Inside Business: 'Empowered' is not a dirty word
Sunday 28 December 1997
But, despite this widespread cynicism, certain organisations - usually those that are less tied to the traditional command-and-control approach - claim great things for the concept. The only problem has been that adopting it in its truest sense has required an act of faith. You either genuinely believe that giving employees initiative is a powerful motivator with benefits that far outweigh the risks, or you do not.
Now, though, help could be at hand for the waiverers. Bourton Group, the management consultancy formerly known as Ingersoll Engineers, claims to have developed a technique that - in the words of managing director, Keith Bissett - is "starting to demonstrate practically that more empowered companies are achieving greater improvements in business performance".
The firm developed the quantitative management tool, Empowerment Audit, as a means of assessing the degree to which employees in organisations are empowered. But analysis of the databank collected from more than 100 large and medium-sized UK companies also reveals a clear correlation between the extent of empowerment in companies and the level of improvements in business performance.
The study involved Bourton Group examining companies' progress over four years against four key performance measures: turnover, return of sales, return on capital employed and profit per employee. On each measure, Bourton selected the companies in the upper quartile in terms of performance improvement and found that there were significantly more empowered businesses in this group than those managed with a traditional approach.
The correlation between empowerment and performance was confirmed by further examination. For example, among the "more empowered" group (those scoring more than 50 per cent on the Bourton model) as a whole - rather than just those in the upper quartile - more than half had increased sales revenue by 30 per cent, ROS by 7 per cent, ROCE by 12 per cent or more and profit per employee by more than pounds 5,000. Conversely, among the less empowered group as a whole, half matched the sales revenue increase but only about a quarter matched the empowered group on the other three measures.
In devising its empowerment audit, Bourton has identified four key themes in organisational empowerment - relationships, style, structure and communication, with such attitudes and techniques as trust and internal partnerships to the fore. By plotting these against 15 specific indicators, including such descriptions as "traditional", "participative" and "early self-directed", it has produced a 5x15 matrix. This then provides 75 options by which to profile individual organisations, and group views of current and aspirational levels of empowerment.
But though his firm has detected a clear link between empowerment and business performance, Mr Bissett is at pains to point out that it is not saying there is a correct approach for organisations to take. "Correct is a relative term for any organisation," he says.
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