JUMP STARTING CHANGE

Dr. R. Eugene Goodson

Adjunct Professor in Operations ManagementUniversity of Michigan Business School

March 23, 1999

It’s a cultural thing!

Cultures develop slowly They reject change agents! The Norm Bradburn lesson

• The 1973 energy crisis• A traumatic event--short duration• No long-term change

Can cultures change quickly?

Changing culture

Can destroy, i. e. Plant closings

Agreement to change better

Need a catalyst Need a real threat Need a leader

External “Devils” help

Domestic competitor Import Blitzkrieg Customer demand Imminent Plant closing Even a changed sister

plant

A mission to rally ‘round

Impossible dream-- cannot be envisioned

Jumping into unknown territory

Committed leader for duration

Agreement to move to a new cultural state

An involvement process

Articulate required changes

Form teams Diagnose & recognize

problems Develop common

mission statement Set & measure goals

A Leader

Vision Belief that threat

can be averted Commitment Consistency Followers!

The Umbrella concept

A name• TPS, DPS, FPS • TQM, Whatever

All programs under umbrella

One program--evolving tasks

Simple measures

TQM

The Umbrella concept

Constant improvement & change Real concepts learned

• Team protocols• Interpersonal skills• Problem solving tools• Quality systems practices• Customer focus

Transforms people over time

Personal Experiences

Japanese transplant’s suppliers• Threat to company clear to all• Problem not recognized

Cadiz plant not competitive• Down-home, but union culture• Nissan business had to be earned

Oshkosh Truck• Clearly non-competitive• Adversarial union relationship

Change at Hoover Universal Seating--1981

Old-line, but successful auto supplier--good plants

$150 million sales--metal & foam parts for seats

Industry that triple-sourced Average contract--$3 million Change needed--new leader

Change at Hoover Universal Seating--1981

Company threat--Japanese transplant suppliers

Perception--nationalism Real problem--cost & quality Managers did not “see” problems Japanese visit our plants Our unsuccessful Japanese visits

Change at Hoover Universal Seating--1981

Real problem had to be understood Plant tour training

• Intense three-day course • Teaching “to see”

Teams visit Japanese plants Change plans presented to company

board of directors with commitment Success--Grew 35% per year--17 yrs

Change at the Hoover Universal Cadiz plant

Threat--the Nissan metal business & potential plant closing

Old-style, comfortable plant Complete change needed Seat-back quality problem Rolling mill operator story

Change at the Hoover Universal Cadiz plant

Metal seat backs sold for $3.21 Over 7,000 per day being made Major quality issue--J-frame length Rolling mill quality issue--operator? Separate “shops” in plant No visual communication Forklifts everywhere

Change at the Hoover Universal Cadiz plant

Offices

PRESS SHOP

Weld shop

Rolling Mill

Shipping

Wire shop

Receiving

Paint

Steel Receiving

Forklifts

Forklifts

Forklifts

Forklifts

Plant Layout

Change at the Hoover Universal Cadiz plant

Found out the problem was us! Contract negotiation deadlock Real rolling mill issue Catalyst for change Moved presses & welders Made new containers & carts All visual pull systems--no forklifts Success!

Change at the Hoover Universal Cadiz plant

Offices

PRESS SHOP

Weld shop

Rolling Mill

Shipping

Wire shop

Receiving

Paint

Steel Receiving

New Plant Layout

Presses

Containers

Carts

Press WeldersCarts

Change at Oshkosh Truck

UAW work force--adversarial history Machine shop imminent closure Big meeting with all three shifts

• Enmity was palpable• No words helped

The $30,000 offer! The struggle among themselves Turning point at Truck

Change at Oshkosh Truck

Brought in a consultant--previous successes in union environments

Hired new manufacturing VP Formed teams Developed mission statement Defined new TQM Umbrella Completely changed production & plant

layouts--still continuing

Change at Oshkosh Truck

New union contract in 1992--second one in 1997 negotiated early

Two acquisitions--both non-union Continual increase in productivity,

quality, and business Won new marine truck contract Stock price has doubled in a year

Lessons learned

People want success People will detect insincerity The external devil must be real--

not contrived Plateaus are nice but death awaits

those who relax on one Continual change the only way

What can you achieve?

Teams committed to a common goal beyond their individual grasp are surprisingly successful

Make sure your dreams are beyond what you “know” is achievable

The Prize 2001

You