How Texaco R&D Improved Its Organization

Abstract

OVERVIEW: The managerial climate of Texaco's R&D Department was improved through the combined use of employee surveys and enhanced delegation skills. Employee surveys were conducted by an independent consultant who analyzed the returns and, based on the survey results, made recommendations to the department's management. Management developed and implemented an action plan to address the most pressing issues, which included communication, the incentive system, establishing and prioritizing objectives, training, and ability to get things done. The survey, feedback, and action planning process was repeated three times over a period of four years. The results show that the managerial climate improved significantly. In 1984, the Texaco Research and Development Department at Beacon, New York, recognized the need to increase both the pace of research and the Department's contribution to the company's bottom line. In some areas, the R&D function was viewed as a drain on corporate funds, a view that pervaded many other companies also. In the spring of 1985, the R&D Department suffered a layoff, the first in its more than 50-year history. As a result of the layoff, morale of those remaining was at an all-time low. People felt insecure and uncertain about their future. Indeed, they were uncertain about the future of the organization. Turnover had increased to 8 percent in 1984 (compared to a normal around 3 percent). Absenteeism had increased to 7 days (compared to 5.4 days for Texaco Inc.). To pull the Department out of the turmoil of the layoff and to improve employee morale, R&D management decided to improve its own effectiveness and to begin by conducting a series of delegation skills seminars. We felt that by developing the delegation skills of our management team, the research process would progress faster. We also felt that decisions would be made faster and that better delegation would improve the morale of the organization because employees would be involved with making many decisions that impact their work and their livelihood. Management asked one of us--consultant Donald Huffmire--to survey employees to gauge their perception of management in various areas and to present the delegation skills seminars. Professor Huffmire conducted the survey and, based on his analysis of the feedback, made recommendations. He also conducted the delegation skills seminars tailored to our organization's needs. R&D developed and implemented an action plan based on Prof. Huffmire's recommendations. Follow-up surveys were conducted about nine months and about three years after the first to determine progress. The R&D Department implemented action plans over broad categories after each survey and report by Prof. Huffmire. The purpose of this paper is to share our positive experience with improved delegation skills. THE 1985 STUDY The survey that was conducted in May 1985 was the first of its kind at the Research Center in which all employees had a chance to participate. Many employees were skeptical about voicing their concerns on the survey, and also about whether management would pay any attention to the results. Yet, 271 out of 540 employees participated. The survey consisted of three questionnaires. One was the Likert Profile of Organizational Characteristics questionnaire, which was designed to measure the managerial climate of the Department, and of each unit, in regard to: Leadership, motivation, communication, decision making, goal setting, and controlling. The second questionnaire, Suggested Improvements, asked employees to indicate which three things they would like to see done in their unit to improve their own satisfaction and the unit's overall effectiveness. This questionnaire generated the Comments (described later) in regard to various management areas perceived as needing improvement. The third questionnaire, Performance Planning and Review, was designed to measure the management ability of each individual manager. …