Changing the tune

Posted on 18 Aug 2008 by The Manufacturer

Implementing change is one thing – getting it to work and then establish it as part of the company culture is something else again. Ruari McCallion finds out how to make sure change is for the better

To misquote the famous phrase: some changes are born, some are achieved and some are thrust upon the unwilling recipients. While it’s true that, in order to survive, companies have to change and adapt, there are essentially two ways of doing it: the right way and the wrong way. The right way will see your business grow, whether within its existing market or into new ones; the wrong way will see it, at best, fail to progress. At worst, change initiatives are the last desperate wave of a dying organisation. But how does one make sure that the process of change works, that it delivers the desired result – a better, more responsive and more competitive business?

“It has become a bit of a buzz-phrase but it is about operationalising things – the ‘how’ detail,” said Graham Salters of Celerant, which is one of the world’s biggest independent operations consultants. It works in a range of sectors with a variety of clients, including Conoco, Philips and BT. The work it is currently undertaking with Volvo represents a pretty good example of the way it works.

“We’re helping to roll out ‘the Volvo way’,” he said. “They have been undertaking assessments for two years but the plants themselves haven’t moved. They have great models and plans but it is really about understanding how. What we do is help large organisations break things down into bite-sized chunks, getting away from the ‘boil the ocean’ approach.” He firmly believes that, in order to work, change has to be distilled to where it can be readily identified with by the people on the ground, in their individual daily activities. “You break it down to ‘see that machine that’s broken down – go fix it’.” There are any number of buzzphrases and toolboxes, from TQM and TPM to lean and six sigma and they all have their followers, and startling success stories. But Salters believes that successful change is about something else.

“Five per cent of it is about the tools and techniques; 95 per cent of it is about changing the culture,” he said. “You often find that large organisations have a ‘blame and fire’ culture.” As someone once said, it’s not about whether you win or lose but how you place the blame that counts. Another old saying with resonance is that success has many fathers but failure is an orphan. The blame game is counter-productive: things don’t get done because people don’t want to be landed with the responsibility. “We have been working with a company making auto components, whose production manager is terrified of making a decision. So it becomes cause and effect: what you need to change is confidence and once you see change happening, confidence grows. How we help to get over the fear is to train people to work through possible scenarios and their outcomes, so that when they make decisions, they’re confident they won’t go wrong.”

You can implement change one department at a time, using the beacon approach: it has worked here, see the difference – wouldn’t it be nice if your department was so good/such a pleasant place to work/recognised and respected for its excellence? But there can be a danger, which wartime convoys knew all about. They could only move at the speed of the slowest ship and incremental, department by department change is potentially vulnerable to resistance, changes of mind and the arrival of yet another new manager – who wants everything explained in detail, new studies and further assessments undertaken – so wouldn’t it be best to put everything on hold until we get a clearer picture of where we’re going? If it’s a department subjected to ‘bungee managers’ – one is hardly in place before s/he’s moved on again – then the delays can become interminable. In many ways, such a blocking approach is a symptom of a fear of blame. That being the case, a multi-layered approach is well worth considering. External consultants with the right personnel can be handy in helping that to be achieved. Their senior people can work with the senior executives; managers with managers; and hands-on guys get on with it with the operatives.

“Multi-layer ensures there’s a consistent message across the business,” said Salters. In short, while the change is probably best delivered in bite-sized chunks, they shouldn’t be in isolation; it should be part of a clear and recognised strategy. Engagement and support of senior management is generally recognised as essential to achieve transformation but that support has to go far beyond mere words and exhortations.

VT Shipbuilding, in Portsmouth, put the change words into practice in a very visible manner. The directors work as a team and are enabled to make decisions in others’ departments, if the ‘official’ head is unavailable. It has shifted itself from a ‘command and control’ structure to involvement and engagement, at every level. When it was seeking to address problems of ontime delivery and quality, the shipyard brought in outside help – previously virtually unheard-of. The shopfloor workers came up with the idea of the ‘war room’ – a dedicated space with a wall devoted to visual representation of progress. It covers everything from 10 days ahead of the arrival of sheet metal through fabrication to the assembly hall. If there is drift from plan, it becomes immediately apparent; everyone can see what they’re doing.

One of the biggest contributors to come out of the approach was the understanding of why machinery breakdowns happened; it was to do with maintenance, which is now undertaken on a scheduled, preventative basis, rather than ‘fix-when-broken’. The success of eliminating bottlenecks, improving delivery and working conditions – which became apparent quickly – stimulated the workforce as a whole to embrace change. The company had tried improvement programmes before but they had always foundered, for a variety of reasons. Visible change at the top, clear engagement of management and workforce, and investment to improve all helped to shift the culture to one of improvement.

“Unless we change the way we behave, we know our improvement process won’t be sustainable,” said Mark Salisbury, UK lean manufacturing director, St Ivel Uniq. It is a year into its change programme, which has a particular focus on establishing appropriate steps to achieve operational excellence. The process towards building the Uniq Operating System is based on three pillars: improvement, organisational effectiveness, and people development.

“We knew we needed a change in culture as well as methodology. In some ways, we believe we have to be just as proud of our change in culture as of the change in numbers,” he said. To demonstrate that this was a genuine shift from the top down, Salisbury and his team began by asking the firm’s own people what their problems were. “We got a huge amount of data. People came back with responses to statements like ‘numbers are cascading up and down the organisation’ – they weren’t – and ‘we’re losing money’, with the reply that they didn’t understand where or how.” While Salisbury and his team were able to identify a large number of initiatives, they decided to start with a lean project in a small part of the organisation. “The pilot was hugely successful and we achieved that success through bringing the vision together with people’s observations of what was wrong. For example, 20 per cent of the raw material that arrived didn’t end up as finished product. We didn’t actually change much there – we simply found that the data we had wasn’t robust. We had apparently doubled our efficiency but we didn’t have the trend figures for waste. It wasn’t ‘giveaway’ we were wasting, it was what was left in the hopper. We addressed that with a pretty straightforward mechanical solution.

We had been taking action in the wrong areas; with the UOS, we came back to the root cause, measured it and improved it.” At the end of the initial 10 week period, the review identified what had gone well and what hadn’t, and determined how to sustain that which had worked.

The fact that the company had visibly taken employee contributions on board, acted on them and improved the situation was a positive in gaining acceptance. “We want to create a culture of improvement and, to do that, we need to understand what went wrong,” said Salisbury. “I would compare it with learning to ride a bike. You know you’ll make mistakes, you’ll fall off, but we accept that. We’re open with our people. When there’s an error, we have to understand why – it’s demoralising making the same mistake time and time again. We now review operations every morning at 8 am, which everyone has to attend.

We’re taking a disciplined approach – we work things out together, we don’t simply hand problems back. And there is something else – when people go to investigate a problem, it enhances their self-esteem. They’re more likely to take on responsibility if they can see their actions have an impact.” Engagement and the delivery of genuine and visible improvement is at the root of effective management of change.