Note: This post illustrates the importance of decision-making rules and briefly describes how ISA develops optimal decision-making rules with organizations.
John Eagan who founded the American Cast Iron Pipe Company, ACIPCO, in 1905 and willed it to his employees at his death, determined to run his company according to the Golden Rule he had been taught. “Do unto others as you would have them do unto you,” recalls, ACIPCO’s CEO, “Before you make a rule, say, ‘OK, this rule, what if it applied to me? Is it fair?’”1 The one person to dissent was the then president , J.R. McWane who left to start his own company. ACIPCO has made the Fortune 100 Best Companies To Work For list eight times. At one point 10,000 people applied for 100 openings there; turnover is less than half a percent a year.
McWane built his business by buying up failing foundries and running them according to the “McWane Way.” Over the years the McWane foundries stayed faithful to a “disciplined management” approach. But the McWane way yielded different results. With 100 percent turnover a year at one plant, they turned to hiring ex-convicts from the local prison. McWane has had one of the worst workplace safety records in the US. Between 1995 and 2003 more than 4,600 of their worker had been injured, including death on the job, disfiguration, and loss of limbs. Fines for OSHA and EPA violations in the millions of dollars have been levied at specific plants. As you delve deeper into the McWane way you discover two decision-making rules always operating: first, keep the pipe rolling off the line and second, reduce man-hours per ton.
Having optimal sets of decision-making rules operating throughout an organization is one key to success. Developing them requires a specific set of guidelines. When we work with an organization to develop decision-making rules we use a facilitated process and help each functional area build a relevant set. However, while decision-making rules are developed in the context of particular functional areas they take into consideration the broader requirements of a sustainable planet.
We develop decision-making rules based on principles, which we have determined from our research to produce optimal results. Building a set of decision-making rules is a team effort; at the end of the process, each individual owns the rules. Knowing the decision-making rules allows individuals to move forward independently in many situations. This is particularly evident in meetings where people more quickly decide the best way forward. With optimal decision-making rules the organization is able to more efficiently pursue its goals.
Decision-making rules are developed at a particular point in time. Important here is the notion that decision-making rules evolve. As changes occur in the environment people change in their thinking. People learn things that they wish to incorporate in the decision-making rules in which case a set of decision-making rules will need to be revisited.
