Archive for Company Culture Leadership — Examples

334 — Employee Involvement Doubles Plant Productivity — Two Examples

Preparing the Soil

Managers of a California manufacturing plant with several hundred employees, at corporate’s prompting, agreed to build a more open workplace. Several meetings with the plant leadership group produced a vision and a plan.

Supervisors were trained to lead open problem-solving meetings with employees. Through a series of discussions with supervisors, managers committed to initially support just two employee problem-solving groups: manufacturing and sanitation and safety. Each group began by identifying problems interfering with their tasks.

1. Production Team

Breakdowns gave the production line group the most trouble. These were physically and psychologically draining for the workers. With guidance, the small group systematically collected data on the frequency, type and cause of breakdowns. The process of identifying and analyzing problems soon led to problem-solving. As their analysis looked deeper at root causes, the group involved other shifts and other departments in the analysis; first to collect and analyze data, but later to list and map broad system-related issues connected to the breakdowns.

It was not easy for the managers to remain open as the employees took responsibility for analyzing and addressing inter-departmental and, later on, external supplier issues. Many managers felt that this was their exclusive territory. (“If I don’t own that who am I?”) But with a little help from the plant manager and Meridian Group, they restrained themselves from interfering and soon adopted a strongly supportive role.

2. Sanitation and Safety Team

Meanwhile, the small group of sanitation and safety employees had begun analyzing their own work-related problems. Their biggest frustrations were the large mounds of product waste they had to constantly clean up. As a long-range goal, they wanted to keep the plant cleaner by stopping the mess at its source. As with the production group, it wasn’t long before they involved other parts of the plant in mapping broad system-wide issues that led to product waste.

Uncovering Systemic Problems

From a broad perspective all problems are related. So the two groups quickly found themselves working closely together on system-wide issues, a process that eventually involved, to some degree, almost everybody in the plant. It was clear that a new wind was blowing.

Trust in Management

Employees knew that upper management now supported employees in solving their frustrations at work, even if this sometimes involved changing comfortable and long-standing (but not necessarily constructive) relationships with supervisors, managers and other departments.

Not only did productivity increase and product loss decrease, but morale rose to the point that people were openly excited about coming to work. People discussed at home what was going on at work — something few had done in the past.

Other Leadership Changes

It wasn’t just employees who experienced change. I was pleased to hear the assistant plant manager talking with a group of new supervisors say, “After 28 years with the company, I’m looking forward to bringing you along so that you don’t have to unlearn what I have unlearned about leadership in the last year.” With employees taking more responsibility for issues in their work area the plant manager told a visitor, “I have more control of what goes on here now when I’m away from the plant than I had before when I was on-site.”

The Key: Senior Management’s Open-mindedness

It was upper management’s new openness to employees’ concerns that set the stage for these innovative changes. Management didn’t give employees these problems or abstract goals such as “increase productivity” or “improve customer service.” Managers allowed employees to identify real concerns and solve these through an open evolutionary* dialogue with each other and with management. Because employees identified the problems, they were highly motivated to solve them and to make their solutions stick.

The specific problems or their solutions were not set by upper management. While the process began with people’s workplace frustrations it soon led to addressing broad, system-wide interdepartmental and supplier issues that had been unapproachable for many years. At this plant, in 18 months, productivity doubled. Small evolutionary steps had led to big changes.

* Evolutionary Problem Solving?

Evolutionary change means changes that happen as a response to the environment. Here we use “evolution” to mean the step-at-a-time changes where the next step depends on what happened at the last step, i.e. how the situation responded to the previous action and what you do as a result of that new information. This contrasts with planned change, where the end goal is set and actions all geared to achieve it. To illustrate one difference: in planned change obstacles are identified and overcome with effort. In evolutionary change there are no obstacles because the path forward is always the easiest next step — whatever the situation (environment) suggests.

cc 334 — © Barry Phegan, Ph.D.

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332 — A Plant Turnaround, The Manager’s Story

By engaging employees, a manager improves productivity and avoids closing the plant. This is his story in his words.

“I was a Plant Manager at the California Plant of a multi-plant Fortune 50 company. There I worked with Meridian Group for a number of years, and with their help, became a student of the cultural approach to leadership. During all my years at the California plant, this operation was the number one or number two performer in a thirteen plant nationwide production system. My job was to get quality products on the dock, and I did that through people.”

“I was recognized for my management accomplishments with a promotion to Vice President of the company’s flagship plant in the Midwest. In my five years there, I applied the lessons I learned in California, to take this plant from the highest cost producer to among the company’s lowest cost producers.”

“While much of this was done through capital improvements, the attention to the plant culture allowed these improvements to come on stream with a minimum of plant disruption. I kept this question in front of my mind. ‘How do you get the hearts and minds and interest of the people?’

Getting Everyone On-Board

“At the first management meeting at the mid-western operation, the managers were ready to give me the production numbers. But I asked ‘How many people were laid off this week, and on what shifts?’ I also asked about accidents. Second I said ‘I want a measure of the quality of production. Then last I’ll want the numbers.’ The response was silence from my managers.”

“I said ‘Here is the direction, how can we get there?’ I got the message out in weekly meetings, and annual meetings. I repeatedly explained the overall goal, and opened the plans to the people affected. This really threw them off base. They were used to management keeping things close. I kept asking [myself and managers], ‘How can we ensure that the people will trust management?’”

“We had weekly meetings with supervisors. These were “No-Agenda” meetings. The topic was relationships. The Plant Manager was there week after week.”

“First I explained the numbers, and if we don’t go from here to there, all our jobs will go, and the plant will shut down. ‘Do you agree with my figures? My choice is to do it or shut it down.’ I put all the numbers out for everyone to see and understand.”

“We had many different unions on the production floor. Because of the increased production, it meant layoffs in one area but more work in another. I committed to no long-term layoffs. That meant a lot of retraining.”

Operating Results

“Over five years we shrank the workforce from 2,500 people to 1,700 people, all by attrition and retirements. On the way we had 1 million man-hours without a lost-time accident. And we did all this while keeping people on-board.”

“I had a coherent master plan — reduce cost by one million dollars a month. We aimed at sixty million over five years. We easily achieved that. The actual savings were almost double our goal over the five years.”

 “I used lessons I learned at a smaller plant, to change the largest plant in the system.”

cc 332 — © Barry Phegan, Ph.D.

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333 — Culture Change in Three Days?

My partner and I had an initial three day visit with a new client in the Midwest. The company’s workforce was overworked and demoralized. Turnover exceeded 80%. The managers wanted to improve morale and help new hires and temporary employees quickly become productive. Here is the story of a highly motivated group moving quickly to action.

Day One

The client is a 300-person division of a $2 billion annual sales retailer. The first meeting my partner and I had was Wednesday at 8:00 a.m. with the unit manager. We discussed work issues and what Meridian Group would do over the next three days. At 9:00 a.m., we attended the daily Operations Meeting where we met the managers and supervisors and discussed why we were there. Following the meeting, we spent the rest of the day in one-on-one interviews with department managers, establishing relationships and learning about the culture. That evening, my partner and I shared our interview notes with each other and developed our preliminary understanding of the culture.

Day Two

At 9:00 a.m. the following morning, Thursday, we attended the weekly Senior Staff Meeting. As we had done at the Operations Meeting, we discussed company culture — what it is and how to change it. But now, armed with information gathered from the interviews, we spoke from greater knowledge. We outlined to the managers the basics of culture change:

“Think of culture as a circle. The bottom is the operations half, WHAT we do, the hardware, systems, controls, production, and profits. On the top is the human half-HOW we do operations. This includes communication, trust, relationships, involvement, and the meaning people give to management’s actions. Most companies have a well-developed bottom half, but their top half is underdeveloped. In most workplaces, what people do is largely outside of their direct control—driven by laws, technology, customers, markets, and financial constraints. Fortunately, culture flows mostly from how we do our work. We have almost total control over this. Developing the company culture means getting the two halves in balance-paying attention to the messages we convey in how we do things.”

First Decide Where to Go

Then, we asked each of them, “Think of a work situation where you felt involved and motivated. What were the qualities of that workplace?” In summary they said, it’s a situation where:

    • I am recognized.
    • There is camaraderie.
    • I get honest feedback.
    • I get support from management.
    • I am trusted — give and take on ideas.
    • There is respect from the top down—not fear.
    • Expectations are in line. We know the goal and what to do.
    • People help each other — teamwork.
    • I feel I am a part of something bigger.
    • I receive mentoring and training.
    • There is pride in accomplishments.
    • I feel trust.
    • That I am taken care of by leaders.

 

We titled that list “What we want more of here at work.”

Then Decide What to Do — Action

We then asked, “What opportunities happen every day that can reinforce these qualities?” They said:

    • Everything every day.
    • How we manage staffing, retention and training.
    • Daily interactions with associates — more balanced.
    • Talk one-on-one with new hires.
    • When people do it right — recognize it.
    • New people at the start of the shift — introduce them.
    • Find out something personal about a low performer and encourage them.
    • Rotations, cross training.
    • Talk with smaller, nine-person teams, not just the full shift.
    • Follow through on issues employees raise, involve them.
    • The new production process, involve people.

 

Almost everyone committed to doing something that same day and to talk about what they did at the Friday morning Operations Meeting.

Day Three

There were five people from the Staff Meeting at the Operations Meeting. They had each done something:

    • One had conversations with several people he didn’t normally talk with.
    • Two brought their teams together to get their ideas on proposed procedures.
    • Two started to meet each day with a different team member—”Quality time.”

 

The operations manager was as impressed as I was. He asked if this “people side” discussion should be a permanent part of the daily operations meeting. They all agreed. The Operations Manager reminded them that small steps were best steps.

The Future

Large trees from little acorns grow. As these managers continue their attention to the top half of the culture it won’t be long before morale and productivity will improve and turnover will cease to be a problem. The managers can then tackle the broader system issues that led to the present crisis.

This was the fastest move to action I had ever experienced. I could tell that the managers were as pleased as I was. I looked forward to our next site visit to see what had developed and to plan with the managers the long-range change process.

cc 333 — © Barry Phegan, Ph.D.

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331 — 8 Examples of Successful Culture Change

“If you know where you are going, it doesn’t matter where you start.” Anonymous

Here are examples of some steps managers took on the path to major company-wide changes. Don’t be turned off by the apparent simplicity of each example. While changing a culture is very simple, it is also very hard, perhaps the hardest thing a manager ever undertakes. As these examples show, you quickly create the culture you want by taking small, simple steps, using every-day ordinary situations that provide opportunities to move your company in the direction you want.

The generic path of company-wide culture change is described in article 312, but the steps you take will be unique and personal — just as these examples are unique to the companies they came from. Your steps will be distinctive to your company because you will find ample opportunities for progress in the particular things your people do — every day. Once you’ve decided what cultural values you want, it doesn’t matter where you start.

1. Equipment — The management team in this California plant of a national company were committed to increasing employee involvement — which they believed was the key to improved performance and market share. They recognized an upcoming decision to replace a $1 million high-speed packaging machine as an opportunity to engage employees. (This management team was well down the culture development path and had learned to see every operational problem or plan as an opportunity for involvement.) As the design neared completion the design engineers met with the 12 machine operators. Over several meetings the operators input modified the design, e.g. by adding a raised platform with handrails around the machine so operators had better access to controls.

Plant manager; “We were learning to get participation on major financial decisions. The operators were very impressed and pleased to be involved. Following this involvement the operators decided to train themselves on the equipment — before it arrived. The resulting start-up cost savings were large, and the more user-friendly design increase the efficiencies well beyond what we had originally expected from the machine”.

2. Process — The cleaning crews in this plant were frustrated by continuously growing piles of product waste. Management, committed to employee engagement, asked the cleaning crew to tackle the problem. Over many months the cleaning crew carefully analyzed the complex causes of product waste and loss. This analysis engaging people from almost every part of the plant, bringing heightened awareness and sense of cooperation and responsibility across the board. The piles of waste became history, accompanied by stunning cost savings.

3. Process — In this plant, production line operators, frustrated by frequent breakdowns in the production process, decided to carefully analyze and correct the myriad small problems plaguing their line. Similar to the waste problem described above, these operators reached out to almost all other departments, and in this case to most of the outside material suppliers. With the strong support of management, over two years the production line’s productivity doubled, while product loss fell to almost zero.

4. Supply Chain — To strengthen the supply chain, a director invited representative managers from all areas of the retail giant to meet and make improvements. Initial meetings, while ostensibly focused on system improvements, were really a stressful jockeying among the attending managers for position, power, and control. These competitive department managers felt threatened by any topic they interpreted as challenging their autonomy. But this director knew that improving company systems required cooperation, not competition. By gently smoothing ruffled feathers and pushing all decisions into the group for consensus, the director managed to get serious interdepartmental problems on the table for resolution. The collaborative process opened up the supply chain for rapid and continuous improvement, while building a new level of trust in relationships across this previously heavily siloed company.

5. Emergency Response — Most chemical plants are ready-to-explode bombs. Safety is #1. As part of a plant-wide effort to increase participation in this chemical plant, the department managers agreed that when there was a plant emergency they would act as “available-resources”, rather than their usual “take-command-and-control” role. During the next emergency (caused by a sudden externally-caused power outage, shutting down much of the plant) the department managers came to the action point (centralized giant electrical control panels) but stood to the side, visibly handling complete control to the designated, supervisor led, Emergency Response Team.

For the department managers, such standing aside took unusual self-control, but it got the attention of everyone in the plant. By their visible behavior the managers clearly stated, “We trust you. We want you to take control of your jobs and see us as coaches and consultants.” This was one of many management changes that led to significantly improved employee engagement and a big jump in plant efficiencies and profitability.

6. Professional Services CompanyThe partners in this California professional services company saw employee engagement as a way to improve productivity and reduce errors. Purchase of a new and elaborate copy machine provided the first involvement opportunity — bringing employees together to discuss their needs and collectively choose a copier. The managing partner explained, “It would’ve been simpler for me to decide, but we saw it as an opportunity to build participation in teamwork. Everyone was pleased with the result.” This was the first of many actions the partners took to build more teamwork and cooperation that eventually remade the entire company’s work processes, way surpassing the original goals of improved productivity and reduced errors.

7. Transportation In this vast distribution center, managers realized that if they wanted employees engaged in cutting costs they should help people understand the financials. As an experiment they expanded the traditionally “management only” monthly division financial review meetings by inviting some truck drivers. The drivers were excited at receiving this new information and asked to be invited to future meetings. Managers were quite surprised and impressed at the drivers’ enthusiasm. Seeing how much employees longed to understand the financial sides of their work, the managers invited other previously excluded groups to these financial reviews. These previously “outside” participants gradually and unexpectedly morphed the financial review meetings into broad-based business and financial planning sessions — to the great benefit of everyone and to the DC’s bottom line.

8. Quality Control Lab — This plant is a sprawling, 2,000 employee chemical complex. As in the previous examples, the management team was committed to greater employee engagement. When they learned of employee frustrations in the lab (largely created by conflicting directives from various shift supervisors) they invited the employees to tackle the problem. Rather than directly tackle sensitive authority issues with their supervisors, the employees cleverly decided to write a standardized procedures manual. It took 18 months, involved all employees, and touched base regularly with supervisors. The process of generating the manual produced full agreement between all supervisors and employees on best practices. As the Plant manager said, “It solved the technicians’ immediate frustrations while strengthening teamwork across the lab and between employees and managers. Morale and productivity in the lab is at an all-time high.” An unexpected result: this manual became the model for new manuals in the many other labs in this international Fortune 50 corporation.

Lesson Learned

While most of these examples appear to be about equipment and procedures, they inevitably touched on, and resolved, long-standing issues in sensitive areas such as authority, control, power, and values. This is what developing your culture means, balancing the operations side with the human side. A balanced company culture invariably brings high performance and profits.

As these examples show, committing to openness and engagement, inviting people closest to the action to take personal responsibility and resolving their own operating frustrations, is the simplest and quickest way to get the culture you want — and the profits you deserve.

cc 331 — © Barry Phegan, Ph.D.

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