President Obama and Paul Levy, CEO of Beth Israel Deaconess Medical Center in Boston both have employed the same “commonsensical” idea, one that more businesses would do well to emulate if they want to get better business results, especially in these difficult times.

President Obama’s recent statements made clear that federal workers were important players in the way costs get managed in the workplace. In his April 25 radio/internet address, he announced that the government would “establish a process through which every government worker can submit their ideas for how their agency can save money and perform better. We'll put the suggestions that work into practice.

Levy had a similar idea earlier this year. The economic downturn was a creating a financial hole that threatened to obliterate 600 BIDMC jobs. Instead of turning to his management team to figure out the best way to do layoffs, he went to the employees and asked for their help in identifying ways to cut costs.

In a companywide email, he outlined the serious nature of the medical center’s financial problems (omitting the traditional sugarcoating), and turned the organization into a giant idea generator. Numerous town hall meetings were convened to get the reactions of employees, who were understandably nervous and upset. Even though there was uncertainty and fear,  people submitted thousands of creative ideas for better managing costs.

Mr. Levy drafted and distributed a preliminary plan and asked for feedback and comments. By incorporating employees’ ideas, he was able to craft a final recommendation that reduced layoffs by 75 percent. More than 450 jobs were saved.
In a HBR Idea podcast, Levy says that transparency works as managing strategy at because it is always framed “along the underlying values of the people in the organization and the major mission of the organization.”

Is such transparency unusual? According to Levy, it is. And he finds it odd that more leaders don’t use this “very successful approach.” His story about how he was able to avoid massive layoffs was widely publicized, yet no one has been clamoring for his advice on how to achieve similar success.

It truly is “commonsensical” that people on the front lines—those who are doing the work and are typically closest to the marketplace—have great ideas on how an organization can be run more efficiently and effectively.

“Why wouldn’t you want to listen to them?” Levy asks. “Frankly, it strikes me as odd.”

Obama echoed the same reasoning in his radio address. “After all, Americans across the country know that the best ideas often come from workers, not just management.

That’s not just anecdotal evidence cited by the President and backed up by one CEO’s story. Research backs them up. Based on 10 million interviews, research published by Gallup establishes that engaged employees are more profitable, more customer focused, safer, and less likely to leave an organization.

Gallup’s research also reveals that most workers are not engaged at work or worse, are actively disengaged, which means many companies are adding to the costs of doing business by failing to tap into one of their most powerful sources for improvement: the collective wisdom that exists among the organizations’ workers.

How can leaders begin doing that?

First, commit to transparency about the realities of the marketplace, what it takes to be successful there and how that gets measured. Then find ways to support people in making meaning of those realities. People don’t typically choose to be accountable for finding solutions to something they don’t understand. Creating widespread business literacy will give workers the information they need to understand why what they do matters and help them make better choices in service of the customers.

Leverage technology. Use email, videos and podcasts. Take advantage of social networking, create chat rooms and electronic forums where people can talk about problems, discuss ideas and ask questions. Intranets, company newsletters and meetings are other tools that can be utilized to help people understand the business of the business. Remember that communication needs to flow up, down and across. Management has a lot to teach workers about the big picture, and workers have a lot to teach managers about how work really gets done. This information flow will cover the organization more quickly by overhauling the most ancient of technologies: the every day conversations that people have at work.

Create new ways of interacting and deliberating. Large, well-organized “town hall” meetings can get people talking to each other about the business and how what they do contributes to it. This fosters systemic thinking that helps individuals focus taking accountability for the success of the whole business, not just their little piece of it. Regular cross-departmental meetings will increase the awareness of interdependencies and minimize the breakdowns in accountability that happen in the “white space” between divisions and departments.

Transparency requires sincerity, honesty and openness, says Levy, and dissemination of the bad news along with the good news. When you see an organization comprised of well-meaning adults who want to contribute, it can be easier to keep the conversations authentic.  

@henning-showkeir & associates, inc.