A serial entrepreneur, who started his organisations in the ‘normal' managerial style then shifts and adapts an open, transparent and empowered style of management. Read on to see if you could adopt some of these techniques to build an Open Organisation.

Balaji Pasumarthy Chief Catalyst, Golden Square and Businessgyan

Excerpts: Happy and engaged!! This is not about marriage; it's about the organisation, it is a HR manager's ultimate dream to have ‘engaged employees'.

It is interesting to note that you care the most for things that belong to you. It becomes evident when we compare the difference between how we maintain our own homes and our streets, the way we take care of our car as against the misuse of a company car. How we travel frugally on a holiday and how we splurge on business travel. The fundamental difference is the sense of belonging or the lack of it.

Initially when I started off, my management background made me exercise control and do performance appraisals etc. to manage my company. I continued to do all these till 2002, when  I happened to  read ‘Maverick' a book by Recardo Semler. It is about a very profitable and rapidly growing "Open" organisation called Semco. The other books which influenced me were ‘A Bias for action' and ‘The Individualized Corporation' by Sumanthra Ghoshal. These books influenced me enough to want to try it out in my own organisations and provoked me to think and learn more about open organisations.

Before opting to talk on this subject  I wanted to check from my team how open we are 6 years after we started this journey... here are the responses. The figures in the brackets are how far we have reached.

Do you have a say in what's going on  (80%)

Know what's going on (80%)

Have control over your own work (90%)

Decide how and when you do work (95%)

Decide who you work with (70%)

Decide your salary (65%)

I once came across a person wearing a badge which said "I am the OWNER of this Company", I was impressed and probed him only to hear "I've been told to wear it !!" and he was most certainly not happy wearing it.  Ownership can be seen only in action not in words.

On the contrary, here is an example of an empowered team effort.....Last year during the height of power cuts, a customer of our Golden Square Business Centre was very unhappy as the AC was not working. Our people hired an air cooler, filled it with ice and set it up in the customer's office space; to say the least the customer was thrilled. Impromptu decisions like this, show true empowerment, which helps expand the management's bandwidth and also provides better profitability.

Ownership is really about having a say in what belongs to you. Sure in a team just like at home one truly needs to take everyones views and concerns into account. Can we create a culture that really makes people feel that the company belongs to them? This is what is possible in an open organisation.

Another key factor is the trust within the team, when you treat someone with trust, they reciprocate it, and it's called the Pygmalion Effect; People raise up to the expectations set for them. Recently we took a new office and recruited a security guard, the team contemplated giving him a phone with restriction on STD and ISD calls. After a short discussion we decided that if the security guard was to misuse the facility, then he is unfit for the role anyway. How can we trust someone with the building if we cannot trust him with a phone?

One key for creating trust is one should be transparent, to the extent that even a single cup of tea consumed by me, is accounted for and charged to me in my company.

An employee in our company does not depend on external motivation, he works because he likes it, and he is internally driven. We don't have external motivators like "Best Employee of the Month" awards for this very reason.

Respect each person as an individual, immaterial of their ideology or opinion. There are no designations, the reason is to have fluid roles and responsibilities, it allows us to change roles dynamically and allow people to move to their preferred area of work. People derive respect  from their competence and not from the job title.

Decision Making is at the Point of Activity; the person who takes a decision is responsible for it and has complete authority to carry it out. He knows best about his job. 

We have an internal rule called ‘Target profit', which takes into account the return on investment that the business requires, beyond this 20% of profit goes to the team, and they decide how to share it. Some years this was nearly 2 months of the payroll.

Each individual can work as he pleases as long as it does not affect others; if it affects others then he needs their consent/ involvement. Feedback is immediate, both positive and negative. It is done without ego, so there are no hurt feelings. We have a heterogeneous mix of people; each one comes with different talents, aptitudes, abilities & skills. A team needs to have all sorts of skill sets. There is no force fitting of people into roles. Sometimes the  market value of an employee does not allow us to afford him, the interesting aspect is that people give us 6 to 8 months notice, and make the transition very easy, some of our people help us  years after they leave, there is a lot of good will towards the organisation. We have also had several instances when people came back to our organisation, because of the culture.

The real benefit of an open and empowred culture is that the organisation taps into the minds of its people rather than looking at them as mere bodies. This I believe is a key asset in a knowledge economy.

Role of the management is to set the right environment and the boundaries; You create the desire then the team takes charge and drives you.

Balaji has set up several businesses. He is a Keen observer of organizations, especially in the start up phase. Once the business takes off, he takes a completely hands off approach. His personal strengths are his insights into business strategies and a strong belief in fundamentals and processes.

He was speaking at a Panel Discussion organized by Businessgyan and TASMAC  on the topic ‘Empowerment'.

Compiled by Ms. Mangal D Karnad for Businessgyan.

Issue BG89 Aug 08

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