Giving the power to your people Management: more companies are beginning to see the benefit of involving employ ees in the decision-making process

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The Independent Online
SCOTTISH NUCLEAR is a curious entity. Although generally assumed to be a conventional public-sector body left behind when much of the rest of the electricity industry was privatised, it is in fact a company registered under the Companies Act in wh ich the only shareholder is the Secretary of State for Scotland. "We're not civil servants," says Robin Jeffrey, chief executive.

But all this effort to convince the world that it is not a true public-sector body would be mere candy floss if it were not transforming itself. It is here Dr Jeffrey believes he has a story to tell.

The company has turned a loss of £33m, suffered when it was created out of the old Scottish Electricity Board in 1990, into a £72m profit, doubling productivity per employee and increasing output by 40 per cent along the way.

Some of this turnaround can be attributed to the private-sector expertise brought in by Dr Jeffrey three years ago. "We've been running the company in a fully commercial way," he says.

Dr Jeffrey is convinced the company should be privatised. But he insists the main objective is greater commercial freedom.

While acknowledging its core business must be generating nuclear energy, the company is set on diversifying. It is doing consulting work in Eastern Europe, and working on developing renewable energy sources. But it wants to go further.

Confident that the environmental debate has swung in its favour - because it has made a case for producing energy without acid rain, while apparently convincing many that safety problems have diminished - the company is concentrating on reducing the costof producing a unit of electricity.

Boehringer Ingelheim is also a curiosity. A German-based international private company operating in pharmaceuticals , , it is unknown alongside the likes of Glaxo and SmithKline Beecham. Yet last year it had a turnover of DM5.9bn (£2.4bn).

Where Scottish Nuclear is seeking greater competition, Boehringer Ingelheim is being forced to respond to challenges produced by recent changes in its industry. But their solutions are the same: get the employees more involved in the company.

"Empowerment" is all the rage at the moment - so much so that the concept has been all but devalued - but these two widely differing organisations seem to be making it work.

At Boehringer Ingelheim, the initiative has only just begun. Staff at the UK operation in Bracknell have been attending presentations designed to spread the word about a performance project to improve efficiency, and a "vision and leadership" programme with the more ambitious aim of changing the philosophy of a company that has been controlled by one family for more than a century.

Some employees may have had trouble adjusting to a new openness and the idea of challenging the way things are done. But Patrick Knowlson, UK managing director, is pleased with initial results. As an example of how people are responding to the new environment, he cites the mailroom's idea that a second daily delivery between the company's UK sites be reinstated. It had been dropped to save money, but it was actually costing money, because urgent packages that just missed the single delivery were being sent by more expensive means. It is the sort of thing that is so obvious that management has to be told about it.

The drugs company cannot yet measure the effect of such ideas, but Dr Knowlson is confident the "cultural restructuring process" will work by broadening the entrepreneurial scope of the company and providing greater freedom to develop and implement new ideas.

Conscious that this is a fundamental shift for the 23,000-strong company, he says that the approach has to work. The industry is changing so much and so fast that there is no choice.

Dr Jeffrey, though, is in no doubt about the benefits he has seen from working closely with 1,900 employees split between the Hunterston and Torness power stations and the East Kilbride headquarters. He admits that the company's quality-management programme, Target Outstanding Performance (or Top), was initially greeted with scepticism. But at last month's staff conference, he claims, there was overwhelming support for it.

Moreover, the employees have devised their own profit-sharing scheme, recently launched under the name Gainshare. The company has set aside a £500,000 bonus for the employees, to be paid out if output is improved and costs are cut by more than £3m. The system decided on by the workers - and not the management - provides that for every £3 gain, £2 goes to the company and £1 to the employees.

At the conference, not only did the idea win great support as a way of improving performance, but delegates also declared the new cost target announced by Dr Jeffrey was achievable.

"I think that's absolutely fantastic," the chief executive said. "I'm certain that had the company asked that three years ago, there would have been disbelief."