John Amasi is the director of Production and Engineering at RL Wolfe—a $350M privately held plastic pipe manufacturer headquartered in Houston, Texas.
Four years ago in 2003, when RL Wolfe had purchased Moon Plastics—a small, family- owned custom plastics manufacturer in Corpus Christi—Amasi had seen an opportunity to implement self-directed teams (SDTs) at the new plant. He had been interested in SDTs for several years, since taking a business school executive education course on workforce motivation and team structures. Amasi had been intrigued by reports of 30% to 40% improvements in productivity and quality for SDT-run units, when compared with traditional manufacturing facilities, and returns on investment more than three times the industry average. Those reports had come from a variety of industries—food and beverage, consumer goods—but Amasi felt he saw evidence that he could use the SDT model to drive high productivity in a plastic pipe manufacturing plant.
Amasi’s first step had been to gain the board of directors’ approval to approach the workers’ union and offer a long-sought concession in health care coverage to clear the path for what became known as “the Corpus Christi experiment.” The new plant would not be unionized, in contrast to Wolfe’s other two plants. His second step had been to attract 35-year-old Jay Winslow from Wolfe’s top competitor to become plant manager.
When Amasi and Winslow sat down to design the work system, they both envisioned a flattened and simplified organizational hierarchy and committed work force with a high level of satisfaction in their work. That commitment and sense of ownership, they believed, would inspire the workers to continuously improve processes, thereby increasing productivity and quality.
Now in 2007, Amasi was on his way to tour the plant and talk with Winslow. He was a frequent visitor at the plant, eager to see firsthand whether SDTs could help him achieve and sustain high productivity in a plastics manufacturing plant. So far, the plant was running between 80% and 82% of design capacity annually, but he and Winslow were not satisfied with that result. He and Winslow planned to use this visit to tour the plant and to address the barriers that were preventing higher productivity.
Corpus Christi in 2004: Moving Toward a Self-Directed Work Force
Back in 2003, Amasi and Winslow had asked the managers of Wolfe’s Austin, Texas, and Columbus, Ohio, plants to join them on the Corpus Christi implementation team. The four met in Corpus Christi for three days of planning meetings addressing job definitions, hiring, team setup and responsibilities, and the role of the coordinator.
Job Definitions
For Corpus Christi, Amasi and Winslow strongly advocated pushing aside the job distinctions and roles currently in place at Wolfe’s two unionized plants and creating semi-autonomous work teams in their place. Traditionally, the workers were divided into two categories—production and maintenance—with work assignments further determined by job classifications and seniority. The implementation team maintained that these traditional divisions would not provide the flexibility and equality that were necessary to make SDTs a powerful source of continuous improvement ideas. A related issue was associated with conflicts between maintenance and line operator personnel at the two unionized plants. No workers on the line, foremen included, were authorized to perform maintenance on equipment. Maintenance personnel were paid a higher wage than production personnel, and production personnel were promoted to maintenance positions only after at least one year at the plant. Even if a line operator knew how to fix a problem, the extrusion line would halt to wait for a maintenance worker to fix the problem. Maintenance workers and line operators often disagreed on the reasons for the breakdown of equipment as well as the best way to troubleshoot the line. Further, line operators had an often-justified fear they would be blamed for any drop in the line’s productivity while a fix was being made. To compound the problem, maintenance workers on the Austin plant’s third shift called in sick at a rate 20% higher than third-shift workers at comparable plants. For the Columbus plant, the rate was 35% higher than at comparable plants.
The implementation team agreed on two job levels for workers on the factory floor. The first classification included line operators and materials handlers. The second level, called “technicians,” would be assigned to the more technically demanding work on the plant floor. The job descriptions for line operators and technicians were very similar, but technicians were expected to take the lead in technical problem solving
Hiring
The team recognized that the innovative work system planned for Corpus Christi would require characteristics that were not traditionally sought in factory floor workers. Winslow was committed to flexible work assignments at Corpus Christi and wanted, ideally, every worker to learn every job at the plant. But fully participating in self-directed teams would clearly require both management and workers to learn a new set of skills. Winslow and the others documented a set of personal characteristics to use as hiring criteria, including problem solving and a thirst to learn, performance reliability and adaptability, judgment, organizing skills, and initiative.
Then they set up three exercises, or simulations, to evaluate applicants on these dimensions. These exercises mystified some applicants but others enjoyed the process, as one former oilfield worker explained: “I’d never had a job interview like that. They want me to actually think and make choices on the job. I didn’t understand how it would work but I sure got excited by the idea.”
Winslow and his hiring team interviewed 500 applicants for approximately 90 positions. They initially offered positions to Moon Plastics workers but eventually hired only 20. “Moon was unionized,” Winslow had explained to Amasi, “and I did not want teams to fall back into the old ways of doing things.” Applicants were offered compensation comparable to that at Wolfe’s other plants. Amasi had wanted to pay a premium of up to $2 per hour, based on job description, to employees at Corpus Christi, but under pressure from the union he set aside this idea.
Team Definition
The implementation team debated how to design the SDTs. They asked questions such as, “How big can a team be and remain productive?” and “Do workers identify themselves with a specific job, a specific shift, or an area of the floor?” Winslow and the others considered using a shift—all 27 people working eight hours on the floor together—as a team. After all, it was the shift that produced plastic pipe. Further, if workers rotated through all the jobs on the floor, they would gain a deeper understanding of the pipe production process. As a result, they would start to think of the work areas as interdependent and as equally responsible for the production of a quality product. Ultimately, the managers on the implementation team decided to set up two teams—extrusion line operators and material handlers—for each shift. Each team contained 12-15 people.
Boundary of Team Responsibilities
In establishing boundaries for team decision making, the managers at the Wolfe’s two unionized plants highlighted the gap between most plant workers’ experience and the roles that Amasi and Winslow wanted them to play. In the other two Wolfe plants, most decisions were made in the office suites, with little involvement by the workers. What could the Corpus Christi implementation team reasonably expect in terms of initiative and problem-solving skills from the new hires?
In the beginning, Winslow expected the teams to take over the control of their day-to-day activities—for example, setting up break time policies, fixing equipment on the line, and ensuring that the right raw materials were always available for a given extrusion line. Winslow did not set a hard boundary line for the decisions that teams could take on as they matured—though, in 2004, he could not imagine that they would set production goals for themselves or participate in strategy- setting for the plant as a whole.
Role of the Coordinator
The least traditional role on the Corpus Christi factory floor was that of the coordinator, who was expected to support and facilitate the teams, but with little formal direction. One coordinator was on the floor per shift. Acting as a directive leader, a coordinator would provide specific instructions and supervise workers one on one, similar to the traditional role of a foreman. Acting as a coach, a coordinator would explain decisions and ask for suggestions but would retain the power to make decisions. Acting as a supportive leader, the coordinator would involve workers in making decisions and act as a facilitator. And, finally, as a delegating leader, the coordinator would turn over decisions and responsibility to the team.
Delegating leadership was the ideal, Winslow said. He asked the implementation team:
What do we mean by a self-directed work force, and how will we know when we get there? For me, the answer is when our coordinators are true delegators. For example, if an extrusion line decides to make a change in the water temperature used to cool the extruded pipe, a coordinator in a delegator role would support their right to experiment with this improvement, even if he disagreed. Wrong decisions cannot affect workers’ take-home pay—if it did, everyone would fear innovation. And yet, the team as a whole must take responsibility for thinking through decisions that affect the bottom line.
Coordinators were asked to participate in a three-day training when hired. Winslow also acted as mentor to all the coordinators and met with them as a group once a week.
2007: Tallying Successes and Disappointments
When Amasi reached the Corpus Christi plant that May morning, Winslow was waiting. The two managers sequestered themselves in a meeting room to explore the successes and disappointments associated with the same issues they discussed at the plant launch three years before.
Job Definitions
While initial job rotations on shifts caused disruptions, with workers confused about where they should go from day to day, this issue was successfully resolved in 2005 by implementing a series of recommendations from the SDTs and coordinators. Many line operators and materials handlers feel they lack status when compared with technicians. It appears as if subtle distinctions between roles are creeping back into our culture. Yesterday, one line operator told me, “The technicians are being used like foremen and they are not supposed to be. When the coordinator comes by, he asks for the technician. He doesn’t value our opinions much.”
Hiring
In the past three years, Winslow had discharged seven factory floor employees. Some employees were fired because they refused to participate in the SDT process, instead sitting silent and impatient at their team meetings in the factory cafeteria and bolting for the door as soon as possible. Others had misunderstood the concept of employee empowerment. “Empowerment does not mean autonomy or total freedom to do what you want,” Winslow explained. “The source of empowerment comes from the willingness to take on responsibility—responsibility to the team and to the plant as a whole.” Winslow continued: Most of our teams have taken ownership of quality improvement and safety issues. Neither John Amasi nor I am satisfied with the plant’s performing at 80% to 82% of design capacity, but across the shifts the teams are generating 20 ideas for process improvements per month. We have an excellent safety record—only one accident in three years compared to two a year at the Austin plant. Our third shift, though, is not making its production targets. And when the coordinator or I try to help, the workers claim we are going back on our promises.
Team Definition, Boundary of Team Responsibilities, and Role of the Coordinator
“In 2004,” Winslow continued, “I would say 100% of decisions were made by coordinators in a directive leadership style. Now, 80% of decisions about the work on the factory floor are made by the teams. In many cases, the workers know more now about plastics extrusion than the coordinators do. As one coordinator said to me last week, ‘Now the workers are the experts, and they are accountable to each other.’”
Remaining areas of difficulty centered on personnel management and plant policy. Winslow shared examples with Amasi:
- Individual recognition: “We’re successful at group recognition, but individual recognition is a big problem. When a coordinator posted a list of outstanding performers, people on the list didn’t like it and asked for it to be taken down. Also, workers are asking for pay increases for high performance. But I want to incent teams, not individuals acting on their own—how do I do that?”
- Performance evaluation: “Floor workers tell me that coordinators know their names but little about the work they do. And yet, no one wants to do peer evaluations, which I have seen as a goal since 2004. They worry that disagreements between workers will be reflected in negative comments in people’s permanent files. And peer appraisal raises a host of questions. How would we use the results?”
- Size and composition of the teams: “I think small teams are far more effective than larger teams, but I’m struggling with how to define smaller teams on the factory floor. Furthermore, we have fairly high turnover of floor workers—which means membership of the teams changes frequently. That change makes it difficult for teams to gel, and when a team loses a true leader, its decision-making ability falls.”
- Overtime, vacations, and policy: ‘Teams want control over the amount of overtime they work and when they work it. But I believe that production goals, pay, and benefits are out of bounds for team decisions. Just yesterday a worker complained, ‘We were given the impression when we came here that the majority rules, but that’s not the way it is.’ The problem, as one of my coordinators said to me just yesterday, is that the boundary between management and workforce decisions is constantly shifting and everyone has a different idea of where the line should be.”
“There is no turning back with self-directed teams,” Amasi said, after listening to Winslow, “It’s like teaching a bear to dance. Once we started dancing with the bear at Corpus Christi, we gave up the ability to say when it’s time to stop. We still have a higher productivity, measured as a percentage of design capacity, than we do at the other Wolfe plants. The big question is, how do we use the SDT model to drive even better performance?”
“And was it possible,” Amasi mused, “to persuade the unionized workforce at the other Wolfe plants to accept the SDT model? I do not want this experiment to end.”
Questions
- Why does Amasi decide to use this work system at the new Corpus Christi plant? How would you characterize Amasi? For example, is he attempting to drive change or lead change?
- Identify and rank order the most challenging problems in this case.
- How would you address the identified areas of struggle between the workforce and plant management? Where would you set the boundary in decision making between the self-directed teams and management?
- If you were Amasi, how would you present the benefits of the self-directed team concept and the reasons for continuing the “Corpus Christi experiment” to the unionized workforce in the other two Wolfe plants?