Many organizations express their desire to boost productivity and reduce costs, but the reality often reveals increased activity without substantial improvements or cost reductions. This discrepancy arises from organizational structures rooted in outdated theories that inadvertently hinder progress. This short article explores the transformative effects of applying McGregor’s Theory Y to modern organizations, illustrating how forward-thinking CEOs can swiftly implement changes originating on the frontline, for the better.
The scenario – Managing a team
During my time managing a team of managers in an international company, the insightful CEO encouraged the submission of improvement ideas directly to him or his top executives. One observation that caught my attention was the inefficiency in the leave approval process. My managers were spending time applying for leave on the HR system, only to wait for my approval. This administrative bottleneck accumulated across the entire organization, consumed valuable time.
Theory X and Theory Y
McGregor’s 1960s work split management philosophies into ‘Theory X’ and ‘Theory Y.’ Theory X clings to the past, viewing workers as needing external prodding and control. Theory Y, the more progressive (and evidence-based) view, taps into intrinsic motivation. Old-school management clings to X, but smart organizations gravitate towards Y.
Applying Theory Y to the situation
Seeing the redundancy in leave approvals, I questioned the need for my nod. These were adults, not school kids. An email to the CEO followed, weaving McGregor’s Theory Y snippet, explaining the issue, and painting the benefits: treating staff like grown-ups, saving time, and redirecting focus.
Email to the CEO and the CEO response
Within 24 hours of sending the email, the CEO, responded and pulled his head of people into the discussion. Displaying astuteness and agility, they both saw the potential savings and his team started work on making changes across the entire organization. Managers were no longer to be burdened with approving leave requests and staff treated like the clever, thinking individuals that they are. This swift implementation not only saved time but also signaled a shift in organizational dynamics, emphasizing autonomy and trust.
The outcome
Within two months, the organization had implemented the changes. The CEO and executive team’s proactive approach to embracing Theory Y principles resulted in improved efficiency and increased autonomy. A signal that said, ‘we trust you’ and ‘focus on the customer’. This case exemplifies how leadership, when aligned with contemporary management theories, can bring about positive organizational change driven from the top. It takes another step forwards for progressive workplaces becoming less like top-down schools and more like environments where adults work with purpose and autonomy to create value for customers and service users.
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