Geb 5212 Recommendation Summary

To: Teledyne Oil & Gas Executive Team

From: Mike Jolley, VP Global Operations

Subject: Retaining and Managing our Knowledge Workers Effectively

Teledyne Oil & Gas has struggled to maintain and manage our knowledge workers effectively over the past several years. Our SGA expenses continue to increase as a percentage of sales, eroding our profitability. An article by Roger L. Martin, “Rethinking the Decision Factory” (October 2013, HBR) provides insights and approaches we should consider. A summary of the article is provided below.

Summary: Rethinking the Decision Factory

Knowledge workers are arguably the most vital asset to modern day companies. They are responsible for producing decisions in what Martin calls the “decision factory,” similar to, but critically different from, the product factory. Over the past 30 years, businesses have been downsizing their manual labor workforces and spending greater amounts on knowledge workers, a growing portion of company costs.

Many companies struggle with the effective management of their knowledge workers. After investing large amounts of money in recruiting, hiring and retaining the best talent, they find that these workers are not as productive as they had hoped. When costs get tight, they lay off huge numbers of them. Soon after, though, they’re out recruiting again. These recurrent “binge-and-purge” cycles of hiring and firing are a highly inefficient and costly way to deal with such a critical segment of the workforce.

The primary cause of these recurrent cycles is that companies structure work in the decision factory in the same way as the product factory: they give knowledge workers a fixed set of activities, “the job”, to be repeated daily. However, the decision factory is based on projects, not daily tasks. As a result, decision-making output fluctuates between peaks and valleys of intensity. The organization of knowledge workers around full-time jobs, rather than projects, makes...