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if you have been following me for a while, you probably won’t be surprise to hear about our latest achievement. Our company conducts an employee engagement survey every two years. The last time that this survey was conducted IT had a participation rate of around 30%, and a Net Promoter Score (NPS) equivalent of -15.
This year 82% of our IT associates participated in the survey and our NPS equivalent score was +42. We improved ourselves in every category (with the exception management relationships,which is hard to understand when you hear about self–management all the time), and have become one of the leading groups in engagement across the company.
I am certain that all the IT associates hard work as well as XOIT has contributed to this change. This is not to say that we are perfect – there are still areas where we can improve, but it is a complete change from two years ago.
This post begins at Fremont, California home of one of the worst auto factories ever owned by GM. The quality of both the cars and the employees that produced them was so notorious that GM made the decision to close the factory in 1982.
In 1983 Toyota and GM began negotiations to again open the Fremont factory, with each partner having different goals. GM began to think about manufacturing smaller and more efficient cars and thought that they can learn the successful “Toyota Production System.” Toyota on the other found themselves behind Honda and Nissan, both of whom had factories in the States, and they were afraid that they could lose market share in the United States. Those discussions lead to the creation of NUMMI (New United Motor Manufacture Inc).
As you can imagine there were many areas of disagreement, and one of them is applicable to our story today. Toyota came into this partnership with a culture that was known as the Toyota Production System. This radically different culture promoted two basic ideas:
- Employees were coming to work to contribute their expertise. The company trustedthem to make the right decisions and contribute to their greatest ability.
- To promote continuous improvement, which was obtained by the company shyingaway from bureaucracy and encouraging employees to come with new ideas and a willingness to test them.
Those two Ideas where translated into a more tactical approach that was implemented intoemployees’ daily work lives:
- People are more important than processes and to succeed they need to work in groups based on commitment and trust;
- Decentralized decision making – pushing decision making to the lowest possible level: People that are doing the work know the domain better and can fix issues and improve the process;
- If you put people in the position to succeed they will;
- Mistakes are OK, as long you learn from them. The biggest problem occurs when employees do not have opportunity to make mistakes.
When GM heard about the Toyota approach they literally laughed. Workers in the Fremont factory were characterized as only caring about themselves while performing the least amount of work that they could get away with. GM had committed to the union that NUMMI will reemployed 80% of the previous factory’s employees, perhaps because the thought this new initiative would fail while still learning enough from Toyota in order to be successful. Toyota, on the other hand, agreed to take the risk. Perhaps they knew that success in Fremont would translate into greater success throughout the US.
Once the agreement was signed, waves of employees from the old GM Fremont factory madetheir way to the Takaoka auto factory in Japan to learn about the Toyota Production System. They returned with stories about the “Andon cord,” and how managers are “working” for employees. The general feeling was that something different was going to happened under NUMMI.
In 12/10/1984 the first Chevy Nova (Yellow Chevy Nova) was manufactured and things were really different. The past bad behavior had disappeared, the Andon cord had not been pulled, nor had new suggestions been implemented.
A month after NUMMI was opened the President of Toyota, Tetsuro Toyoda, paid a visit to the new factory. While going through one of the production lines he noticed an employee struggling to install some rear lights on a vehicle. Mr. Toyoda approached the employee, looked at his badge, and said “Joe, please pull the andon cord.“ Joe looked at Mr. Toyoda (and the entire factory executive team behind him) and replied, “I can fix it, sir.” Mr. Toyoda replied ‘Please Joe,” to which Joe replied “I can fix it sir.” Mr. Toyoda then reached out and taking Joe’s hand, he lifted it up and together they pulled the andon cord. A yellow light beganto flash and Joe (with his hand shaking) continued to work on the car. Once the car reached the end of Joe’s work area, the production line stopped. Joe finished his work and pulled the andon cord again, the production line return to normal work. Mr. Toyoda bowed to Joe and began to speak in Japanese. “Joe,” he said, “please forgive me! I’ve done a bad job ofcommunicating to your managers the importance of the andon cord. Only you can make the best cars. I’ll do everything in my power to make sure that I don’t let you down again.”
By noon the entire factory had heard about it. The day after that the andon cord was reportedly pulled over ten times, and an average of 100 per day a month after Mr. Toyoda’svisit. Two years later, and a visit from the Harvard Business School to have data proving that the worst factory ever had become the best factory GM had, with a quality level on par withToyota factories in Japan. NUMMI was a huge success that was discussed and celebrated.
The Toyota Lean System, or the Lean Management as it is known in the states, penetrated many industries and began to make a difference. From Hollywood to Health Care, the new culture and concepts influenced many different industries.
This change didn’t pass up the software industry. On February 11-13, 2001, at The Lodge at Snowbird ski resort in the Wasatch mountains of Utah several software engineers met to discuss how to bring Lean Management into software development. They looked for a way to help software companies to adopt the Toyota Production System, instead of creating new strict ceremonies and processes.
If you look at the Agile Manifesto, you’ll see the Toyota Production System elements that I laid out in the beginning of this post. Each statement of the Agile Manifesto promotes trust, commitment and continuous improvement. The Agile Manifesto simply tried to adjust this culture and tactics to the software industry.
Culture changes are the hardest to implement, therefore human beings are more open to adopt new process and ceremonies to promote new culture. Regretfully it’s not working. Changing a culture is hard work that demands a lot from everyone that is involved in this effort. The fruit of culture changes are the same as NUMMI experience.
Agile, DevOps and whatever will come in the future are all culture changes, so understand the difference in the culture and adopt it. Simply adopting new processes and ceremonies to replace the existing ones won’t drive any change.
And NUMMI? NUMMI was closed in 2010. Today this factory is being used by Tesla to produce their cars
As we began running our IT group using XOIT we began experiencing how it works, in both the good times and the bad. Of course you can’t have the good times without the bad, and we are no exception. Whether it is a project that was pushed to production with too many defects, or a stable environment that became unstable, or a security patch that disrupted the business, these are all examples of human error that while done with good intentions, caused harm.
In an environment such as ours, where we are pushing people to be autonomous and are granting them the authority to reach their groups’ and roles’ purpose handling these types of scenarios can be tricky. Yes, we hold roles and groups accountable for their actions, but at the same time there is a fine line between holding people accountable and generating fear to take action.
You need to make sure that people will understand the results and impact of their decisions and actions from an accountability perspective, not punish them or imply that they have done BAD work. Sure it is more difficult, but finding how to make people understand that not only have they made a mistake, but that they should make sure it doesn’t happen again is priceless. By doing so you maintain your long-term strategy by not negatively impacting the team’s authority and autonomy.
In order to be able to support people’s self-reflection of their own mistakes my advice is to:
1. Make sure that there are no immediate HR implication (policy violations, for example)
2. Allow time for self-reflection
3. Involve group members with the reflection process
4. If the associate didn’t reflect and/or understand the consequences of his or her action, start the process to let them know that they are not performing as expected.
Was happy to see a game developed by our most talent Eric Levick (https://www.linkedin.com/in/levickerin) to learn the governance meeting process.
Here is a quick update on our XOIT journey thus far. After our implementation road map (https://friedkingroupcio.com/2016/07/19/xoit-self-management-implementation-road-map/) this week we have begun implementation of governance meetings for the Shared Services group.
While all IT groups have begun to practice tactical meetings, representatives from our Shared Services group are attending a one day training course on how to run governance meetings. In addition to practicing running governance meetings they will also go through an adjusted training on Crucial Conversations.
Following this training it is our hope that the elected representatives will be able to successfully run governance meetings on their own.
I’ll keep you posted.
In this post I want to share with you the progress that we have done in the last four months (since we started XOIT implementation) base on key metrics results. while we still have a lot of opportunities, I believe that the metrics demonstrate progress in almost all of the metrics we are measuring for all IT: