Empowerment: A Corporate "Ace in the Hole"

"We founded our company in 1981, based on the principle that empowered people can achieve remarkable success. Today, with businesses in 26 countries, we continue to improve and expand our global power services through great people, solid operations, and strong financial results." (Quote from AES Corporation website*)

AES, a highly successful global electricity company, based in Arlington, Virginia, can give us a few clues about just what empowerment is, what it isn't, and how it can be effectively implemented.

1. A lack of hierarchy within the company structure contributes to empowerment.

According to Roger Sant, Co-founder and former Chairman of AES, "The more authority figures you have above you, the more likely it is that you won't make decisions yourself."** To express this principle in a more positive way, "The fewer authority figures you have above you, the more likely it is that you will make decisions yourself" (author's paraphrase). This perspective gives us a little more insight into the productive atmosphere that can be created with a bit of wise planning by company owners and managers.

Dennis Bakke, Sant's fellow founder and former CEO at AES, agrees that allowing employees to "take on very big challenges without requiring them to get approvals from senior people before making decisions" encourages them to rise to meet the challenges they face. In fact, both Sant and Bakke firmly believe that, "almost invariably, people will rise to the level of trust and dignity you invest in them." Few would argue that empowering employees to make their own decisions without consulting the "powers that be" for each and every one, creates a sense of dignity in the "colleagues" who are entrusted with the decisions that affect their own work.

2. "For (empowerment) to work, every (employee) must become a well-rounded generalist who understands every aspect of (the) operation, who understands the economy in which (the company works), and who has the good of the whole company in mind when he or she makes decisions. It's like every...person is a mini CEO " (Sant).

According to Bakke, job rotation is one way to make that happen. He states, "People move from team to team and from plant to plant." This allows team members to learn about the entire operation so they can make informed decisions that can be of real benefit to the organization. Working on multiple teams in multiple plants (or in multiple departments/capacities)--as well as gaining an understanding of the company's financial picture--gives a team member an "owner's" perspective, making him or her far more likely to have the company's best interests at heart and thus far more valuable to the company.

3. When employees are fully engaged, mentally and emotionally, empowerment can come to full fruition.

Knowing and embracing a company's values, understanding and being dedicated to its mission, having a good overview of its objectives, and possessing a real conviction that what one does and what one accomplishes matters to the company--all this contributes to full engagement in the everyday tasks that are involved in the running of the company. Such employees do not have a "9:00-5:00" mentality. They don't watch the clock and stop in the middle of a task when it's time to go home. They don't give the minimum of effort that they can get away with to avoid being fired. They have a stake in the company's success, and all their faculties are involved in doing their part to contribute to that success.

4. "Free and frequent information flow" is absolutely critical to effective empowerment of employees.

For employees to give their best to the company, they must have access to any and all information that would help them perform their jobs effectively. Bakke considers this principle so important that he says, "I don't know how we'd function without it, because it undergirds everything we do." He goes on to state why: "When people are making big decisions on the front lines, it's not as if they are doing so in a vacuum. They shouldn't be. We have lots and lots of corporate memory, and it's crucial for people to be able to access it....You need information to make a good decision."

At AES, that even applies to "the details of potential acquisition decisions," as well as to "all financial and market information." Bakke states, "We have very few secrets at AES." Such open communication--and "open-book management"--gives employees the tools they need to do what every boss wishes all his or her employees would do: run the company as if it were their own.

5. Real empowerment includes an element of accountability.

Empowerment is not "a big free-for-all where everyone is allowed to do whatever he or she wants," regardless of consequences. Bakke states, "...People are more accountable for their actions in our system than that, and maybe more accountable at AES than at many typical, traditional, hierarchical companies." Sant goes on to say, "If a team feels it is fully accountable, it will take more responsibility than if it feels that its boss is accountable." As a result of this sense of personal responsibility, empowered employees will be far more likely to make decisions with care, rather than carelessness.

AES, the model on which these principles are founded, is still going strong, after 25 profitable years. They must be doing something right.

*http://www.aes.com
**All quotes come from "Organizing for Empowerment: An Interview with AES's Roger Sant and Dennis Bakke," Suzy Wetlaufer, Harvard Business Review, 2001 (Reprint 99109)