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Participative Management

excerpt from "Best Practices in Project Evaluation and Influence on Company Performance," by John Schuyler, Journal of Petroleum Technology (JPT), Society of Petroleum Engineers, August, 1997, pp 818-823.

Technical professionals are increasingly expected to be businesspersons also. The modern corporation is challenged in too many ways for a traditional hierarchy to perform well; timely decisions are necessary to be competitive. Organizations are being reengineered to be flatter so that decisions can be made by people close to the action. A more loosely defined organization structure can self-adapt to changing business conditions and current projects.

Participative management has been around a long time. The themes were formalized and popularized by behavioral scientists as Blake and Mouton (Managerial Grid), MacGregor (Theory X and Theory Y), and Lickert (Four-Model Systems). The central idea is that empowered employees will feel better about their jobs and be more productive.

Participative management goes by many names. A recent buzzword is open book management (OBM). This is an emerging, repackaged approach for managing businesses and other organizations. Thousands of businesses that have adopted this style are already running their unique versions. OBM has three central ideas:

A culture of trust where there is ready access to information needed to do one’s job (hence the name, "open book management"; not necessarily all company information, but sufficient for employees to gauge company performance)
Incentive compensation system, of some form, where employees have a stake in the business outcome, good or bad.
Business literacy training so that employees can understand the business.

Everyone is to understand his or her role in the enterprise and how to the company is doing. The OBM strategy is to build a community of business-people where employees increasingly think and care like owners.

—John Schuyler, August 1997