JUMP STARTING CHANGE Dr. R. Eugene Goodson

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JUMP STARTING CHANGEDr. R. Eugene Goodson

• Adjunct Professor in Operations Management
• University of Michigan Business School
• March 23, 1999

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Its 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?

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Changing culture

• Can destroy, i. e. Plant closings
• Agreement to change better
• Need a catalyst
• Need a real threat
• Need a leader

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External Devils help

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

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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

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An involvement process

• Articulate required changes
• Form teams
• Diagnose recognize problems
• Develop common mission statement
• Set measure goals

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A Leader

• Vision
• Belief that threat can be averted
• Commitment
• Consistency
• Followers!

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The Umbrella concept

• A name
• TPS, DPS, FPS
• TQM, Whatever
• All programs under umbrella
• One program--evolving tasks
• Simple measures

TQM
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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

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Personal Experiences

• Japanese transplants 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

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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

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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

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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

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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

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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

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Change at the Hoover Universal Cadiz plant
Plant Layout
Offices
Receiving
Shipping
Forklifts
Paint
Weld shop
Forklifts
Forklifts

Wire shop
PRESS SHOP
Forklifts
Rolling Mill
Steel Receiving
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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!

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Change at the Hoover Universal Cadiz plant
New Plant Layout
Offices
Shipping
Carts
Paint
Press Welders
Weld shop
Presses
Carts

Containers
Wire shop
Rolling Mill
PRESS SHOP
Receiving
Steel Receiving
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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

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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

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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

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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

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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
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