Experiencing Joy at Work

Dennis Bakke

From: Joy at Work (PVG Publishing, 2006)

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Editor's note: In spring 2005, Dennis Bakke, co-founder and CEO emeritus of The AES Corporation, published a landmark work, Joy at Work. We're privileged to publish here an executive summary of that fine book.

Preface

Dennis W. Bakke’s 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 organization’s success than the bottom line is the quality of work life.

In Bakke’s 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 society’s 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 winning—especially winning financially—as, 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 company’s 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.”

Chapter 1: My Introduction to Work

Bakke grew up as one of four children in the isolated Nooksack Valley at the foot of Mount Baker in Washington State. There, by doing farm chores and raising his own herd of cattle, he learned stewardshi­p, responsibility, time management, and the satisfaction of knowing at the end of each day how well he had performed. He enjoyed strong support from his parents, who believed in what their children could achieve and gave them the freedom to work and make decisions.

After going to college on a football scholarship and eventually earning his M.B.A. at Harvard Business School, Bakke worked six years for the federal government in Washington, D.C. He had grown up enjoying work—and even took great pride in washing the family dishes—but now he saw how central staff operations tend to exert a “destructive tyranny” over organizations. He knew that purpose makes work meaningful and believed that fun and work weren’t 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. “Let’s 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. 

Since society grants corporations certain rights and privileges, Bakke believes that corporations are obligated, in turn, to operate in a way that benefits society, mitigating potential negative consequences. How a corporation operates should be shaped by principles derived from mainstream values, as practiced by billions of people worldwide.

As one of the new company’s first steps, therefore, AES held a two-day retreat where 20 employees hammered out its “shared values”—integrity, 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 organization’s 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 AES’s Values” out of the “Business of the Company” section and into the “Special Risk Factors” section. Bakke was amused that SEC officials thought AES’s 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.

Chapter 2: A Miserable Workplace

Today’s management structures and attitudes toward workers are rooted in the Industrial Revolution. As capitalists created factories and hired laborers, they defined two classes of people: management and labor. Workers moved from independence and generally high self-esteem in the agrarian model to dependence and low self-regard in the factory model. In the contemporary business world, managers can get education, take responsibility, oversee budgets, and make decisions. But workers are considered lazy and irresponsible; capable only of work for hourly wages; in need of constant training and supervision; and not to be trusted to make sound decisions.

In today’s economic formula (labor + material + capital = production), people (labor) are treated as a quantity like financial and fuel resources, to buy and sell, depreciate, and, when used up, dump. Business leaders are far more concerned with the tasks these interchangeable, expendable “human resources” can perform than with who they are as humans.

Current approaches to leadership are often hierarchical and paternalistic, with decision making, compensation, and control all centralized. But decentralizing makes more sense, since lower-ranking people are most often closer to the problems and better positioned to come up with solutions, especially if they seek advice from a broad range of colleagues. Yet making such changes ignites resistance.  Executives are loath to delegate much of their power and control to others in the organization and to share their knowledge and expertise with all who work in the organization. 

Laws and attitudes must also change. Laws support centralized, top-down structures. Boards, shareholders, and investors tend to believe that “important” decisions should be made only by people at the top, because they are held responsible for company performance. The Sarbanes-Oxley Act of 2002, for example, requires CEOs and CFOs to certify financial results, even though most have little or no connection to creating and assembling the numbers they certify. 

In the AES experience, staff technicians were more engaged and reacted more quickly to problems when no bosses were looking over their shoulders. Delegating responsibility for managing plants and field offices to those who work in the field wouldn’t reduce corporate liability or change a company’s chances of being sued, but it would make a huge difference to the people away from headquarters. They would feel they played an important role in their company and know that the company trusted their judgment.

Everyone in an organization has the uniquely human abilities to make decisions, take risks, learn, fail, grow, make progress, experience loss, and make progress again. In our paternalistic corporate systems, however, most people work for security. As decision making is centralized and job descriptions box employees in, forcing them to answer to multiple staff specialist “bosses,” they fail to develop to their full potential, find meaning in their work, and create a joyful workplace.

We need to design organizations that encourage people to look beyond job security. Most executives have no idea how to create such an environment because they may never have experienced a joyful workplace themselves. But the love of work and accomplishment, the passion to serve, and the readiness to honor individual traits, gifts, and failings still exist in the human spirit. These qualities transcend industrialism and must be welcomed where we spend most of our waking hours—the workplace.

Chapter 3: From Misery to Joy

Early on, two crises tested Bakke and Sant’s decentralized, values-driven philosophy. The first showed them that encouraging freedom to act and make decisions was as hard a sell to employees as it was to executives and boards of directors.

In mid-June 1992, nine technicians at AES’s new plant in Shady Point, Oklahoma, conspired to falsify water test results reported to the Environmental Protection Agency and the state of Oklahoma. By this point, 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 management’s 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 group’s challenge to a new AES power plant, the company’s 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 Bakke’s 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. Bakke realized that if he pursued his radical approach to creating a joyful workplace, he ran the risk of being ousted by the board. His challenge was to achieve economic sustainability while asserting his positive assumptions about people, all within established organizational structures—a tall order.

To Bakke, work is “opus,” a voluntary, meaningful, and creative act. In his experience, pay has almost no effect on the quality of one’s work experience. It is a reward for work accomplished and cannot predict future happiness. Rather, people want to feel useful and creative, to know their work is significant, worthwhile, and trusted. They want to be held accountable. They are fallible and unique. They can make important decisions and want to use their skills and talents for positive contributions. 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.

Chapter 4: “Honeycomb”: Dynamics of a Joyous Workplace

“What made AES unique was that we acted on our ideas,” Bakke writes. Some became policy, others were scrapped after one try, but gradually AES became a different kind of organization. 

For example, Bakke and Sant improved management and increased workplace joy by cutting the layers of supervision between the CEO and entry-level people. They disbanded “service” departments and central staff groups, integrating the specialists into local plant and office work teams, and into task forces that operated company-wide. In some cases, the company retained three layers from top to bottom and, in rare cases, four. Everyone, from entry-level worker to CEO, became an “AES business person,” with equal rights and opportunities, responsible for performing his or her functions in the context of balancing the interests of all stakeholders. Decentralized and integrated, the environment supported trust, freedom, and individual action. AES named it “Honeycomb.”

Bakke and Sant also moved the organization to become transparent, so that information could flow in all directions and be shared by people working at all levels, from CEO to line worker. This became the basis for the “advice process.” Before making a decision, and to ensure the best possible balance of interests among all affected groups, everyone on a team or task force was required to ask for as much advice as possible inside and, if necessary, outside the company.  Operating unit work teams took responsibility for everything in their areas: budgeting, workload, safety, schedules, maintenance, compensation, capital expenditures, purchasing, quality control, hiring and firing, education, risk and environmental management, economic performance, long-term strategy, charitable giving, and community relations. 

Bakke and Sant found the system to be self-regulating: People given the responsibility for decisions want to succeed. The chances of reaching the best decision are greater in an advisory team framework than in a top-down structure; decisions are made more nimbly, and lines of accountability are clearer. Every team member gets an on-the-job education in what it takes to run the business, as well as an appreciation of their colleagues’ work. After AES went public, employees overwhelmingly chose to continue getting full access to information, even though they would be considered “insiders” and restricted from freely trading AES stock.

There is great resistance to this form of management, however, as it requires leaders to delegate most of their decision-making power and to trust the judgment of lower-ranking members of the organization. While leaders are trained to make decisions, Bakke believes that every decision made at headquarters takes away responsibility from people elsewhere in the organization and reduces their ability to feel they are making an effective contribution.

In the AES experience, the typical restructured organization can accomplish twice as much with half the number of people. Bakke favors 300 to 600 as the “right” number of people to staff any one facility, divided into roughly 15 to 20 teams of 15 to 20 people each. Above 500 or 600 at a facility, people have difficulty identifying with the organization, its values, and mission. The team size limit is pragmatic: Most of us have difficulty maintaining strong relationships with more than 20 people.

Chapter 5: Scorekeeping, Accountability, and Rewards

Workplace freedom must be balanced by accountability and feedback on performance. This starts at the top. Sant suggested basing executive compensation half on how the individual advanced the organization’s values and principles and half on his or her technical performance.

Evaluating technical, earnings, and growth performance was relatively easy to do with standard tools. Business development was more difficult to track; decisions made today may not show results for years. Judging values performance was more subjective. So, AES started using a company-wide annual values survey. By 1988, the survey was generating tens of thousands of comments and took months to review, summarize, and distribute. The results presented such an accurate, current picture of AES that every business unit was required to read and discuss them. 

The comments were overwhelmingly positive, regardless of the AES business person’s nationality, religious affiliation, political system, income, or education level.  From the United States: “You have to be blind not to realize what the corporation has done to change the way people view their workplace”; from Pakistan: “The AES values at work are basic human values and are similar to what we tell our families at home”; from South Africa: “These were our values before you came to our country.” Most negative comments came from those who had been part of the company fewer than three years. The surveys always reminded AES management that they ran a highly unusual company.

Worker performance reviews were also unconventional. At AES, the subordinate did an extensive self-review, with the leader assuming a coaching role. Worker compensation was also the subject of experimentation. Bakke realized that arbitrary pay structures maintain two classes of people, management and labor, in their places. Regardless of where AES did business in the world or under what political system, the same gulf existed between the two groups, often aggravated by the elitism of management and the militancy of unions. Bakke found this system morally unsupportable and inconsistent with AES shared values. So, he took a novel approach:  Put everyone on salary. 

Such a step had never been attempted on this scale before. U.S. labor laws prohibit forcing such a change, to protect hourly workers from management exploitation. It took Bakke three years of lobbying to persuade AES plant leaders that they could experiment and create a voluntary program. People could choose to take salary (calculated based upon hourly pay and average annual overtime), then opt back into the hourly pay and overtime system at any time, no questions asked. As part of the package, everyone 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 company’s 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.

Chapter 6: Leading to Workplace Joy

Business guru W. Edwards Deming said a leader’s job is to drive fear out of the organization so that employees will feel comfortable making decisions on their own. Most leaders do not show the humility to make that process a priority. But to Bakke, a willingness to serve and help others do better is crucial in a leader. Leaders must interpret an organization’s shared values and principles. They are advisers to everyone in an organization, and they demonstrate integrity as the organization’s collective conscience, pushing it to reach its goals and live up to its ideals.

People possess the motivation, discipline, and inner strength to act in a way that is true to themselves. The role of leaders is to create a joyful, rewarding environment that allows these qualities to flourish, giving an organization its best opportunity to succeed.

Leaders must realize that character is transparent to those around us. People “catch” character, virtue, and values by observing and practicing “right” behaviors and actions, and making them habits. When a leader acts as if he or she is the center of the organization, everyone else feels extraneous. It takes courage for a leader to delegate and free his or her people to act, exercising their natural gifts and fulfilling their potential. Leaders who create dynamic, rewarding, enjoyable workplaces love people, love spending time with them, and love affirming that they are worthy and important.

Federal and state governments require company officers to sign monthly plant compliance documents. AES senior manager Dave McMillen noted that the company’s technicians had the best information about their plants: They understood the rules and AES environmental values and commitments better than anyone. So, AES made the technicians officers of the company, enabling them to sign the documents. 

A World Bank manager once asked Bakke for advice. She wanted to erase layers of home-office veto power, so she could give decision-making authority to her in-country people. “Be prepared to lose your job, because this is radical stuff,” he replied.

Where leaders and board members can exercise tight control is on issues that affect the strategy and shared values of an organization. With the exception of those required by law to be made by top executives, all other decisions, including those with major financial implications, should be delegated to team members who are closest to the matter under consideration. Leaders must serve as advisers—advisers able to distinguish an organization’s unchanging principles from its constantly changing strategy. Bakke and AES board members became active advisers on every important issue facing the organization, which tended to offset their loss of enjoyment in surrendering decision-making control. Bakke believes the result was that AES directors were far more influential, committed, and engaged than those of more conventional companies.

Leaders must also put a high priority on accountability. When the Shady Point problem occurred in 1992, Bakke took a 30 percent reduction in his own pay that year as the most senior person responsible for adherence to AES values. Other corporate officers and leaders in the plant also took pay reductions ranging from 10 to 20 percent. Taking responsibility must become a habit in order for each worker to trust in the organization and partake in the joy and accomplishment that the workplace offers. 

Chapter 7: Purpose Matters

Corporations exist at the pleasure or sufferance of society, since the state grants them their special status and associated rights and responsibilities. Consequently, they must achieve broader and more meaningful purposes than just making money. Bakke expects to see any modern, progressive, socially responsible organization striving to achieve three goals:

• to serve society with specified services or products;

• to operate in an economically sustainable manner;

• to achieve these results while rigorously adhering to a defined set of ethical principles and shared values.

As individuals tend to act in ways that are consistent with their personal goals and missions, so do organizations. Yet, corporate boards generally consider non-economic goals “soft,” and capitalists tend to assume that a company’s primary purpose is to make profits for shareholders. These attitudes open the door to executives who misuse their enterprises as means to make themselves rich, powerful, or profligate, or all three. To Bakke, this is wrong.

In early purchase negotiations with Allegheny Power, for example, Allegheny wanted to pay considerably less than AES was asking. Bakke and Sant resisted until they realized that their goal wasn’t to make the maximum amount of money for AES but to finance the deal, cover expenses, and profit enough to generate a reasonable return on the investment. The figure Allegheny offered did that.  While AES lawyers were aghast that the partners had agreed to a lower figure, the economics of the lower price worked for AES, and the customer was better served, too. 

To Bakke, the words “serving” and “stewardship” more appropriately describe the work of corporations than “selling” and “management.” Employees are not owners of resources but guardians or stewards of them. Companies that recognize that fact, and give a high priority to serving society, energize their employees. Most corporate CEOs know their company’s success and its total value result from the contributions made by all stakeholders, not just shareholders.

Recognizing this, Bakke changed the salutation in his annual report letter from “Dear Fellow Shareholders” to “Dear Friends” and included separate sections to keep the various AES stakeholders abreast of how business was conducted. He stresses that employees make corporate decisions based on what they believe their leaders value, how the company determines compensation, what information it presents to shareholders and banks, and how its leaders live their private lives. Corporate values are only worthy if they are widely shared, lived, and considered at least equal to economic criteria in all major decisions. 

Thus, every business decision, from compensation to strategic planning, should be evaluated on whether the economic and non-economic criteria serve all of a company’s purposes. Board members and other company leaders should back this wholeheartedly and stress its value with investors, banks, communities, and other stakeholders. It is perfectly appropriate to aim high. Goals should not be set according to how easy or hard they are to measure. They should be set because they’re right.

Chapter 8: Potholes in the Road

Study at Harvard Business School helped Bakke learn why people dread work. Bakke and Sant sought to change that, taking their lead from business theorist Peter Drucker. Among his ideas: Stress self-discipline and individual responsibility in the workplace; make the same person responsible for both planning and execution; and use supervisors to assist subordinates.

At the AES Beaver Valley plant near Pittsburgh, Pennsylvania, Bakke first recognized a way to defuse union-management tension. When the leader of its Oil, Chemical, and Atomic Workers International Union asked him, “What do you think of unions?” he responded, “I don’t think much about unions. My job is to eliminate management. If I succeed in doing that, I don’t know what unions are for.”

Leveling management helped create good relationships with AES unions. Some examples:

To negotiate a contract with union leaders at new AES hydroelectric facilities in Brazil, AES sent its own group of union leaders, not managers or attorneys. The resulting generous deal did not break the AES bank, and it left the Brazilian workers feeling a sense of accomplishment. They had negotiated successfully and felt ownership in their workplace.

When AES bought three California power plants from another company, union members chose to continue working under AES rather than to transfer or terminate.  The union’s research team had observed AES Shady Point and found people there to be self-motivated, dedicated to company values, working in effective teams, and leading by example.

At Beaver Valley, AES put union and nonunion families together at all celebrations and social events for the first time in the plant’s history, and the company opened survey participation and plant information to everyone—managers and union members alike. 

After AES put everyone on salary and removed the management layers against which unions defined themselves, people at several plants found they no longer needed union protection and voted, without AES prompting, to decertify. 

The “victim mentality,” however, still runs deep. Changing that attitude requires constant effort to win people’s trust and get them to trust themselves. Bakke found that individual performance is more a function of work environment than hiring process. No hiring prerequisites will guarantee delivering a decisive, responsible employee. Generally, employees themselves know best when they’re ready for more responsibility: They’ll ask to take on a bigger role. 

Pushing decision making down to the lowest possible level creates risks that big mistakes will be made, but Bakke believes that freedom in the workplace is worth it. Decentralized organizations make no more mistakes than traditional centralized ones, and they perform just as well or better over the long term, because they tend to be much more rewarding workplaces. 

Job security, a chief concern at many businesses, is an illusory goal. In our dynamic world, every job and every person are in a constant state of flux. Bakke finds it obstructive, demoralizing, and costly to let people stay in jobs when they’re not needed, especially when their creativity and energy can be better used elsewhere in society. Toward that end, he advocates generous severance arrangements to compensate people leaving organizations. The right-size workforce is the number of people needed to make the workplace fun. 

Chapter 9: Another Crisis

When the AES stock price tumbled in 1992 and again in 2001, top management and board members blamed Bakke, and Bakke blamed himself for failing to persuade them that the decentralized, shared-values approach was the right way to run the organization. It had succeeded in discharging AES’s obligations to all stakeholders and to the society that supported the corporation. 

But thousands of shareholders inside and outside the company blamed Bakke when the AES stock price plummeted from $70 a share in 2000 to a post-Enron low of $5 a share in February 2002. They lost confidence in his leadership and refused to follow him when things got tough. The executive team hired lawyers, consultants, and advisers to protect AES, called for a major reorganization of the company, and moved to centralize decision making.

While the recession, the 9/11 terrorist attacks, spectacular financial defaults, and coast-to-coast bad economic news drove down share prices of most companies, regardless of their economic performance, Bakke traces the AES debacle to four structural mistakes:

1. Originally, AES had limited investments in any one market to 10 percent of cash flow. But it later abandoned this ceiling to participate in a wider range of business opportunities.

2. Following a financing philosophy that “debt is cheaper than equity,” AES funded new businesses with debt kept on the parent company’s books, rather than selling more AES shares to investors to raise needed investment capital.

3. Like its competitors, AES speculatively built or purchased power plants, without long-term contracts from customers to buy their energy output. The resulting excess capacity drove down open-market electricity prices.

4. AES so emphasized business development that it lost focus on economic sustainability.

Most of AES’s competitors in the energy market operated with top-down management structures, and they too suffered the same kinds of losses and stock price declines as AES.

A decentralized, values-driven structure, however, helped AES avoid other serious problems. For example, unlike centralized decision-making companies, AES plant teams didn’t purchase turbines in bulk to achieve per-unit cost savings, so AES didn’t get stuck with huge turbine surpluses when the energy market collapsed. AES did not breach any legal or ethical rules in its financial accounting or in buying and selling electricity. And no executives or board members sold major blocks of AES stock before its price decline. It would have been next to impossible for senior people to engage in this sort of malfeasance because important decisions were discussed at every level of the company.

Rather than focus on the ethical transgressions of Enron’s top executives, which led to their frauds and crimes, subsequent congressional hearings focused on the financial losses of Enron shareholders and employees. The federal corporate-governance laws and orders generated from this exercise were political in nature, not pragmatic. None will improve the quality of information provided to the public, nor reduce fraud. 

Bakke resigned as CEO of AES in 2002. Retirement from the company gave him time to reflect and write Joy at Work. Since this did not quell Bakke’s passion to create the most fun workplace, he founded Imagine Schools with his wife, Eileen, a lifelong educator. In June 2004, Imagine Schools acquired Chancellor Beacon Academies to form one of the largest charter-school companies in the United States. The company operates about 70 K–12 schools on 40 campuses in nine states and the District of Columbia, serving nearly 20,000 students. Bakke realizes that success as defined in Joy at Work cannot be guaranteed, but he will strive to live out the ethical principles embodied in integrity, justice, and a fun workplace.

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 aren’t 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 organization’s purpose is shallow or selfish, and employees see no worthwhile higher purpose in what they do;

• management and labor are adversaries, and employees are treated like children;

• mistakes in a decentralized structure are often attributed to the system rather than to human error or outside forces, prompting management’s return to a top-down style.

Bakke suggests that we quit searching for the secret to always winning, to profits and stock prices that rise quarter over quarter. Let’s accept that losing is part of life and that we can make mistakes and fall on our faces. Out of these experiences come new learning, growth, hope, and life. He advocates for an unselfish and benevolent concern that allows people to give up power and control, to treat each person with respect and dignity, to serve others, and to inspire people to work with greater purpose. To Bakke, this is love—perfectly consistent with even the most aggressive economic goals and the final and crucial ingredient in a joy-filled workplace.

Postscript: Enter Into the Master’s Joy

As Bakke grew up in his Christian home, he observed that people seemed to get more credit for contributing to society if they did it within a Christian rather than a secular context—with the exception of homemaking. Bakke always wanted to do something useful for society and felt called to service in the secular arena, but he never believed that work in government or business would be as honorable as church work. Searching for intersections between his desire to contribute, his calling, and his faith, he joined Christian Bible study and discussion groups and began to formulate a values- and principles-based approach to business.

“God is not a typical boss,” Bakke writes. God delegated decision making to humans from their introduction in Eden. Adam’s and Eve’s jobs, and those of all humans who followed them, were to act as stewards—that is, keepers of the Earth and all that was created there. God appears pleased by all human work, not preferring one type over another. All kinds of production and management activities appear to honor and please the Creator, particularly if they please the person who does them. 

Bakke asserts that everyone working, regardless of where, should see his or her work as a sacred responsibility. We are called upon to steward our talents and skills and to use them in stewardship of the planet where we apply them. “Entering into the master’s joy” is a matter of recognizing that linkage. The Creator has delegated the decisions about Earth’s stewardship to us, and we ought to take that responsibility as a sacred trust and as a duty to honor our Creator in all we do. 

Dennis Bakke, a graduate of Harvard Business School and the National War College, co-founded The AES Corporation in 1981 and served as its president and CEO from 1994 to 2002. He is now the president and CEO of Imagine Schools, a company that operates elementary and secondary charter schools in ten states.

To learn more about the book Joy at Work, or to purchase it, please go to www.dennisbakke.com