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harvey@harveyschachter.com

***

Freedom, Inc.

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By Brian M. Carney and Isaac Getz

Crown Business, 303 pages, $34

We celebrate freedom. We consider it a hallmark of our political and economic systems. Business leaders are quick with paeans to the freedom of the capitalist system, and the perils of shackling business.

But freedom often stops at the front door of their business. Employees are far from liberated, bound by the rules, hierarchy and culture of their firms. Easy gains for the company are squandered because employees can't follow the Nike motto and "just do it." They must seek permission, and so too often don't even bother to pursue their ideas, or their requests get lost in the bureaucracy.

Freedom, Inc. shows us another way. Journalist Brian Carney and management professor Isaac Getz take us into companies that have made freedom their lifeblood - companies that trust their employees and liberate them, counting on those employees to act in the best interests of the company, and taking advantage of that passion to achieve enviable corporate financial results.

At the French firm FAVI, a brass foundry, it starts with the supply closet. There is no lock on the door. Actually, it probably wouldn't matter even if there was a lock because the closet is missing one of its four walls, allowing employees to take what they need to keep their machines operating.

Madness, right? The employees probably pilfer, and the supply room is likely a mess. That's what a visiting chief executive officer thought, so he stopped to question a machine operator. The ensuing conversation is recorded in the book.

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"What happens if the part you come for is missing?" the CEO asked.

"It never happens," the operator replied, "because the guy who takes the last piece in the box goes to the warehouse and brings back a full box."

"Fine," said the CEO, no doubt skeptical, but moving on to probe another obvious weakness. "But what happens if there are no more boxes in the warehouse?"

"Simple. If the guy sees that he's taken the last box from the warehouse, he lets the operator taking care of purchasing know so that more can be ordered."

'And what if he doesn't do it?" the CEO persisted,presumably assuming he was exposing the fatal flaw.

After a pause, the operator told him, "It's a question of good manners, Monsieur."

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Okay, so maybe you're dubious. It does seem like a bit of a fairy tale. But the authors say that what we have today in business is a nightmare. Because we don't trust some of our employees - the 3 per cent who might pilfer or otherwise need close oversight - we have tied the 97 per cent of enthusiastic, intelligent, loyal employees in knots with rules and bureaucratic supervision.

"The great intellectual error of bureaucrats everywhere is to assume that because something is called a rule, it's preferable to a less formal arrangement. And yet most of those rules are not only great morale sappers, they're preventing the vast majority of your employees from doing the right thing. The rules become so stifling that the only way for employees to do a good job is to go around them - sometimes at great cost. At the same time, they are, likely as not, failing to prevent the tiny minority of potential malefactors from doing your business harm."

This transcends open supply closets, but let's go back to that anyway, because it does epitomize the issue. When Jean-François Zobrist came in as CEO at FAVI, it was an old-economy, family-owned company, manufacturing brass plumbing fixtures and gear forks for cars. The new leader initially just hung around, trying to get the feel for the place. One day, he saw a worker getting new gloves. The process involved showing them to a supervisor, getting a slip for the exchange, crossing the workshop floor - chatting with others, and perhaps stopping in the bathroom - before ringing the supply closet's bell, waiting for the keeper, and giving him the slip to receive the old gloves. Some simple math revealed that it cost the company more than $15 in the worker's time every time a pair of gloves needed to be exchanged - twice the cost of the gloves.

So the keeper went, and the supply closet was opened to all. As well, time clocks were eliminated because the new CEO felt that employees should work to make products, not hours. And he eliminated overtime pay, raising the employee's salaries to the level of total pay for the previous year, for the same reason.

Mr. Zobrist sees two categories of companies, a distinction that the authors borrow and use throughout the book: In French, they're comment, or how, and pourquoi, or why, companies.

"Comment" companies spend their time telling workers how to do their job. That means employees are judged, according to Mr. Zobrist, by everything other than what counts - whether the job gets done and the customer is happy. It also becomes very difficult, if not impossible, to change the plethora of rules that rise up.

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In a pourquoi company, the many "hows" are replaced by a single question: Why are you doing what you're doing? The answer should always be the same: To keep the customer happy. As long as that commandment was being satisfied, Mr. Zobrist didn't worry about how it was being done. The company he was worried would succumb to Chinese competition is now a European leader in its sector, exporting to China.

When one of the company's customers had a problem with a product, two workers immediately left the factory - without authorization - and drove to Germany to deal with the matter directly, delighting the customer with their hands-on approach.

On another occasion, when a truck needed to deliver product hadn't arrived, employees - this time with the CEO's knowledge - hired a helicopter. One time, when an important new customer was late in arriving at the airport in Paris, Mr. Zobrist assumed he wasn't coming, and left. On arrival, the customer called the plant, where only the night janitor was present. She immediately drove to the airport to pick him up and welcome him on behalf of the company.

In an era when we hear a lot about the need for employee engagement, this book offers an avenue for achieving it: freedom. The examples are often eye-opening, and certainly stirring, and are backed by the authors' advice on how best to achieve a culture of freedom in companies that want to take that step.

The book is journalistically written, with the steps you might take presented casually, rather than as an x-step plan, and with the caution that transforming from comment to pourquoi - and embracing freedom - is far from easy.

Special to The Globe and Mail

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