July 18th. 2006
Sent to but not published in the Boston Globe
Managerial lessons from the Big Dig
We learned today that, back in 1999, workers on the Big Dig project expressed concerns to their managers that the bolts holding the roof panels might not be up to the task.
There are a number of managerial lessons to be learned from this episode.
Lower level employees have a wealth of tacit knowledge; knowledge that is not codified and written in engineering manuals but that is based upon experience with the tools and materials in their interaction with other materials on the work site. Both codified and tacit knowledge are valuable. In combination, the two types of knowledge provide a formidable underpinning to enable the manager to make correct managerial decisions.
Inexplicably, this information seems to have been discounted in the decision to continue to use the epoxy based bolts. Even more surprising, given that managers had this information, we are informed that the decision was also made to stop testing the epoxy to make sure that it was being mixed correctly. If this is true, this is cost cutting at its worst. Surely spot checks on the viability of the epoxy bond should have continued throughout the construction phase.
This may also illustrate the effect of uncertainty absorption. As information is passed through several levels of the hierarchy it is changed. Some information is dropped or smoothed, other information is sharpened. It is likely that as information passed up the line to ratify these decisions that the employees concerns were given less emphasis than the codified engineering knowledge.
In 1999, employment in Massachusetts was quite high (an unemployment rate of about 3.3%). When Labor Markets are tight, employers are usually forced to treat workers well and allow them some empowerment in order to retain high quality employees. Workers respond, as in the Big Dig case, with constructive criticism. They respond to commitment by the firm with commitment to the firm.
The good times continued until the recession of 2001 when the unemployment rate almost doubled from 2.8% to 4.7% in a single year. During that year, over 70,000 Massachusetts residents lost their jobs – a dramatic illustration of the unwillingness of managers to show any commitment to their employees when they no longer needed to do so in the new Labor Market conditions. There are after all alternatives to layoffs. For example for a company to share the pain by having all members of the organization take a 10% cut in both hours of work and pay rather than firing 10% of the workforce would be a vivid statement that the top management was truly committed to their work force.
If managers show a high level of commitment, then employees will reciprocate in kind. If the 1999 problems had occurred in 2002 or 2003 in firms that experienced big layoffs, it is unlikely that constructive comments would have been made – rather the attitude would be, “It´s management´s problem, let them solve it!’
It is a truism to say that organizations are systems. All the parts are important. Managers and executives may be more important, but lower level workers are also needed to do their part – and their part is more than just following order unthinkingly as those workers in 1999 showed at the Big Dig. What a pity their views were discounted.
