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JOY
AT
WORK
A Revolutionary Approach
to Fun on the Job
DENNIS W. BAKKE
Joy at Work
EXECUTIVE SUMMARY
PREFACE
Dennis W. Bakkes passion is to make work exciting, rewarding, stimulating, and enjoyable. While most business books focus on top executives,
Joy at Work is aimed primarily at the working life of the other 90 to 95 percent of people in large organizations. According to Bakke, co-founder and
CEO emeritus of the AES Corporation, a worldwide energy company with
40,000 employees and $8.6 billion in revenue by 2002, a better measure of
an organizations success than the bottom line is the quality of work life.
In Bakkes view, successful business people should be guided by principles and purposes meant to be ends in and of themselves, not techniques
to create value for shareholders or to reach financial goals. He is disturbed
that societys preoccupation with economics often leads people to calculate
their worth as individuals based on their salaries or wealth and to judge
their leaders more on financial results than on values.
Bakke views winningespecially winning financiallyas, at best, a
second-order goal. Yet, most business books do not go beyond this objective
and thus fail to define the ultimate purpose of an enterprise. Bakke challenges us to broaden our definition of organizational performance and success beyond dollar value. The timeless values and principles he advocated
during his tenure at AES, he says, stand on their own merits, whatever a
companys share price. Bakke and AES partner Roger Sant redefined the
basic operating structure for organizations and created an unconventional
global success story. At AES, said senior executive Tom Tribone, We try it
out in practice and then see if it works in theory.
tions. He knew that purpose makes work meaningful and believed that fun
and work werent at all incompatible. So, when he and business strategist
Roger Sant brainstormed forming a private-sector company to generate
electricity, the two already had a different kind of organization in mind.
Lets make it fun, Sant said. The two launched AES in January 1982, with
a $60,000 personal bank loan and $1 million from investors, including
family members.
As one of the new companys first steps, therefore, AES held a two-day
retreat where 20 employees hammered out its shared valuesintegrity,
social responsibility, fairness, and fun. All AES personnel were encouraged
to develop a collegial, values-driven atmosphere at work and to live these
values off the job, too. AES leaders stressed these values from the start to let
people know where the company stood and to give prospective employees
the choice of whether they wanted to be a part of AES or not.
Fun was the most difficult value to define. To Bakke, fun was not the
Friday afternoon beer blast or the annual holiday party. Rather, fun meant a
joy-filled, rewarding, creative work environment, free of autocratic supervisors and staff offices, where each and every employee could fully utilize his
or her talents for success.
Bakke believes that values are the organizational infrastructure that
guides management and gives a company its distinctive character. An organizations values cannot change with the ups and downs of the stock price
or be regarded as some management tool or system that runs parallel to the
operation. Yet, CEOs rarely talk about values in investor meetings and rarely
consider them in judging the performance of managers or employees, or in
making business investment decisions. When, in 1991, AES management,
employees, and investors decided to take the company public, they submitted a draft public-offering document to the Securities and Exchange
Commission for review. SEC staffers advised moving the paragraph on
Adherence to AESs Values out of the Business of the Company section
and into the Special Risk Factors section. Bakke was amused that SEC officials thought AESs values posed a business hazard and that the U.S.
Government thought it was very risky to try to operate a business with
integrity, fairness, social responsibility, and a sense of fun.
the AES shared-values and principles campaign was well under way. As AES
brought the new plant on line and discovered operating violations, it had
adjusted procedures and added new equipment to correct them. AES also
conducted two confidential and anonymous values surveys during the conspiracy period, and no employee had mentioned anything amiss. So, when
the guilty Shady Point workers said they had falsified samples because they
feared losing their jobs if they reported a violation, Bakke and Sant were baffled. They thought that by now, employees understood the shared values and
managements commitment to trusting everyone and treating them as
adults. They put that in writing in an AES open letter: No one at AES has
ever lost his or her job for telling the truth, nor will they ever, as long as we
have anything to say about it.
The second crisis made clear that AES had further to go in living up to
its shared values. Between the Shady Point news and a Florida interest
groups challenge to a new AES power plant, the companys stock price sank
60 percent. Bakke saw that the stock price was more important than the
breach in AES values to most AES leaders and board members. Those who
had applauded the Bakke-Sant management philosophy when the stock
price was high now believed AES was foundering because of the very same
decentralization, lack of organizational layers, and unorthodox operating
style. They urged Bakke to concentrate on making the profits that investors
wanted to see and to tone down his values rhetoric, which they said made
AES look hypocritical and arrogant. Bakke realized that he had done a poor
job of teaching the intrinsic worth of the shared-values concept. The management of Shady Point reverted to a proven approach, and staffing there
was increased more than 30 percent.
Neither the business literature nor Bakkes observations at AES suggest
that operating AES in a more conventional manner would have protected it
from mistakes. But weakening the shared values and principles, and the
company-wide trust they fostered, would take the joy out of working there.
To Bakke, work is opus, a voluntary, meaningful, and creative act. In his
experience, pay has almost no effect on the quality of ones work experience.
People want to feel useful and creative, to know their work is significant,
worthwhile, and trusted. They want to be part of a team contributing to a
larger purpose. Failure and mistakes are as essential to learning as is success,
in making games and work fun. Bakke strived to create such a learning environment at AES. His challenge became achieving economic sustainability
while asserting his positive assumptions about people, all within established
organizational structuresa tall order.
salaried was eligible for bonuses and stock options, based on individual,
plant, and corporate performance. Each plant also kept a record of hours
worked, for government accounting and for individuals who decided to opt
back into the hourly system. When AES started the compensation policy
change in 1993, only 10 percent of people worldwide were paid a salary. By
the time Bakke left in 2002, more than 90 percent of 40,000 people in 31
countries were paid salaries, just like the companys leaders.
This giant step helped break down barriers between management and
labor, bringing them together as AES business people. Most became more
productive, took more responsibility, initiative, and pride in their work, and
spent less time than before at their plants and offices. This gave them more
time with their families and communities, and, most important, it built
their self-respect.
EPILOGUE
Bakke takes pleasure in affirming success stories on the AES way of
doing business. The best means is to celebrate AES people who stayed with
the company out of love for its shared values and freedom to make decisions.
He writes about Aparecido Cas Castellace, an operator at a new AES
plant in Brazil, who refused to take a generous severance package. With
AES, he said, I have never loved working as much as I do today. I am good
at what I do. I have significant responsibilities, and I have the freedom to
make decisions. My health is good, and this is what I want to do. I have
decided to stay.
In New York State, two AES plant operators attended an Independent
System Operator conference on statewide electricity scheduling. At first,
they felt intimidated by people from Enron and other companies who were
well versed in electricity trading and dispatch. But it soon became clear that
they were the only two people at the conference who knew anything about
actually running power plants. By the end of the event, they were at the
center of almost every discussion. They returned to work confident in their
knowledge about effectively operating the facility and marketing electricity.
At another AES facility, the Wall Street Journal covered plant operator
Jeff Hatch and maintenance technician Joe Oddo negotiating by phone the
best 30-day rate for $10 million worth of Treasury bills. Both were members
of an AES team managing a $33 million plant investment fund. Giving
investment responsibility to coal handlers, Bakke said, resulted in their
matching, and once bettering, the returns of corporate counterparts. The
participants enjoyed this and learned so much about the total aspect of the
business that they are changed people.
If academic research and anecdotal evidence about the AES-style management approach are so positive and convincing, why arent more companies doing it? Bakke sees these obstacles:
board members and senior executives still control information,
make decisions, marginalize lower-level employees, and certify
all government-required documents;
managers and bosses distrust subordinates and keep the decision making for themselves;
leaders motives center on financial success, or objectives unrelated to creating a fun workplace, so the organizations purpose
is shallow or selfish, and employees see no worthwhile higher
purpose in what they do;