Conventional wisdom says that to be successful, our ideas—be they strategies, products, performances, or services—must be concrete, complete, and certain. And when it comes to leading people, we need organizations to be highly ordered, with a strong and well-defined structure. But what if that’s wrong? What if we can gain through loss? What if we can add value by subtracting?
Take the case of French company FAVI, an autoparts supplier that manufactures copper alloy components. CEO Jean-Francois Zobrist eliminated the personnel department immediately upon taking the helm of the company in 1983. But that wasn’t all he got rid of. Says Zobrist: “I came in the day after I became CEO, and gathered the people. I told them tomorrow when you come to work, you do not work for me or for a boss. You work for your customer. I don’t pay you. They do. Every customer has its own factory now. You do what is needed for the customer.” And with that single stroke, he eliminated the central control: personnel, product development, purchasing…all gone.
Twenty teams were formed on the spot, based on knowledge of the customer: Fiat, Volvo, Volkswagen, and so forth. Each team was responsible not only for the customer, but for its own human resources, purchasing, and product development. There are two job designations in the team: leader and compagnon—or companion—which is an operator able to perform several different jobs.
Every customer has a single FAVI linchpin, who oversees all aspects of the relationship, which are handled by the team, including all of the technical requirements, cost negotiations, purchasing, product development, quality control issues, scheduling and delivery, meeting organization, and information coordinating. The linchpin is a critical position of high strategic importance, so Zobrist handpicked each one. In effect, what happened at FAVI was that it moved from being one big plant to being a couple of dozen entrepreneurial mini-plants housed under one roof.
So, Zobrist’s redesign added by subtracting.
The lack of hierarchy solves a number of problems. With work at FAVI organized into horizontal customer teams, job titles and promotions become irrelevant, so they are no longer a distraction. All energy is channeled into the work itself, which at FAVI is of the highest quality. Employees are accountable to the customer and to the team, not a boss—and they are free to experiment, innovate, and solve problems for customers. Equipment, tooling, workspace, and process redesign all rest in the hands of those doing the work. FAVI people are encouraged to make decisions and take quick action to improve their daily work and respond to the needs of their customers. They’re known for working off-shift to serve customers or to test out new procedures. Control rests with the front lines, where it adds the most value.
It works. Still, customers visiting FAVI are often astounded at what they perceive to be a total lack of control. A favorite story Zobrist tells involves a customer’s site inspection at FAVI: “They asked to audit our procedures,” he says. “They were not pleased because we had no measurement system for tracking late orders—nothing in place, no plan, no process, no structure in case of delay. They are a customer for over ten years, so I say, ‘In that time, have we ever been late?’ They say, ‘No.’ I say, ‘Have we ever been early?’ They say again, ‘No.’ And so I ask them why they want me to measure things that do not exist.”
Zobrist’s management reveals a different way of thinking, one driven by questions like: What would my customers love for me to eliminate or reduce or stop adding? What is it that my competition would struggle with if I were to cease? What would my most highly valued people love for me to stop doing?
In other words, the key to applying design thinking in management may be as simple (not easy!) as understanding the art of subtraction.