Wednesday, December 7, 2011

Involving Employees in Change

Organizations going through change should involve their workforce as much as possible in the process. Stryker Navigation shows how.

by Marco Nink and Klaus Welte
Employee surveys have now become standard in most organizations. Yet too often, the wrong questions are asked and the wrong things are measured. To make employees feel completely involved in the organization, "satisfaction" with the workplace alone is not enough. An employee who is satisfied with his salary or the amount of annual leave is not necessarily, of his own free will, going to lend full support to his employer and his employer's goals. Satisfaction can be connected to passivity -- employees can be satisfied and yet still be indifferent.
There is more value in optimizing the work environment, thereby increasing emotional attachment -- or engagement -- to the organization by rigorously fulfilling employees' core needs and expectations. The stronger the engagement, the more likely it is that the employee will act in the interests of the employer -- and the more engaged employees there are, the more productive the organization will be. It is possible to measure the degree to which these core needs and expectations of the workplace are met.
What to ask and where to start
Building on years of research, Gallup has developed 12 items -- the Q12 -- and employee responses to these items give information about the state of employee engagement, which in turn correlates with organizational performance. It is crucial that the results are discussed at the workgroup level as well as with the leadership and that action plans are put into place and followed through. The results act as a focus point for intense discussion within the team. (See graphic "The Employee Engagement Hierarchy.")

To ensure that the process is sustainable, the survey should be carried out regularly. Also, changes in the survey results over time need to be discussed within the team, and both action planning and follow-through must be monitored. Only when this happens will the employees feel really included and get actively involved in action planning. The results of the employee surveys can also be correlated with key performance indicators (KPIs). By combining these two types of organizational data -- the "soft" employee engagement data with the "hard" KPI data -- we can demonstrate the direct economic benefit of the actions on costs and growth.

The Employee Engagement Hierarchy
Stryker Navigation is an example of how this can be put into practice. As a company, Stryker is a global leader in the manufacturing of navigation systems for computer-assisted surgery. Stryker's machines help doctors and surgeons perform operations more quickly, more safely, and more accurately. Development and production for global markets is done at Stryker's site in Freiburg, Germany.

Decreasing motivation rang alarm bells
When the Freiburg management team registered that the engagement of its employees was decreasing, it set alarm bells ringing, as the company was facing some difficult technical issues that needed to be resolved. It was not going to be possible to produce some important products as quickly and economically as previously thought. This lack of engagement became particularly apparent in the cooperation between teams -- for example, between the Development and Production teams. While the individual departments were performing well in their own range of tasks, they were not prepared to view the manufacture of new products as a complete process that required their collaboration.

Stryker turned to Gallup to measure the employees' engagement and to help the company develop actions for improving the situation. In addition to the Q12 items, questions were asked about the collaboration between teams. The results were analyzed at the project team level and at the department level. The advantage of this approach is that it allows many different opinions on a project to be heard and discourages siloed thinking. The employees involved in a project can then work together to produce a list of actions, which serves to strengthen connections beyond departmental borders.

The most striking results were gathered in a presentation. Using Gallup's database comparisons and benchmarks, Stryker was able to see the areas in which the company was performing at excellence and those in which it was below average. Each team received its own scorecard, and internal benchmarks were used to show the teams how they ranked within their department as well as within the company as a whole.

How employee engagement doubled

The results of the first Stryker Navigation employee engagement survey demonstrated the potential for improvement. With 32% engaged employees, Stryker Navigation Freiburg was considerably better than the total working population of Germany at that time but was below average when compared with other organizations Gallup works with in Germany. (See "A Threat to German Growth" in the "See Also" area on this page.)

The company tries to position employees where they can best use their talents.
Most notably, the employees had rated two fundamental questions particularly low: "I know what is expected of me at work" and "I have the materials and equipment I need to do my work right."

So these items became the starting points for action planning and implementation. For example, Stryker concentrated on describing more clearly what was expected of employees on individual teams and projects. The frequency of feedback discussions was also increased. And to promote the idea of project-based working, changes were made to each team's composition, structure, and where team members were seated.

These actions quickly brought about improvements. The percentage of engaged employees doubled to 64% within a year. But the management wanted to embed these changes for the long term. With this in mind, they designed the follow-through process to be highly transparent because it is important that employees see what actions should be achieved and how far they've progressed in that process.

Recipe for success: a transparent follow-through process

Since then, Stryker Navigation has conducted regular monitoring of action plans, which are discussed with the team at monthly meetings. Responsibility for achieving individual points lies not solely with the management but is deliberately shared with the employees. When compiling and implementing action plans, collaboration between technical supervisors and the human resources department is very important. Therefore the company closely links employee engagement tools to additional personal development programs. Stryker, for example, considers selecting and promoting talent to be highly important, so employees should be positioned where they can best use their talents, which is a significant factor for employee engagement.
Employee Engagement and Key Performance Indicators
In Stryker's opinion, the transparency, continuity, and coordination of the individual tools is key to the success of the action plans. The atmosphere in the company has changed for the better. Employees and managers feel that together they can get things moving and make improvements. Since 2004, the percentage of engaged employees has stabilized at an elevated level of 70% and had reached 73% after the survey in 2011. Stryker Navigation Freiburg is thus overall in the top 10% of companies in Gallup's database of German organizations.

Positive effect on KPIs

There has also been a change of mentality as far as collaboration within projects is concerned -- individual teams now see their colleagues from other departments as customers. They want to deliver results to them that they can work with optimally. This speeds up the development of new products for the market.

There are other indicators that confirm that Stryker Navigation has set out on the right path. In the past 10 years, the turnover of products from the Freiburg site has increased tenfold. And the quality of new products has also increased tenfold when measured against the number of repairs or customer complaints. (See graphic "Employee Engagement and Key Performance Indicators.")

Stryker now faces new challenges. It is already clear that the company is set to grow rapidly in the next few years. This also means that teams are redefining themselves and that work routines and responsibilities are changing. In collaboration with Gallup, Stryker Navigation will prepare its employees for this organizational change, with the goal of continuing to gain the workforce's commitment to Stryker and keeping turnover at a low level.
This article originally appeared in Personalwirtschaft in September 2011. Reprinted with permission.

Marco Nink is a Practice Consultant for Gallup.
Klaus Welte is Vice President and Plant Manager of Stryker Navigation in Freiburg, Germany.
The Q12 items are protected by copyright of Gallup, Inc., 1993-1998. All rights reserved.

How You Change Is the Change!

Interesting perspective on managing lean.. 


Lean management is not a change methodology. It is a destination, a desired set of practices and culture. How you get there will determine the outcome.

By Lawrence M. Miller,

There are far more failures than successes as companies attempt to implement lean manufacturing or lean culture. I believe that most of those failures are the result of the absence of sound change management strategies and skills. How you change creates a set of expectations for what will follow. You create a "pull" for adoption of the change, or you struggle to "push" the string of change up hill. 

Most managers and most consultants do not make the distinction between the destination and the method of travel. The destination can be defined as maximizing customer satisfaction, eliminating waste in all its forms, reducing variances or quality problems, speeding cycle times through core processes, and it can be defined as a culture of continuous improvement and empowerment. But knowing the "what" is like looking at a photo of Mr. Universe and saying, "I want to look like that!" That's easy. But, getting there is something else. Most failures are not the result of failing to know what you want to look like. Rather, they are failures in the process of change.

Here are some of the keys to successful lean implementation and culture change from my experience.
1. Ownership is 80% of success - The first rule of change management is: People will implement and make successful that for which they feel ownership.

Too often, the very people who are required to implement a change in processes or culture have it imposed upon them and do not feel that they had any say in its creation. This will almost guarantee failure. The worst way to go about change is to hire a high- priced consultant and have him or her study, write a report, make a presentation, and leave the implementation to those who struggle with the day-to-day realities of life.

Habitat for Humanity knows something about managing change. Their program of building homes for the disadvantaged is not merely about putting up structures. It is about building human capacity and human dignity. When they build a home for a family they ask the members of that family to contribute "sweat equity", their own labor to the construction of the home. This has the effect of giving the new owners a feeling of pride in "their home" that they helped to build. The probability of the family caring for and maintaining the home goes up in proportion to their sense of ownership.

Most senior managers have insufficient appreciation for the human capacity within their own people. For many years I have been facilitating internal "design teams" comprised of both first-line employees and managers who are assigned the work of redesigning their work processes and their social system or culture. These are the people who have their feet on the ground and have true knowledge of how things work in the organization. They invite in their customers and listen to their concerns. They map out the current state of the work process and identify all the variances that cause waste in the process. And, they analyze the culture, the sources of motivation and decision processes. Then, they design the future state, an "ideal state" that transforms both the work process and culture.

I can honestly say that after doing approximately 100 redesign projects it has never failed that those who design the future will develop a passionate commitment to their own design and will fight for its implementation and success. There is this commitment because it is literally "their own" design. It does not belong to a consultant or to senior management. These folks will make it work! That is 50% of success.
2. Build Competence, Don't be Consultant Dependent.

Gaining ownership leads toward the development of competence in those who will implement the new design. But the building of internal capacity must go beyond that ownership. It must develop the skills of change management and skills and tools of training and developing people to live within a lean organization.

I am not anti-consultant. After all, I are one! However, consultants are very often misused. Consulting firms are all too happy to have you dependent on their consultants, the more the merrier, for a long time. That is, after all, how they make money. But, is that in the best interest of the client?

The longer a client is dependent on a consultant the less likely it is that the consultant is transferring his or her competence to the client organization and building capacity within the client firm. I recently completed an assignment at a Merck manufacturing plant where 71 teams are implementing lean practices in every department and function and at every level of the organization. Everyone is involved. My role was to work with the senior team of the plant and to train and coach 14 internal coaches, both salaried and hourly, who serve as coaches to all of the other teams.  Who learns the most in this scheme? Of course, the internal coaches who have to turn around and train all of the other teams. They now have the capacity to carry on the process indefinitely. As a team of coaches they meet and learn from each other. This internal consulting team can now learn virtually any new practice that comes along and serve as vanguard for implementation. They don't need me anymore.
3. You Won't Get It Right the First Time -- Plan for Experimentation and Iteration.

When either Honda or Toyota have designed a new car and is preparing to manufacture that car, and even though they may have the world's best manufacturing engineers, they do not assume it will all go right the first time. An auto assembly plant may produce a thousand cars a day. But, when these companies are beginning production of an entirely new car they close the plant production to zero, install the required new equipment and programs, retrain all the employees on the new car and the new jobs around its production, and then they make ONE car. They watch that car go through the production process. Inevitably, they find things that don't work as planned. They may find machines that need to be re-adjusted or re-programmed. They may find workers who have not been fully trained. They will fix these things and then build another car. It may take months to gradually build up to full production.

Perhaps your managers implementing a major change are smarter than the Honda or Toyota manufacturing engineers, but I doubt it. The idea that we are so smart that we can design something that is complex to work perfectly the first time is pure arrogance, and arrogance is the worst enemy of continuous improvement. It forces managers to try to cover mistakes, inhibits learning and creates waste.

Design the new process and the new human systems as best you can. Then implement those changes with an "attitude of science," a willingness to try things out, then make adjustments and modifications. This attitude will drive out fear, maximize learning and maximize the rate of improvement.
4. Partner with Your Customers.

It is not you against the world unless that is how you choose to write the script. I am currently leading a couple of design teams that are redesigning the core work process of a service organization. They have major problems with unhappy customers. The design team invited in the managers of those customers, the very managers who are unhappy with the service they are receiving, and asked them for help. The design team asked the customers what improvements they would like to see. They asked if they knew of any best practices that they should adopt. And they asked the customer if they would help them in their effort to design the ideal service delivery system. It works every time! I have seen this over and over again. If you ask a customer for help in developing a better way to serve them, they always agree to help! Now you have a partner in your customer.

Every interaction with a customer is a sales call. Every interaction either increases or decreases the probability of future business. Asking the customer to co-create a solution to serve them is one of the best sales calls you will ever make. You have created a new partnership, a new co-owner of the house you are building for them. They will help you make it successful.
5. Invite In the Whole-System -- Embrace the Complexity.

Every organization is a complex system, an ecology, with a variety of sub-systems (people systems, financial systems, information systems) all interacting with one another to determine the course of the whole. Just like our economy, the human body or the culture of a country, the culture and competitiveness of a company is never the result of one system standing on its own. Yet, we hire a consultant to redesign the work flow. Another to implement teams or a motivation system. While another is redesigning the flow of information and another may be redesigning the structure. It is a prescription for the creation of waste. All of these systems must be aligned to the same principles and goals. They are all interacting and interdependent. If you don't approach major change with an appreciation for this interaction and interdependence, you are programming in failure.

Charter a design team to implement lean principles through the whole system, the core work process of the organization, and the enabling or support systems. If the human resource processes are not designed to enable the work of the core work process, you have reduced the chance of success. If you have not designed the IT/IS systems to provide those who do the real work of service to customers with the information they need, you have again reduced the chance of success.
6. Get in the Boat and Row; Stop Standing at the Shore!

Be the change! If you want change in your organization, LEAD! Lead doesn't mean writing encouraging memos. Leading is not simply deciding to go, or approving a budget. Leading is leading, being out front, doing what you want others to do. Be the model!

Twenty years ago Nevius Curtis was the chairman of Delmarva Power and Light. He wanted to transform his organization into a fully empowered, high performance organization. In my first meeting with him I told him that if he really wanted to succeed, he needed to make his team "Team No. 1." He needed to have his team go through the same training, do the same things he desired of every other team in the organization. He signed up and he signed up his team. In a few years Delmarva became recognized as a model for quality management and empowerment. That effort has sustained to this day. It worked because the leader provided true leadership. He didn't stand on the shore and yell "Row" or criticize the efforts of others. He provided a model.

If you want to create genuine and lasting change you will get in the boat and pull on the oars, and you will soon find that you have an army of rowers all pulling behind you, and in the same direction!
Lawrence M. Miller has been doing organizational change consulting for 35 years, beginning with his work creating a free economy in prisons. He has worked with Honda, Shell Oil, and dozens of other corporations. He is the author of nine books, most recently Lean Culture -- The Leader's Guide. His website and blog is

Tuesday, December 6, 2011

The Challenge of the Average Employee

This an interesting post on how to manage the majority of our workforce... the work horse..

posted at by Anthony K. Tjan

CEO, Managing Partner and Founder of the venture capital firm Cue Ball and vice chairman of the advisory firm Parthenon.

Most businesses have a normal distribution of talent — a limited number, say top 10 percent, of high potential, rock star performers, a bottom decile of underperformers, and a thick middle of 80 percent of folks who get the day-to-day stuff done. In well-managed businesses, there are clear feedback mechanisms to ensure that the bottom of the talent pack gets managed out efficiently and objectively. While at GE, Jack Welch popularized the notion that it was good to fire the "bottom 10" of his managers every year. On the other end of the spectrum, the better companies manage the top-end of their talent pool, providing mentors to groom this group of next-generation of leaders and compensating them differentially in recognition of their superior performance.

The challenge lies in productively managing talent's fat middle. What is the right people strategy for the average employee — the stalwart who is performing well enough, but is not necessarily a standout? Here are a few of the challenges with the middle base of talent:

  • Almost by definition, they often get lost in the mix, lacking appropriate guidance and management attention. This creates an issue of not understanding who holds real potential to move up the talent curve with the right nurturing, versus those who have limited upward mobility, versus those who should not be at the company.
  • They can be a drag on those who truly are the best. While not everyone can be above average, the more mediocre talent you have in a business, the more likely it is to have a negative effect on those who can really make a difference. This creates retention and motivation issues for your higher performers. There will always be a distribution, even if it is a forced curve, of talent potential and capability in a business. But the goal should be to raise the overall average of the entire pool, and avoid letting it get pulled down.
  • In a similar vein, average talent can harm a firm's talent recruitment potential since those who are average tend to be more threatened by bringing in better people. The adage of "A's" attracting "A's" and "B's" attracting "C's" holds true.
So what should business builders do to better manage their talent base — especially in this middle area? Two simple ideas can help:
  • First, the best practice of conducting regular and specific performance feedback is critical. It is equally important to make sure that the person doing the review is capable and respected. Senior people who are responsible for managing the middle pool of talent should also be managed on their own ability to see, sift, cultivate, and retain the very best of that pool. How you grow and mentor organizational talent should be an evaluation criterion for senior managers' performance. Mentees and direct reports feel differently when they know their own managers are being evaluated (with real implications for good or bad performance) on their ability to effectively manage, mentor, and cultivate talent.
  • Second, at regular intervals of a person's career, there should be not just "performance reviews" but also what I call a "Fit Test Point." Too many times we see someone who can do the job, but if we are truly honest know that in the long-run they will be stuck in the middle of the organization. My sense is that companies spend more time discussing performance than they do "fit." Performance reviews are biased towards looking out for the best interests of a company — as long as someone is doing their job they have a place. A "Fit Test Point" is a tool to carefully consider the best interests of an employee. Is this person in product development really better served finding a position as an industry or market researcher, or is that analyst who can clearly make the next two rungs of the management track better served making a switch in her career now given the opportunity cost of time? We all know situations where instincts and experience alerted us that a job was not the best fit for someone, yet we let the person continue because they filled a short-term need or because we lacked the courage to have the honest "Fit Test" conversation. Consider key inflection points of one's career advancement and have the parallel conversation of performance and fit reviews.
Trying to serve everyone equally does not do anyone a service, but catering only to the top of the talent pool or overemphasizing the middle or bottom also does not work. An explicit strategy for managing each tier of talent needs to be in place. The public education system has shown that if we just settle, accept, and teach to the middle that is a formula for failure. As business leaders we should see how we can realize the full potential of each employee and help those who are not right for the business find other jobs where they can be more productive and happier.