If you want to create a great company, create one where your systems unleash the power of your people. That's what the Roman Army did.

In 410 BC, the Gauls sacked Rome, a horde of individual warriors defeating other individual warriors. But by the end of the Second Punic War, mostly due to Scipio Africanus, the Roman Army was unlike any other in the world.

Other armies depended on the skill, bravery, and prowess of individual warriors and their leaders. The Romans created an army where systems, training, and supervision combined to create a world-conquering force.

There are two common meanings for the word, "system." Both are relevant for the Roman Army and for us.

A system is a number of inter-connected parts that work together. If you do something to one part of the system, other parts are affected.

A system is also "the way we do things." Routine things are done the same way every time. Processes have the same steps every time.

In the Roman Army every routine thing was reduced to understandable and manageable actions. Large, complex activities like preparing camp for the night were reduced to individual actions that created a camp with the same layout and defenses every time.

Tents were standardized. Eight men shared a tent. They also shared a mule and eating equipment which they were responsible for transporting.

Training was the way that soldiers learned how to do all those routine things. Other armies had "practiced" what to do. The Romans taught soldiers what they needed to do to live, fight, and win. And supervisors oversaw learning and execution.

In other armies, the warriors answered to someone from their tribe, clan or family. In the Roman Army, the various levels of private soldier and legionnaires answered to senior men, including a centurion, who had earned their positions.

The Romans understood something that we keep forgetting. We love "heroic" leaders. We worship "talent" as if it were an undifferentiated quality, applicable to any situation.

And so we ignore the fact that great success comes from creating a system that allows people of average competence to combine to produce results that otherwise could only be achieved by people of great talent or genius. We ignore that fact that even the most talented individual will be hard-pressed to produce great results in a flawed system.

The idea of creating a system that would help ordinary people be more productive was the driving concept behind Frederick Winslow Taylor's "Scientific Management" and its search for the "one best way." It is idea that sent battalions of efficiency experts armed with stopwatches and clipboards into factories around the world.

It was the modern approach of the nineteenth century. Engineers were imagined as gods and the sensible workers as compliant parts of a well-designed machine. For decades, scientific management, time studies, and the like created huge improvements in organizations.

Then experiments at Western Electric's Hawthorne Works showed that human factors, unrelated to any "one best way" affected productivity and that individual line workers could do some pretty creative and effective things. In the early fifties, W. Edwards Deming demonstrated that a system could make a huge difference. His 14 Points are about technique and management and training that come together in an organized way to produce results.

Deming's work is the bridge between the efficiency experts of the early twentieth century and an idea of effective systems that will work in today's interlinked, knowledge-worker world. After a visit to see the Japanese companies who had adopted Deming's methods, Woody Morcott, CEO of the Dana Corporation returned home and asked a friend: "Why did we hire 55,000 brains and only use three of them?"

As Jack Welch, former CEO of General Electric, says, you have to get every brain in the game today. But that's not enough. You also have to create a system where those brains can be productive.

The current great example of such as system is a company that adopted Deming's approach and improved it: Toyota. And the best example of how that system can be applied outside Japan is New United Motor Manufacturing, Inc., or NUMMI.

For years, General Motors operated an auto plant in Fremont, California. Absenteeism ran around 20 percent. The plant had the highest defect rate in the country. Producing a car there cost more than anywhere else.

In 1985, Toyota took over the plant under a Toyota-GM joint venture named New United Motors Manufacturing, Inc. (NUMMI). Eighty-five percent of the workers in the new plant had been workers at the plant when GM ran it. But the results were different.

Absenteeism dropped to 3 percent. The defect rate plummeted. The NUMMI plant turned out some of the highest quality cars in America at one of the lowest costs. The people, the talent, were the same as when GM ran the plan alone.

The difference was Toyota's system. It's so commonly used as a model today, that the Toyota name is often dropped and replaced by the term "Lean Manufacturing."

The organizational core of Toyota's system is the basic processes and methods of production. There is constant training, including training in quality methods and problem solving. And there is supervision, though Toyota expects a supervisor to be primarily a facilitator and trainer and not a directive boss.

Toyota's system won't be the last word. It works well for a manufacturing process, but there are bound to be modifications for service or knowledge-worker activities where the goal is customized response rather than uniformity of output.

The Market Based Management system at Koch Industries or the organic approaches to organization that you find at Semco will probably produce new variations on the basic concept of business systems. And there are certainly other experiments and developments going on right now that we haven't heard of.

Whatever the future holds, we can be sure of two things. We can be sure that companies that grow systems for success will outperform companies that rely on a few stars. And, we can be sure that the systems of the future will make today's systems look crude and old-fashioned.

 

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