Managing by listening – to employees’ suggestions – Entrepreneur’s Notebook – Column

Robert Davies

The day I came to work in a sweater and slacks was the day I realized that listening to your employees is good not only for them but for their managers as well.

Before I started my computer-services firm in 1980, I had worked in various levels of management at six other companies and as an officer in the U.S. Navy. While none of the companies had dress codes as strict as the military’s, male managers were expected to wear a suit and tie to work, and women had similar standards.

When I founded my own firm, SBT Corp., I continued this policy and the strong, authoritarian management style I had learned. I changed only when the company focus changed a few years later.

SBT began as a systems integrator, offering solutions to people who worked with computers. In our second year, we landed a large client. But when we sent our invoices, the company sent them back with a note instead of a check: “Needs our complete 20-digit purchase order number.” The problem was that our invoice program would print only 10-digit purchase order numbers.

Back then, if your accounting software didn’t fit your business, you had to change your business to fit the program.

After spending several weekends creating a program that could handle 20-digit purchase order numbers, I realized I was on to something. Because businesses and their needs are changing all the time, I began thinking, maybe other having the same problem. Why couldn’t I give them software that could be changed to fit their exact needs?

That was when I decided to turn SBT into an accounting-software company, and that’s when I started to change my management style.

SBT specializes in giving customers the “source code” that allows them to change their programs to fit their special needs. The source code, in nontechnical language, consists of the detailed program instructions that determine how the programs do their job inside the computer. SBT also puts customers in touch with experienced consultants who can help them with their changes.

Our business has now grown to $10 million a year. During the transition from a small firm of about 10 employees to our present size of more than 80 employees, I had to make some fundamental changes in my management style.

Just as I had to create flexible accounting software to meet the needs of my original firm’s customers, I had to become more flexible as a manager to keep our employees motivated.

To encourage an environment where employees have a voice in company decision making, I formed a group of 15 line managers who meet weekly. We include two employees at each meeting; all they have to do is sign up. This way, we hear ideas from all levels of the organization.

Yet forming groups and changing your management style means little unless you really “hear” what your employees are saying and unless they are willing to risk telling you what they really think. To accomplish this, we’ve developed a special E-mail suggestion system. Connected to more than 100 stations on our computer network, this electronic suggestion box lets all SBT employees pass along new ideas or make direct requests to me. A special password enables employees to leave their suggestions anonymously.

Over the past six months, more than a hundred suggestions have come into my office. Several have saved us considerable money. Of course, by promising to read and consider every suggestion, I sometimes put myself in a difficult position. Case in point: the company dress code.

Because I had always worked in places with a strict dress code, I didn’t want to change it. But as suggestions for a more relaxed code kept making their way to me, I started to think that if it motivated my employees, why not?

So last October, I reluctantly agreed to experiment with suspending the old dress code in favor of more casual attire. At the end of the year, we made it permanent.

Interestingly, after trying the new system, I no longer feel comfortable in a suit and tie. Unless I’m giving a seminar or hosting an important guest, I usually wear a sweater and an open shirt.

Best of all, the employees now find me more approachable because I feel more comfortable and don’t look as intimidating. And that makes it easier, I think, for me to be receptive to their ideas, too. And when you have 80 people contributing, you have a veritable “idea factory.” From the receptionist to the programmer, I never know who will give us the next great suggestion.

Robert Davies is founder and president of SBT Corp., in Sausalito, Calif.

Readers with special insights on meeting the challenges of starting and running a business are invited to contribute to Entrepreneur’s Notebook. Write to: Editor, Nation’s Business, 1615 H Street, N.W., Washington, D.C. 20062-2000.

COPYRIGHT 1992 U.S. Chamber of Commerce

COPYRIGHT 2004 Gale Group

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