Organizing for
Empowerment
AES Corporation
A Global Energy Company
1
Introduction
• AES Corporation
• Founded in 1981 by Chairman Roger Sant
and CEO Dennis Bakke
• 90 electricity plants in 13 countries
• Employs 40,000 people
2
Why Empowerment
• Empowerment is becoming popular among
corporations
• One of the few management topics that
has received much attention recently
• Execute important decisions without top
down interference
• Will give you a broader perspective as a
future manager
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Presented By:
•
•
•
•
•
Nick Rosendal – Interviewer
Courtney Gehring – AES Rep
Chris Bezooyen – AES Rep
Ulf Geerds – AES Rep
Catherine Henderson – Critic
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Vision of the Company
•
•
Create a different kind of company that
“we” ourselves would like to work for
Embodied the four principles of
1)
2)
3)
4)
•
Fairness
Integrity
Social responsibility
Fun
Engage peoples hearts, minds and souls
5
What makes these
experiences possible
• Designed to make sure power gets
distributed throughout the organization
• Lack of a hierarchy and organize around
small teams
• Structure and practices
• hiring
• compensation
• information flow
6
What makes these
experiences possible
• Every person at AES is like a CEO
• Eliminate all groups of functional
specialists
• Each team has social responsibility in
terms in their area
• operation
• maintenance
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How does that CEO
perspective get formed
• Job rotation
• Employees begin to know
most aspects of our
operation inside and out
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Does eliminating
specialists hurt efficiency
• Process of learning and doing is what
creates engagement
• Worth the trade off because people gain
• sense of control
• social responsibility
• People with arrive to the level of trust and
dignity that you invest in them
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Does eliminating
specialists hurt efficiency
• Involving people changes them forever
even though it may not have a large effect
on the company
• Once a team figures out how to do certain
projects it is time to pass the job onto other
teams
10
Hiring Practices
• Look for people that are enthusiastic about
our values
• Usually have lots of selection therefore:
• Best cultural fit first
• Expertise second
11
Performance Evaluation
• Visit plants and listen to peoples concerns
• All employees fill out value surveys
• Read by top management and leaders
• Gives a better sense of what is happening in
all plants
• Make sure employees adhere to the principles
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Hourly vs. Wage
• Want all employees on salary but that is
their choice
• Believe people contribute more than just
time to the company
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Information Flow
• Information is widely circulated
• Very few secrets
• The system works because people
volunteer information – they share
knowledge
• Information is needed for good decisions
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Accountability Enforced
• Consequences for
• Poor performance
• Violation of the second principle, Integrity
• Penalties vary
• Loss of bonus
• Demotions
• Pay cuts
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Mistakes & Forgiveness
• Serious mistakes are
punished financially
• Making mistakes is part
of learning
• Forgiveness is required
through fairness
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Role of a Leader in an
Empowered Organization
• Four roles for leaders in AES
•
•
•
•
Advisers
Chief guardians of principles
Chief accountability officers
Chief encouragers
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Why Empower
• Companies must exist primarily to benefit
society
• Reinvent capitalism around a sense of
mission
• The point is improving the world
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Business Should
Benefit Society
• Companies should handle the third
principle, social responsibility, in an
integrative way
• Build it into its values and practices
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Make Money
• Profits are a consequence of doing a good
job
• Profits are not the central purpose
• Competitors stakeholders too
http://finance.google.com/finance?q=AES
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October 24, 2006
Empowerment Applicable
• Possible in other Companies as well
• However
• Empowerment also means more
accountability
• Greatest problem is giving up power for the
higher management
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Challenges to go into
the world
• Less than expected
• All four values exist all over the world
• Sometimes the Non-American employees
get the concept faster than the American
employees do
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What about Alliances
• AES does not work very well with other
companies
• Do not like to sacrifice four core values to be
compatible with other old hierarchy companies
• On the other hand, new situation with Williams
companies seems to work fine but only on a
contractual basis
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The Future
• They are worried that the company will
stop living up to the values
• But, too many employees in the company
believe in the values and will carry them on
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Conclusion
•
Empowerment Through
1)
2)
3)
4)
Fairness
Integrity
Social Responsibility
Fun
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Questions
• So what are the four principles that make
empowerment possible?
• Any Questions!
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