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