In February we published a blog item on Jared Sandberg’s Wall Street Journal column entitled “A Modern Conundrum: When Work’s Invisible, So Are Its Satisfactions.” Turning to researchers at U.C. Berkeley’s Haas School of Business and Cornell University’s Johnson Graduate School of Management, Sandberg easily makes the case that “it can be hard to find gratification from work that is largely invisible, or from delivering goods that are often metaphorical.”

Indeed, pointing to evidence which suggests that workers across many industries are becoming more removed from the finished product, Sandberg concludes that “At closing time, work doesn’t seem completed, just temporarily abandoned.”

Unchecked, this progression of the nature of work from something tangible that employees can personally point to as the outcome of their effort to something less tangible can lead to dissatisfaction. This phenomenon is exacerbated if their employer doesn’t place the utmost emphasis on up and down communication, including encouraging personal risk and responsibility as well as prompt follow-up by supervisors when key tasks are completed.

When you then factor in the trends of reduced capital spending and offshoring in the face of an uncertain economy, the result may be nothing less than the biggest missed opportunity crisis the business world has ever faced.

How, then, can this trend be reversed? Part of the equation has been advocated over the last few years by many business scholars and institutions, such as the National Federation of Independent Business (NFIB) – namely, that management, and especially immediate supervisors, must be visible and available to employees.

Yet, this alone is not enough. As the NFIB noted in a white paper from 2006, “One of the greatest causes of employee dissatisfaction is having questions and concerns [be] ‘swallowed up’ in the system without being acknowledged or answered.”

The key to creating work that’s visible to employees is closing the loop of this knowledge management void. On the one hand, employees must be empowered, in no uncertain terms, to push their ideas forward. They must also be assured, by senior management and by the day-to-day action of their supervisors, that those ideas will be fully evaluated acted upon in a timely manner. And if their ideas are not acted upon, they need to be told so promptly and given the encouragement to bring them up later, as well as to submit new ones.

This scenario may seem easier said than done, but in cases like this, smaller firms, with fewer hierarchical hurdles, often have an advantage over their larger peers. Our Top Small Workplaces, for instance, do everything they can to bring in employees on all manner of organizational decisions and keep the knowledge management loop firmly closed.

One of 10 themes we identified among our 2007 winners was an unwavering commitment to open, honest and transparent communication between leadership and employees. Cultures based on open book management, in which the company’s financials are shared with all employees, are common, but are not a prerequisite. Of greater importance is the frequent and intentional assembly of employees in various forums – from the common monthly, all-hands meeting to small group get-togethers as well as lunches with the CEO, supervisor or a mentor.

This type of frequent, person-to-person communication, which small firms in many industries are using in tandem with increasingly affordable, technology-driven communication tools such as intranets and wikis, are powerful tools that give employees a solid understanding of how their contribution affects the team’s or even the company’s performance.

One 2007 Top Small Workplace, Exactech, a Florida-based manufacturer of orthopedic implant devices and surgical instruments, typifies this approach. In 2005, the 261-employee, publicly traded company – the only one among our 2007 winners – missed a quarter’s revenue target due to increased operating expenses that stemmed from a shortage of the raw materials they needed. Part of the leadership’s solution was to fully engage employees to refine and improve processes to become less dependent on vendors.

“We started breaking up into business units, and each is really empowered to take over their area,” one employee said during our evaluation of Exactech last year. “Everyone knows what is happening in the business.”

By the end of 2006, the firm had met revenue targets for each quarter. Employees earned profit sharing for the year to boot.

Another common theme was the intentional structuring of the organization around teamwork and collaboration in order to minimize hierarchy and maximize the cross-functional achievement of goals.

You couldn’t ask for a better example of this theme in practice than Washington-based Point B Solutions, a project leadership firm that has grown to over 350 employees in only 13 years. When we evaluated them last year they operated in five U.S. cities, and they’ve since expanded into two more.

This fast growth could have stifled the firm’s culture, considering that they have no physical offices. Yet, they’ve used the fact that most employees are working daily at client sites to their advantage, creating opportunities for knowledge sharing among teams in each city such as evening “watering holes,” where both work and non-work topics are discussed and ideas are often incubated. Also, in the absence of physical spaces in which to gather, the company has developed a robust and active online knowledge management system.

Keeping work from becoming invisible must be a priority for small firms. In terms of the returns around retention and productivity, the pursuit can help them stay anchored in an unsettling economy. It can also help them compete against their larger peers on a global scale.

Read more about Exactech and Point B in our 2007 Top Small Workplaces Data Report. You can also hear Exactech’s CEO, Bill Petty, address the topic of Designing Strategy from the Bottom Up in our June 2008 webinar.