1. JUMP STARTING CHANGE Dr. R. Eugene Goodson Adjunct Professor in Operations Management University of Michigan Business School March 23, 1999

2. It’s a cultural thing! l Cultures develop slowly l They reject change agents! l The Norm Bradburn lesson The 1973 energy crisis A traumatic event--short duration No long-term change l Can cultures change quickly?

3. Changing culture l Can destroy, i. e. Plant closings l Agreement to change better l Need a catalyst l Need a real threat l Need a leader

4. External “Devils” help l Domestic competitor l Import Blitzkrieg l Customer demand l Imminent Plant closing l Even a changed sister plant

5. A mission to rally ‘round l Impossible dream-- cannot be envisioned l Jumping into unknown territory l Committed leader for duration l Agreement to move to a new cultural state

6. An involvement process l Articulate required changes l Form teams l Diagnose & recognize problems l Develop common mission statement l Set & measure goals

7. A Leader l Vision l Belief that threat can be averted l Commitment l Consistency l Followers!

8. The Umbrella concept l A name TPS, DPS, FPS TQM, Whatever l All programs under umbrella l One program-- evolving tasks l Simple measures TQM

9. The Umbrella concept l Constant improvement & change l Real concepts learned Team protocols Interpersonal skills Problem solving tools Quality systems practices Customer focus l Transforms people over time

10. Personal Experiences l Japanese transplant’s suppliers Threat to company clear to all Problem not recognized l Cadiz plant not competitive Down-home, but union culture Nissan business had to be earned l Oshkosh Truck Clearly non-competitive Adversarial union relationship

11. Change at Hoover Universal Seating--1981 l Old-line, but successful auto supplier--good plants l $150 million sales--metal & foam parts for seats l Industry that triple-sourced l Average contract--$3 million l Change needed--new leader

12. Change at Hoover Universal Seating--1981 l Company threat--Japanese transplant suppliers l Perception--nationalism l Real problem--cost & quality l Managers did not “see” problems l Japanese visit our plants l Our unsuccessful Japanese visits

13. Change at Hoover Universal Seating--1981 l Real problem had to be understood l Plant tour training Intense three-day course Teaching “to see” l Teams visit Japanese plants l Change plans presented to company board of directors with commitment l Success--Grew 35% per year--17 yrs

14. Change at the Hoover Universal Cadiz plant l Threat--the Nissan metal business & potential plant closing l Old-style, comfortable plant l Complete change needed l Seat-back quality problem l Rolling mill operator story

15. Change at the Hoover Universal Cadiz plant l Metal seat backs sold for $3.21 l Over 7,000 per day being made l Major quality issue--J-frame length l Rolling mill quality issue--operator? l Separate “shops” in plant l No visual communication l Forklifts everywhere

16. Change at the Hoover Universal Cadiz plant Offices PRESS SHOP Weld shop Rolling Mill Shipping Wire shop Receiving Paint Steel Receiving Forklifts Plant Layout

17. Change at the Hoover Universal Cadiz plant l Found out the problem was us! l Contract negotiation deadlock l Real rolling mill issue l Catalyst for change l Moved presses & welders l Made new containers & carts l All visual pull systems--no forklifts l Success!

18. Change at the Hoover Universal Cadiz plant Offices PRESS SHOP Weld shop Rolling Mill Shipping Wire shop Receiving Paint Steel Receiving New Plant Layout Presses Containers Carts Press Welders Carts

19. Change at Oshkosh Truck l UAW work force--adversarial history l Machine shop imminent closure l Big meeting with all three shifts Enmity was palpable No words helped l The $30,000 offer! l The struggle among themselves l Turning point at Truck

20. Change at Oshkosh Truck l Brought in a consultant--previous successes in union environments l Hired new manufacturing VP l Formed teams l Developed mission statement l Defined new TQM Umbrella l Completely changed production & plant layouts--still continuing

21. Change at Oshkosh Truck l New union contract in 1992--second one in 1997 negotiated early l Two acquisitions--both non-union l Continual increase in productivity, quality, and business l Won new marine truck contract l Stock price has doubled in a year

22. Lessons learned l People want success l People will detect insincerity l The external devil must be real-- not contrived l Plateaus are nice but death awaits those who relax on one l Continual change the only way

23. What can you achieve? l Teams committed to a common goal beyond their individual grasp are surprisingly successful l Make sure your dreams are beyond what you “know” is achievable The Prize 2001 You