Scrum Methodology

Discretionary Energy and Paul O’Neill

Posted by ewok_bbq under Agile and Scrum

A few days ago I watched a CNN special produced by Fareed Zakaria Editor-at-Large of TIME Magazine which featured an interview with the 72^nd US Treasury Secretary Paul O’Neill.  For those who missed the program I wanted to offer a summary of the piece as well as some follow on analysis.  As usual, I encourage all of the readers to submit comments in the comments section below.

Before becoming the 72^nd US Treasury Secretary Mr. O’Neill was the CEO of Alcoa.  When he came into the organization, by all accounts Alcoa was lagging behind in terms of both employee morale and revenues and not delighting users.  Instead of focusing on increasing revenues, Mr. O’Neill zeroed in on safety.   At first glance it seemed like a very curious choice and one that did get immediate negative feedback from his management team and some of the long time tenured employees at Alcoa.

So why would a new CEO spend most of his time on an initiative focused on safety?  Really, how would that lead to profit and revenue growth?  The answer is the concept of Discretionary Energy.

Discretionary energy is the amount of attention you are getting from your employees and it speaks to their willingness to be “checked-in” vs. their willingness to be “checked-out” during work hours.  What Mr. O’Neill recognized was that there was a correlation between his employees’ safety violations decreasing and discretionary energy increasing. Amazingly, even with his internal detractors, his theory played out.  What he saw was a huge decrease in safety violations and a huge increase in discretionary energy.

Once the employee base discretionary energy was at a heightened level, Mr. O’Neill could begin leveraging his successful experiment by rolling out additional top-down initiatives that would spur additional activities / yielding results that he wanted.  With employees already going the extra mile and sending additional energy around safety it wouldn’t be a stretch to ask them to do the same around other tasks.

When you go back to work after the first of the year, ask yourself –how much discretionary energy are you spending at work? How much is being asked of you (are you allowing yourself to be checked out)?  And if you are a manager ask yourself, what you can ask your team to focus on that would heighten their discretionary energy levels.