work restructuring.);
* Directories of providers;
* Fliers;
* Conferences; and
* Courses.
These mechanisms reach only a small proportion of service
providers. There is a real need to reach more providers with high
quality information.
The strengths and weaknesses of current arrangements for
delivering services include:
Strengths:
* When suppliers must depend on their success in the marketplace
to generate revenue, the motivation to develop and deliver
customer focused services is very strong.
* Many states subsidize assistance, thereby making it more
affordable to small businesses.
Weaknesses:
* There are few mechanisms to encourage reluctant CEOs of small
and mid-sized businesses to change. Most service providers only
serve those that are already "turned on."
* Participation by the education community in service delivery has
been weak (though it is growing).
* The focus of service delivery has been primarily on large
organizations.
* Materials, courses, etc. are expensive and time consuming.
* It is real tough for service providers to get up-to-date,
applied information if they are not connected to the right
sources. This is especially true for the small consultants and
individual service providers that are most likely to be
providing services to small businesses.
* Effective mechanisms do not exist to allow small businesses to
be assured that the consultants they hire are competent. Caveat
emptor prevails! Some states are moving toward providing lists
of consultants with names of their previous clients, so that the
small businesses can check the consultants' track records. The
problem of determining consultants' skills is especially acute
in the work restructuring area because of the diversity of the
field and the breadth of knowledge required to be an effective
service provider.
* When providers are required to live off the revenue they
generate, it discourages efforts to promote network development
among small and mid-sized companies. It requires real effort to
set up and facilitate the networks, but while networking
services can be high leverage services, they are not high
potential revenue producers.
RESEARCH AND DEVELOPMENT
The strengths of work restructuring research and development
include:
* Baldrige provides a good consensus of what to work on.
* There is growing academic interest in the field, and this will
stimulate research. This has been facilitated by industry
programs such as Quality Challenge, where large corporations
have "adopted" university faculties for a week-long educational
experience. The IBM Total Quality Grant process sparked a
national competition involving over 200 universities, and
required that university presidents become involved. The seven
winning schools are working to develop models for incorporating
total quality into the curricula of business and engineering
schools.
The weaknesses of work restructuring research and development
include:
* Only a few national firms have the financial resources to
produce significant research. Much of what is produced is
self-serving.
* The advanced development work is going on by trial and error
within large companies. Some (e.g., Proctor and Gamble) have had
many years experience with restructuring. Firms that consider
their methodologies proprietary or a source of competitive
advantage have little interest in sharing their knowledge with
other firms.
* Until recently, education has been out of the loop. Educators
were asking the "why" question, and business was asking the "how
to" question.
ORGANIZATION AND MANAGEMENT
Gaps and weaknesses in knowledge development and dissemination
include:
* The lack of participation of diverse groups, such as unions.
* Federal agencies work without coordination and focus on only
part of the issue.
* A general lack of funding from federal agencies for management
oriented research in the quality area. Most of the federally
funded research is technologically oriented, but the barriers to
work restructuring do not stem from a lack of technology.
* The best books are not available in book stores. The best
courses not available in all locations.
* There is a wide variation in consultant quality. There is no
mechanism for controlling the quality of community college and
consultant offerings.
* Knowledge development should not be the exclusive domain of
academia. Many non-profit and private groups better understand
the needs of clients. More collaboration between service
providers should be encouraged.
FINANCIAL INFRASTRUCTURE
In companies, products and services are geared to people who
can pay, i.e., large companies. Less is available and the quality is
lower for smaller businesses, government, education, and
not-for-profit organizations.
For the small firm that is often struggling with day to day
cash flow issues, investment in work restructuring competes with
other investments which often have more urgency, if not more
importance. Because work restructuring promises an uncertain and
delayed (although significant) return on investment, it may have
little value in the mind of the owner.
Much of the support available to service providers from the
federal government is "wired" for certain groups. Many competent
providers are not aware of the opportunity for funding for
developmental work. In addition, the ability to access foundation
funding is beyond the scope of many small service providers.
The amount of public funding for work restructuring efforts
seems to be much less than the significance of the area to the
competitiveness of the nation would warrant. However, we really
don't know how much funding is available from all sources.
INTEGRATION
The work restructuring area is closely linked to
labor-management issues. This is because much of the work done has
grown out of joint labor and management efforts to survive. Work
restructuring and training are also linked because work
restructuring tends to drive training needs. Work restructuring
efforts appear to be less well linked to literacy efforts, with some
notable exceptions (e.g., joint efforts by General Motors and the
United Auto Workers in the auto industry).
EXTERNAL ENVIRONMENTS
* Political. Both political parties are open to re-inventing
government. On a programmatic basis, there is some discussion
that manufacturing technology centers should be encouraged to
become more involved in human resource issues. Rather than
re-invent the wheel, the centers should be encouraged to
collaborate with existing suppliers that have human resource
skills and experience. Collaboration between the Department of
Labor and the National Institute of Standards and Technology (in
the Department of Commerce) might promote this thinking.
* Economic. The recent recession slowed dissemination of work
restructuring to education, government, and small businesses.
* Social. Unions still have to find their place in restructuring
efforts. The interests of local unions and their regional and
national headquarters sometimes collide. However, unions can
and often do exert a very positive force to insure that work
restructuring efforts are real and not management "shams."
Unions generally should be partners in work restructuring
efforts. However, not all unions and union leaders are
qualified to play the role of partner. Union leadership should
be developed so that unions can be true partners in
restructuring efforts.
* Demographic. Most people work for small businesses.
Restructuring needs to take place in these firms if it is to
have a national impact. The "modernization" movement has
occupied most of the spotlight on improving small businesses.
However, while modernization (usually defined as technology
modernization) may be part of small businesses' problems, it is
not the major problem. Unless small firms are guided by a
clear, appropriate business strategy, neither work restructuring
nor modernization will yield business results.
* Technical. The information super highway may provide
opportunities. CD-ROM may provide access to key documentation
on work restructuring.
* International. We have surpassed Japan in work restructuring in
education, government, and financial services. While many
pioneering work restructuring efforts have been conducted in
Europe (e.g., Tavistock mining studies, Volvo, etc.), these have
addressed such issues as labor shortages. The global
competitive realities now facing Europe are causing a renewed
sense of urgency about more radical forms of work restructuring.
This may cause European countries to address their work
structures more effectively than they did in the past.
There is a significant amount of work restructuring in Southeast
Asia. However, it is largely driven by the multinational firms
(e.g., U.S. and Japanese) that have located production
facilities there to take advantage of low labor costs.
NAFTA and GATT are likely to stimulate additional interest in
restructuring as markets open and as competition heats up. For
example, in Mexico there is a booming industry for work
restructuring efforts and a strong network of state quality
centers that is working to meet the needs of small firms. Some
of the models developed at the state level for assistance to
small firms in Mexico have applicability in the U.S.
In the near term work restructuring is being slowed by the
growing international obsession with IS0-9000. This movement to
have production sites and firms registered with respect to their
quality management systems has diverted resources that might
otherwise be spent on restructuring. Long term however, this
will be a boon to restructuring, as firms realize that ISO-9000
provides only the "ticket to the stadium," not a path to
competitive success.
* Regulatory. The rules of the IRS regarding what a non-profit
organization can do must be considered. Issues like unrelated
business income and the use of independent subcontractors need
watching. Firms should be allowed to capitalize investments in
people as a means of promoting the organizational learning that
will be essential to future competitiveness.
There has been concern over the ruling of the National Labor
Relations Board on the Electromation case and its implications
for teams in the workplace. It is important that labor law be
clarified, and changed if necessary, to remove any barriers,
real or perceived. It is important that there not be any
barriers or excuses for firms to avoid engaging in "true" work
restructuring.
CRITICAL ISSUES
1. What work practices should be embraced under the heading of "work
restructuring?"
2. How can small to mid-sized firms obtain the resources and
expertise to effectively implement work restructuring?
3. How can small and mid-sized firms have access to information
about advances in the development of applied knowledge in the
work restructuring arena?
4. How can small and mid-sized firms be helped to 1) develop the
management processes necessary to create learning organizations,
and 2) take advantage of the potential of advanced technology?
5. How can we guarantee an adequate supply of high-quality work
restructuring services for small and mid-sized businesses?
6. What professional development system will prepare consultants to
tailor services to meet the needs of small and mid-sized
companies?
7. How can the Collaborative use information technology, including
the information highway, to design a delivery system for the
large number of small to mid-sized businesses in the country?
8. How can the Collaborative promote a fully integrated service
delivery model (combining workforce literacy, technical training,
labor-management relations, and work restructuring) which is
appropriate for organizations at different stages of development
and approaches businesses from a strategic perspective
emphasizing business results, not programs?
Dr. Thomas Tuttle
Maryland Center for Quality and Productivity
.