Magazine article Personnel Journal

Fiat Revs Up the Engines of Change

Magazine article Personnel Journal

Fiat Revs Up the Engines of Change

Article excerpt

In 1990, management at the Fiat Group--Italy's largest private employer--responded to today's business challenges by reevaluating our structure. After taking a hard look at ourselves, we embarked on a long journey of organizational development focused on delegation of authority, management training and an improved focus on customers. In short, we decided that to remain competitive we must do what we do both better and at a lower cost.

That such changes might be necessary at Fiat isn't surprising; it's a well-established company that has been adapting to changing business conditions since 1899. Once strictly an automobile manufacturer in Italy, Fiat now operates in 65 countries and is involved in 15 distinct lines of business that range from automotive components to chemical-fiber bioengineering. In such a complex organization, change is inevitable; the challenge is managing it.

For us, the process began by renewing our commitment to customer satisfaction. Our definition of customers included both final customers (buyers, who are the impartial judges of Fiat's ability to meet their requirements) and internal customers (whom we believe we must treat as a supplier treats its customers).

Within this framework, structure exists not so much to chart decision making and paper flow, but instead to map professional skills, techniques and tools. Managers serve then not to direct, but to link various groups--storehouses if you will--that offer particular skills. We are committed to creating an environment that ensures cooperation, whether through formal committees or ad hoc work groups. Working sessions, therefore, include the people who have the most to contribute) regardless of their position. Individuals with specific skills support those responsible for implementation. To achieve their goals, the work groups and committees must make decisions and take appropriate responsibility.

Still, employees within the group must make decisions within context. For us, the work began with the supposition that delegating authority works best when it's limited to a specific responsibility and task. This demands a consensus: The person who delegates authority and the person who receives it must jointly define the scope of the autonomy that is being granted. The rules must be accompanied by knowledge, so that employees can solve their particular problems, taking into account the company's customers and competitors. Employees then consult higher levels of authority only in exceptional situations.

The final product then is the responsibility of an individual who has the organizational authority, skill and information to achieve the best quality, cost and improvements. This view is based on what we call the learning organization, in which employees learn from their successes and mistakes.

MANAGERS STILL HAVE A ROLE TO PLAY. This redefinition of the employees' role does not mean that the role of managers has become less important. On the contrary, a lean organization accentuates the value of each level. We've assessed the value of managers by consideering a combination of skills and leadership, including the ability to:

* Identify and prevent problems. This means knowing how to set priorities and making sure that they're observed

* Encourage and promote the new ideas created within their jurisdiction, reinforcing them with their authority and expertise

* Provide the framework for solutions. This includes clarifying objectives and tasks, guiding activities and evaluating improvements

* Transmit values and knowledge, which means facilitating the learning process, stimulating professional development and being accountable for results to associates and superiors

* Keep their system open to other entities and functions, balancing the drive to achieve short- and long-term objectives.

This is a challenging assignment, entailing broad responsibility and seasoned professional skills, which cannot be drawn from any other source. …

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