Job reengineering: a new approach to meet the challenges faced by rural electric systems.

• Author: Sommer, Steven M.

Business organizations in America have encountered a paradigm shift. As discussed in several prior issues of Management Quarterly, this revolution in management philosophy has also touched the rural electric industry. In their previous articles, Scott Luecal, Steve Collier, and Dr. Fred Luthans have described the need to abandon many of the traditional philosophies of operating rural electric cooperatives. They have also identified new management and industry trends that need to be recognized and addressed if the rural cooperatives are to be competitive providers of energy into the next century. Some of these trends include the changing federal attitude toward and intent to provide loan funds to rural cooperatives, the success which cooperatives have had in establishing service to rural consumers, and the changing market in which open competition between private and cooperative utilities will become common.

Indeed, systems are going through a significant period of transformation. However, unlike prior industry shifts, these changes will not be accomplished by incremental or piece-meal approaches. For example, Mr. Luecal|1~ spoke of the need to focus on providing the greatest total value to the CONSUMER, an acronym he developed to represent a wholesale change in a rural electric's future strategic mission. Mr. Collier|2~ described the new paradigm of competition in which the "3 R's" (retail consumers, resource competition, investor return) will replace regulated monopolies, price regulation, and sustained growth as the industry paradigm. A call for revolutionizing the way member cooperatives think about doing business. Finally, Dr. Luthans|3~ discussed how Total Quality Management (TQM) could be utilized to identify what rural electric customers want (outage prevention, utility rates, customer service), and how cooperatives can provide the best quality service in meeting those needs. Again, a call for change that requires transforming organizational processes.

These past articles have discussed needed changes in the global perspective of member cooperatives. In this article, we will present a method by which rural electric systems can look at their specific operating processes, evaluate their current effectiveness, and identify and initiate wholesale changes to close the gap between current operating deficiencies and these future visions. This discussion will focus around a recent development in the management literature called Job Reengineering.|4~ Job Reengineering is a procedure in which an organization "takes out a blank sheet of paper" and draws how it should set out to accomplish its strategic purpose. However, before we get into a detailed discussion of how to re-engineer, we feel a discussion of the history of management practices from which Job Reengineering emerged is warranted.

A History of the Design and Redesign of Work

In this section, we will point out past approaches to improving work effectiveness that have focused on incremental approaches. While each of the approaches to be presented have demonstrated their utility in past change efforts, they may be insufficient to meet the transformational challenges now facing the rural electric industry. Our purpose in here is to help member cooperatives use these practices to gain the limited benefit they can provide. However, this discussion is also intended to increase your awareness to the necessary depth of commitment needed to pursue the massive steps necessary for Job Reengineering.

Beginning with Adam Smith's|5~ famous thesis on the benefits of the division of labor, studies of economics, industrial psychology, and management have pursued methods by which employee productivity could be increased through the efficient design of the person-job fit. To start at the beginning, Smith demonstrated how the manufacturing of a straight pin (those things that impale us when we forget to search our new shirts carefully!) could be greatly increased by dividing the required process into 18 distinct operations. His investigations showed that one employee alone could make from 1 to 20 pins a day. But, when the 18 steps were allocated to 10 employees the result was an increase in productivity to 48,000 pins a day! Needless to say, much subsequent attention has been devoted to building upon this discovery--both in how to best design work to focus and utilize employee talents, and in how to redesign work to enhance the development of productivity and employee abilities in a particular job setting. Here, we will review some of the landmark developments that have occurred during the last century.

After Smith, the most famous contributions to the management literature on job design come from two sources. One source was the industrial executive Frederick Taylor. Taylor is widely considered the father of Scientific Management for conducting the first empirical studies of work behavior and productivity.|6~ In his classic "pig iron" studies, Taylor tested the effect on employee productivity of many work factors: how far the worker bent over to use the shovel, how big the shovel blade was, how much load was placed in the wheelbarrow, frequency and duration of rest breaks, how many workers to assign to each task, how many tasks to break a job into, and so on. From these data he derived "the one best way" to do this job, a method he extended to find the best way to do other jobs. The industrial engineering couple of Frank and Lillian Gilbreth|7~ developed a detailed method to apply Taylor's methods of classifying elements of work, and thus helped pioneer the well-known "time and motion studies" process of job design. In general, this approach to designing work focused on maximizing the economic benefit of work to both the organization and the worker.

In terms of current implications for designing work for rural electric systems the Scientific Management approach would involve studying various aspects of providing utility service and determining the most efficient method to deliver service. For example, what types of tools (e.g., wrenches, cranes, transmission wires) are needed to extend service to a community? What are the best ways to use them? How many members are needed to create a quick and efficient pole installation crew? On average, how much time does it take an office representative to handle a customer transaction? To accumulate the information and referrals to resolve a complaint? How fast can and should repair work be initiated and completed to insure quality service delivery? Thus, this method can still be useful in answering incremental questions to fine tune efficiency in already identified work processes.

The next major contribution in how to design work comes from the seminal work conducted during the 1920s and 1930s at the Hawthorne Plant of the Wester Electric Company.|8~ The results of this work are commonly said to have set the direction for the future of management practice. Two major findings still have significance to this day, especially in terms of job design activities. One, employees do not consider work solely as a means to satisfy economic desires. The Hawthorne studies demonstrated time and again that employees will create informal social groups within or across from their formal work groups. These groups will develop their own personalities including work expectations and rules for social interaction. One study refers to "banana time" in which the social group would meet lot lunch, empty their pails onto a table, and allow each member to choose from the...