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 / Second Quarter 1997 / Issue 7(originally published by Booz & Company)


The Triumph of People Power and the New Economy

Employees gain security by building critical skills.

The notion that employees must learn critical skills to insure their employability rests at the very heart of the New People Partnership. Employees are furnished extensive opportunities to build skills that are desired in the marketplace, not just in their own company. Learning and people development are entwined in all aspects of the business.

But it is not a one-way street. Employees must also commit themselves to continuous learning to develop these critical skills. The days when someone is promoted because of who he knows and his exquisite understanding of the politics and processes of the company are numbered. What matters is what you know and how you get things done.

In an organization like Intel, employees must take personal accountability for learning and building their skills. Intel provides the resources to support learning through its training programs and career centers. Employees must understand their own performance reviews, as well as their own goals and objectives, and lay out a plan that addresses both.

Perhaps more than any other company, Motorola has committed itself to the concept of lifelong learning. Motorola was one of the first to truly integrate education with business targets. At Motorola, gaps between strategic objectives and skill levels set the stage for training and development goals. Comprehensive training systems have been developed to support strategies (e.g., the Six Sigma Defect Reduction Program). The company has committed the resources to make it happen. Motorola University, established in 1981 with a budget of $2 million, now has some two dozen sites worldwide and a $120 million budget. Every Motorola employee receives at least 40 hours of training annually. Many training courses have been offered not only to employees, but also to suppliers and customers. Motorola utilizes apprenticeship or "embedded learning" -- new employees learn tasks under a more experienced worker's guidance, in addition to formal training.

And Motorola has had the dedication to stay the course. While it is difficult to measure the rewards of training, Motorola claims that each training dollar yields $30 in productivity gains over three years. Its commitment to lifelong learning extends beyond training current employees to improving students' preparation for the workplace -- investing millions in a campaign to overhaul school curriculums. As Robert W. Galvin, the company's chairman of the executive committee, has said, "Today, we spend hundreds of millions of dollars on training. These items don't 'cost' us any money because they make each of us a little smarter, a little more competitive."

Responsibility for performance extends to all levels.

An important tenet of the New People Partnership is that employees take personal responsibility for the company's competitiveness. They have to accept the reality that their personal future and the attractiveness of their jobs are directly tied to the company's performance. Accordingly, employees are held accountable for the organization's performance at all levels, and the performance of managers is measured against the New People Partnership.

Again, this means some notable changes in the way a company evaluates and rewards its work force -- linking pay with organization performance and offering employees the opportunity to share in both the risks and the returns.

At Norwest, 85 percent of employees are shareholders. As one employee puts it: "We think and act like owners because we are. With 85 percent of us owning stock in Norwest, we are aligned with the interests of shareholders, have a growing stake in the company and are rewarded through a higher stock price for ideas that improve efficiency, enhance service to customers and increase sales."


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