CHAMPAIGN, Ill. - Top-down management that counts workers out of decision-making likely contributed to the nation's economic freefall, but changing it could still help businesses rebound from a deep and lingering recession, a University of Illinois leadership expert says.
Business administration professor Gregory Northcraft says meltdowns such as the sub-prime mortgage crisis might have been averted or minimized if firms fostered a culture of listening to employees, not just handing down orders.
"It's very hard to blow the whistle on an organization when you're just this one little worker who thinks the ship is headed in the wrong direction," he said. "If employees don't think there's a vehicle for their input and that their feedback is welcome, I think the organization may be slitting its own throat."
The fact that risky loans and other problems went largely unaddressed until they sank the economy is a sign that many U.S. firms have yet to embrace inclusive workplace strategies that first swept in from Japan in the 1980s, said Northcraft, whose research includes conflict management, collaboration and employee motivation.
"Was it the case that no one in these organizations saw things were moving in a bad direction or was it a case that the organizations didn't create a dialogue for hearing those concerns and integrating them into their thinking?" he said.
Northcraft, the Harry J. Gray professor of executive leadership and interim associate dean of faculty, says inclusive polices can still help firms as they weather the recession and develop new business strategies.
Tapping employees provides a source of new, potentially better ideas, he said, and also increases the odds that workers will support the ultimate decision because they had a voice in the process.
"By getting them involved, it's 'their' solution not 'your' solution," Northcraft said. "And at the end of the day, that means it's a solution they're much more willing to implement and stand behind, rather than a solution forced on them that they walk around complaining about."
He says inclusive cultures can even help with the toughest, recession-driven problems, such as layoffs, furloughs or other cost-cutting moves.
"If managers decide how much needs to be saved and consult employees, they might have better, less painful ideas," Northcraft said. "We each bring a unique perspective to the process, and including them makes it more likely that ideas will surface that managers would never have thought to consider."
He says managers should work through a committee of employees rather than dealing with the workforce as a whole. Workers could then appoint members who represent a broad range of interests, from ethnicity and gender to geographic and lifestyle.
Managers then need to be willing to listen and explore employee suggestions, not just create a façade to rubber-stamp ideas from the top, said Northcraft, a panelist for a June 13 economic forum in downtown Chicago who also will appear next week on "First Business," a nationally syndicated television program focusing on markets and investments.
"In the '80s, a lot of managers were told to be more inclusive, but they just went through the motions," he said. "Employees aren't committed until they know what they said was actually considered. The process requires a real acceptance of their input and without acceptance it doesn't work."
Northcraft said inclusive workplace policies provide transparency that appeals to employees' sense of fairness, giving them an advance briefing on management proposals and a chance to voice concerns.
"Inclusiveness and transparency both contribute to trust," he said. "And I think trust is what helps ensure successful implementation."
Some managers are uncomfortable with consulting workers, arguing that as bosses it's their job to make decisions, Northcraft said.
"I say 'no,' that's not right," he said. "It's not a manager's job to make the right decision; it's the manager's job to make sure the right decision is made. That means they need to get the right people involved in the decision-making process.