Professional Documents
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The Magic of Self-Directed Work Teams: A Case Study in Courage and Culture Change
The Magic of Self-Directed Work Teams: A Case Study in Courage and Culture Change
The Magic
of Self-Directed
Work Teams
A Case Study in
Courage and Culture Change
Palmes_Front-F.qxd 1/24/06 1:43 PM Page 2
The Magic
of Self-Directed
Work Teams
A Case Study in
Courage and Culture Change
Paul C. Palmes
12 11 10 09 08 07 06 5 4 3 2 1
HD66.P335 2006
658.4'022--dc22 2005035907
ISBN-13: 978-0-87389-676-4
ISBN: 0-87389-676-9
Contents
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Preface: “It’s Always the Same…Or Is It?” . . . . . . . . . . . . . . . . . . . . . xi
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix
Part I: The Old Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Chapter 1: Welcome to Northern Pipe . . . . . . . . . . . . . . . . . . . 3
Chapter 2: Wrong Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Chapter 3: The Failure of Half Measures . . . . . . . . . . . . . . . . . 27
Part II: Out of the Darkness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Chapter 4: The A-Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Chapter 5: In Their Own Words . . . . . . . . . . . . . . . . . . . . . . . . 49
Part III: A New Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Chapter 6: There is No Plan B . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Chapter 7: Servant-Leaders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Chapter 8: Return on Investment . . . . . . . . . . . . . . . . . . . . . . . 83
Chapter 9: The Climb to the Top . . . . . . . . . . . . . . . . . . . . . . . . 89
Appendix: Quality Council Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
v
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Figures
vi
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Foreword
F
eeling alive came naturally when we were kids—childhood is
a time when we live a life of learning and adventure as we
explore and master our worlds. We venture out bravely not
knowing the rules, adapt as we go, and have fun living out our
fantasies of being brave heroes and heroines who do good for others.
Somewhere along the way, conformity and compliance become the
rules—about the time we go to school, I imagine. From then on, most
of us sacrifice much of our courage and authenticity as we try to fit
in to be accepted by others in order to “succeed.”
As a college student at the University of Minnesota in the late
60s, I found part of that special energy in the love of study and
learning. I majored in sociology and psychology, and my school work
was my play. As a Secret Service agent who chased counterfeiters in
Chicago and protected presidents, vice presidents, and foreign
dignitaries around the world, I found more of the aliveness as I lived
a compelling mission and was a member of a great team. As a
recovering alcoholic for more than 30 years, I found power in the
12 Steps of Alcoholics Anonymous—a spiritual guide perfect for
leaders and followers alike in today’s chaotic world. I learned that
there are no quick fixes in life and that deep spiritual principles can
guide our lives better than rule books. In nine management positions
over 18 years at the Star Tribune newspaper in Minneapolis, I found
the strength of conviction, the power of truth, and the courage
required to live a value-driven life in a dysfunctional corporate world
where “inauthenticity” remains the first rule of survival and where
ethics are often an inconvenience. I learned to stand alone when
necessary. In my last leadership position, I led a 4500-employee
business unit through transformational change (a fundamental shift
of values, culture, and operating practices). When I left the corporate
world in 1994, the CEO of the company said my leadership had
vii
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viii Foreword
changed the organization forever. I don’t know about that, but I was
certainly changed forever.
Now, with more than a decade of consulting experience, I realize
more than ever how difficult it is to lead change and how invested
many remain in ways of doing things that no longer bring forth the
results we want. Always on the lookout for what is genuine, I listened
to a group from Northern Pipe Products of Fargo, North Dakota as they
spoke at an ethics luncheon sponsored by The Center for Ethical
Leadership at Concordia College in Moorhead, Minnesota. They spoke
of their success in using new tools like self-managed work teams, open-
book management, and continuous learning, as well as the various tools
of the quality movement. Paul, the quality guy, was high energy and
exuded enthusiasm. Wayne, the president of the company, was humble,
soft-spoken, and easy to be around. Their colleague, Kristin, was being
prepared by them to lead in the future.
A few months later, I participated in a book discussion group led by
Paul, Wayne, and Kristin. At the end, Wayne invited me to visit the
company. We all met in the conference room with project leader Ken
Doggett. We talked with high energy for two hours, and they gave me
a tour of their plant. I thought, “These people are for real.” They are in
the midst of a special experience: It is evident in the way they talk, what
they talk about, their appreciation for the difficulty of true and
sustainable change, and the unwavering nature of their vision. They
have a grace and compassion about them, possessed by people in
pursuit of noble goals. They exude the quiet pride of true adventurers.
They have found their life’s work.
In the late 90s, the leaders of change at Northern Pipe Products
realized that the linear, mechanical process and quality tools of a
manufacturing plant were not the whole picture; they were embedded
in a living and dynamic system of high energy filled with creative
potential. Most of what is important in life is found in the grays that the
black-and-white “machine” model ignores. At Northern Pipe, the meta-
phor of the organization as a machine was replaced by the organization
as a dynamic system with a lot of machines in it.
The leaders at Northern Pipe Products still lead, but differently.
Instead of telling people what to do, they ask them questions and
provide them with information. They give employees time to be in
relationship together so the wisdom embedded in the system can
emerge. They give people freedom to make decisions and take action
about the work they do, while still holding them accountable. They
teach others how to do things for themselves and require them to do so.
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Foreword ix
They listen instead of talking (well, Wayne listens; Paul loves to talk).
Most of all, they model the change they want to see in others.
The changes in employees at Northern Pipe were immediate and
obvious. Those who had been among the walking dead for years came
alive and made important new contributions. Leaders recognized
unnoticed talent in people. People took new initiative, and teams
performed great feats. The organization’s performance improved in
dramatic and unpredictable ways. Great employees now stick around
instead of quitting after hours or days on the job.
The courageous rebels and artists at Northern Pipe Products are at
the vanguard of organizational evolution. They rebel against the old
rules and create new forms to capitalize on human potential. But they
aren’t perfect. They know they will make mistakes as they march toward
their vision. They proceed with the confidence that they can learn and
adapt along the way. When they make a mistake, they say, “We are sorry.
Let’s fix it.” And then they move on with greater mutual trust.
As you read Northern Pipe’s story and learn from its journey, keep
in mind that you cannot copy what they did. You must take your own
journey; your personal and organizational reality is uniquely yours. You
can, however, learn about the process of change and many of the
experiences you can expect.
Why would anyone want to do this difficult and risky work?
Because we want to be truly human, we want meaning in our lives, and
we want a sustainable and safe world for all of our children. Venture out
bravely, make new rules, adapt as you go, and have fun living out your
fantasies of being heroes and heroines doing good for others. Should
you fail in a material sense, in a few years, no one will remember the
disappointment and at least the time spent will have been fulfilling. But
should you lack the courage to live your life’s adventure, you will regret
your cowardice for all of eternity. Which legacy do you want to leave?
Preface
xi
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xii Preface
he’s half in the bag, there’s no way he’ll be alert enough to do a good job
inspecting and palletizing. No, Jack’s going over to 1 or 3 for the
upcoming shift. Can’t get into too much trouble on either of those lines.
And we’ve got two temps for the night. One of those guys did a
pretty good job when he was here last week, so it’s not going to be
totally Babysitting 101. But it’s still two temps, one possible no-show,
and Jack with whatever chemicals he has working through his system.
It’s five minutes before start of shift, and everyone’s in the lounge
waiting to be told what line they’ve been assigned to for the next
12 hours. The supervisor reads their first names and the line number.
There’s not much else to say and less to discuss. What’s the point?
Nobody’s really going to be any better off than anyone else for the next
12 hours anyway.
“Pete, Line 4. Jerry, take 6. Brad, you’ve got 7, and do what you can
to help out Jerry on 6, too. Seven’s running heavy wall sewer tonight,
and it’s slow enough to give you some extra time.”
Jack wants to know what’s up with that new kid. Everybody laughs
that nervous laugh which pretty much sums up what they already
know. Scratch him off the list. If there’s one rule around here, it’s this: If
you don’t call and don’t show up, don’t bother coming back.
Twelve hours from this moment, the same events occur, just as they
have day or night, year after year. It’s always the same.
OR IS IT?
That was 1999. In 2005, those conditions no longer exist. Toxic attitudes
and the denial of human potential no longer bind us to the unending
process of hiring replacement workers as if they were defective
machines from a sole-source vendor. Northern Pipe Products is today
experiencing unprecedented efficiencies, employee involvement, a
vibrant and desired training program, record output per work hour,
and the lowest overall waste in company history.
What we did and what we learned over the past five years is the story
of this book. Because it’s a true story, we know you will find pieces of
yourself within it. And because this experience has been overwhelmingly
positive, we expect that you, too, will be changed as a result.
This is about people. Our story could have taken place in a hospital,
school, supermarket or any other organization that requires people to
work together for the greater good. Regardless of the setting, be it
computer service, health care, education, manufacturing, or child care,
what follows could just as well be your story. It’s about people and their
unlimited potential to achieve extraordinary things; the manufacture of
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Preface xiii
pipe is simply a metaphor. Any group of people facing another day just
like yesterday can choose to follow in our footsteps, regardless of the
style or color of shoes they wear. True opportunity is “one size fits all.”
ROCKET SCIENCE
What follows is rocket science without working equations, defined
weights and measures, reliable test results, and a known distance to
target. If nothing else, “self-direction” appears to be less science and more
art in that, at its core, the original plan is to “do good” and the outcome
is personal growth, mutual trust, and organizational improvement. But,
along the way, are thousands upon thousands of course corrections, each
requiring a higher degree of vertical involvement and/or awareness than
the classic hierarchical structure of top-down control and authority. Our
experience is that management must be in the game to act as coach, role
model, and guide to everyone in the organization.
Unfortunately, self-direction and teamwork are subject to any
number of books and articles that lay claim to successful techniques
regarding human interaction (as if any one approach held the key to
success). Others rely on relabeled common sense to paint the subject in
scientific terms. For example, our HR director, Ken Doggett, was amazed
to read that to be successful, team members needed to work in the same
location whenever possible! That might be scientifically correct, but is
little more than words on paper to most people. An equivalent statement
in the science of nutrition would note that “regardless of the chosen diet,
people must eat to avoid starvation.” As if we didn’t know that!
The science of self-directed work teams (SDWT) resides in the
realization that chance and stewardship are different sides of the same
coin. Admitting to the obvious truth of infinite human variation
dismantles the notion of being able to truly control people. If not by their
actions, surely in their minds and attitudes, people resent being told what
to do. They much prefer to be taught how something works and apply
their unique talents and strengths to manage the assignment. Leaders who
understand and respect individual differences use diversity to create
value—allowing the insights of others to create superior approaches. This
was the case when our “A-Crew” decided to buy T-shirts with target
production numbers boldly printed on the front. The idea was inspired by
leadership’s request to improve output and efficiency through awareness
and added care. In other words, leadership’s concerns became a fashion
statement. And it worked! Naturally, not one member of the leadership
group would’ve considered this approach. In fact, they assumed that
traditional training would be required. Instead, the A-Crew’s shirts
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xiv Preface
Preface xv
xvi Preface
Acknowledgements
A
cknowledgements quite naturally begin with deep appreciation
to and for the people of Northern Pipe Products and our parent
company, the Otter Tail Corporation. To this day, our story
continues to evolve in full view of our shareholders, who justifiably
appreciate results and expect profitability as we experiment with new
methods to improve our working lives and realize our highest potential.
We are grateful for their recognition of our unique approach to open-
ness, transparency, trust, and communication.
Of course, it all starts at the top and as president of Northern Pipe
Products, Wayne Voorhees occupies the position and inherits the
results. He remained steadfast in this adventure and asked just the right
questions to motivate, encourage and offer guidance along the way.
Ken Doggett, human resource manager, continues to coach our teams
through their daily concerns, expressing his dedication to the better-
ment of our employees through action and involvement. Mark
Boutiette, production manager, deserves deep praise for having carried
the burden of traditional management training and experience into the
transition to self-direction. He, along with other key employees, who
initially struggled to come to terms with this new approach, are due a
special thank-you for their convert’s zeal and dedication.
Our employees are the heroes of this book. Unleashing their
potential continues to be a source of magic to us all. In that magic is
more than enough energy, inventiveness, strength, and frugality to
satisfy the most demanding customer within an increasingly
competitive marketplace. For every word contained in the pages that
follow are hundreds more in their own words that tell this story far
more eloquently than I could ever hope to do.
Kristin Munro stepped up to the plate on several occasions as this
book took shape, notably in the eleventh hour, volunteering her
organizational talents to the task of managing revision control and
xvii
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xviii Acknowledgements
Paul C. Palmes
Quality Assurance Director
November 2005
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Organization Chart
Northern Pipe Products
Fargo, North Dakota
Otter Tail
Corporation
A-Crew
Day Shift
D-Crew
Night Shift
xix
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Part I
The Old Culture
120 96.0
Part I:
The Old Culture
95.66
104.6
100 95.5
96.2 95.32
MI L L I O NS O F P O U NDS O F P I P E P RO DU C E D
90.3
80 3 4 95.0
P E R C E N T E FFI C I E NC Y
77.2
75.6
72.8
94.53 94.55
60 94.5
94.44 1 2
40 94.04 94.0
20 93.5
0 93.0
1999 2000 2001 2002 2003 2004
2005
1
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1
Welcome to Northern Pipe
N
orthern Pipe Products is located in an industrial park on the
north side of Fargo, North Dakota. Three blocks to the east,
Interstate 29 runs north to Canada, and just two miles south
intersects Interstate 94 and the east-west corridor from Illinois to
Montana. An average of 20 trucks a day leave the plant loaded with pipe
of all shapes, lengths, and colors. Green 8-inch sewer pipe and blue
12-inch C-905, used in municipal water systems and heavily regulated,
join approximately 300 other pipe products making their way to
distributors and contractors throughout the upper Midwest and Canada.
Northern Pipe is known for quality. Since the very beginning,
quality and operational improvements have influenced decision-
making within the company. In an otherwise low-tech industry,
Northern Pipe was one of the first to computerize extruder controls,
building its own—and eventually selling—control panels throughout
the country, even to competitors! The entire blending operation, also
automated, was designed and in use long before most other U.S. pipe
plants. Visitors to the plant invariably remark about the level of clean-
liness and the obvious care given to machinery and tool maintenance.
They have to be. Making PVC pipe profitably is a game of fractions.
Even with all the quality in the world, this is a commodity business
where the price of resin dictates the selling price. In a market upswing
it’s wine and roses, but when things go the other direction, so does
profitability. And when those profits are measured in fractions of a
penny, having control of operations is critical.
Here’s an example: The largest expense to a pipemaker is what’s
called overweight. The ideal length of pipe uses only enough material to
meet all the expected minimum specifications. However, in the real
world of pipe production, all pipe contains a bit more material than
required, yet the selling price remains unchanged. The degree of
variation inherent in the extruding process forces a responsible
3
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MAINTENANCE
Northern Pipe Products has, from its earliest days, valued “sharp” tools
to control costs. As a result, careful and detailed maintenance is a way
of life—an operational imperative that’s measured in several critical
areas. First and foremost, unanticipated machine downtime is considered
a major and unacceptable condition. The price of machine failure is
understood to have a negative effect on customers, reputation,
employees, and time forever lost—time that might otherwise have been
used to make pipe. Emergency repairs are typically short-lived,
primarily because parts rooms are well stocked. The contents of those
rooms are chosen carefully. Measurements are taken to determine what
best to have on hand in the event of failure so replacements can be made
in the least amount of time. The cost of maintenance, from overtime to
time required for special projects, is also measured and reported to top
management on a regular basis.
The machinery and their protectors, the maintenance staff, are
fiercely proud of their accomplishments. They are responsible for setting
up each production run because the degree of care in setup has a direct
impact on whether they’ll get called back to make further adjustments.
This was certainly the case in late 1998, when employees, skilled in
problem solving and experienced in the finer points of adjustment, were
few and hard to find.
So, driven by the need to make pipe continuously and within all
specifications, the maintenance department acted as the initial quality
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Tier 1
Maintenance Tier 2
Supervisor Tier 3 Skill
QC inspectors Packaging Required
lasting supervisor was someone who could repair and adjust machinery
without having to call maintenance for assistance.
QUALITY
From the start, Northern Pipe Products has maintained two mottos,
both of which are considered mutually supportive:
• Keep the line running
• The quality name in PVC pipe
It might have been more appropriate to simply say, “Keep the line
running in order to make quality PVC pipe,” but it so happens that each
is a separate science.
To our customers, quality PVC pipe has several subjective charac-
teristics. A high-gloss white appearance is perhaps the primary of these,
and the most difficult to achieve. The extrusion process essentially melts
raw materials such as resin, wax, stabilizers, and other inert ingredients,
which, as they blend together, create a molten mass that’s pushed through
a round die to become pipe. However, at maximum melt, best use of
formula and at fastest extruder speed, the product will normally appear
dull with a yellowish cast. Northern Pipe Products must go beyond
standard practices to achieve a stronger, more attractive product than its
competitors. In the early days of our industry, yellowing PVC was often
an indication of brittleness and perhaps outdated product. While time
and improved formulations have largely eliminated any connection
between surface appearance and overall acceptability, public perception
remains unchanged.
In fact, Northern Pipe Products are not only gloss white; they also
have a longer-than-normal bell—another customer expectation that
makes installation easier and, with normal expansion and contraction,
reduces the chance of failure over time. Northern Pipe Products also
require minimal insertion force (compared to competitors’ products) and
are capable of withstanding very high flex and pressure demands. All
of these characteristics are product differentiators and workmanship
targets that remain centermost in daily practice, inspection and testing.
But, given the small margin of profitability mentioned earlier, these
characteristics carry a price that is only acceptable through tight process
control. Every nuance, each and every control point and setting, has to be
understood in relation to all the others in the complex chain of events in
the extrusion process. Once again, this is not a job for amateurs. Instead,
the expertise of Tier 1 and 2 maintenance and supervisory staff was
primarily entrusted with the work of maintaining Northern Pipe’s
reputation and competitive advantage.
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TESTING
“Pipe,” as a customer once told us, “is supposed to have only two holes—
one at each end!” It is every pipe manufacturer’s nightmare to learn that
somehow they exceeded the maximum allowable number of openings.
Most often, these are one-time instances where a piece of foreign matter
becomes imbedded in the pipe wall and under pressure is blown or
washed out, creating a leak. Finding and replacing the defective section is
a costly and wasteful exercise; the expense is most often assessed to the
manufacturer. Early in its history, Northern Pipe Products began a testing
program to ward off such claims. To reduce risk even further, test
parameters were developed that go beyond industry minimums. Crush
and burst testing, for example, are basic to the industry, but at Northern
Pipe Products, the degree of stress applied to samples is typically in the
range of 140 percent to 170 percent of required minimums. Frequency of
testing, especially with thin-wall products, is also above industry norms.
Testing is a requirement of several regulations that apply to the
manufacture of PVC pipe. The production of potable water pipe, for
example, involves many stringent health-related standards and
regulations. In fact, if you look carefully at a manufacturer’s pipe code
(the printing that appears on the side of each stick of pipe), you’ll notice
quite a few industry watchdog logos and references to applicable sections
of industry and government regulations.
Testing pipe requires training, special tools, and accurate record
keeping. Regulators’ inspectors are regular visitors to the plant (one a
month is not uncommon), and those records are first priority items
during the audit.
In order to protect Northern Pipe Products from itself and from
outside regulators, a class of experts grew to occupy a favored status in
much the same manner as the maintenance staff. Called QC inspectors,
they were responsible for overall quality inspection and testing during
each shift. Their tools and records were under lock and key. Of course,
their job naturally required strong partnership with the shift supervisor,
who was charged with overall quality control. Together, the QC
inspectors and the shift supervisor had complete responsibility for
product acceptability. As was the case with maintenance, specialized
knowledge and experience defined the QC inspector’s position within
the company; they were involved, but also above the work of the lowest
tier workers who palletized or otherwise packaged the pipe. Their
specialization was considered a necessity, just as the skilled mechanic
brought his expertise to bear in a highly compartmentalized function.
QC inspectors carried out their responsibilities as experts among
experts, and watchdogs of the third tier, the palletizing workers.
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The same is true of any work in which the operator must be in one place
to perform a specific set of activities. Office workers and professionals
alike find their own “on-time free time” during the workday. The manu-
facturing worker differs from the clerk in the cubicle only in regard to
visibility and opportunity.
Making pipe, however, does not yield much free time. In fact, a
well-operated extrusion line requires workers to move beyond the
basics of establishing a rhythm to attain much deeper levels of
concentration. The best operators are curious about the process and
enjoy the challenge of maximizing output and efficiency—something
that comes with experience and self-confidence.
Developing that confidence with the handicap of Tier 3 status was
a hard assignment in 1998, starting with the concentration of power,
authority, and responsibility in the hands of the maintenance and
supervisory staff. The lowest on the totem pole, Tier 3 workers were
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PEOPLE
Mechanical resources were the first priority in the late 90s. It’s no
wonder that several new employees excused themselves at the 2 p.m.
break and never returned. In fact, the rate of turnover among new
employees was so high that most were treated as if they were expected
to leave! As a result, people didn’t go out of their way to welcome a new
employee, let alone strike up a conversation on their first day or for
several days thereafter. Production blamed HR for setting the bar too
low when screening applicants. HR blamed production for scaring
away anyone with an ounce of promise. People skills was a phrase too
often spoken as if it were an oxymoron, which was sadly true. In fact,
the three-tier hierarchy was designed to accomplish anything but
nurturing skillful decision-making, empowering employees, or
developing a healthy team of workers. Instead, it was dedicated to the
hard assets, the machinery that truly occupied the uppermost tier and all
the attention of a four-tier system as depicted in Figure 1.4.
Tier 2
Maintenance Tier 3
Attention
Supervisor Tier 4 Given
QC inspectors Packaging
Little wonder that turnover was high, morale low, quality improve-
ments few, and newcomers shunned and unwelcome. The people were
first to grasp that they were last, even though this was never a conscious
operational decision. A degree of top-management concern was suffi-
ciently evident within the company to convince many people to stay
and fight the good fight. But a sense of helplessness and resignation in
the face of constant turnover had a chilling effect on just about every
major decision. Regardless of the subject, sooner or later someone
would remark about the inability to hire and hold onto people long
enough to recover the investment of training them, whether a potential
machine upgrade would be technically beyond the average worker’s
H1270_Palmes_01Chap.qxd 1/24/06 11:58 AM Page 11
capabilities, or if the potential for damage was too high to entrust expen-
sive equipment to unsophisticated and marginally trained people.
In their landmark book, The Discipline of Market Leaders,1 Michael
Treacy and Fred Wiersema argue that there are really only three primary
types of businesses, represented as separate points of a triangle. Most
important is that each business type requires a different approach,
structure, and reporting system. The first is customer intimate, where
personal service and special attention to each customer is common-
place. The second is technologically advanced. These companies are
designing and producing products that are ahead of their time—
revolutionary and exciting stuff that often renders the competition’s
products obsolete. Last in the group are the operationally efficient types
that concentrate most of their resources on throughput. They know how
to move products and are constantly trimming time and other resources
from daily operations to accomplish more with less.
Northern Pipe Products was, and to a great extent still is, opera-
tionally efficient. The true Tier 1, manufacturing machinery, is at the
core of our success. Other than sales figures, most reports detail how
much and how fast pipe was produced on any given day. While we
have very loyal customers, they also buy from our competitors on a
regular basis strictly because of price. As a relatively small operation,
surrounded by giant competitors in a volatile industry, operating
efficiently makes it possible to at least be in command of something. At
Northern Pipe Products, everyone’s attention was on the machinery,
and upon reflection, the employees followed suit.
This is a story of how Northern Pipe Products changed a mechanistic,
four-tier structure into an organic, molecular organization where people
are entrusted to control their work, and leaders serve as coaches and
resource providers. We made more than a few course changes, revising
the program numerous times and, while we hope that you might learn
from some of our mistakes, it was necessary that we made them.
The vision of what we’ve become was, for many years, a dream of
Wayne Voorhees. And while it may have taken years, his patience and
subtle guidance was a source of strength to each of us along the way.
Patient, subtle guidance is essential, but that comes much later.
First, you have to let go!
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2
Wrong Models
D
emanding, strong, crude, or demeaning bosses often have
learned behaviors from a role model who bullied people into
doing things by fear, coercion, and intimidation. Autocratic
leadership, expressed as, “My way or the highway!” is deeply
embedded in the negative expectations and experience of most workers.
But that management style just doesn’t work anymore. In fact, it
takes more effort to sustain this type of leadership than it does to give
workers the authority to manage their own work. It’s harder for a single
individual to push others than to be pulled by the group. And, as you
will see, positive results greatly surpass anything accomplished
through strong-arm tactics. The notion of “park your brain at the door”
(and do what I tell you to do!) is no longer valid in the information age.
In a world of public education, the Internet and television, the average
worker is simply not the same as the 19th-century immigrant with
limited skills and minimal expectations. Ultimately, the 19th-century
model led to the appeal of unions as stewards of their collective rights
in the workplace. Members of the information age, today’s workers are
far more aware of their individual rights, talents, strengths and
aspirations. Today’s workers want to participate and do good work.
But regardless of the latest book, news story, or testimonial, the
hardest thing for most managers and supervisors to do is to let them.
Make no mistake, this is going to take a managerial paradigm shift on
the same plane as a religious conversion or resolution of a midlife crisis.
Know this: The whole subject of self-direction requires major adjustments
by management—more than by those who report to them.
Northern Pipe Products had to arrive at a point where we simply
were unable to accept or continue what was happening around us.
Wayne Voorhees, Ken Doggett, Mark Boutiette, and I were too often
upset at our conditions, our staff, our processes, our supervisors, or
each other. But whenever one or more of us brought our concerns to the
13
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Time
But notice that management and the work force are initially
divided—separated by the traditional leader/follower model. Managers
are committed, while workers must make changes to accomplish what
management has decided they must do. Conversely, workers are rarely
committed from the start. Most change programs are begun reluctantly,
and commitment is more show than substance. But, given time,
especially if things work as planned, people naturally become committed.
And as this happens, management finds itself having to change! If
only because a committed and changed workforce brings new things
for top management to decide, decision-makers at some point find
themselves having to regularly respond to and incorporate the results of
the program. They are the last to change.
This is exactly what happened when the former owner of Northern
Pipe Products faced one worker’s questions in regard to an item in the
original employee manual. You will remember that the founder, inspired
by the advice of a lawyer, became committed to the need for an
employee manual. The employee was at first put off by legalese, but
eventually changed his assessment through use and familiarity with the
new tool (something he was directed to read and understand). The day
he challenged management to deliver on its promises was a stark
moment of disclosure, and the change/commitment scorecard was
updated to read: “Workers 1, Management 0.” Prior to that moment, the
working staff thought the score was even—that management would not
require change of them if not for both having changed and become
committed to the new program themselves.
Management occasionally unveils initially high-commitment initia-
tives that produce less-than-desired performance. Waning commitment,
however, is readily apparent to staff members in all organizations.
Often, they are first to sense diminishing enthusiasm from their leaders.
In this event, the employee manual question would never have
surfaced. In its place would be the classic complaint of corporate life,
“Another Flavor of the Month!”
To the extent that change is physical, commitment is intellectual.
Traditional management imagines a better future, enlightens and
energizes its key players, and then relies on staff to build it. Stripped of
all the trappings, this ultimately results in leadership telling people
what to do.
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LETTING GO
Transitioning from an organization that orders people around to one
that allows them to make their own decisions turns traditional
management on its head! Instead of directing others, the transitioned
management group (this was true in our case) progresses through the
following phases:
1. Feel: Awareness grew first in the gut. We were walking in a
circle. Corrective actions didn’t take hold, and no one really
thought they would in the first place. We felt helpless,
demoralized, even angry about the callousness, lack of
respect, and low quality of life in our work environment.
2. Think: Once we exhausted all the “likely suspects,” the people
and processes most often found wanting, it dawned on us that
we were the only ones left to blame. Talk about change! The
one constant regarding all past performance was that we
delegated responsibility to everyone but ourselves.
3. Act: Not a tough decision, and not difficult to implement, we
not they had to embrace all the above and take charge of the
turnaround. Our hands needed to get dirty, our ears had to
hear these problems, and our answers had to follow in
real time, face to face, not filtered through layers of middle
managers and supervisors.
4. Admit: These are both simple and difficult, and both flow from
the above observations:
a. No matter how much management tried to help our
supervisory staff to shift our cultural gears, the company’s
transmission remained stuck in neutral.
b. Although unsure of exactly how to proceed because of a
history of partially successful programs, in order to move
forward we needed to take the driver’s seat ourselves,
place our hand on the shift lever, and calmly, humbly,
but confidently ask our passengers what to do next.
1999
Many of Northern Pipe’s initial changes were designed to improve
basic communication:
• An “in-out” board was added to the lobby wall for sales and
management team members to record and make visible their
whereabouts.
• Internal e-mail addresses and messaging was established and
training provided to management, office, and sales staff.
• Computer workstations were installed on each extrusion line,
and operators’ names were added to the company e-mail post
office listing.
• Operators were trained on basic computer skills, how to
send and reply to e-mail messages, and given introductory
classes in navigating through word processing and spread-
sheet applications.
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SALES
But some things didn’t change. For 17 years the sales department was
at the top of the food chain. With years of too few line workers amount-
ing to anything of significance, it was natural that they assumed
nothing would ever change. Their habit of taking a break by standing at
the periphery, smoking cigarettes, and watching workers sweat through
15 minutes of their day, often without even acknowledging them, was
developed over time. In fact, within a small but vocal group in the sales
department, ISO was just another in a string of improvement initiatives
that represented a waste of time and money; it would die away sooner
or later due to lack of follow-through or the introduction of some other
new idea. I wrote the following memo in early 2000. It was distributed
and discussed among the sales staff with their director:
costs and delivery time. What they said they wanted in the first
place was the equivalent to diamonds, but when they see how
much it costs, suddenly they want the same look and function-
ality for the price of glass. So then it’s time for the redesign
phase. Every engineer knows that’s the same thing as planning
to build a better boat as the stream carries you closer and closer
to the rapids. They want it cheaper, they want it tested, they
want it to do everything, but they still want it by the original
date! Engineers are used to working on designs as the date for
production draws closer and closer.
Then, there’s the production group. They know some new
project is coming because the top brass are so quick to brag
about all the money “everyone’s going to share!” Seems like
every day they have to remind engineering that time’s running
out to build the tooling or order materials. The engineering staff
has to take it from both sides as the heat builds up to produce
the most in the fastest time for the least money. After awhile it
feels like all they do is to take care of whiners. Stuck in the
middle isn’t really the most fun place to be, and XYZ
Corporation engineering learned the hard way not to trust
some new program that’s supposed to make everyone sud-
denly get along and work as a team.
It’s always the same, they said. Get some posters, have
some stupid meetings, and give out some cheap awards for
marginal improvements. In a month or two it’s back to the same
games. Didn’t anyone realize, they thought, that without their
brainpower and design smarts, there would be no XYZ
Corporation in the first place?! The company was founded on
design, after all! The company name itself, stands for technical
excellence, not production, who never appreciated designs, but
just complained about how tough they were to build. Not
purchasing either, who made a religious rite out of buying
substandard components, barely at the bottom of tolerances,
just to save a penny. “So please,” they said through their
behavior, “play your games without us because we have real
work to do!”
The chief operating officer spoke to me about the day he
sat down with the engineering department manager in his
office. His message was simple. He said that he realized the
engineering department felt they were responsible for the
success of the company, and asked the manager if he agreed. At
first, he hesitated. To agree might sound conceited. But it was
the truth, he finally said, when you take away all the hype and
talk about everything and everyone acting as “one big family.”
The COO then asked him if he and his staff were being paid
enough to carry that burden every day. I’m told the manager
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didn’t know what to say. And with that, the COO simply
walked out of the manager’s office. But before he cleared the
door, he turned back and told him that while he appreciated all
the concern for saving the company, there were lots of others
throughout the organization that wanted the chance to help out.
And as long as he and his staff kept possession of all that stress,
there wouldn’t be any way they could understand how to work
with others and share the load.
The next day, they talked again. This time, though, the
manager came to the COO’s office. Frustrated, he looked at him
and blurted out, “Just what do you want?!”
“Your best, just like always!” was the COO’s reply. “Just
share some of it along the way with the rest of us. No one
person or department deserves to carry the whole weight of
this company’s success on their shoulders. Maybe in the past
that was necessary, but in the process your group isolated itself
from everyone. While you don’t believe it, things have changed
around here, and it’s because of your isolation that you can’t
see it.
“Start with production. Ask for them to help by working
with them and the client as a team. Make production part of the
design process so they can’t complain about deadlines; instead,
they will plan more effectively because they can see the whole
picture. They’ll also better understand the difficulties you’ve had
to face alone in dealing with clients.
“As the design develops, include purchasing. Let them
hear what goes into the decision to use one type of component
or another. Have them order the prototype parts to open up the
time they may need to establish vendor contracts, and to also
insure that what you really intended to use for components
ends up in the final assembly.”
It took time, but more importantly, it took leadership and
patience. Engineering started to open up to other departments,
and before long there were a few successes. Little things, really,
but enough that the engineering staff started to relax and listen
to others outside their department. The biggest breakthrough
came when one day someone on a design team from the
assembly line mentioned that the prototype could be packaged
upside down and save lots of time and effort. Engineers who
once had to think of everything suddenly realized that genius
wasn’t only found in their department.
Today, a typical design, initial build, and shipment takes half
the time it took to produce the design alone four years ago.
Customers love it; in fact have grown to expect it. Sales even takes
along an “Implementation Team” when they make their proposal.
They all explain what they need from the customer to insure that
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CASUALTIES
Our experience in turning around these perceptions did not work well
in the long run. Most of the previously mentioned vocal minority is no
longer with us, as is true of several others who chose to apply
stubbornness more than patience and objective observation.
They refused to change and therefore couldn’t commit.
The list of casualties eventually included the production manager
and several supervisors. Even though self-direction hadn’t even begun,
the foundational work of ISO process and system management,
improved communication, and workers taking greater responsibility
was too threatening, too difficult to remember, or presented uncom-
fortable challenges. For whatever reason, the period between early 1999
and mid 2000 represents an even mix of success and confusion, but the
groundwork remained. Those who could let go past sins and disap-
pointments and begin to work with others more effectively experienced
positive results. Unfortunately (or fortunately, for the rest of us), those
who nurtured past discretions they couldn’t forgive found themselves
working in a place that no longer tolerated or understood their predict-
able negativism. A last major casualty, one that in retrospect was a
welcome event and the subject of the next chapter, characterized the
period from mid 2000 to the birth of a planned pilot program for self-
directed production in 2002.
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3
The Failure of Half Measures
MIDDLE MANAGEMENT
Chapter 1 made clear that Northern Pipe Products’ supervisors were
primarily responsible for maintaining the highest product quality and
maximum machine output. More often than not, the best way to accom-
plish both was with a wrench in one hand. Adjustments and minor
repairs were expected to command a supervisor’s time throughout the
shift. With the new call for training and improved communication came
the obvious need to help supervisors make the transition to a more
inclusive and open leadership style.
In late 2000 Ken Doggett, HR manager, Mark Boutiette, production
manager, and I developed a series of six formal training classes for
production supervisors. These classes were held at the Otter Tail
Corporation’s headquarters conference room approximately every two
or three weeks from 6 to 9 p.m. The class text was The Team Handbook,1
and many sections were utilized during months of training and regular
homework assignments.
THE VISION
One of our first assignments was to draft a new vision. We challenged our
group of supervisors to recognize how difficult change can be without a
clear vision of what things will look like once change takes hold.
The foundation of Steven Covey’s 7 Habits of Highly Successful
People 2 is “begin with the end in mind.” If you can’t see it, you won’t
know when you’ve arrived. If you can’t imagine the quality of life, the
benefits, the look and feel of the destination, how can you plan the trip?
The end result is just that. At the end, what will be the result?
Knowing where you’re going also provides an opportunity to measure
progress toward the destination. Travel from Miami to Minneapolis in
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Not only were we excited by our work that evening, but when we
reread our vision it became clear that we’d already begun what we set
out to become! The magic had taken hold, as if all it took to accomplish
a major cultural upgrade was to believe in a “new future.” Of course,
our naïve exuberance was soon to be tested by our lack of experience
and the truth contained in the phrase, “Wishing does not make it so.”
The following days and weeks were business as usual. Demanding
schedules and missing employees continued to pull us away from our
ability to control the present, let alone create a new future. Habits
formed over too many years were easier to use than new theories,
philosophies, visions, or operating models.
Most important, the belief that autocratic supervisors can change to
an inclusive management style turned out to be unworkable in an
environment where workers relied on the safety of being told what to
do. Training supervisors alone was a mistake—what we now see as a
“half-measure.” Changing an entire culture is an all-inclusive exercise—
something we learned the hard way. Our supervisors were perhaps
disproportionately challenged to become different people, to manage as
coaches and mentors while weighted down by years of practice and
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Soon after Bob joined the company, and along with his assistance
and support, Ken Doggett distributed the following memo to everyone
in production:
THE A-CREW
This was the start of the A-Crew, a group of dedicated employees that
ultimately revolutionized how we work together, and paved the way to
efficiency and productivity improvements that no one could’ve
imagined in early 2002. In large measure this is their story, though what
they discovered was also adapted and improved upon by others within
Northern Pipe Products. The training and nurturing of A-Crew brings
us to Part II of this story and the transition from the limited success of
parts and machinery to the unlimited potential of people, including
ourselves.
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Part II
Out of the Darkness
120 96.0
Part II:
Out of the Darkness
95.66
104.6
100 95.5
96.2 95.32
MI L L I O NS O F P O U NDS O F P I P E P RO DU C E D
90.3
80 3 4 95.0
P E R C E NT E FFI C I E N C Y
77.2
75.6
72.8
94.53 94.55
60 94.5
94.44 1 2
40 94.04 94.0
20 93.5
0 93.0
1999 2000 2001 2002 2003 2004
2005
35
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4
The A-Team
I
f you were alive in the 80s, you were aware of Mr. T and the other
characters in a weekly action-adventure TV show called, The
A-Team. Mr. T was brusque, tough, and mean-mannered to the
point of appearing perpetually angry. Each episode would feature a
segment, however, where the rough-and-tumble Mr. T would save a
kitten or help an elderly woman across the street in a Hollywood
minute designed to portray his softer side. At Northern Pipe Products,
we had 14 Mr. Ts in each of our four crews. And, truth be told, several
of those were ladies.
With a new sense of order and use of the process approach through
application of ISO 9001:2000, the plant was a better place to work in
2002. Our ISO program was actually developed and first registered in
late 1999, but many of the expected 2000 revision’s elements were
already built into our system. We also undertook a fairly aggressive
Five-Pillars program that went a long way toward changing the look
and feel of the plant floor. Wayne refers to our ISO development process
and the pride brought about by registration as one of many stepping-
stones in the progression of events necessary to bring us to the point
where self-direction was possible.
However, we were still far from an open and empowering environ-
ment on the plant floor. The addition of women into the crew mix
during the timeframe from 2000 to 2002 had a softening effect.
Improved plant conditions and processes designed to reduce confusion
created a certain momentum and believability in regard to
accomplishing what we set out to do. So, by the time the A-Crew was
ready to begin training, there were four women and eight men ready to
take this new work concept for a spin. Ken, Mark, and I retooled the
materials we previously used with the supervisors and walked into the
training facility with high hopes and expectations.
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With all the potential for good that’s contained in the bulleted items
above, it’s startling to realize that most values, vision, and mission
statements are dull, excessively wordy, uninspiring, and written as if
the real reason for the company’s existence is to “provide value for its
shareholders” (whatever that means)!
To endorse, promote, and support self-direction is a far greater cultural
statement than proclaiming openness and honesty in a values statement.
Self-directed people are faced with having to apply, be accountable to, and
work within their company’s stated values. The process of training and
mentoring Northern Pipe’s self-directed teams made clear that without
strong, relevant, and well-stated company values, vision, and mission
statements, we would have been at a decided disadvantage.
Little wonder that throughout the entire two days of training, the
“filler slide” was our values, vision, and mission statements:
Values
• We place our highest value in the limitless potential of people.
Provided opportunity, we will accomplish extraordinary things.
• We are honest and fair.
• We are open about our performance and expect our people to
contribute their intellect as well as their strength toward our success.
• We believe strongly in the products we provide, and we are
passionate in our desire to make them ever better.
Vision
• Create a company whose name is the industry benchmark for the
products and services we deliver.
Mission
• Growth. Build and/or acquire pipe plants in the Western half of the
Americas to provide diversified plastics products in several markets
to better control our profits and our future.
ARISTOTLE
Issues and concepts from an excellent book by Tom Morris, If Aristotle
Ran General Motors, were floating through our conversations before and
during the initial A-Crew training. I remember quoting several sections,
the first of which challenged the group to recognize how the manner in
which we talk to each other communicates much more than the words
we use. Morris summarizes the work of Martin Buber’s book, I and
Thou, as follows:
“Buber explains that there are basically two fundamental
relationships that can exist between you and another individual
entity in this world. First, there is the I-It relation. This is a way
of relating to something as a thing, or object, whose only value
is extrinsic or instrumental. When you stand in the I-It relation
to something, you value it only insofar as it serves your
purposes. This is the relationship you have toward a cup whose
only value consists in its ability to hold the water you’re
drinking and to convey that drink in an efficient way to your
mouth. This is the relationship you have with a copy machine
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LETTING GO
The biggest gamble was, and to this day remains, the human element.
Opening up and letting go of manipulating people and information for
predetermined outcomes is the opposite of how a traditional manager
operates. If you are a traditionalist and find this to be true, then allow-
ing an entire group of people to decide the right thing to do, at their
own pace without interference, is a tremendous risk. If all this sounds
genuine and real, imagine the potential for success of a team whose
coach refuses to allow his players to develop at their own pace. Instead,
he demands that his players run, think, and react beyond their
capabilities. He sets the bar. Their success depends on his assessment of
their ability to succeed. He’s in control. It’s his game plan, his team, his
reputation, and his legacy as a coach that takes first place in the
development of a winning team. Where would they be without him?
In a real sense, they’d be right where they are—on the very same
team. But now they’d have to work together to win. No longer is a
single voice, a single opinion, or a single self-serving reputation and
desire driving them to improved performance. They no longer want or
need the approval of one individual; they want all individuals to know
that their contribution was an important addition to the team’s success.
A team coach understands that in the end it’s all about the players.
Celebrity CEOs and hot-ticket MBAs with all the answers may never
INITIAL TRAINING
The following agendas embody our choice of study and concentration for
the A-Crew’s initial training during the period from March 13th through
March 26th, 2002. We began with Fish!,3 a wonderful program (book and
video) about a Seattle fishmonger who turned work into play. In fact, we
used the Fish! tape several times as an energizer during these classes.
Training Agendas
Empowerment Training
• Seminar – Empowerment within the Team! (4 hrs.)
• Understanding – Pride, Trust, Relationships, Ownership,
Commitment! Team member or business partner.
Communication Training
• Seminar – Effective communication skills. Writing, speaking
and listening. (4 hrs.)
• New Language – Team leader versus supervisor, team member,
or associate versus employee, etc.
Vicki Stainbrook
Vicki Stainbrook was, and still is, a member of the A-Crew. Her comments
about the benefits of our training program:
“The training was awesome. So much energy. We really saw
what SDWT could be like and we were all into this new
concept. It was a chance to do something new, something
totally different. Training also forced us to look inside ourselves
and see who we were, compared to who we could be and what
we could bring to NPP if we wanted to. This was a concept
that’s totally different than most of us were used to. No one
ever asked us for that kind of input before.”
Now, there is a huge trust factor. It’s a major thing with our
crew. Granted, we still have moments with some people, but
then again, who doesn’t? I think our trust as a team and us
being together as a team is really good. We work well together.
And if there’s a problem, we bring it up, as a team, and solve
the problem, as a team.
The Fish book was really good. Definitely the Fish book!
I remember, we were talking to Ken Doggett about that section
in the Fish story about outsiders looking in. This was about the
“yogurt dudes” who came down from their office buildings to
just watch them selling fish during their lunch hour.
Well, there’s still these different rankings in Northern
Pipe—sales is up here, and production is down there, you
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TRAINING PARTICULARS
Any of the previous training headings can be entered into an Internet
search engine to generate answers to content and approach. That’s what
we did. When topics from books or discussions among Wayne, Ken,
Mark, and myself led us to look elsewhere for greater depth or concrete
examples, the Internet was our greatest ally. In retrospect, and given the
power of this entire effort as a home-grown exercise, this was the best
thing we might have done to develop content and confidence as
instructors.
Having developed our own training, our examples were highly
specific to the work we do and our major challenges. The first real
application of self-direction was, for example, the wholesale
restructuring of shift meetings and the process of including the team in
determining job assignments.
In another display of direct application of training concepts, one
afternoon we placed $500 in cash on one of the student tables for use by
the team in whatever manner they chose. Imagine the reaction! Talking
about mutual accountability, trust, and respect between team members
and working together to solve mutual problems is no longer an
abstraction when the group faces questions such as:
• Who picks up the cash and takes responsibility for it?
• Where is the money to be deposited?
• How do we decide what to do with this money?
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5
In Their Own Words
P
receding chapters tell this story from a leader’s perspective. I
remember one member of our group in late 2000 remarked that
one day he realized none of his children would probably seek,
nor be encouraged to apply for, employment as a production worker.
Thus far, this has been a narrative of what we worked through to
reverse such self admonitions and take charge of what we came to
understand as an ethical responsibility to throw open the windows of
cultural change. What’s been missing is the reaction from those who
listened, questioned, built, and are responsible for present conditions in
the plant—the people who must live with and constantly improve the
results of their own decisions.
In June of 2005, I asked two team leaders, Corey Perryman and
Tammy Blotsky, to talk about self-direction. Following is a summary of
their response. (The discussion was largely unstructured and rambled
from one topic to the next; subject headings have been added to enhance
readability.)
49
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something to the person and resolve these issues rather than blowing
them off or going to a higher-up person and asking them to take care of
the problem. I guess you could say it’s about getting people to not be
afraid. For a long time, people would complain about things, and I
would bring it up in our meeting—put it out on the table—and we
would start discussing it. But then it got to the point where I was looked
at as the bad person because I was always having to do that. So now
when people complain to me, I make notes on what the complaints are,
who said them, and when we are in a meeting I’ll call these people by
name and ask that they talk about the issue. Its helping, but we still
have a way to go.
“But even with all that, self-direction is an absolutely wonderful
thing. It truly makes people aware of their coworkers. Being self-
directed, they know they have to evaluate each other, so people are
stepping up more…you know that the guy working next to you—he
could be part of my evaluation! The old way…if the supervisor liked
you, that would weigh pretty heavy during the evaluation. But in self-
direction, if you aren’t doing your job, you have 12 or 13 people out here
who will see that right away. It’s a great opportunity for every crew and
crew member out here.”
Tammy Blotsky: “I agree. I like it…and you don’t have to go by the NPP
policy manual; you can make your own rules and everybody has a say
in making the rules and other input. I may look up to the go-to person,
the team lead, but you’ve got to do your own thing when you’re in a
meeting—you don’t just sit there. Everybody has their own input.”
“The old way, no wonder you got people who weren’t necessarily
of your way of thinking. Recently, I got to work with another crew.
During the hiring process, we rotated through the interviewers with
folks who were with the crew only a short time. They thought that was
neat—being involved with hiring somebody so soon after they were
hired themselves…. That’s why we stress the importance of speaking
up—because they may see an easier way of doing something. Being
vocal is very important. Sometimes you can tell if a person is going to
have that potential. Some people just want to stay at one level. Others,
you can tell if they are asking lots of questions and wanting to get
involved. I’m getting a lot better at showing people as well. Sometimes,
I’m intimidated myself, but I think it’s great.”
Termination
Tammy Blotsky: “When someone starts on the team, I explain what we
do and tell them that they have the same say as any other team member
when working with, helping, reprimanding, and even terminating
other team members. Some people think it’s neat, some are really
intimidated; especially when needing to let someone go. It was shocking
to me. I didn’t know we could actually do that. ‘I get to voice my
opinion on whether I want this person on the crew?’ It was shocking!
I remember that I had been here only 12 hours and I had to face that.”
Corey Perryman: “This all starts with the SDWT questionnaire. Every
person who comes in…the thing they mark themselves the lowest on is
their ability to fire or reprimand somebody. This form is filled out when
they fill out an application, and it is then given to the crews to help them
out during the interview process. I get a lot of ‘wow, I can’t believe you
do that here’ reactions as well.
“Every person scores themselves real low on their comfort level
with hiring and firing others. They never had to do this before in a
previous job. It’s new to them. It’s a big responsibility. It can be an
intimidating thing for people coming in here, thinking, ‘I’m a new
person, and I’m going to have an equal say to someone that’s been here
for 15 years.’ They just want to fit in, and often vote how they think the
crew would want them to vote. It takes a while for people to be able to
speak up and do what they want, instead of doing what they think the
crew wants. That’s what it was like for them at their old job. They were
expected to go with the flow. Now, when they come in here, it’s like they
don’t believe us initially.”
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EVALUATIONS
Tammy Blotsky: “Everyone is going to evaluate each other. That’s the best
motivation tool. When you are working alongside someone else and you
know that in six months, they are going to be telling the whole crew
whether they think I’m doing a good job or not; that forces people to step
up and be honest. In our evaluations, you evaluate yourself first before
the rest of the crew does. So it forces you to be very honest with yourself.
Because if you’re not, you are definitely going to get called out on it!”
RESPONSIBILITY
Corey Perryman: “The difference between the old way and self-directed
is huge! We’re all responsible for what goes on when we are working
here. We used to write our individual names on the production test
sheets for the line we were running. We don’t do that now—we write
A-Crew. If something happens on Line 1, the Line 1 operator isn’t the
only one responsible—A-Crew is! Everyone is accountable. Everyone
has raised their bar. No longer are problems just taken out on the
supervisor. The crew sees that there are now consequences to not
stepping up, and we are rewarded for stepping up.”
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Tammy Blotsky: “Who is the weakest link? We’ve had that conversation
lots of times. We then work with that person so that they aren’t the
weakest link. We want everyone to be an equal participant. The old way,
if someone made regrind on Line 8 for six hours, it was, ‘Thank God
that wasn’t my line! That’s not my problem!’ Now, people start
questioning what happened—everyone from the line operator to lead
staff. ‘What is with the problems over there?’ We discuss it during our
pre-shift meeting: ‘You need to step it up; you’d better step up inspec-
tion, or output, or whatever.’
“The old way, we would have looked at management to fix things
or just blamed the operator and thought, ‘What a jerk!’ Now that
everybody has equal say for everything, everyone appreciates the issues
and takes responsibility as a team to fix things.”
IS IT WORKING?
Corey Perryman: “I think success at NPP is summed up by everyone
becoming self-directed. When we first started, people laughed about it
and said it won’t work. Now they see that it is working. Crews are
combining numbers. They are pushing each other to work that much
better. You don’t want to be responsible for not making 95/3/2.1 It
forces everyone to raise their game to another level. Peer recognition.
You recognize what a poor job on your part will do to the rest of the
organization.”
Tammy Blotsky: “If you don’t care, we will do our best to find you work
elsewhere. We want someone who wants to work and will care. Peer
pressure is a big deal—getting people to contribute. The fact that you
are being rewarded as a crew is a neat thing. Managers give out small
monetary rewards—but that’s not as big of a thing as verbal recognition
like hearing, ‘The plant is running great!’ Praises from those guys
(managers) are rewarding to us.
“I think a big thing is that everyone attends company meetings, and
managers talk to other NPP employees face to face. Night crew attends
these meetings, too, by sending representatives.”
TOOLS
Corey and Tammy referenced several tools in the preceding narratives
that have become staples in the design and maintenance of self-
direction at Northern Pipe Products. The most recent iterations of each
tool are included on the following pages. Each was conceived and
originally written by HR director, Ken Doggett. The old notion of
human resources as primarily a clerical and recruitment function ended
with the dawn of self-direction at Northern Pipe Products. In the
current era, Ken remains the primary mentor to each team and
maintains daily, direct contact with team members. None of the
following is considered complete. All are subject to change in the event
that the team decides to explore new territory in the name of
improvement. As such, each is therefore a “work in progress.”
A-CREW CHARTER
The following are several excerpts from the A-Crew charter. Notice that
content is relatively free-flowing, and the language is their own. Ken
Doggett and Mark Boutiette continue to work with all teams within the
company to revise and improve their charters.
Mission
Our mission is to set an example. If we work together to solve our own
problems with conviction and the right attitude, it will become a
“mission possible.” Just think about it—if we work and live as a self-
directed work team, what a better life this would be!
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Attendance
Team attendance requirements will be governed by NPP’s current
absenteeism policy. (See NPP company policy manual.)
Team members are responsible for notifying a team leader by 5 a.m.
should he/she be unable to report for work.
1st = verbal warning
2nd = written warning
3rd = suspension
Three written warnings for either attendance or tardiness issues
received within one year of receiving the second written warning will
result in termination.
A member of the team will record attendance daily.
Responsibilities include:
1. Record daily attendance and related notes.
2. Complete understanding of NPP’s attendance policy.
3. Communicate to team, individual’s substandard attendance
issues, document, and turn into the HR department for filing.
4. Provide team with attendance summary at team meetings.
Tardiness
Tardiness is considered reporting for work anytime after 5:45 a.m. If a
team member is tardy, their tardiness will be handled as follows:
1st occurrence within a 30-working-day period: Verbal Warning
2nd occurrence within a 30-working-day period: Written Warning
3rd occurrence within a 30-working-day period: 1-Day Suspension
(no pay)
4th occurrence within a 30-working-day period: Termination
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Team Meetings
Team meetings will be held once a month. The purpose is to allow the
team an opportunity to discuss and resolve team issues. Note: Failure to
attend will be considered an absence under the team’s attendance
guidelines, unless given prior notice.
The team will appoint a member who will be responsible for
assuring an agenda is prepared, based on issues and concerns of the
team, for each two-week meeting.
The team will appoint a note taker who will be responsible for
assuring accurate notes are taken and distributed to team members.
We will also do some training during our monthly meetings.
Team Staffing/Interviewing
The team will requisition, interview, check references, and hire team
replacements.
This will consist of a four-member team who will be appointed by
the team.
These individuals will assume these responsibilities for a period of
six months and then rotate throughout all members.
This team will also be responsible for communicating the team’s:
1. Values and mission statement
2. Team charter and agreement
3. Safety/risk management program
4. Scheduling orientation with NPP trainer
5. Introductions to rest of team
6. Other pertinent information as required
1. Based on the chart, identify which two team roles best describe how
you see yourself contributing to the team.
1. __________________________________________________________
Explain ____________________________________________________
2. __________________________________________________________
Explain ____________________________________________________
3. Read each ability, and circle the answer which best describes your
level of comfort in doing so.
(1 = very difficult and 5 = very comfortable)
1 2 3 4 5 Speak your mind in front of a team.
1 2 3 4 5 Confront team member about substandard performance.
1 2 3 4 5 Dismiss a member of the team.
1 2 3 4 5 Committed to the long-term success of team.
1 2 3 4 5 Actively participate in team issues and concerns.
1 2 3 4 5 Sharing your knowledge and area of expertise with
everyone.
4. Read each activity and circle the number which best describes your
level of contribution to a team.
(1 = little contribution and 5 = huge contribution.)
1 2 3 4 5 Generates lots of ideas.
1 2 3 4 5 Natural ability with interpreting data.
1 2 3 4 5 Skilled in organizing activities.
1 2 3 4 5 Diligent in monitoring performance and scheduling
deadlines.
1 2 3 4 5 Immediate action in event of serious accident or injury.
1 2 3 4 5 Communicates team vision and purpose regularly.
5. Summarize a situation where you successfully persuaded others to
do something or to see your point of view.
8. Name four things that you do in your job today, or have done in
past jobs, that would greatly benefit our organization.
1.
2.
3.
4.
10. Everyone has had a job they look back on and say “it was the best
job I ever had!” Share with us what that job was and what made it
the best job you ever had.
12. Pretend you own a business. You need to hire some people, but you
can ask candidates only three questions. What would they be, and why?
1.
2.
3.
Thank you!
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Evaluations
5 (highest)
to 1 (lowest)
Interpersonal Skills
Maintains objectivity and emotional control in stressful
situations.
Contributes to preventing or solving interpersonal conflict.
Performs all duties in a safe, efficient manner and observes
all appropriate company safety regulations.
5 (highest)
to 1 (lowest)
Production Task Skills – continued
Performs minor maintenance tasks to include routine
equipment cleaning.
Teamwork Skills
Takes initiative to assist other personnel in plant
functions as required.
Promotes and maintains positive, cooperative
working relationships with all plant employees.
Executes the production schedule in which jobs are
performed in sequence, according to schedule.
Takes breaks in a timely manner while considering
the workload of fellow team members and ongoing
production-floor responsibilities.
Please feel free to write any comments or concerns on the back of this page.
Management’s Turn
When midday arrived and the conference room began to fill as it
normally does for these monthly meetings, the leadership group intro-
duced ourselves to our newest employee. John was accompanied by
several members of his new “crew,” and we learned that while he did
well on Line 2, it was still uncertain whether pipe making would turn
out to be his true calling in life.
It was then time for leaders to summarize the financial results of the
prior month and year to date for our employees. In turn, Northern Pipe
Products employees are expected to ask questions about financial
results, company programs, and strategic decisions. All this occurred as
Palmes_05Chap-r2.qxd 1/24/06 1:39 PM Page 66
Part III
A New Commitment
120 96.0
Part III:
A New
Commitment
95.66
104.6
100 95.5
96.2 95.32
M I L L I O N S O F P O U N DS O F P I P E P RO DU C E D
90.3
80 3 4 95.0
P E R C E N T E FFI C I E NC Y
77.2
75.6
72.8
94.53 94.55
60 94.5
94.44 1 2
40 94.04 94.0
20 93.5
0 93.0
1999 2000 2001 2002 2003 2004
2005
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6
There Is No Plan B
C
ortez burned his ships as a statement to his men that there was
no turning back—that the mission of conquering Mexico was an
all-or-nothing proposition. A modern-day business analyst would
question the logic of destroying perfectly good assets just to make a
point about commitment and focus. But that only indicates that
business logic doesn’t normally address the occasional need to strip
away all vestiges of comfort and safety to achieve big things.
I’m not addressing risk in the classic sense, where an organization’s
risk appetite might otherwise demand care and safety in moving
forward with a new program. In that context, business leaders are to be
commended for burning down the ships of resistance to change and
other classic disincentives thrown in the way of new ideas by those
whose first response is driven by a personal fear of losing comforts and
perks. However, classic risk management, where carefully developed
reports precede carefully implemented projects, doesn’t often carry
direct connectivity to personal risk. All those carefully written reports
are also developed in part to insulate leaders from potential program
failure. This is the risk that Cortez addressed head on by burning the
ships and thereby making it impossible to blame the original data or lay
claim to having been misled by the work of an underling. If modern day
managers were to model Cortez’s behavior, they would launch any new
project by ceremonially setting fire to all their analysis reports, market
surveys, and meeting summaries, and proclaim that from this point
onward there is only a common future that will require everyone’s
complete attention.
The whole subject of management involvement relative to
successful culture change is clearly one that emphasizes both as the
universal perquisite for success. Jack Welch, legendary CEO of General
Electric, once wrote the following to his shareholders:
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“In the old culture, managers got their power from secret
knowledge: profit margins, market share, and all that... In the
new culture, the role of the leader is to express a vision, get buy-
in, and implement it. That calls for open, caring relations with
every employee, and face-to-face communication. People who
can’t convincingly articulate a vision won’t be successful. But
those who can will become even more open—because success
breeds self-confidence.”1
To actually function as Welch describes, true corporate leaders must
be in the game not to get, but to give power to others through direct
leadership. Now, combine Welch’s thoughts about leadership with the
following from Bruce A. Pasternack and Albert J. Viscio. They make a
strong case for factoring chaos and change into the modern business
world, where competitors come in increasingly more shapes and sizes,
and at a rate that has never been faster.
They see this new world as one of “…far-reaching technological
advances, and a consumer who has adjusted to this quicker
pace and whose fickle preferences are revised with the speed of
a television commercial.”2
In the hands of a leader, as described by Welch, this speed of change
cannot be managed from the harbor, in the relative comfort of the
captain’s stateroom. Leaders have to get off the boat to manage in
Pasternack and Viscio’s world; and to remain competitive, they would
be well advised to flip a lighted match to the drapes on their way out.
Culture change at Northern Pipe Products required key leaders to
carry torches that were used first to burn down impediments to direct
involvement and accountability, and to then set fire to the suppressed
potential of our employees. In the process, we did all we could to pass
those torches to the team members themselves. Interestingly, a few had
to contend with their own, in some cases plush, conditions relative to
others and were reluctant to burn their own ships. Some didn’t make it;
others struggled with the strangeness of it all, mostly because there was
simply no prior model. In my work with other companies, I’ve often
had occasion to discuss our transformation from autocratic to largely
democratic operations with leaders attempting self-management.
Almost without exception, I find challenges from leaders who claim
that opposition would be greatest from the rank and file and not from
the management group in their companies. True, no one comes through
this without struggle, but when I hear these claims, it impresses me that
such statements are designed to keep their ships safely anchored in
calm corporate harbors.
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US VERSES THEM
In the new world of speed, high risk, and opportunity, blaming the
masses from positions of power or, in fact, blaming anyone for anything
within the organization regardless of position, exposes the greatest risk
of all: Us verses Them. When Cortez burned his ships, he became as
much a refugee as any of his crew members. Demonstrably living
permanently on dry land with the rank and file, talking face to face with
those who, like himself, had no remaining reasons for criticizing
performance under sail, Cortez positioned himself as a leader of first
order. To those sailors who recognized that their hammocks were just as
cooked as Cortez’ blankets, he was suddenly not one of them but one of us.
Contemporary business needs both us and them working together
as never before to succeed in the current marketplace. Why is it that this
simple statement is so readily agreed upon by leadership and yet so
hard to achieve? Friction and ill-will between people is counter-
productive. Teamwork is undoubtedly preferable to other project-
management models. Yet, one after another, companies embark on Plan
A to bridge the gap between us and them, only to find the connection
elusive, risky, and unproductive. Our experience indicates that we
almost made the same mistake and would’ve come to the same
outcome if we hadn’t found our ships on fire hours before training was
to begin.
The trouble with Plan A is that an entire alphabet of other options
still awaits a failed attempt to change. This is exactly what they believe
about those of us in positions of leadership when the “flavor of the
month” is unveiled. Without the smell of smoke, who can blame them
for this perception? Without the smell of smoke, they can hold back
acceptance, since their current condition is relatively unchanged—just
as ours is largely unchanged when we walk back to our offices. Us and
them reinforce their respective positions on a constant basis. Given the
opportunity to cross arms and close ranks around a well-developed set
of beliefs, it’s natural to insist that tomorrow’s performance will be
more or less as it was today. And as long as each side remains true to its
prejudices, an appeal to improve (such as the introduction of self-
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If you prefer, we discovered that not having all the answers was one of
our greatest strengths because it gave us the opportunity to work with
our employees to arrive at a best solution. Us and them never became
just us, nor were we expecting anything along these lines. However,
the process of learning and teaching, listening, laughing, questioning,
and simply spending time together went a long way toward bringing
us together.
SMOKE SIGNALS
From time to time, little opportunities presented themselves to indicate
that we were operating differently. For example, employee lounge
issues gradually became less and less a result of disrespectful behavior.
People began to see the lounge as a place that was more welcoming if
kept clean, and in time more trash ended up in the trash can than on the
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PLAN A
Deciding to invest in cultural upheaval is a high-risk proposition. From
any vantage point, the odds of predicting outcomes with any real
certainty are slim. As this work is largely a matter of faith in a well-
intended effort, rapid and strong consensus is a first order priority. To
do that effectively requires everyone’s undivided attention. That was
Cortez’s reasoning when he decided to light up the harbor of Vera
Cruse, and it was ours when we decided to end 20 years of
authoritarian practices. If the goal is to move everyone forward, leave
nothing behind that allows for retreat and yesterday’s comforts.
Plan A is all there is when there is no plan B.
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7
Servant-Leaders
T
raditional managers occupy a higher position—one detached
from the workers, primarily because they are responsible for
maintaining order and control. They often have individual offices,
in part to provide privacy for decision-making and meeting with
individual workers to discuss personal matters. In other words,
management has its perks, and the trappings of traditional manage-
ment have evolved to the point where traditional workers simply accept
them. In 2000 and 2001, we modeled this approach in executive offices
at the front of the building for managerial and executive staff. Pipe
production was an activity that took place on the other side of a well-
designed, almost soundproof 18-inch concrete wall. Our corridors are
carpeted; the plant floor is concrete. We have windows and climate
control; they have neither.
Today, we still have the same layout, but the degree and types of
interaction between managers and workers is much different. Mark
Boutiette and Ken Doggett’s office space may be on the other side of the
wall, but the amount of time spent there is far less than it was several
years ago. And if either Mark or Ken are working at their desks, it’s not
at all uncommon for literally anyone to drop in and begin a
conversation. What’s the primary difference between today and
yesterday? The concept of servant-leaders.
WHAT IS SERVANT-LEADERSHIP?
Robert Greenleaf, the man who coined the phrase, described servant-
leadership in this way:
“The servant-leader is servant first… It begins with the natural
feeling that one wants to serve, to serve first. Then conscious
choice brings one to aspire to lead. He or she is sharply different
from the person who is leader first, perhaps because of the need
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what he probably will always call “Mick’s old office.” Jim Collins’s book
Good to Great makes a convincing case for what he calls a Level-5 leader,
an individual who leads gently and with reserve in order to allow for
employee growth and expression.4 At one point in the book, he
characterizes the Level-5 leader as one who leads in crisis by looking in
a mirror, compared to the self-absorbed, celebrity CEO who looks
instead through a window at his employees.5 The involved leader is
concerned with his place in the incident; the self-centered leader looks
through the window for a scapegoat. In each of the companies within
the Fortune poll, it would be expected their success be traceable to an
enlightened Level-5 leader.
With the luxury of 20/20 hindsight, we’ve come to believe that self-
direction is a Level-5 activity and requires three primary qualities of its
servant-leaders:
• An unwavering belief in the potential of others
• An innate ability to listen
• Lifetime commitment to coaching and training
Our experience differed from what we read or heard from other sources
because it was implied that, at some point, we managers would quietly
return to our offices as employees took up the banner of self-
determination and self-management. Not so. Ken Doggett is actually
more engaged today than he was during initial training. Mark Boutiette
is similarly taxed with generating reports, conferring with engineering,
and, most important, getting out to the floor and answering workers’
questions. All three of the above qualities are central to servant-
leadership, but in the long run, time to relate to and work with others is
most important.
Watering a plant according to a strict process can kill it. Each plant is
different, and each day will contribute differing amounts of light and
heat. If the process requires watering twice a week, but the plant begins
to die, the sane gardener will cut back the watering frequency and
watch carefully for a positive reaction. They will use all their senses in
real time to actually coax the plant back to health. But in a mechanized
system that knows only what the process is programmed to administer,
over or under watering is not only possible, but also probable.
TEAM LEADERS
Self-directed work teams also have their own servant-leaders. At
Northern Pipe, the team chooses their own leaders to help them manage
and facilitate their activities. Things simply work best when someone is
in charge, even if leadership rotates from one team member to another
throughout the year. Of course, this is invaluable experiential training,
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a natural proving ground for present and future leaders of the company.
Our experience has been that no one team develops in similar fashion,
and that the same is true for the leadership structure and duties that
evolve within the team. The maintenance department uses its two most
senior members to facilitate meetings, write meeting minutes, and work
within the team to develop upcoming agendas. The team veteran,
within team-defined staff specialties, assigns daily and emergency work
projects as they arise. The entire team wrote their team charter booklet
and decides who will work on long-term or major projects.
A-Crew rotates its team leader from one month to the next. The
team decides who the next leader will be during a team meeting.
C-Crew is now doing the same, and one member commented that it’s the
smartest thing they’ve done in some time. In both teams, individuals are
chosen when the team decides they are ready to tackle the job; integral
to the decision is the degree of successful training they’ve amassed.
Successful training at Northern Pipe Products means that the employee
received one-on-one training and then passed a written and
demonstrated skills test to become certified at one of five levels of
defined competence.
Two members of C-Crew commented recently that once a team
member goes through that first month as team leader, they’re “changed
employees.” They gain a new and powerful respect for the difficulties
of scheduling, coaching, testing, arranging the break schedule,
managing absences, and learning how to best approach each team
member during the shift. Remember the Adobe core values press
release mentioned earlier? The last phrase of that release is precisely
what our self-directed teams are now doing: “inspiring and
empowering employees to become leaders.” Servant-leaders.
8
Return on Investment
W
e’ve come to the point where numbers are required to support
the bottom line, measurable benefits of self-direction at
Northern Pipe. Northern Pipe’s Cost of (poor) Quality program
(CO(p)Q) and our open-book management meetings have, if nothing else,
laid a foundation for appreciation of financial performance as a prime
indicator of program success. Starting in late 1999, we developed several
detailed and specific families of costs that are tracked on a monthly
basis. Scrap rates and efficiency calculations were relatively easy
targets. In the case of self-direction, however, human asset investments
were a bit harder to define and calculate. For example, self-direction
incurs additional meeting costs. We capture these hours by recording
attendance on a laptop in the conference room. Much the same is done
electronically for other meetings and training sessions, and the total
number of hours is eventually factored into monthly CO(p)Q reports.
The financial impact of X number of staff and management people
involved in various meetings, while consistently calculated each month,
was at first based largely on informed estimates. Over the first several
years, and with improvements in both reporting accuracy and
calculations of true investment amounts, we came to believe in the
importance of regularly monitoring CO(p)Q to see if the numbers were
going in the right direction.
CO(p)Q
Cost of (poor) Quality is a measure of four classic expense types: pre-
vention, appraisal, internal failure, and external failure. Often, the latter
two are combined into a single category loosely called process failure.
Northern Pipe Products has been tracking CO(p)Q since 1999 with a
goal of less than 5 percent total waste in these categories as a percentage
of the price of a pound of resin during the reporting period. We measure
everything against the price of resin and have done so since our earliest
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days. So it is a natural thing for us to distill down and track costs such
as shipping, blending, maintenance, and administration relative to the
price of our most basic commodity, the resin we purchase to make pipe.
As a crude example, adding together the number of hours in
meetings and training (a prevention cost), product testing (an appraisal
cost), dollars lost in regrind (an internal failure), and customer claims (an
external failure), we not only compute total waste in dollars, but can also
depict percentage of waste by type. We examine these reports monthly
and create a master report annually for what we call our annual quality
review. In 2000 (Figure 8.1), our CO(p)Q “profile” for the entire year
reflected failed product testing, resulting in internal and external failure.
Not surprisingly, effective appraisal is strongly allied with employee
competence, commitment, and training, all essential to team success.
External Failure
Costs 6.75%
Prevention
Costs 23.89%
Internal Failure
Costs 62.44%
Appraisal Costs
6.92%
External Failure
Costs .31% Prevention
Costs 22.55%
Internal Failure
Costs 60.44% Appraisal Costs
16.70%
This overriding goal differs from those outlined in Figures 8.1 and 8.2.
They represent a categorical breakdown of where we spent money in
non-value-added activities in a given period, whereas the goal of less than
5 percent total waste combines all these categories into one number.
Figure 8.3 indicates that we finally achieved our goal in 2004:
CONVERSION EFFICIENCY
Figure 8.4 is particularly interesting in that ISO implementation in late
1999 appears to have produced a positive effect; however, the chain of
events that launched self-direction created far more improvement
within the system. Kevin Berlin’s appointment to master setup
associate—to train and help the teams—was the starting point:
96.0
95.66
95.5 95.32
B-Crew SDWT
April 2003 C- and D-Crew SDWT
95.0 May 2003
PERCEN T
94.53 94.55
94.44 A-Crew SDWT
94.5
May 2002
94.04 Kevin Berlin –
Extrusion Coordinator
94.0 April 1, 2002
93.5
93.0
1999 2000 2001 2002 2003 2004
1,200
1,051
Kevin Berlin – B-Crew SDWT
1,000 Extrusion Coordinator April 2003
April 1, 2002 852 865
C- and D-Crew
800 756 SDWT
A-Crew SDWT
POU N D S
May 2003
617 May 2002
594
600
400
200
0
1999 2000 2001 2002 2003 2004
SUMMARY
The return on investment for self-direction is obviously more than the
financials or these charts might indicate, especially regarding morale,
retention, safety, and customer satisfaction. As is often the case with
improvement in human resources and working conditions, most of these
returns lie below the radar. Other than as an expense, the new lounge,
cleanliness projects, training costs, and rewards programs are typically
Palmes_08Chap-r2.qxd 1/24/06 1:41 PM Page 88
9
The Climb to the Top
T
hroughout this process, we found that the “right time to act” came
to us intuitively, not through advanced planning and discussion.
With the benefit of hindsight, it appears that we advanced much
as a mountaineering team climbs to the summit:
• We progressed slowly, one hand-hold, one tentative step
at a time.
• At a highly personal level, we knew that failure was not
an option.
• We took frequent rests and planned for the next phase as we
caught our breath.
• The original plan was naively simple: “Go up!”
• Our primary guide was a vision of life at the summit.
Even with all the uncertainty within the process, the return on
investment continues to be huge. No one manager could’ve accomplished
the degree of improvement and actual, bottom-line profitability that
self-management brought to Northern Pipe. We are quite confident that
self-management—and not some other mechanical influence—was the
primary catalyst for improvement; interviews with several team members
and production manager, Mark Boutiette confirmed this to be the case.
According to them, the primary change occurred when failures became a
team responsibility. Instead of privately giving thanks that someone else
made a mistake, team members became publicly responsible for each
other’s work, and improvements on all levels followed.
You may remember from the first chapter that the culture of
Northern Pipe is strongly in favor of “sharp tools.” The years preceding
self-direction relied on preventive maintenance and top-of-the-line
machinery—well oiled, clean, and attended to by experts. The
89
Palmes_09Chap-r2.qxd 1/24/06 1:42 PM Page 90
best possible price. The celebrity issue in 2005 has been making money.
And the QMS was restructured to accommodate these two new quality
objectives, expressed in a single phrase: “increased sales and profitability.”
SELF-DIRECTION’S CHALLENGES
Of course, this was a major shift in attention away from production
teams to issues surrounding sales and marketing. While we all knew it
was the right thing to do, we also knew it could have a negative effect
on teams, as meetings took on the look and feel of sales and shipping
discussions. Balanced against those misgivings were five years of open
communication, and a mutual trust that if things became tense, we’d
recalibrate our efforts to meet whatever challenges came our way.
They did. Employee turnover rose throughout the year. By mid
year, in fact, most teams were operating with a core of seasoned leaders,
with mostly new employees surrounding them. Of course, throughout
the process, teams were either celebrating those who moved on for one
positive reason or another, or proud to have the authority to ask non-
performers to find employment elsewhere. The gains of self-direction
remained in that teams continued to do many of the things that
“managers” once did. Regardless of the self-determination that comes
from, say, the authority to hire and fire, a sense of frustration regarding
our overall financial status took the air out of everyone’s sails.
Every spring, we assemble a team of volunteers to decide how to
distribute any bonus money, should there be profits that warrant a
company-wide distribution. There was none in either 2003 or 2004, even
with remarkable improvements internally. It’s generally accepted
within the company that our inability to see external reward in keeping
with those improvements dampened the resolve of several who found
better paying jobs elsewhere in the Fargo area. Year-end bonus plans
leave a lot to be desired, and we’re currently exploring options for an
incentive program. But during the first five years of the new millen-
nium, we’ve been tied to an old model—one that, when times are good,
has been highly rewarding.
But that’s the problem with annual bonus plans, especially bonus
plans that are based on profitability alone. If we’d split the financial
gains of each rise in productivity, each one-tenth of a percent of
improved CO(p)Q and all the other advances seen during the same
period, our people might have connected more than praise to their
efforts during those “bonus-less” years.
More to the point, it’s hard to believe in gold at the end of rainbows
when there’s no rain in the forecast. As we assembled in January 2005
Palmes_09Chap-r2.qxd 1/24/06 1:42 PM Page 96
to listen to Wayne Voorhees’ annual report, it was clear that even with
our new twin objectives there was no guarantee of exceptional
profitability. Instead, we were facing a series of daunting challenges, not
the least of which was rising oil prices and the potential for scarcity of
raw materials. (Little did we know how true the latter would become in
the wake of two major hurricanes and a refinery fire at one of our
primary feed stock producers).
CLOSING COMMENT
The challenge for top management within industry, government, and
service alike is to recognize that this model is universal. To prove the
point, ask yourself if you agree with the statement, “No one really
wants to come to work to do a poor job!” If your answer is yes, consider
how powerful a motivator it can be to simply act on what you already
know to be true.
Finally, consider this: Every morning, we do our best to give away
our traditional managerial advantages, preferring instead to listen,
coach, and mentor. And, to our knowledge, not once have we been
taken advantage of by our employees. After all, how can our employees
take advantage of us when we do our best each day to give it away?
H1270_Palmes_Back.qxd 1/24/06 1:44 PM Page 99
Appendix
Quality Council Charter
October 1998
MISSION STATEMENT
The mission of the Quality Council is to rapidly and successfully report
and manage opportunities and threats to Northern Pipe Products Inc.
through open and honest communication between its members.
CHARTER
The Quality Council, through regularly scheduled weekly meetings,
reviews the overall state of current operations and future business
planning for Northern Pipe Products Inc. Its membership is composed
of at least one representative from Sales, Manufacturing, Engineering,
Shipping, Quality, Purchasing, and Executive Management. Attendance
is recorded, and minutes are maintained and distributed electronically
throughout the company.
The Quality Council is responsible for insuring the effective
operation of NPP’s quality prevention and non-conformance
management process, reviews internal audits and requests for change to
controlled QMS documentation.
Each week, the chairperson reviews action items from the previous
meeting followed by individual reports from the attendees. Attendance
at quality council meetings is open to anyone currently employed at
Northern Pipe Products Inc.
99
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Notes
PREFACE
1 Internet site: http://www.answers.com.
2 Ibid.
CHAPTER 1
1 Treacy, Michael and Wiersema, Fred, The Discipline of Market Leaders:
Choose your Customers, Narrow your Focus, Dominate your Market
(Reading, MA: Addison-Wesley, 1995).
CHAPTER 3
1 Peter R. Scholtes, Brian L. Joiner, Barbara Streibel; The Team
Handbook (Madison, WI: Oiel, 2003).
2 Steven Covey, 7 Habits of Highly Successful People (New York: Simon
and Schuster, 1989).
CHAPTER 4
1 Tom Morris, If Aristotle Ran General Motors, (New York, NY: Henry
Holt and Company, 1997).
2 Ibid, 29.
3 Fish! – Catch the Energy, Release the Potential (Charthouse
International Learning Corp., 2000).
101
H1270_Palmes_Back.qxd 1/24/06 1:44 PM Page 102
102 Notes
CHAPTER 5
1 Critical target numbers in production: 95 percent or more machine
efficiency, 3 percent or less overweight, and 2 percent or less regrind.
2 Ideal Team Profile Questionnaire, © Steve Myers & Profiles-r-us.com,
2003.
CHAPTER 6
1 Jeffrey A. Krames, The Welch Way, 2002.
2 Bruce A. Pasternack and Albert. J. Viscio, The Centerless Corporation
(Simon and Schuster, 1999).
CHAPTER 7
1 Robert K Greenleaf, Servant As Leader (Indianapolis, IN: Greenleaf
Center for Servant-Leadership, 1970).
2 The Robert K. Greenleaf Center for Servant-Leadership.
921 East 86th Street, Suite 200, Indianapolis, IN 46240.
Phone: (317) 259-1241, Fax: (317) 259-0560.
3 Adobe Named to FORTUNE's List of “100 Best Companies to Work
For” SAN JOSE, Calif. — Jan. 10, 2005.
4 Collins, Jim C., Good to Great (Harper Collins Publishers, 2001).
5 Ibid.
6 Kerry Thornley, Principia Discordia, 5th edition (IllumiNet Press, 1991).
7 Paul M. Johnson, Department of Political Science, 7080 Haley
Center, Auburn University, Auburn, AL 36849.
H1270_Palmes_Back.qxd 1/24/06 1:44 PM Page 103
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Case, John, Open-Book Management. New York, NY: HarperCollins, 1995.
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104 Bibliography
Johnson, Spencer, M.D., Who Moved My Cheese? New York, NY: G.P.
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H1270_Palmes_Back.qxd 1/24/06 1:44 PM Page 105
Index
105
H1270_Palmes_Back.qxd 1/24/06 1:44 PM Page 106
106 Index
N
G Northern Pipe Products
Good to Great (Jim Collins), 77 automation, 3
Greenleaf, Robert (coined “servant business description, 3
leader”), 75 competitive advantage, 6
Greenleaf Foundation, 75 competitors, 11
engineering department, 18, 77, 99
ethics luncheon, x
H human resources department, 10,
Hiring employees, 31, 51-52, 59-62, 96 54, 56
maintenance department, xvi, 3-6,
29, 80, 90, 99
I manufacturing department, 99
If Aristotle Ran General Motors (Tom operational improvements, 3
Morris), 40-41 organization chart, xxi
ISO 9001 quality management system, policy manual, xvii-xviii, 15, 50, 56
17, 19-20, 26, 37, 44, 91-93, 95, 99 product quality, 3, 6, 27, 84, 94, 97
International Space Station, xvi product testing, 7, 19, 20, 84, 92
production department, xvii, 10,
14, 29, 31, 32, 45, 58, 74, 93, 95
J-K purchasing department, 99
Japan, 21
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Index 107
108 Index