Leadership | December 22, 2011
the legacy of a powerful change agent
How one manufacturing executive brought about a radically new system that empowered employees and led to industry acclaim.
At the end of 2011, O.C. Tanner will say goodbye to a man who has had an astounding impact on the company. Harold Simons, Executive Vice President of Supply Chain, will retire after 16 years with the company and a 38 year career. Harold’s legacy? Creating a world class supply chain at an American manufacturer to cost-effectively and efficiently produce awards of the highest quality. Most importantly, he was able to complete this transformation by adhering to the twin values of respect for people and continuous improvement.
As you read Harold’s story, you should know that his bedrock principle was always one of tremendous respect for people and their capabilities. He truly felt if people weren’t performing, they were either in the wrong job or hadn’t been given a compelling vision of where they needed to go.
It was Harold’s belief in people that really changed the way we worked together. When Harold first arrived, he found us experimenting with one-piece flow manufacturing and the use of teams. But we were missing some key elements of success. Harold identified the need to not just change our processes overall but address the way people viewed the work they did. As we dismantled departments to create multi-functional cells (or mini-factories), we were changing from a system that honored individuals who did one job skill extremely well, to a system that honored teams of people who each worked multiple jobs. And who, together, worked for the betterment of the whole.
We transitioned from hiring people for their hands, and who expected the boss to solve all the problems, to hiring people for their minds, hearts and hands, and who were part of a self-directed team that needed to solve its own problems.
Management needed to change from boss to facilitator; from problem solver to coach; and from decision-maker to people developer.
Change at all levels is hard. How did Harold meet these challenges head on? Let’s look at his bold moves that helped redefine our processes and empower his people.
1. A weekly merit system replaced semi-annual raises.
Designed to help teach new expectations and help team members live them, the new system provided a short list of weekly expectations for each individual and their team. Come to work. Be there on time. Cooperate with your team. Produce at the team rate. Be safe. Improve team QCD (Quality, Cost, Delivery), etc. Each week, every team member was coached on these expectations. Employees and teams that were successful 15 out of 18 weeks would get a small raise. Success on a regular basis meant people could earn more than they used to with their semi-annual raise. If expectations weren’t met, then a smaller amount was earned. The key: people were actively and measurably earning their raises.
At first, most people groused that the system seemed to be designed to cheat them of their future raises. But I remember one team in the ring department that earned their first raise after 15 weeks, and then earned a second raise after another 15 weeks. Word spread quickly, and after just a few months on the system, most people were taking personal responsibility for their success, and for the success of the company.
2. Job skills were expanded.
Previously, one of the biggest constraints on team capabilities was having each person trained only to do one particular job. Expanding the skill set of each team member became a priority. At first, many were outraged that we would ask them to learn a second skill. But anyone who learned and worked a new skill received an hourly raise. People signed up fast after that.
Before long, people were demanding new skills faster than we could afford it. And so we put a constraint on how much job skill money was available each month. This led to some very interesting dialogues with our teams who were frustrated by the constraints on job skills. Not because of the money but because they needed the additional skills to improve their team results!
I will always remember the meeting where team members asked us to stop paying for job skills so that they could learn more, faster. We soon found out that all the other teams felt the same way and just like that, we no longer paid for job skills.
3. Empowerment and continuous improvement became embedded in our culture.
Harold continued to modify the compensation system as our teams grew and developed. Today, our teams are self-directed—driving daily improvement. We have returned to a semi-annual raise where most team members receive a standard dollar amount. The exception is for those team members everyone agrees have delivered extra value in the last six months.
Harold is leaving us much better than he found us. In addition to an effective compensation system, we also have other effective systems such as, individual development coaching, daily team problem solving and continuous improvement. His improvements have transformed our organization and we now find ourselves sharing our best practices around the globe.
“The real act of discovery consists not in finding new lands but in seeing with new eyes.” –Marcel Proust
Do your systems reinforce that people matter—and in fact, make all the difference? What could you do differently in your work to leave a powerful legacy like Harold’s? I’d be interested in your thoughts.