by Albert B.
Blixt,
Partner, Dannemiller Tyson Associates
Introduction
In less than one year, Ferranti-Packard Transformers,
a troubled Ontario, Canada manufacturing plant, achieved a
remarkable turnaround by involving its employees in both formulating
and implementing a new strategic plan for the business. The
process relied heavily on the use of teams, including worker
participation in a two-day Whole-Scale® change
event using the "one-brain, one-heart" methods of
Dannemiller Tyson Associates. Results have included: an empowered
workforce, improved labor management relations and increases
in quality, productivity and profitability.
The purpose of this paper is to detail how
whole-system change methodology makes use of teams and how
the people of one plant became engaged in creating fast and
far-reaching change in their plant. It is written from the
perspective of one of the consultants who participated in
the change process.
Business Situation:
Ferranti-Packard Transformers, Ltd.
Ferranti-Packard Transformers, Ltd. manufactures
power transformers for public utilities and industrial clients
in three plants located in Ontario, Quebec and Mexico. It
is a division of Rolls-Royce of Canada, Ltd. which, in turn,
is part of Rolls-Royce of the United Kingdom.
In the fall of 1995, the outlook for the Ferranti-Packard
plant at St. Catharines, Ontario was bleak. With sales revenues
of approximately $40 million, the plant had lost money for
several years and was on track to lose $4.5 million in 1995.
Plagued by a flat market, tough competition, high quality
costs (rework), delivery problems and an adversarial labor-management
climate, the St. Catharines plant was in trouble with its
customers, its workers and its owners in Toronto and London.
New leadership was clearly needed.
In August, 1995, Pierre Racine became the
head all Ferranti-Packard operations. He took personal charge
of the operations at St. Catharines. He was the fourth CEO
in three years. Racine’s job was to turn the plant around
"soon" or it would be closed or sold. "Rolls-Royce
said, ‘This is your last chance, boys. Get it right this
time.’" recalls Human Resources VP Scott Smith,
who had been on the job only two months when Racine arrived.
What they found was a management "team"
that wasn’t a team at all. They did not meet regularly
or communicate effectively. What passed for a strategic plan
had been locked in the desk drawer of the previous CEO. There
was no shared business plan and no functional strategy for
any of the operating functions such as engineering, operations
or sales & marketing. There was a surprising lack of knowledge
of the marketplace. According to Smith, "There was no
clear idea of who our customer was or what they wanted."
Pierre engaged Doug Emerson and his firm,
Managerial Design of Oakville, Ontario, to work with him on
developing the leadership team. While dealing with the daily
crises caused by quality problems, late deliveries and unhappy
customers, Racine made time to meet with his six direct reports
on almost a weekly basis. He and the group began to work as
a team. They developed a draft strategy to turn the business
around. By early 1996 they had identified six key result areas
that were to be the focus of the strategy.
The Need for
a Whole System Intervention
As the strategy took shape, the leadership
team recognized that the strategic plan would need the full
support of the plant’s unions and employees if it was
to have any chance of succeeding. That did not appear to likely.
Relations with the three locals of the United Steel Workers
were not good. Previous management had left an atmosphere
of mistrust, cynicism and downright hostility. There was no
meaningful communication between management and the union
leadership. A way had to be found to unite management, the
unions and workers in developing and implementing the new
strategy.
In March, 1996, Dannemiller Tyson Associates
was contacted to discuss using its Whole-Scale®
methodology to involve all of the internal stakeholders in
both strategic planning and rapid implementation. Kathleen
Dannemiller and I drove through a snow storm to the plant
just outside of Niagara Falls to meet with Pierre and Scott.
When we arrived, Pierre was in the midst of conducting a series
of informational meetings with workers to share business and
financial information that had never been shared before.
We sat in on one of those meetings and simultaneously
learned about the business problems and experienced skepticism
and anxiety of the workers. The facts Pierre presented were
sobering but his style was open and honest. He answered every
tough question candidly. Still, the doubt on the faces of
those people leaving the meeting was unmistakable. They had
seen too many new leaders and heard too many hopeful scenarios
to be convinced by words. They would need to see real action
on the part of management before they would support anything.
Kathie Dannemiller and I met with Pierre and
Scott Smith after that session. It was decided to close the
plant and take everyone off site for a two-day meeting that
would bring about the rapid, plant-wide change needed. The
event would be designed and facilitated using the Whole-Scale®
methodology. June 13 and 14 were chosen as the dates for the
event.
Dannemiller Tyson
Associates and
Whole-Scale® Methodology
Dannemiller Tyson Associates
(DTA) was founded
in the early 1980’s by Kathleen D. Dannemiller and the
late Charles Tyson to help organizations achieve fast, long-lasting
change. The earliest work was with the Ford Motor Company
as it sought to move its culture from "command and control"
to a more participative style. In the late 1980’s DTA
expanded its work to other companies and organizations. The
methodology has evolved over the past decade through the work
of Dannemiller, Paul Tolchinsky, Roland Loup and other DTA
partners. The result is a flexible and comprehensive approach
to change management. Whole-Scale®
expands the thinking of Real Time Strategic Change
and Real Time Work Design'
previously developed by DTA.
Whole-Scale®
methodology is used in a variety of applications including
strategic planning, work design, re-engineering, training
and culture change. Robust, repeatable processes allow organizations
to:
-
Clarify their current reality (including
the drivers for change)
-
Shape a vision for the organization they
are striving to become
-
Develop action plans that move them toward
that future
-
Address information, process, structure
and relationship issues vital to the change process
The core Whole-Scale® competency
is around planning and facilitating large whole-system meetings
as the key link in the change process. These sessions allow
a "critical mass" of the organization (or a sub-system
within the organization) to define the criteria for the new
team-based culture while experiencing it directly. Whole-Scale®
is a model for what the change can look like and the vehicle
by which a paradigm shift is accomplished. Participants experience
working in teams to do real work in Whole-Scale®
events.
The term Whole-Scale® was chosen
to reflect the need to address the whole system regardless
of the scale (large or small group) at which work was being
done. Whole-Scale® sessions can create "critical
moments" in the change process but only in the context
of a sound change strategy that includes clear strategic goals,
strong leadership alignment, adequate training and concerted
implementation follow-through.
Roles of Pre-Event
Teams
Planning for the June 13-14 event began in
early April. Ferranti-Packard identified a hotel in nearby
Niagara Falls that could accommodate 250-300 people and contracted
for the space. The most important planning task was the design
of what would happen in the event. Two teams played complementary
roles in that design, the Leadership Team and the Event Planning
Team (also called the Design Team). A third team, the Logistics
Team, was responsible for staging the event and seeing to
it that it was "seamless" for participants. Finally,
the team of three DTA consultants facilitated the design and
planning of the event.
Leadership Team
It critical in any change process that the leadership
team be predictable to each other and the organization so
that they send consistent messages of support and direction
throughout the change process. Without clear sponsorship
and participation by leadership, the change effort cannot
succeed.
The Leadership Team was comprised of Pierre,
his direct reports and the leaders of the three union locals.
It was critical for the success of this event that leaders
from both the labor and management sides were seen as acting
together to support the effort. The team’s first responsibility
was to prepare the draft strategic plan which would be presented
to the entire organization in the event. That work was complete.
The next task was to identify a representative microcosm
of the plant to serve as the Event Planning Team. We asked
for a cross-section of the entire organization including
all levels and all functions including some union and management.
23 people were selected including the presidents of the
three union locals in the plant.
Finally, the Leadership Team needed to decide
how much authority they were willing to give the Design
Team and the entire organization in developing the strategic
plan. They decided that they were willing to receive input
on every part of the draft strategic plan with the understanding
that the Leadership Team had to have ultimate control over
what went into the final draft of the plan..
Event Planning Team (Design Team)
The Dannemiller Tyson approach to designing and holding
large scale interactive meetings relies heavily on working
with an Event Planning Team(EPT) or Design Team. This team
is active throughout the planning process and during the
event itself. At Ferranti-Packard, the team continued to
play a role during implementation. Generally, one day of
planning with the EPT is required for each day of the actual
event. In this case, the Event Planning Team met on May
30-31, two weeks before the large group session.
The Event Planning Team’s job is to
figure out both what needs to be discussed at the
large-scale meeting and how it should be discussed;
but it is difficult (if not impossible) to be responsible
for the content and the process at the same time. We complicate
the matter further by working with the EPT by consensus.
We do not have the "right" design until everybody
agrees. Given all that, we have found it particularly important
to be clear about roles. As exernal consultants, we see
ourselves as "process" experts; while the Event
Planning Team members are the "content" experts.
If we can keep our roles clear, a consensus process will
result in a most effective design by linking what the process
experts know about how to do this kind of session with what
the content experts know about the company. By using similar
processes and the same underlying principles during the
planning as we use during the large-scale event, the Event
Planning Team’s reactions help determine what will
and will not work. Their experience is a constant reality
check on the developing design.
The Ferranti-Packard Event Planning Team
meeting began with the 23 members sitting at three round
tables of seven or eight, just as participants would in
the large-scale event. Seating had been assigned to make
each table a microcosm of the whole team. The team received
a clear charter from Pierre about its role and authority.
As individuals, as tables and as an entire team, they built
a common database about the company, its environment and
what was working and not working. By the end of two days,
the people on the team had a new understanding and appreciation
of each other. Many on the team had worked at Ferranti-Packard
for many years and recalled with pride the days when their
plant was a top competitor in their industry. They discoved
that, despite their apparent differences, they all wanted
the same thing. They united around that common yearning
to be great again, to be part of a company they could be
truly proud of. They became a team while working on a purpose
statement and agenda outlining the basic flow of the large
group event.
The team decided on what needed to happen
and in what order things needed to happen. The team decided
to invite an industry expert and a panel of current and
former customers to give their input to the planning process.
They wanted to see Pierre and his entire leadership team
present the draft plan for input to show that they were
all behind this process. They decided to invite the plant’s
suppliers to be participants at the tables. And, they decided
to invite all of the workers then on indefinite layoff to
come, believing that they also had a stake in the outcome
and should have a voice in making decisions. The team even
undertook to organize the "max-mix" seating chart
for the event, deciding how to make each of the 36 tables
a the best possible microcosm. By the afternoon of the second
day, the team was working on its own and the three consultants
simply stepped back and got out of the way.
When the work was done, the team was excited
because they knew the design was one of their own choosing.
They saw the world in a different way and were anxious to
have everyone in the organization have the same experience.
At the close of the meeting, each person was asked what
they would tell people back in the plant when asked what
had happened in these two days. Mark Renner, the shop floor
union local president and a vocal skeptic when we began,
replied, "They will ask me if we have gotten in bed
with management and I will tell them we own half the bed."
Event Logistics Team
To have a successful Whole-Scale® change
meeting, it is particularly important that the activities
flow like clockwork: that all the meeting components - participants,
speakers, consultants and materials - are where they are
needed, when they are needed. The alternative would be seen
by participants as chaos. They would either feel "herded
around" or they would feel that no one is in charge
and therefore, the meeting was not important. A well-organized,
well-briefed logistics team is needed to carry out the behind-the-scene
activities that take place to ensure the meeting runs smoothly.
This includes administrative matters as well.
The eight members of the team were volunteers
from outside of the plant. (Being a logistics team member
is a full-time job during the event and can’t be done
by participants.) Some team members came from other locations
within Ferranti-Packard or other divisions of Rolls-Royce.
Some were outside consultants seeking a chance to experience
the Whole-Scale® method first hand. They came
together to begin work on Staging Day, the day before the
large-group event.
DTA Consulting Team
The consulting team consisted of Kathie Dannemiller,
Al Blixt and Mary Eggers. Kathie and Al were responsible
for contact with the leadership team and facilitating the
Event Planning Team meeting and the large group meeting
itself. At Ferranti-Packard, the role of logistics "tzar"
was filled by DTA consultant Mary Eggers. She was in charge
of forming and leading the logistics team. She also was
responsible for all negotiations about room set-up, meals
and other arrangements with the hotel facility. All three
consultants worked together to develop the detailed design
"script" for the actual event.
Event Purpose
and Design
The purpose and agenda below shows the outline
of the event as drafted by the Event Planning Team. Each participant
had a copy at their place when the event began. A minute-by-minute
detailed design was developed by the consultants (see appendix).
Ferranti-Packard
June 13-14, 1996
Purpose: To work together
as a Ferranti-Packard team to become the #1 competitor in
our industry by: agreeing on
• Where we are
• Where we want to be and by committing
to
• How we are going to get there as
individuals and as a whole
Day 1
7:30 am Welcome
Purpose and Agenda
Telling Our Stories
Common Themes, Significant Differences,
and Outcomes
View of the Industry
Open Forum
View From Our Customers
Open Forum
lunch
Organizational Diagnosis
View From the Leaders Bridge
Participant Input
Evaluation and Close
4:00 pm Adjourn
Day 2
7:30 am Summary of Evaluations/Agenda
Revised Strategy Statement
View from Rolls Royce
Goals: Preferred Futures
Preferred Futuring
"Systemwide Action Planning
Vote and Lunch
Report Out
Valentines
Back Home Planning
Report Out
Wrap Up
Evaluation
4:00 pm Adjourn
Roles of Teams
During the Event
Table teams
The flow of activities in a Whole-Scale® event
is from the individual to the table to the whole room. Each
max-mix table of eight is basic unit of work during the
event. Each table has its own flip chart pad and markers.
By the end of the event, the walls are covered with the
work product from the tables. Each table is self-facilitated
with roles of facilitator, recorder and reporter being rotated
for each new activity. Each person can experience leading
the team at some point. Because each table has representatives
from all parts of the organization, similar conversations
take place at each table. The room is brought whole through
methods such as call-outs, report-outs, voting or just getting
up and wandering around to look at the work done at other
tables.
Leadership Team
It is important to note that all of the leadership team,
including Pierre, sat at tables and participated in all
activities with the rest of the organization. On the afternoon
of Day One, Pierre and the team presented the draft strategic
goals and answered questions from the tables. In the next
activity, each of the tables provided input on changes,
additions or deletions they would like to see in the mission,
vision and goals. Then the whole room voted on which suggestions
they agreed with most. The Leadership Team took this input
and stayed late in the evening of Day One to rewrite the
strategy. This act of transformational leadership was one
of their key roles in the event. A copy of the revised strategy
was at every place the next morning when the team presented
its work. Finally, Pierre and the team were responsible
for publicly committing to what would be done following
the meeting.
Functional Teams
At specific points during the design, people who work
together gathered as functional teams to do certain kinds
of work, including back home planning. One of the key times
when functional groups meet is to process "Valentines"
which is our name for cross-functional feedback. At Ferranti-Packard
there were 24 functional groups identified. Each max-mix
table sent a "valentine" to each functional group
telling it what it needed to do differently if they were
to achieve their goals. Public commitments from the functional
groups about what they would do differently formed a key
part of the post-event accountability structure.
Event Planning Team
Members of the Event Planning Team were distributed
among the tables as participants. They were the eyes and
ears of the consultants during the day to give feed back
about the flow of the event. At the end of Day One, Event
Planning Team members sat down with the consultants and
members of leadership to read participant evaluations and
advise on any needed changes in the design for the next
day. At the end of Day Two, EPT members provided their insights
into the event and what was needed to implement the plan.
The group had worked so well together that they reformed
at the end of nine months to research the status of plan
commitments from the functional group. (see appendix).
Logistics Team
The Logistics Team managed every aspect of the physical
environment to make sure everything worked for participants.
On the staging day, team members went through the detailed
design with the consultants and decided on what roles each
would play. Operating from a "war room" next door,
the Logistics Team managed seating of participants, greeting
and guiding outside speakers, handling wireless microphones
and distributed handouts and assignments to the tables on
a just-in-time basis. The team managed the production and
distribution of the revised strategic plan between Day One
and Day Two. They even would "sweep" the halls
to get participants back from breaks and lunch on time.
Their work day began at 6:00 AM and ended at midnight.
Consulting Team
The role of the consulting team facilitating the event
is to provide the minimum structure necessary to allow the
participants to have the right conversation at each point
in the event. One consultant is usually "up front"
facilitating a given activity while the other monitors the
energy in the room to make sure the event is working. When
an activity runs long (because the right work is being done)
the consultants must redesign the remaining activities to
fit the time available. When something isn’t working
for participants, the consultants must know when to step
in and change the activity. Continuous conversation between
the consultants and the logistics tzar are necessary to
monitor and adjust the flow of the day.
Event Outcomes
The first and perhaps most important outcome
of this meeting was that the people of Ferranti-Packard saw
the world in a different way when it was over. They had heard
an industry expert tell them that their market was not growing
and their competitors were producing better quality faster
and at lower cost. They heard from their customers. One ex-customer
(which had taken Ferranti-Packard off their bid list because
of poor quality) told the 280 people in the room, "We’re
not trying to put you folks out of business. You are doing
that job yourselves." But, then another major customer,
Westinghouse, told them, "I am building power plants
around the world that will pay a premium for fast installation.
If you can shorten your delivery times from 28 weeks nearer
the industry standard of 20 weeks, I can fill your plant."
If there was a single turning point in the event, it was at
that moment.
You could almost feel the atmosphere change
as each person wondered how to get eight weeks out of the
order-to-delivery cycle. They realized almost immediately
that there were many places they could speed things up if
they improved the way in which the various departments worked
together to process orders. Orders from the sales department
might sit for days or weeks in engineering before drawing
were ready for the shop floor. Similar delays were found in
the hand-offs between engineering and purchasing, purchasing
and manufacturing, etc.. In short, nearly everyone in the
room suddenly discovered there was something they could do;
but only if they could improve interdepartmental cooperation
The tangible "deliverable" of the
event was a working strategy for the plant that everyone understood
and had a hand in creating. There were nearly 100 specific
public commitments for action from the 24 functional groups,
including the suppliers group and the Leadership Team. People
began acting out of the new strategy even before they left
the meeting. This was demonstrated by conversations that were
happening around the room and in the halls during breaks.
Workers from different departments were talking about how
to work better together. Suppliers were in conversations with
workers from the shop floor about how to serve their needs
better.
The intangible outcome was just as important.
As the Event Planning Team had wanted, the participants had
worked "together as a Ferranti-Packard team" taking
responsibility for shaping and moving toward their shared
vision of the future.
Role of Post-Event
Teams
The place where most strategic plans fail
is in implementation. For this plan to succeed, several key
teams needed to follow through on the new strategy the group
had created.
Functional Teams
Because the strategic planning had been tied directly to
functional work groups, each area of the plant had specific
action plans to work on. Many of these plans involved improving
communication and cooperation with other areas of the organization.
Ad Hoc Task Teams
Some work coming out of the event was assigned to one
of several task teams that were formed to tackle issues
that involved more than one department.
Leadership Team
In addition to their own commitments, the Leadership
Team was responsible for maintaining and supporting the
implementation effort. That included communications that
would keep everyone informed on progress as well as responding
to the greatly increased demand for training programs. Finally,
the Leadership Team for making the case to Rolls-Royce for
some much needed investment in new plant equipment based
on the new strategy. Representatives from Rolls-Royce had
been present at the event and were favorably impressed with
the direction that the plant had taken.
Event Planning Team
The Event Planning Team was reluctant to disband. While
their official work was complete, they had formed strong
ties with each other. As a group, they took it upon themselves
nine months later to monitor progress on the plan.
Results After
One Year
By June, 1997, the future of Ferranti-Packard
at St. Catharines looked very different:
-
Cycle times for product delivery had been
reduced from 27-28 weeks to 18-19 weeks making the plant
"world class" in that category.
-
The cost of quality (scrap, rework) had
been reduced from 8.6% in 1995 of sales to 3.4% in 1996.
The new goal is to reduce that figure to 1.5% of sales.
-
Sales were up from $40M in 1995 to a projected
$50M in 1996 and $60M in 1997.
-
A new program to involve shop floor employees
to lead plant tours received rave reviews from prospective
customers and actually resulted into orders in several cases.
-
Cross-functional problem solving teams
were formed to involve shop floor employees in addressing
long standing process problems in the plant.
-
In the Spring of 1997, all three locals
of the United Steel Workers agreed to new three year contracts
that included more flexibility in job classifications (which
management wanted) and an early retirement option for senior
workers (which the union wanted).
-
Union grievances have dropped significantly
in the plant.
-
After losing $5.5 million in 1995, the
plant trimmed that to $1.5 million in 1996 and expects to
break even or be in the black for 1997.
-
All laid off workers have been called back
and the plant has increased its total workforce by 20% in
the past year, accepting applications for new employees
for the first time in this decade.
-
25% of all workers in the plant are currently
training for new jobs or responsibilities.
-
And finally, Rolls-Royce has approved investment
in major new plant equipment based on the improvement in
financial performance.
Final Thoughts
The reason the
Whole-Scale® event
described here "worked" is that it allowed the leaders
and the people of Ferranti-Packard to uncover and combine
their common longing for an organization of their own choosing.
The formula for change that guided this work is a simple one.
It comes from the work of Richard Bechardt and David
Gleicher.
We shared this formula with the Event Planning Team and with
the participants.
Formula for Change
D x V x F > R Three factors must
be present for meaningful (transformational) change to occur:
D = Dissatisfaction with
how things are now. Dissatisfaction must be public and shared
if it is to create the willingness needed for change. Usually,
introducing new information into the room (industry trends,
stakeholder views, participants views, leaders views) is what
is needed to convince people that they want to improve their
situation.
V= Vision of what is possible,
what "better" would look like. Vision is the clear
sense of overall direction that every member of the organization
needs and that guides behavior. While the role of setting
direction rightly belongs to leaders, engaging everyone in
shaping that direction is a powerful way of building commitment
and participation.
F= First steps in the direction
of the vision. Concrete, practical steps that can be taken
immediately are key to successful implementation.
The product of these three factors must be
greater than R= Resistance to change. Every
organization has a form of inertia that resists change. For
some it is comfort with the present situation; for others
it is the fear of loss in an unknown future even if the present
is not very satisfactory. If any of D, V or F are missing
or very small, the product will be zero and nothing will change.
For the people of Ferranti-Packard, the "event"
of June, 1996 was a turning point in their history. It was
not because some outside expert told them what to do. It was
not because they had leaders who knew all the answers. It
was a turning point because they discovered the power of working
together with shared information and shared goals as a single
empowered team.
To learn more about the
Whole-Scale®
methodology, the following readings are recommended:
Large Group Interventions,
Engaging the
Whole System for Rapid Change, by Barbara Bunker and Billie
Albin, 1977. Jossey-Bass Pubishers
Real Time Strategic Change,
How to Involve
and Entire Organization in Fast and Far-Reaching Change,
by Robert W. Jacobs, 1994. Berrett-Koehler Publishers
Appendix
-
Invitation letter to workers from Pierre
Racine
-
Detailed event design
-
Selected handouts from the event
-
Representative post-event Ferranti-Packard
newsletters
