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THE IMPACT OF COMMUNICATION ON EMPLOYEE REACTION
TO ORGANIZATIONAL CHANGE
A CASE STUDY

presented by

SHANNON DAY

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THE IIVIPACT OF COMMUNICATION ON EMPLOYEE REACTION
TO ORGANIZATIONAL CHANGE:
A CASE STUDY

By

Shannon Day

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF ARTS

Department of Advertising

1995

 

 

 

 

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ABSTRACT

This thesis studies the impact of communication on employees during organizational
change. The project is presented as a case study conducted at Freudenberg-NOK, an
automotive supplier headquartered in Plymouth, Michigan. The question prompting the
study was, "To what extent does communication influence employees during times of
organizational change?” An employee attitude survey, which involved the collection of
original data from 3,080 employees at Freudenberg-NOK (80% of the employee base),

supplied many answers to this question.

Organizational change and the development of new corporate cultures can have a
significant effect on employee morale, participation and employee enthusiasm (or lack
thereof). Therefore, this thesis suggests that during organizational change, a formalized

communications plan can and should play a key role.

 

 

 

 

 

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Chapter
1. INTROD?
2. LITERA'I
3. FREL'DE
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TABLE OF CONTENTS

Chapter

1. INTRODUCTION

2. LITERATURE REVIEW

3 . FREUDENBERG—NOK

Freudenberg-NOK President & Chief Executive Officer: Joe Clark

Freudenberg-NOK's GROW'I'I‘H Program

Communicating the GROWTTH Program To
Freudenberg-NOK' 3 Employees

4. FREUDENBERG-NOK EMPLOYEE ATTITUDE
SURVEY AND RESULTS

GROW'I'I'H Communications Plan for 1995

5. CONCLUSION

Appendix A: GROW'I'I'H Logo and Communication Tools
Appendix B: Employee Attitude Survey

Bibliography

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CHAPTER ONE

INTRODUCTION

Organizational change and the development of new corporate cultures can have a
significant effect on employee morale, participation and employee enthusiasm (or lack
thereof). Therefore, during organizational change, a formalized communications plan
should play a key role. Without one, a company may pay a great price. Employees may
feel uninformed, uninvolved, devalued and alienated. When employees' opinions are not
sought, and their concerns and feelings are ignored, they can disengage themselves from

making any real effort to make the company's changes successful (Duck 1988).

Communication, if it is well done, can play a role in facilitating and in some cases being
responsible for employees' understanding of and willingness to accept organizational
change. ”Companies should start by getting people to buy into a new corporate vision,
thereby changing their attitudes, says Jeanie Duck (Harvard Business Review, 1988).
"Companies should want their troops to get excited and have a winning attitude.
Unfortunately, it's not realistic to expect that kind of response in most companies these
days!’

The theory upon which this thesis is based was developed from both research and personal

experience in the field of communication. This theory is listed below:

 

 

 

 

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Companies that are proponents of change are more likely to succwd and win the
participation and enthusiasm of employees if the company's leader

(President/ CEO):

1. Provides a vision justifying the change.

2. Provides strong leadership, instruction and guidance.

3. Demonstrates personal involvement among employees concerning the
changes being made, and

4. Instills and relies heavily upon a solid communications program to

effectively promote change.

The examination of this theory involves a case study conducted at Freudenberg-NOK, an
automotive supplier headquartered in Plymouth, Michigan. The question prompting the
study was, "To what extent does communication influence employees during times of
organizational change?" An employee attitude survey, which involved the collection of
original data from 3,080 employees at Freudenberg-NOK (80% of the employee base),

supplied many answers to this question.

The culture change which Freudenberg-NOK began in September of 1992 is based on a
quality program that completely converted the way parts are made at the company. Parts
which were made using a mass production method are now being made using a new system
called Lean Manufacturing. While mass production requires large volumes of inventory
and produces high percentages of rejects due to limited quality checks, lean production is
so called "lean" because it uses less of everything: factory space, inventories, materials,
physical effort, investment in tools, and engineering hours to name a few. (More in-depth
descriptions of each manufacturing method are provided later in the thesis). During this

transformation at Freudenberg-NOK, every employee in the company was affected by the

Ix)

 

 

 

 

 

changes
administr

well eno'

Freudenl
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Harmon

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changes taking place. whether they worked in the plants operating machinery, or in
administrative areas. The challenge management faced was to communicate the program

well enough to relieve any employee fears and thus gain their cooperation.

Freudenberg-NOK's lean manufacturing program, modelled after the Toyota Production
System, is ealled GROWTTH, which is an acronym for Get Rid Of Waste Through Team

Harmony. The program involves all 3,600 employees across North America.

Many traditional business paradigms were shattered during the formation of GROW'I'I‘H.
Internal communication at Freudenberg-NOK is at an all-time high. The traditional
hierarchies that lead to non-communication between management and shop floor employees
have been broken. Joe Day, Freudenberg-NOK's president and CEO, created and started
the GROWTTH program, and is its biggest advocate. He arranged for the second largest
allocation of resources dedicated to starting the GROW'I‘I‘H program to be given to the

communications effort (approximately $800,000).

The GROW'I'I‘H program has created many positive changes for employees, one in
particular being an employee suggestion system where employees are empowered to make
suggestions to management and are then put in charge of implementing their ideas. Using
lean systems, increased responsibility has been placed on operators to not only make parts,

but to inspect them during the process and take ownership of their quality.

 

 

 

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how emp‘.
much of
questions

in the pr

The res
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Management's concerns about changing the culture at Freudenberg-NOK were directed at
how employees would react to the changes happening in the company. Because of this,
much of the communications effort the first year was aimed at answering employee
questions, as well as edueating and training employees about how they would be involved

in the program.

The results from the survey show that employees' reactions to GROW'I'I‘H and their
willingness to accept and participate in the company reorganization are very high. It is my
theory that much of this success is due to the communications effort which is detailed in
this thesis. (Unfortunately, Freudenberg-NOK did not conduct a survey prior to 1992

when the GROWTTH program was started for a comparison study.)

In addition, while many companies have not adopted lean manufacturing programs
specifieally, many have reorganized by starting other quality programs like Reengineering
and Total Quality Management. However, in my research, very little information was
found which discussed companies' communication programs that might support their
organizational changes. Whether these companies have programs or not, evidence of their
efforts to communicate these organizational changes to employees was rarely found. This
case study modeling Freudenberg-NOK'S communications program serves as a
demonstration of how organizational change can quickly succeed when management

promotes and supports employee communication.

 

 

 

 

 

Attordin
sources c
try to e
inten'ie
matchin
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According to Yin (1994), a case study is an empirical form of research that uses multiple
sources of data to investigate some phenomenon in a real-life setting. Case studies often
try to explain how or why something has occurred. Sources of data include documents,
interviews, and participant observation. The data can be analyzed by either pattern
matching or explanation building. In pattern matching, the observed pattern is compared
with a pattern that might be predicted from theory or from past experience. In explanation
building, the researcher uses the evidence to propose a generalized cause or causes for the
phenomenon under investigation. This thesis is analyzed using explanation building based

on the survey which was conducted.

The following chapters support the theory of this thesis. The first chapter is a literature
review which provides in-depth information about many of the concepts discussed in the
thesis relative to the American automotive industry and Freudenberg-NOK, the company
this case study is based on. The literature review also illustrates employees' reactions to
organizational change and the importance of communicating change to promote
understanding and involvement. Chapter 2 takes a close look at Freudenberg-NOK, its
President and Chief Executive Officer, Joseph Day, as well as the company's GROWTTH
Program which cause organizational change at Freudenberg-NOK. Chapter 3 examines
the communication effort of the GROWTTH program to Freudenberg-NOK'Semployees
and leads up to chapter 4 which presents the original research conducted company-wide
at Freudenberg-NOK as well as the results. Based on much of the research and results of
the survey, chapter 5 presents Freudenberg-NOK‘S communications plan for 1995.

5

 

 

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CHAPTER TWO

LITERATURE REVIEW

The automobile industry has developed over time into a fiercely competitive industry. To the
American car companies, General Motors, Ford and Chrysler, who have maintained their roles
as leaders in automobile manufacturing for decades, it was a difficult time during the 1980's
to realize that another country could test the great minds in the United States, and proceed

to out-create and out-produce the Americans. This country was Japan.

During the oil embargo of 197 9, which significantly raised gas prices, consumers began to
reject the American oversized gas-guzzler for the small fuel-efficient Japanese car. The
American auto industry was being questionednfor its careless quality, wasteful methods,
closed-minded top management, and outdated products. In response, when the Big Three
tried to compete with the Japanese to make better, more efficient cars, they failed to match

their price or quality (Ingrasia and White 1994).

How was the American car industry to compete with the Japanese? During this time, large
target markets like the Baby Boomers were less concerned about supporting the American

economy, and more interested in the sleek styles, price and quality of the Japanese produced

 

 

 

 

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cars. While the American auto industry suffered, the Japanese industry blossomed. Toyota
in particular came out on top with its highly developed Toyota Production System, a quality

assurance system unmatched by any other car maker in the world.

Over the past twelve years, the Big Three automakers have had to begin to accept that the
Japanese were beating them with their efficiency. Without a choice, they had to adapt to the
Japanese methods of production, especially when in 1982, Detroit watched Honda began to
build cars in the US, in Marysville, Ohio. Americans had quickly given a message to the Big
Three through the Japanese cars they were choosing to purchase. In response, a year afier
Honda came to the US, General Motors (GM) formed a joint venture with Toyota called
NUMMI (New United Motor Manufacturing, Incorporated) in an effort to improve quality

(Ingrasia and White 1994).

The Japanese started teaching the Americans how to build quality into their cars and, in doing
so, stripped away Detroit's excuses for why they were still falling behind. In retrospect, even
Lee Iacocca bluntly admitted the downfall of American cars. In a full page newspaper ad
placed in the spring of 1991, Lee Iacocca pronounced, "In 1981, the quality of American cars
was just plain lousy. All of usuFord, GM, Chrysler-mbuilt a lot of lousy cars in the early
1980's. And we paid the price. We lost a lot of our market to the import competition. But

that forced us to wake up and start building better cars" (Ingrasia and White 1994, p. 14).

But even when Toyota tried to teach GM leaders like Chairman Roger Smith and others

about less wasteful methods for producing cars, they utterly failed to get the message. The
American executives continued to throw money at problems instead of solving the root
causes, and for many years after they found that this only made their weaknesses more

expensive.

But the knowledge that the Americans have begun to learn from the Japanese has very slowly
started a new American car industry. Much of this knowledge has come from Toyota and the
brilliant minds behind their premier style of business. Their fine-tuned well-developed
manufacturing method has created what researchers are calling the most revolutionary change
since Henry Ford's assembly line. Once it spreads beyond the auto industry, it is predicted
to affect almost every industry, and consequently how people work and live. This system is

The Toyora Production System, also known as Lean Production.

The Toyota Production System

Taiichi Ohno, a production genius and Japanese engineer working with Toyota, pioneered the

concept of lean production. Lean production is a manufacturing philOSOphy that results in

better, more cost efficient products or processes, higher productivity rates, improved

employee attitudes and greater customer loyalty (Ohno 1982).

There are four hallmarks of lean production: communication, efficient use of resources,

 

 

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elimination of waste, and continuous improvement. Studies have proven that, when lean
production is used, cars can be built with one third the defects, half the factory space, with
halfthe man hours (Jones, R008 and Womack 1990). Teamwork is also a crucial part of lean
production. ”Lean production welds the activities of everyone from top management to line
workers, to suppliers, into a tightly integrated whole that can respond almost instantly to
marketing demands from consumers. It can also double production and quality, while keeping

costs down" (Jones, R005 and Womack 1990, p. 11).

Toyota's production system has redefined the way cars can be made, not only in Japan, but
all over the world. This success has sparked the American automakers to stress important

issues like quality, cost reduction, and teamwork.

The efi‘ects of the oil crisis, and the subsequent increase in sales of Japan's fuel-efficient cars,
left the American auto industry sales flat. Japan, after experiencing great increases in car sales
during this time, spent many years following the oil crisis investing in research and
development aimed at the creation of new production and inventory control methods that
would allow companies to reduce production costs. In later years, Toyota developed and
practiced these methods in creating the Toyota Production System. Taiichi Ohno also created
the concept of Just-In-Time manufacturing, a crucial component of lean production, which
means producing the exact product needed in the exact quantity needed at the exact time

needed by the customer (Ohno 1982).

 

 

 

 

 

 

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In 1950, a co-worker of Ohno's, Eiji Toyoda made a visit to Ford's Rouge production plant
in Detroit, which was at that time the most eficient plant in the world, making 7,000 cars a
day. Together they concluded that mass manufacturing, although efficient at the time, would
not cater to Toyota's goal which was to become a car producer offering several different car

models, and mass manufacturing would never allow them the flexibility to do this.

To understand why the Toyota Production System chose to create a better way of
manufacturing which differed from more traditional methods, a brief chronology of
manufacturing methods will help in understanding why Toyota chose to shy away from mass

manufacturing and create the Toyota Production System.

Automobile manufacturing is still the world's largest manufacturing activity, with nearly 50
million new cars produced annually (Roos, Jones and Womack 1990). The way in which cars
were made in 1907, when Henry Ford started Ford Motor Company, hardly compares to new
manufacturing methods of today. Yet back then, the art of craft production was the only way

manufacturers knew how to make cars.

Craft production was really the first method used to make goods for consumers. Using crafi
production, highly-skilled workers created goods one by one with great detail. These
craftsmen were flexible and able to make exactly what the customer wanted, but their
products required huge amounts of time. Furniture manufacturing was a good example.

Automobiles, as another example, were also made using crafi production back in the late

10

1800's. The obvious problems with this production method were the time required to make
the ears and the expense—there were so few cars available, they were practically unaffordable

(Jones, R003 and Womack 1990).

Therefore, mass production was invented in the early 1900's to combat these problems. The
mass producer used, and many still do, skilled workers to design products made by semi-
skilled workers, who use expensrve, single-purpose machines. The goal of mass producers
is to make products in high volumes. Because capital expenditure is so high, the machines
must run constantly to cover their cost. Mass producers therefore require extra supplies,

workers and space to guarantee smooth production (Jones, R003 and Womack 1990).

Mass producers also keep standard designs in production for as long as possible, to avoid
changing over to a new product which shuts down production. This issue alone became a
major disadvantage to the Big Three's style appeal. When Buick introduced the Reatta in
1989, a car that was marketed as an expensive, high performance sports car, Buick used its
Skylark assembly line, giving the Reatta for example the same interior design as the Skylark.
In other words, because of the nature of mass production, the manufacturers often make
products that lack variety and originality to keep cost down, and customers are therefore

given repetitive and unexciting styles to chose from.

A similar example in 1985 involved Ford, which decided to attack GM cars and their

similarities in a commercial to push the Lincoln Town Car. During this time, GM's luxury

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cars (Cadillacs, Buicks, and Oldsmobiles) were all considered to be unappealingly alike. Jim
Wagner, head of Ford's Lincoln-Mercury division, decided to create a television ad that was
difi‘erent from the traditional luxury car commercial, 3 hard-hitting ad that would attract
consumers. He was out to show that the Lincoln Town Car was in a class of its own. The

ad went as follows:

"A tuxedo-clad man and his well-dressed wife walked out of their club and asked the valet
to pull up their black Cadillac. But as the couple climbed into the car, another man sheepishly
interrupted and said, 'Excuse me, I believe that's my Buick.‘ The hapless couple found
another car and the husband asked the valet, 'Is this my Cadillac?‘ The valet responded, 'No,
it's an Oldsmobile, I think.‘ Soon the whole parking lot was erupting into pandemonium with

club members trying to sort out whose cars were whose.

Just then, a relaxed and dapper gentleman strolled up to the valet and said, 'My Lincoln Town
Car, please.’ He promptly got his car, without hassle or humiliation, while the narrator

intoned, 'There's nothing like a Lincoln'" (Ingrasia 1994, p. 135).

Another pitfall in traditional mass production has large volumes of parts produced in various
locations throughout a plant. They are then moved, inventoried, and handled numerous times
before being shipped. Every time a part is touched by human hands, cost is added; and the
more the inventory grows, the more quality is threatened due to possible material life

expiration, damage from relocating, dust or foreign materials. While a part travels from

17

d

department to department in a plant, being handled by workers who perform only one or two

functions, waste is created and productivity drops.

Comparing mass production with lean production, there's a vast difl‘erence in the way the
manufacturer views quality. The mass producer sees a certain amount of defects (this number
can be rather large), and says that it is "good enough, " because to decrease the number of
defects by increasing inspections would cost too much. The lean producer's mentality is
totally different. Using lean production, the ultimate objective is to make defect-free parts
all the time. Therefore, the manufacturing methods used to try to make defect-free parts are

incorporated into the process.

Lean production is called "lean," because it uses less of everything: factory space, materials,
physical effort, investment in tools, and engineering hours to name a few. While lean
production methods also require fewer inventories, this yields two things: fewer defects due
to old material inventories and the flexibility to make a variety of products (Jones, R008 and

Womack 1990).

In lean manufacturing, parts are produced in small batches, and production steps occur within
a small U-shaped cell, where machinery is configured around the operator which promotes
an ergonomically correct and extremely efficient working environment. Non-value added
steps (steps which do not contribute to the direct production of the part) are eliminated.

Production meets the pace of the customer's needs, and the same person or team is involved

13

 

 

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in the total process.

Timing also becomes a critical part of lean production. Knowing when and in what quantity
a customer requires parts to arrive at his receiving dock allows the lean producer to calculate
how much time he has to make the parts. To effectively address the issue of time, Toyota
created the Kanban System, where Toyota's production plan is given only to the final
assembly line. When this line contacts the preceding process to withdraw parts and materials,
it creates a chain of communication. Because all processes down the line have to
communicate to the preceding processes to request goods, workers know exactly how much

to make and when (Ohno 1982).

Kaizen (kay-zen), which is the Japanese word for continuous improvement, is an integral part
of lean production and is practiced in a team setting. Teams of six or eight people study a
particular problem or process. They have 3 1/2 days to meet objectives and come up with
solutions. One of the fundamental goals of kaizen teams is that at the end of the 3 1/2 days,
the team has to have made some progress and met at least a portion of the team's objectives.
Kaizen teams are a very effective method for promoting teamwork and camaraderie amongst
employees. The make-up of teams is cross functional. The point is to cross-pollinate

employees fi'om different areas of the company to promote objectiveness and creative

solutions.

Original Equipment Manufacturers (car makers or OEM‘s) practicing mass manufacturing

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really suffer when workers pass on errors in a production line because costs begin to sky-
rocket and errors multiply endlessly. An initial error gone undetected, whether it's a bad part
or a good part improperly installed. quickly becomes compounded as the car moves down the
assembly line. At this point, not only is an enormous amount of rework time required, but
there's a good chance that the same mistake has been made in all of the cars that have come
down the line. Furthermore, no production line worker wants to be responsible for shutting
down a line. Today, the cost of shutting down an automotive production line can average

$40,000 an hour (quote from industry professional reflecting Saturn's downtime costs).

In contrast, Toyota's Production System encourages a worker to stop a production line.
Their view is that it's better to stop the line now and fix the problem, than to wait, compound
the problem, and fix it later (Ohno 1982). At Toyota, Ohno placed a cord above every work
station and encouraged any worker to stop the line immediately when a problem occurred that

they couldn't fix without stopping the line.

To illustrate further, in mass production, problems tend to be treated naively at random. Each
error is fixed and treated as an isolated event. Ohno instead instituted a problem solving
system called the "Five Why's" (Jones, Roos and Womack 1990). By asking "why" five
times, workers uncover each layer of the problem and come to understand the root cause.
They then create a fix so the problem will never happen again. At first, Toyota's production

line stopped all the time, and employees became discouraged. But work teams quickly gained

15

 

 

 

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experience in tracing problems, and the number of errors began to drop dramatically.

In US. plants, only production line managers are empowered to stop a line, which they often
have to do because of various mistakes, material shortages, and coordination problems.
Today, in Toyota plants, where any worker can stop a line, the line rarely does stop, and the
plants have practically no rework. In contrast, many mass-production plants spend 25% of

time, and 20% of factory floor space dedicated to fixing mistakes (Ohno 1982).

In addition, mass-manufacturing car makers or automotive suppliers who think that, from year
to year, their prices can increase, should be mistaken in the near future. Consumers will look
elsewhere for a comparable car, if the one they want costs too much. Likewise, a car maker
will shop around for other suppliers if their current supplier decides to raise the prices of its

parts.

"Don't confuse value with price," O'nno says. "When a consumer buys a product, he does so
because that product has a certain value to him. If the costs to the manufacturer go up, prices
can't necessarily go up. Don't take such an easy way out. It cannot be done. If the
manufacturer raises his price but the value remains the same, the manufacturer will quickly
lose the customer" (Ohno 1982, p. 5). In lean production, the producer needs to find ways
to reduce costs within his company and avoid pinning them on the customer. There are so
many ways to increase productivity and reduce waste using lean production. Significant costs

can be saved, and manufacturers and suppliers can use lean production to maintain prices

16

while providing products with increased quality.

But to many automotive companies, the main question remains. How do companies start a
lean production program? There is great apprehension among companies, who are both
afraid of change and don't understand lean production well enough to realize the benefits
they're missing. Many Western companies who do understand the dynamics of lean
production still find the changeover hard to implement, and hesitate to make it because
converting mass manufacturing systems to lean production systems can be a long and hard

process.

One of the problems the Big Three have always shared has been the lack of action to make
necessary changes in their businesses. Their size prevents them; their politics, management,
old ways of thinking, fear of change and failure have all led to a stagnant way of doing

business.

General Motors is a perfect example. As one of the world's great creators of mass
production, it finds itself with far too many middle managers, overcapacity, wastefirl
procedures, and massive excess in its number of employees. To begin to implement lean
production is a frightening concept, especially working with unions. Just the thought of
shutting down a production line is enough to make many managers settle for the way things
are. But many companies will find that they can not survive in this day and age without a less

wastefirl way of doing business. "it's really no longer debatable for survival in the next

17

 

 

century

This nee.
Chrysler)
they have
of the big
I
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maker and
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"150 find I

century" (industry professional).

This need for change has slowly led to restructuring among the Big Three (GM, Ford and
Chrysler) to cut costs, increase productivity, and most of all improve quality. In doing this,
they have a responsibility to monitor the quality of the parts being supplied to them. All three
of the big car makers in Detroit rely heavily on suppliers to make parts. Chrysler, in fact,
makes no parts for its cars; it only assembles the cars at the final stage. Therefore, the
supplier base is a very critical aspect of the car makers success, and the quality of a supplier's

parts has a direct impact on the quality of the car maker's end product.

In my mind, the car makers, in large part, can look at the quality of their cars and see it as the
direct result of the quality of their suppliers. This is true on down the line, as the suppliers
question the quality standards of their suppliers. It is becoming the responsibility of every car
maker and supplier to have a vested interest in improving quality standards, but right now,
not enough companies are taking responsibility. Despite all of the proven benefits of lean
production, many business executives see the conversion to lean systems as a luxury they can

not afford in terms of time, money and cultural change.

For instance, companies who have been moderately successful in the past with average levels
of technology, quality and leadership, may find the stress of reorganization and the financial
burden of converting to lean production as self destructive. But at the same time, they will

also find that by avoiding quality improvements, they will probably not survive.

l8

 

 

 

John McE

2005. the:

 

and cost
ofsupphr
suppliers r
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buy~in,

John McElroy, Editor in Chief of Automotive Industries Magazine, predicts that by the year
2005, there will only be 10 automotive manufacturers left in the world due to the competition
and cost of survival. Along these lines, with car makers demanding better quality, the number
of suppliers in the industry is bound to shrink as well, and in the race to succeed, many
suppliers will go out of business. In shrinking supplier bases, car makers are looking for total-
systems suppliers who can supply, for example, seals for the entire engine, not just the

transmission, and at top quality standards.

Having fewer suppliers allows OEM‘s to create closer partnerships. The suppliers that OEM's
look for these days are those who have implemented quality programs which can ensure
consistent quality. OEM‘s are also looking to create long-term partnerships with suppliers that
are based on continuous improvement activity. Long-term partnerships between the
automakers and the suppliers offer many benefits. They promote teamwork, commitment,
future profitability and elevated quality standards for both parties. Ultimately, these

partnerships will help the American car industry to "get lean" better and faster.

Companies that implement lean systems must also know that, if they do not have employee
buy-in, their program will not succeed. A lean systems program is totally dependent upon
employee involvement, enthusiasm and commitment, and more importantly, it is senior
management's job to educate employees and allow them to understand the dynamics of lean

production so they can then understand why their participation is so vital.

l9

 

 

Senior M.

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decisiort .

John K0:
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Senior Management and Leadership

The idea to convert one's company over to lean production is a massive decision that has to
be made jumping in with both feet. Before a company's president or CEO makes this

decision, he/she had better have a clear vision for the plan of implementation.

John Kotter, in his book The Leadership Factor (1990), describes the four firndamental
qualities of a true leader. These four qualities apply directly to any leader of a company that
is beginning to implement lean sysrems. Because the conversion presents such drastic
restructuring and tremendous change, a company can experience a period of "down time"
when such disruption causes employees to question the decisions being made by management.
During this time, leaders need to be prepared to help ease employees' apprehensions and help
them under stand the changes that are taking place. More importantly, they need to explain
the permanence of the program, that the company will never go back to the old ways, and that
employee buy-in is essential. It takes a person with a clear vision and tremendous faith and

energy to sustain this period of uncertainty.

Kotter's four leadership qualities are:

l) A vision of what should be, a vision which takes into account the legitimate interests of all
the people involved, 2) A strategy for achieving that vision, a strategy that recognizes all the
broadly relevant environmental forces and organizational factors, 3) A cooperative network

of resources, a coalition powerful enough to implement that strategy, and, 4) A highly

20

 

 

motiva
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implerr
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motivated group of key people in that network, a group committed to making that vision a
reality (Kotter 1990, p. 19). Surrunarized, a CEO needs a vision and strategy backed up by

suficient teamwork and motivation.

Although lean production has been around for years, the concept is so complex that
implementation has been slow. The number of companies with actual hands-on experience
is still relatively small (opinion of a consulting professional). Leaders of companies must
realize that the idea to implement lean production may be theirs, but their management teams
may have a lot to learn and buy into. Management may think it's a good idea, but may have
little knowledge of how to implement it. Management, therefore, needs to be trained before
they can be expected to sell the idea and teach their employees. Sending stafi' members to
other companies who already have lean production in place can provide a good learning

environment where actual kaizen team participation is possible.

One area where companies have seen resistance towards change is in middle management.
Middle management exists as the link between upper management and the employees.
Traditionally, it has been the employees who have always had solutions to the problems that
are trying to be fixed, but they have never been asked for their input. In lean production, the
philosophy of employee suggestion is crucial. More often than not, the employees working
on the production floor have ideas and solutions to all sorts of problems that have to do with

inefficiency and ways of making improvements (industry executive).

21

To middle managers, who have been trained in the principles of mass manufacturing for years
and years, it's the only production system they‘ve ever worked with. When upper
management tells them that everything is going to change, they become incredibly unsure and
resistant. Middle management essentially creates a plug in the flow of progress, which then

presents a huge training challenge for upper management (industry executive).

Management also needs to remember that quality management programs can not be dictated
and directed by middle managers, even if these middle managers happen to be strong
proponents of the program. Upper management needs to take ownership and assume the
responsibility of taking an active role in both starting and carrying out the program. They

can't expect to get the response or cooperation of employees if it's done any other way.

In a 1993 Harvard Business Review study, several companies in the midst of implementing
quality and continuous improvement programs, not necessarily using lean production, were
evaluated on the successes of their programs as the direct result of top management's
participation in the programs. The conclusion: "Even with sufficient breadth and depth, a
total quality program will fail without the full commitment of senior executives" (Hall,
Rosenthal and Wade 1993, p. 124). Nine companies were studied, of which only five have
achieved their projected results. Of the five successful companies, four had CEO’s who were
brought in before or during the programs. These senior executives all understood how to lead
an organization during a period of radical change. They combined the performance objectives

with their ability to build consensus at all levels of the organization.

22

Onth
spons
redesi
enpkn

the prc

In the
bemee
buyinz
conunu

R0knd

Note: 1
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51311 an

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Anothe
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”lalntall

On the other hand, the companies who failed to meet their objectives did not aggressively
sponsor their programs. They lefi the responsibility of managing the programs to their
redesign teams, who were expected to sell the programs and gain buy-in from all of the
employees. Management in these companies did not involve their top people, and as a result,

the programs were not managed correctly, or by the right people, and they failed.

In the most successful programs in the study, it was found that senior executives spent
between 20% and 60% of their time dedicated to the programs. As far as creating employee
buy-in and enthusiasm for the programs, one executive in an interview commented, "Efl‘ective
communication creates champions of the new design at all levels of the organization" (Hall,

Rosenthal and Wade 1993, p. 131).

Note: to stress once more, in slight contrast to the examples mentioned above, when
implementing lean production, the CEO and senior executives must be involved from the
start, and not brought in during the program. The idea of restructuring and creating change

has to come from the CEO.

Another weak link in the chain of continuous improvement implementation is the lack of
literature written on the "how to" of the process, versus the overwhelming volume of
literature written about the benefits. Unless companies hires a consulting agency, which is
recommended yet can be expensive, companies may be at a loss for ways to actually start and

maintain a quality program of this type.

23

 

 

 

 

An ec

Succe

that n

to do.

OUUS

funda:

manag

An editor at Industry Week magazine said it well in an article called, "If At First You Don't
Succeed” (Green 1991). In beginning the process of improvement, he says companies find
that not much effort is made to teach this part of the process. Articles and books say what
to do, but they never say how to do it. Furthermore, some companies are now putting the
onus on specific employees to start quality programs, which is wrong. Again, of the
fundamental concepts of change implementation, the decision to start fi'om senior

management down ranks high.

A similar opinion is expressed by ‘Mlliam Keenan in his article, "If I Had A Hammer" (Keenan
1993, p. 56) "One of the most frustrating aspects of a quality manager's job is the
management of expectations within the organization. That's because most people have read
enough about new quality management programs to know that significant and dramatic
changes can take place that will allow the organization to compete more effectively. What
interests pe0ple most is where we are now (how bad it is) and where we are headed (how

good it can get). But very little time is spent considering what has to be done to get there."

The responsibility upper management assumes when implementing change in a company need
also be great. The main reason for this is the power that needs to come fi'om the top to
mandate the program, to show the seriousness of the decision, and to inform employees about

the why's and the how's.

In order for programs to work, management must also communicate with employees in order

24

to gain the support and participation they need. Employees and upper management can only
work together if employees have an understanding of the changes taking place, as well as a
clear understanding of why. But case studies have proven that for several reasons companies

have faced employee buy-in problems and resistance at the outset.

How Employees React To Change And The Subsequent Role of Communication

This topic should be of great importance to upper management. Having an understanding of
how employees will react to changes in their organization will help management prepare for
resistance when it inevitably comes. A consulting firm, if hired, can help management
understand how their employees might react and suggest ways to communicate the changes.
If a consulting firm isn't used, management can analyze case studies, or in an automotive
supplier's case, ask fellow industry suppliers who have implemented similar programs, what

their experiences have been to heip facilitate the transition.

A literature search uncovered some information concerning the effects of change and
employees' reactions/first impressions to organizational change. Articles which illustrated
case studies where changes to employees' day-to-day jobs were altered, their functions
changed and a general overhaul of company procedures was illustrated, showed several

employee reactions.

25

 

 

 

 

Cases \\

 

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similar b

Total Q‘-
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training,
companj
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around

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and MC

Cases where companies were working specifically with lean production were very diflicult
to find. As mentioned earlier, very few companies have begun to implement lean production
because it is difficult to do so. There are, however, several cases about companies
implementing programs like Total Quality Management and Reengineering, which require

similar but fewer changes to an organization.

Total Quality Management (TQM) promotes continuous improvement in pockets all around
the company. Cross-firnctional process thinking is a key factor in TQM, as well as cross
training, employee involvement and empowerment (Kinni 1994). TQM makes sure a
company consistently meets and exceeds customer requirements by creating a culture of
shared values and beliefs. The culture organizes top management's strategy and operations
around customer needs and encourages the commitment of all employees towards the new
culture (Kiser and Sashkin 1993). Companies that mbscribe to TQM focus all of their energy
towards listening to the customer. Below is a list of characteristics companies using TQM
have, versus companies who operate under traditional organizational management (Capezio

and Morehouse 1993, p. 22).

TQM Companies Traditional Companies
Customer-driven Company-driven

Total customer service Customer satisfaction less than 100%
Long-term commitment Short-term profitability

Elimination of waste High scrap and rework

High quality and low cost Low quality and high cost

Quality at the source Inspection after the fact

 

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starti

bufin

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Reengineering has a very similar design to TQM but is a bigger picture. Reengineering means
starting over from scratch, in other words, a complete overhaul of "the old way" of doing
business, and a dedication to adopting new ways that make the company function better.
”Reengineering involves the firndamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical, contemporary measures of performance, such
as cost, quality, service and speed," says Dr. Michael Hammer and James Champy in their
book Reengineering 27w Corporatron (1993). Hammer and Champy feel strongly about the
benefits reengineering can create, and the necessity of using it as a tool to survive. "We
believe that reengineering is the only thing that stands between American corporations --

indeed the US. economy, -- and disaster," they say (Champy and Hammer 1993, p. 12).

Reengineering, although it's more comprehensive, is thought to be easier to understand and
implement than TQM. One reason is the complexity people connect to words and ideas that
come from Japanese thinking. They are often assumed to be too s0phisticated and confirsing
to grasp, never mind using as a tool to apply to one's company. "American companies don't
want to be rescued by a concept like TQM, which in spite of its origin in W. Edward
Deming's studies on process control, came to these shores wrapped in Japanese culture and
terminology. Kanban and kaizen? The Hoshin management techniques? Give us apple pie

and reengineering any day" (Keenan 1993, p. 56).

All three techniques (TQM, reengineering and lean production) follow core beliefs that

increase customer satisfaction, the way a company functions, and stability for the future.

27

 

 

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They can seem very similar, almost hard to tell apart, but lean production is the most
comprehensive of the three and therefore it seems, with so few companies choosing to

implement it, the hardest to do so.

Whichever method one chooses, change is bound to accompany the decision. Change is an
inevitable part of business these days. During the past decade, nearly half of all US.
companies were restructured. Over 80,000 firms were acquired or merged. Several hundred
thousand companies were downsized. At least 700,000 organizations sought bankruptcy
protection in order to continue operating. And over 450,000 others failed (Pound and

Pritchett 1992).

Because change and conformance to changing ways is practically mandated to stay
competitive and in business, how are companies finding the implementation of change
affecting their employees? How do employees react to this inevitable restructuring and

reorganizing? Is there a way to get instant buy-in? Can apprehension and fear be avoided?

Implementing change can be unnerving. Take lean production for example. Employees may
fear it simply for its name "lean" which insinuates a cut back, downsizing, or possibly a layoff.
Asking employees to change the way they work in their daily routines makes them question
why. Traditionally, management neglects to or chooses not to tell employees all they want
to know. As a ccnsequence, employees can feel left in the dark about general company

afi‘airs, and they ofien want to know more than they do. Organizational change is unsettling

28

10 U
Situ;

Org;

Fre
beg
Pro

3J0!

 

 

overall. Employees may not want to embrace change, and many workers resist change at all
cost. Reasons could be laziness, stubbornness, uncertainty, overall resistance to change, and
fear of the unknown. Reorganizing also involves risk. Workers may say,

"What if it doesn't work?

"The change won't last, it's just management's cure of the month."

"It will go away."

"It will help if I get upset about this."

"I can just go about my job like I always have."

"All these problems prove that the changes are bad for the company."
"Top management knows a lot more than they're telling us."

"I'm not in a position to make a difference."

These are all reactions that employees may easily have, and therefore, they need to be made
to understand the realities of these scenarios. The ways in which employees look at a
situation, and the conclusions they reach, can determine how well or badly they will accept

organizational change.

Frequently employees will develop a negative mind set based on misunderstanding. They
begin to accept certain myths about change, which in the end can cause unnecessary
problems. Management must take the challenge to clear up any myths that may be floating
around the office or the shop floor. It's safe to assume that a lot of employees' worry and lack
of interest in company change is directly connected to misunderstanding and a lack of

information (Pritchett 1989).

29

 

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open a
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1989;

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and

tifir

The changes that companies are making aren't going to go away. They will most likely
continue on for the life of the company. Things may settle down after a while, but they will
settle down difl‘erently. Getting upset over changes will not help, especially if employees are
open and loud about their disagreement with the changes being made. Employee buy-in and
cooperation are vital, both to the company's success and for the employee's firture at the
company. Making verbal stabs at management's decisions will only let everyone know who

in the company opposes management's decisions...and who has a short firture (Pritchett

1989)

I interviewed an automotive industry employee who works for a supplier currently
undergoing changes from implementing lean production. He works in the company's
corporate office where most of the big decision making is made. "Changes have been made
all over the company in our seventeen facilities. In the corporate office, numerous changes
have been made to the roles of sales, marketing and engineering to name a few. In fact,
processes have been completely overhauled a couple of times in the last year and a half. But
a lot of the repetitive changes are due to the newness of our way of doing business. Mistakes
and "re-do's" are a part of making change." Regarding employee buy-in, he commented, "I
think employees are taking the changes really well. I know a lot of people who have received

good promotions out of the restructuring of the organization."

When I asked this person if there were any employees in the corporate office who were

resistant to the changes being made, his answer was easy. "Yes, there are some employees

30

who don‘t like change. Some of them are older and aren't used to making quick adjustments,
and just don't seem interested. But there's one employee who has been vocal from the start.
He has no problem walking up to other employees complaining about the new system, but
he's not the only person affected by change. And there's not a person in the building who
doesn't know that he's the biggest resistor to the changes going on in the company, and that
includes his boss and his boss's boss, the CEO of the company. In my opinion, he has

damaged his future at the company. "

It's common for employees to feel that their turf or their jobs are under attack during an
organizational change. If top-level management approaches change with their employees
realistically, as a necessary process, and prioritizes communication and education of
employees, a lot of the employee opposition to the new way of doing business can be

overcome (Hall, Rosenthal and Wade 1993)

"Think about what could happen during a reengineering effort, if senior management didn't
really buy-in to the program; employees may not recognize the need for change,
organizational rumors could create anxiety and affect productivity, employees may feel
disempowered and confused about how their behavior will have to change, and valuable

pe0ple might begin to circulate their resumes" (Hall, Rosenthal and Wade 1993).

In Tony Gonnley's book How To Get Them T 0 Let Go (1992), he confronts some of the fears

employees experience when their companies reorganize. He suggests that management tell

31

 

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heed

owed

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mus

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es

a

Si

employees in as much detail as possible what the goals of the changes actually are: improved
quality, decentralized decision making, or lower costs. Employees should not just be told
how their jobs are going to change. They need to understand the big picture, or the corporate

objective.

Gorrnley also suggests to management that, like a cue ball rolling down a pool table hitting
several other balls, change has the same effect. Change can directly and indirectly affect many
people. Management should try to foresee as many of these hits as possible. Management
must also let employees know what is over for everyone. It may be a chapter in the
company's history, or a completely revised mission statement, or a new way of thinking and
a new way of manufacturing, like lean production. For lean production to work, a company
has to make a mental vow to never revert to the old way of doing business or making parts.
This message has to be communicated down the ranks for everyone to understand. In lean
production, there's a new standard, a new expectation, and an entirely new way management

expects employees to think.

Anticipating employee reactions will also help management bypass a lot of the apprehension
felt by employees. Consulting firms with experience can assist companies with solutions in
dealing with these issues. But the best way to lessen employee doubt, Gormley says, is to
communicate. Let them know about the decisions management is making, and more
importantly, use management as a communication tool as often as possible, so employees can

see and hear management support the changes that are going on.

32

 

rest

sols

arn.
inte

\yd

Tim

liar

Therefore, one of the big challenges a CEO faces is selling the idea of change to employees,
emphasizing a lot of communication. Managing the implementation of the CEO's vision for
the fixture requires both communication and selling of the vision. Leaders today are defining
new problems and opportunities versus solving old problems. Thus, it's the CEO's
responsibility to increase the organization's level of energy towards making these problem

solving changes.

In addition to communicating, a CEO must show action. He/she must "walk the talk," so to
speak. In order for an employee to want to follow a leader, the leader must have a certain
amount of credibility. The believability of the message being delivered and the leader's
integrity and track record will be strongly connected to how soon and how well employees

will join in.

The credibility of corporate managers has been at an all time low in the 1990's because many
have asked for corporate cutbacks that didn't affect their own salaries or perks (Corrado
1993). A Hay Group attitude study since the 1990's has also revealed middle managers
growing more negative. They don't necessarily want more money as much as they want
recognition for their work, honest communication and ethical management. "The medium for

managing change in US. business is communication" (Corrado 1993, p. 32).

A new business model that has recently develOped is the model of leadership versus

management. Management was viewed as impersonal whereas leadership is personal.

33

 

Ens?
inak'
perfc
u'orl

H:or

Son
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that

are

Employees want to know that company leaders care as much about them as they do about
making profits. "Employees‘ views of top management have been viewed to impact
performance more strongly than almost anything else including salary, policies and even co-
workers. The medium for this personal style is and always has been communication"

(Corrado 1993, p. 33).

In a recent national study of workers' attitudes by the Wyatt Company, it was found that in
general, companies do a good job of talking to their employees. About 80% of the 5,836 full-
time and 798 part-time employees who participated in the study said they understood their
company's goals. But just 38% said top management seeks out employee views and
suggestions. And less than one third said employers do a good job of involving workers in
decisions that affect them. Only one out of four workers said their company did a good job

of explaining the reasons behind management's decisions (Corrado 1993, p. 45).

Some companies have been successfiil at responding to change and retraining managers for
the new corporate culture. Others have used the right words like mission, vision, values and
beliefs, but haven't acted on these words. For instance, at GM, employees began to realize
that despite good intentions, communication and efforts to change, bad management decisions

are remembered more than any communication effort (GM employee).

Below is a list of some of the questions leaders face today about communication. The list

comes from the book Getting The Word Out - How Managers Can Create Value With

34

‘
‘ w

."Y'H

(‘omm

Mu:

pan

“3‘s

Communication (Corrado 1993 p. 47).

1. Can we have a good corporate image if we don't have a good internal image
among our own people?

2. Will we have the capability to give employees the wide range of information
they need - all the way from safety to equal employment?

3. Can we have a quality program without better communication?

Much of the new interest in communication is the result of the increase in employee
participation and decision making. Studies over the last 20 years have shown that employees
have very simple communication wants. Among them, they want to know what the
company's problems are, and what the employees' responsibilities are going to be as part of
the fix. Educated employees want to know even more information. They want to know how

(Corrado 1993).

Why might a company be hesitant to share confidential company information with its
employees? Giving away information may mean giving away power. Somehow, the
competition may get a hold of confidential information. And giving out information takes
time. Getting The Word Out illustrates several key messages that must be communicated by
management to educate employees and show concern while developing a new work

environment (Con‘ado 1993, p. 53).

35

1. "This is our mission...and here's how you fit in."
"What you do here is important."

"Let me tell you how you're doing."

"Let me help you do your job better."

"Here's how our unit did this quarter."

"We made a mistake, but here's how we're going to fix it."

SQV‘PP’N

"What are your ideas?"

Unlike corporate communications programs which have traditionally addressed
communication with the customer, new programs like lean production, quality program, or
any type of program or change that occurs inside a company, communicating with the internal
customer, meaning the employees, becomes even more important. In Barbara Glanz's 1991
book, The Creative Communicator (p. 13-18), a chapter is devoted to guidelines for
communicating one's organizational commitment. Guidelines become especially important
when an organization is undergoing and communicating a cultural change. Her guidelines
include thirteen main points which focus on accomplishing this. Some of the most interesting

are summarized below:

"Avoid setting high employee expectations."
When companies begin making changes, it's important not to mislead employees into thinking
that the changes will happen overnight. This mistake can set high employee expectations,

which most likely won't be met. Instead, management should set lower expectations by

36

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saying the changes being made will be a slow process that will take five years at least to
complete. By doing this, whatever achievements the company makes will show progress, and

employees can take ownership in these achievements.

"Expect varying levels of commitment."

Not all employees will embrace change the same way or right away. Everyone reacts
differently to change. Therefore, management needs to understand that the process of
buying-in may take some employees longer than others. Glanz uses the metaphor of a train
leaving the station to explain employees' reaction to a new organizational direction. The CEO
and senior managers are in the engine running the program. Some employees will readily
jump aboard. However, many employees will be unsure of what to do and will watch the
train slowly leave before they decide to jump on. Others will wait longer and grab the
caboose at the last minute. And still, others will wait for the next train. Companies may find
that some employees will even jump in fiont of the train in an effort to stop it. These are the
employees that companies need to be concerned about. After training, coaching, and
communicating, if these employees still haven't given the new culture a try, Glanz
recommends that, if management wants to communicate through action, they may need to

terminate these employees.

" Get employee buy-in by involving them."
In order for new corporate cultures to take shape, companies need the help of employees.

In order to get employees' help, they need to feel a part of the changes that are going on.

37

 

 

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Management can involve employees in the decisions being made that afl‘ect everybody in the
company. They can ask employees to be on task forces, improvement teams, and committees
to work on changing the company's culture. Employees will buy in if they feel that their
opinions and ideas will be listened to and used. Employees can also be involved in planning
special events and fill) campaigns to keep the spirit of change alive. Kasset International
asked 300 senior executives to list the top three factors that led to the company's success with
their new quality program. "Employee input and involvement" was number three, right
behind "extensive employee training, " and "observable commitment and involvement of

management. "

"Focus on management's actions, not on talk."
Commitment without action is hollow, Glanz says. Management needs to truly prove to its
employees that they are committed. Employees need to know what the company has actually

done, and not just hear about the company's goals and expectations.

" Stress teamwork."

Companies can't expect changes to adhere if they don't have employees who are team players,
or who don't know the value of teamwork. By giving employees a sense of the
accomplishments a team can make together, versus the gains one employee can make alone,
teamwork can become a way of life. By letting employees know the importance of what
they're doing, and the mission they all share together, management also creates a new team

spirit.

38

 

 

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"Promise to keep them informed, and then do it."

Over time studies have shown that one of the top three things employees want from their jobs,
even before money, is "a feeling of being in on things." Communication becomes even more
critical when a company begins to make changes. During this critical time when employers
need the cooperation of employees, details of what is changing, why and how can really affect
the attitudes of employees towards these changes. Once a company makes the commitment
to keep employees informed on their changing organization and has begun to develop a
communications program to compliment these changes, it needs to decide how it is going to
communicate. There are several effective ways to communicate with employees. Employee

communication can be oral, written, face-to-face, or conducted in groups, to name a few.

The most popular medium for communicating information to employees is through a regular
publication. All kinds of information can be communicated in a variety of formats. These
publications can also be aimed at many different groups, like an entire company, or just

management, or special groups (Bevan 1991).

Newsletters are a good example. They are simple, generally short, and easy to put together.
Articles tend to be brief and to the point, and illustrations modest. Photos are very popular
with employee newsletters. Many employees don't take the time to read through articles, but
they like to look at pictures of fellow employees and read the captions. In addition, photos

are good because some employees may be illiterate. Newsletters are generally black and

39

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white, and therefore inexpensive to put together, even more so with a corporate desktop
publishing system. They can easily be created internally by an employee with writing, creative
and editorial skills.

Newspapers are commonly used among large corporations, where a large volume of
information needs to be communicated all the time. Newspapers can have varying number
of pages, long and short articles, feature stories, illustrations, and photos. They may be
published anywhere from daily to monthly. Publishing an internal newspaper requires a

dedicated group of employees, maybe even a newspaper staff (Bevan 1991).

One-time publications like handbooks, brochures, pamphlets and fliers can also be produced.
Paycheck inserts, posters, banners, special displays in high traffic areas are additional ways

messages can easily be communicated to employees, especially on an ongoing basis (Bevan

1991).

Letters to the home are a great way to involve employee family members in events happening
at the company (Bevan 1991). In some cases, like healthcare benefits and retirement savings
programs, family members are as important an audience as the employee. Issues of this
nature are most likely going to be discussed at home. Sending letters home about continuous
improvement programs is also a very effective way to let family members know about the
company's efforts to stay competitive and progressive. These letters let family members feel
a part of the changes going on at the company, too. On the flip side, letters sent to the home

have to compete with other mail for attention, and sometimes are viewed as intrusive. But

40

  

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letters to the home can also be highly effective if used sparingly, and only when the nature of

the message is important and appropriate (Bevan 1991).

Bulletin boards are another way to post news that can be seen by employees immediately.
According to an Employee Communication Effectiveness survey, bulletin boards rank fourth
as a major source of organizational information, preceded only by the immediate supervisor,
the grapevine, and employee handbooks. The survey also indicated that employees look at

bulletin boards for information more often than regular employee publications (Bevan 1991).

Using bulletin boards is an especially good way to communicate late—breaking news that needs
to reach employees quickly, without waiting to write a memo or for a scheduled publication.
But the bulletin board is only efi‘ective if it is used frequently. Long-standing memos and
announcements that stay posted long after an event has happened, or a policy has been put
into place, are not effective, and therefore aren't regarded as a good medium for
communication by employees. It's, therefore, important to keep bulletin boards current and

address them as a good vehicle for communication (Bevan 1991).

Companies can dress their bulletin boards to look more interesting, or label them with a line
like, "Late Breaking News. " Bulletin boards can also be dedicated to a specific cause or area
of information like employee benefits, human resources issues, or even a company's quality

program.

41

 

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Methods of visual media, like television and video, are now being used as major features in
the workplace. It is a medium everyone is familiar with, it has high impact and entertainment
value, and it can convey ideas effectively through sound and images (Bevan 1991). Videos
are excellent training tools for showing activities happening inside the company, as well as to
show what other companies are accomplishing with a similar quality program. Videos can
also be used to show a company documentary. For instance, using a quality program
employees have worked with for a couple of years as the subject, an emotional video can be
developed to show employees the progress, dedication, and employee involvement that has
been created over the past couple of years. This type of video can spark new excitement and

commitment for a program of this type and can be very moving and effective.

Another area of communication used by management to listen to employee opinions is called
Upward Communication (Bevan 1991). This method allows employees to contribute
information and ideas, and keeps management in tune with employees' concerns, issues and
questions. Upward Communication also helps to eliminate the gap between employees and
senior management in terms of communication and a shared understanding of how things are
working in the company, as employees often say that management seems too removed from

the realities of the workplace.

Employees are usually willing to communicate upward and share suggestions and ideas. How
well organizations make use of these resources, depends largely on senior management's view

of employees as not just workers, but as thinkers and contributors. If Upward

42

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Communication is used properly, the effect on employee morale is significant, which can be
a major contributor to good performance. The most common tool in Upward Communication
is the suggestion box, where written employee suggestions are submitted and reviewed by
management. This method works best when ideas are studied seriously and are addressed

quickly (Bevan 1991).

Surveys are another tool used in Upward Communication. An attitude survey is an
anonymous questionnaire which asks how employees feel on work-related issues. Attitude
surveys can be given to employees at all levels and inquire about employee's opinions on
topics such as, for example, pay, working conditions, and supervisor-employee relationships

(Bevan 1991).

These surveys are also excellent for understanding how well changes are being accepted and
implemented within a company. Management can assess how well they have created changes
in the company, and if employees are happy about the changes. Management can also find
out how well employees understand the changes. Ifthere is confusion about the goals of the
company, or the objectives of the changes taking place, this may indicate that more

communication is necessary (Bevan 1991).

Another effective communications tool is "Management By Walking Around," where
managers conduct unplanned and informal conversations with employees. This practice

increases management's visibility, exposes management to current ideas and concerns, allows

43

employees the opportunity to give management feedback, and reassures employees that

management cares about what they think (Bevan 1991).

In conclusion, after conducting extensive research, very few companies that are instituting
change are spending adequate amounts of time communicating with employees. TBM
Consulting Group, in Durham, South Carolina is one of only two firms currently teaching the
Toyota Production System around the country. Of the clients they have held over the past
several years (roughly 30), the firrn's consultants say that the communications aspect of
implementing lean production is by far one of the most neglected yet critical aspects of

starting a program.

"Over the years, we've seen clients concentrate on lean production training as if it doubled as
the communications effort. The two are not one and the same, " said TBM consultant, Bill
Schwartz. "We've also seen that each client, even though they study the entire concept of lean
production piece by piece, always seems to specialize in an area, whether it's productivity,
kaizen projects on the shopfloor or administrative areas, training, advanced kaizens, model
cells, etc. In the area of communication, only one client stands out as having implemented
their communications plan strongly and continuously since day one. This client is
Freudenberg-NOK, an automotive supplier in Michigan, whose lean production program

called GROWTTH, is considered the benchmark for many companies in the industry."

44

CHAPTER THREE

FREUDENBERG-NOK: A CASE EXAIVIPLE

While this chapter provides detail about Freudenberg-NOK, it also includes important
information about the leadership qualities of Freudenberg-NOK'S president and CEO, Joseph
Day, who strongly believes in and places great emphasis on communicating with
Freudenberg-NOK's workforce. Information in this chapter was provided by company
documents/literature and speeches as well as personal job experience and several interviews.
In addition, research provided the necessary information to write knowledgeably about

getting employees and management to buy in during organizational change.

Freudenberg-NOK established in 1989, is a North American partnership formed between its
two international parent companies, Freudenberg & Company of Germany and NOK
Corporation of Japan. Together Freudenberg and NOK make up the world's largest
manufacturers of precision seals and custom molded rubber and plastic components for the

automotive industry, with combined annual sales of $6 billion.

This unique global alliance between Freudenberg and NOK actually began through a licensing

agreement in 1960 for the Japanese market. Working together for more than 30 years, these

45

two world leaders continue their dynamic synergy through F reudenberg-NOK as they share

experiences and technology in the US. market.

Freudenberg-NOK headquartered in Plymouth, Michigan, employs 3,600 people in 15 major
locations in the United States, Canada and Mexico. It uses more than 1,100 molding
machines and one million square feet of factory floor space. Five divisions support
Freudenberg-NOK's technological development of its precision seals, custom molded rubber
and plastic components, vibration control systems and aftermarket (a replacement parts
market) rebuild kits. Freudenberg-NOK's customers include all of the major automotive
manufacturers operating in North America, as well as the powertrain and chassis systems

suppliers.

Freudenberg-NOK also derives approximately 15% of its business from several general
industry customers in the Heavy Duty Machinery, Appliance, Electronics, Aerospace and Off-

Road Equipment industries.

Freudenberg and NOK joined forces in the United States for reasons of increased stability,
improved profitability, and better utilization of their trusted international relationship. While
Freudenberg and NOK worked together around the world, they realized that each held several
wholly owned subsidiaries in North America that were underrnanaged and unprofitable. To
solve these problems, they created Freudenberg-NOK (F reudenberg owns 75% and NOK

owns 25%), and joined all of their former independent companies under one new North

46

American corporate umbrella. Freudenberg-NOK's original mission was to serve the needs
of the North American market with an unmatched blend of technology and expertise, a

mission which still stands today.

F reudenberg-NOK Mission Statement

Grow to be a highly profitable $500 million company in 1995 and a
$1 billion company by the end of this decade within the technological
portfolios of our parent companies through a decentralized

organization that uses GROWTTH as the central theme of its culture.

F reudenberg-NOK's Core Beliefs And Values

1. We are committed to anticipating, understanding and meeting our customers'
needs.

2. We are committed to providing a safe environment with opportunity for personal
grth and fulfillment.

3. Innovation, communication, teamwork, GROWTTH, profit and quality are all

essential to our success.
4. As good corporate citizens, we will continue to be environmentally responsible
and community minded.

5. We will behave ethically in everything we do.

Over the years, Freudenberg-NOK and its parent companies have invested heavily in research
and development. Over $200 million is spent annually between the companies, and two

thousand specialists support the technological interests of the companies at over 130 sites

47

worldwide.

Freudenberg-NOK manufactures a total of 1.2 billion parts annually. Automotive applications

support both the drivetrain and chassis systems in the following areas:

Cooling Systems Engine Brake Systems
Steering Systems Transmission ABS Brakes

Sound Systems Drive Systems Air-Fuel Management
Comfort Control Electrical Systems Suspension

Freudenberg-NOK has also earned coveted quality awards fiom over 30 of its customers,
including General Motors' Mark of Excellence, Ford's Q1 Award, and Chrysler's Quality

Excellence Award.

Freudenberg-NOK has been dedicated to developing total sealing system solutions.
Freudenberg-NOK feels that responsible, competent and strategic partners can help OEM‘s
cut warranty costs, enhance reliability and ensure customer satisfaction, especially in rubber

products, which account for 70% of automakers' warranty claims.

In the past three years, General Motors has introduced its new Northstar engine and upgraded
the Quad IV engine. With NOK's assistance, Freudenberg-NOK has become the leading
sealing system supplier on these engines. Freudenberg-NOK also supplies a thermoplastic

intake manifold to the Northstar engine, which won Rubber & Plastics News' Application Of

48

The Year award in 1994. Freudenberg-NOK has also increased its sales with Chrysler, having
been given extensive new sealing business and the responsibility of engineering and

developing every seal in Chrysler's next engine totalling twenty different seals.

Freudenberg-NOK is also leveraging its expertise and capabilities in vibration control
technology and has become a crucial resource to automakers in their efforts to eliminate
noise, vibration and harshness fi'om the next generation of vehicles. In the fall of 1994,
Freudenberg-NOK opened the North American industry's most comprehensive vibration
control laboratory at its Ligonier, Indiana facility. This laboratory was modeled after NOK's
lab in Japan, and is located within F reudenberg-NOK's vibration control production facility
to offer customers the agility and responsiveness that true simultaneous engineering can

provide.

Plastic technology has also become a major focus area for Freudenberg-NOK. Combining
sealing expertise with Freudenberg's experience in plastic molding, Freudenberg-NOK can
offer air intake, file] management and valve cover systems which are lighter in weight, more

economical and more reliable than more conventional systems.

Freudenberg-NOK's Plastic Products Division invested $20 million in 1994 to expand its
capabilities in the development and production of rigid plastic engine components and
systems. Included in this investment were plastic molding cells and a sophisticated

CAD/CAM system to support the development work Freudenberg-NOK's customers seek.

49

With Freudenberg-NOK's lean production program called GROWTTH (Get Rid Of Waste
Through Team Harmony), and the previously mentioned initiatives, Freudenberg-NOK has

positioned itself to be a strategic, long-term development partner in North America.

Freudenberg-NOK CEO: Joe Day

In 1989, Freudenberg and NOK searched for a President and CEO to lead their new general
partnership. They found Joseph C. Day, a top executive at the Dexter Corporation; a paper
products and specialty materials manufacturer in Windsor Locks, Connecticut. With 23 years
of sales, marketing, engineering manpower training, investment strategy, and executive level
management experience at both Dexter and General Electric, Joe Day became Freudenberg-

NOK's President and CEO.

After having accepted the job, Day was faced with unifying eight unintegrated businesses,
each manufacturing similar product lines with complementary technology. Among the eight
companies which were all fiercely independent, there was massive duplication of efl‘ort in
finance, production design, manufacturing engineering, sales and many other areas. For
example, although all eight companies now represented one, in some instances, customers had

six different sales people calling on them.

50

After merging eight financially unstable companies, Freudenberg-NOK lost $12 million in
1989 on sales of $200 million. To jump start the former eight companies which had only been

growing at a rate of 2-3% per year for several years, Day established three immediate goals:

(1) Take action to stop negative profitability; (2) Create a new management environment
that was motivating and morale building; and (3) Dramatically increase the rate of sales
growth to fill up unused capacity. Activities undertaken to accomplish these objectives are

described in the following sections.

Take Action To Stop Negative Profitability.

Day quickly raised prices, consolidated production, closed the three weakest of the fifteen
factories, and eliminated the redundancy in positions across the board by reshaping the eight
companies into three product divisions: Plastic Products, Rubber Molded Products and

Vibration Control Systems.

Create A New Management Environment That Was
Motivating And Morale Building.

Day proceeded to focus on creating a new management team, which largely consisted of new
hires from outside the company. The previous managers of the eight companies were too
willing to maintain the status quo. After Day made his goals and expectations clear, asking
for support and action from his management team, he was greatly disappointed. Where new

hires at the headquarters in Plymouth showed instant loyalty to the company, the managers

51

who had run the plants prior to F reudenberg-NOK's formation were threatened and
uncooperative, as well as insensitive to the fact that everyone involved had the opportunity
to succeed and win by working together. Many managers had their own private agendas that
clashed with Day's goals to grow the business. Day recalled that, when he held meetings,
managers would promise to do one thing and then go back to their plants and do the exact

opposite.

In response, Day was forced to remove three of the eleven executives for inconsistent
performance and activities in conflict with management directions. Eventually, five of the
remaining eight were reassigned to different areas of the company for lack of necessary
management skills. By the end of F reudenberg-NOK's third year, only three of the eleven
executives still held their original positions. The eight open positions were filled by outside
recruiting. In the end, accomplishing his goal of creating a new management environment
that was motivating and morale building, Day realized it wasn't going to come fi'om the

management within the company.

What's interesting to note is that, most often when restructuring occurs in companies, it is the
hourly work force that becomes nervous, uncertain and sometimes unwilling to change. In
this case however, the lack of cooperation was really most evident through the power

struggles among middle management.

"When I was hired, F reudenberg in Germany made it very clear that their businesses in the

52

US. were hemorrhaging," Day said. "Germany knew that the quality of their management
team in the US. was woefully inadequate. Quick action was demanded on my part to turn
things around. In fact, I was even surprised at the country club atmosphere that existed, and
the disregard the American managers had for their German owners. However, there was no
incentive for them to excel. Germany was so infrequently involved, and had done little to

advance management skills" (Joe Day interview October, 1994).

Dramatically Increase The Rate Of Sales Growth And Fill Up Unused Capacity.

Day realized that, while the former management of his new company was weak, the quality
of the products produced had always been excellent. In researching the existing sales
strategy, Day sadly discovered that the sales organization incentive plan had only been
designed to motivate the sales force to maintain and never lose business. Sales people had

not been given the incentive to create new business.

In response, within the first six months, Day personally interviewed every sales person and
often travelled with them on customer visits to get to know them and find out who had the
strongest sales skills. Based on gross duplication of effort, and several inadequate sales

associates, Day shrunk the sales force from 83 people to 50.

He then installed a new bonus plan. Day explained to them that, "People will do what they

are given the incentive to do." With the new sales plan, sales people would only receive

53

bonuses for new business. To prove he was serious about increasing sales, Day raised
everyone's base salary, and announced that there was no cap to the new bonus plan. He
predicted some sales associates could as much as triple their annual salaries, and some did.
At the same time, Day advised the sales associates that this plan would only last for three
years, by which time he figured the plants would be at full capacity. Day instituted the
Shotgun Approach, which stated that any business a customer is willing to give within the

realms of Freudenberg-NOK's product lines and capability should be taken.

In response to the new sales structure, Freudenberg-NOK's sales force shot out into the
industry. Never before had they been given an incentive to work like this. Shortly afterward,
Freudenberg-NOK's sales dramatically increased. For example, while sales people had been
selling boots and dust covers (engine and transmission components) to only one customer
prior to 1989, boots and dust cover sales exploded once Freudenberg-NOK's sales force
began selling them around the industry. Sales on these parts quickly rose to $20 million from
about $9 million. Similariy for jounce bumpers (suspension products), sales quickly rose fiom
a measly $6 million per year to $45 million. Overall, sales escalated from a 3% growth rate
in the mid 80's, to 6% in 1989, to 12% in 1990, and between 1991 and 1994, sales grew at
a rate of more than 20% per year. Since the second quarter of 1991, after Freudenberg-NOK
was able to reduce manufacturing costs and increase sales, the company has never lost money.

In dollar figures, sales have grown from $200 in 1989, to $550 in 1995.

In 1993, as promised, the Shotgun Approach sales strategy really did stop. Day began to

54

place more emphasis on marketing the company's technological resources and information
exchange shared with its parent companies. Now more financially stable, Freudenberg-NOK's
sales force began selling proven design and product performance using what Day called the
Rifle Approach, which created selective growth for Freudenberg-NOK and allowed for higher
prices. Freudenberg-NOK's products were differentiated by technology, international
expertise, and proprietary compounding. Day wanted to target product lines that would use
these advantages as well as Freudenberg-NOK's engineering strengths. For example, where
Freudenberg-NOK used to take any rubber part business with the Shotgun Approach, they

would now only make rubber parts for brake, steering or file] systems.

As part of the Rifle Approach, the sales force was transferred from being a central corporate
department, to being a department within each division. Divisional vice presidents were
responsible for deciding what product lines would drive their growth, and the sales function
complemented these decisions. To prepare for this decentralization, divisional heads were
trained extensively in executive programs at Harvard, Duke and Stanford, to avoid running
the risk of falling back into 3% growth rates and to assure excellent management of

F reudenberg-NOK's divisions.

Freudenberg-NOK has prospered under Joe Day's leadership. His business strategy has both
catered to the immediate needs of the company and has matured over time to guide
Freudenberg-NOK and its employees into a more fine-tuned leadership position for other

industry suppliers to emulate.

55

Among many accomplishments, Joe Day has been the creator and driving force behind
Freudenberg-NOK's GROWTTH Program. Along with the program's success and astounding
results, Day has also been publicly recognized as among the very best in communicating with

his employees.

"Success with lean systems requires a more trusting, open environment for employees, giving
them a sense of ownership. Most employees, given the chance, want to contribute. They
prefer to be led as opposed to managed. So the conversion from mass manufacturing to lean
production has little to do with technology, and everything to do with psychology and

communication" (Joe Day interview October, 1994).

Jack Welch, Chairman and CEO of General Electric, worked closely with Day over 14 years
at GE. When asked by a Rubber and Plastics News reporter to supply a quote about Day,
Welch replied, " Day has a lot of energy, and he has that trait -- the ability to energize others.

Day had all the characteristics of good leadership 20 years ago" (Whitford 1994 p. 1).

Freudenberg-NOK's GROWTTH Program

In September of 1992, Freudenberg-NOK launched its new lean production program called
GROWTTH, spelled with two T's. The program is rooted in the concepts of the Toyota

Production System and is aimed at emphasizing teamwork and communication in an effort

56

to eliminate inefiiciencies in the use of time, labor, materials and space while continuously

improving performance.

GROWTTH is a company-wide program and involves every employee in kaizen projects,
which shift the company's manufacturing approach from mass manufacturing, where
employees generally perform one task and have little interaction with others, to lean
production, where a worker performs multiple tasks from molding to shipping while

constantly supervising quality.

"GROW'I'I'H provides the environment to cultivate employee's ideas, giving them a sense of
ownership of the processes in which they work," Day says. "In today's competitive

environment, we need the use of each worker's mind as well as their hands" (Day, Industry

Week 1994 P. 4).

Freudenberg-NOK's GROWTTH Program is directed by Gary Johnson, Vice President
Quality and Lean Systems Implementation. Each Freudenberg-NOK facility has its own
dedicated GROW'I'I'H Ofiice, which organizes and conducts kaizen projects, as well as trains

each employee annually in the four hour minimum training requirement set by Joe Day.

Freudenberg-NOK also sought the assistance of Time Based Management (TBM), a
consulting group fiom North Carolina. TBM is owned by Shingijutsu, a Japanese consulting

firm made up of consultants who worked at Toyota under Taiichi Ohno, the founder of lean

57

production. Day felt Freudenberg-NOK needed TBM to provide initial training and

facilitation skills as well as their expertise and experience with kaizens.

Since the program's inception, GROWTTH has continued to pay big dividends for
Freudenberg-NOK, an estimated $12 million, resulting from approximately 1000 kaizen
projects. During 1994, GROW'I'I'II‘S second full year, Freudenberg-NOK kaizen teams saved
$8.2 million. Freudenberg-NOK's cost savings and improvements were generated from
approximately 650 kaizen projects throughout the year, involving virtually all of the
company's workforce and many industry guests. Company-wide, results for 1994 included:

Decreasing setup time by 97%

Cutting production leadtime in half

Increasing productivity by 45%

Reducing work-in-process inventory by 63%

Decreasing floor space requirements by 34%

Slashing operator travel distance by 79%

Cutting lead time by 21%

Shrinking scrap rates by 62%

Converting 65% of Freudenberg-NOK's production (1 billion parts annually)

to one-piece-flow production

Other indirect benefits of GROWTTH have included a 25% reduction in the number of days
lost due to occupational injuries and illnesses, a decrease of more than 50 percent in OSHA
(Organization for Safety and Health Administration) reportable accidents, a two-thirds drop

in worker's compensation costs and a sizable reduction in the cost of quality.

58

Freudenberg-NOK also found hidden opportunities in the use of equipment, from kaizen
teams who have exposed the true costs of downtime. Employees now focus on clock time
instead of labor content when changing tools, with the goal of completing the tool change

during one normal process cycle of the machine.

Since Freudenberg-NOK launched the GROWTTH Program in 1992, all of the company's
3,600 employees have had ongoing training in lean systems and more than two thirds have
participated on kaizen teams. In addition, nearly 400 customers, non-competing manufacturer

executives and suppliers have also participated on kaizen teams.

Freudenberg-NOK's success with lean production has positioned the supplier as a benchmark
for the North American automotive industry. Using GROWTTH has meant a better, more
robust and reliable product at lower prices, which is attracting significant new business for
F reudenberg-NOK. Because of GROWTTH and Freudenberg-NOK's commitment to quality,
GM awarded Freudenberg-NOK $300 million of new business in October of 1994 to extend
over a three year period. Freudenberg-NOK will supply rubber and plastic drivetrain and
chassis components to GM's Automotive Components Group. Because of the GROWTTH
Program, Freudenberg-NOK will not have to increase factory floor space, equipment or the
work force to support production of these GM parts. As part of the deal, Freudenberg-NOK
will involve GM personnel in cost-reduction training programs, such as company-wide

continuous improvement projects.

59

F reudenberg-NOK has made a similar agreement with Chrysler involving GROWTTH. A
proposal was made to Chrysler Chairman, Robert Eaton, by Joe Day to help the manufacturer
eliminate wasteful steps in their administrative and production areas, as well as to play a key

role in educating and implementing lean production among Chrysler's other major suppliers.

Freudenberg-NOK's GROWTTH Proposal to Chrysler

1. Lead and direct kaizen projects to study 70 Chrysler parts produced by
Freudenberg-NOK.

2. Supply to Chrysler all production cost data as a base line (information to be kept
confidential between Chrysler and Freudenberg-NOK).

3. Develop theoretical and practical cost reductions generated by kaizen projects.

4. Go the extra step to evaluate Value Analysis/Value Engineering (VA/VE)
opportunities.

5. Allow two Chrysler people and one non-competing component supplier executive per
project.

6. Generate 6-10% reduction in cost and 10-25 times this gain in VA/VE systems costs

(information to be kept confidential between Chrysler and Freudenberg-NOK).

This proposal represents a possible $1 billion savings opportunity for Chrysler if Freudenberg-
NOK GROWTTH assumptions are correct and translatable to Chrysler's vendor base.

Chrysler's continuous improvement program is called SCORE and stands for Supplier Cost

Reduction Efl‘ort.

"Vehicle Quality is only as good as the components that go into the cars," Day told an

60

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Automotive News reporter. He often uses this point to illustrate the importance of quality
standards among automotive suppliers in order that the US. auto industry maintain a

competitive position (Jackson 1994, p. 45).

As car manufacturers continue to shrink their supply bases, they look for systems suppliers
to form strong partnerships and work together to cut manufacturing costs. "The auto makers’
demands for ever-increasing price cuts over the term of a contract prompted F reudenberg-
NOK to take a closer look at its process," said Sharon Wenzl, Freudenberg-NOK's Director
of Corporate Relations. "Freudenberg-NOK must have a process in place that assures we will
continuously improve and be able to meet the pricing requirements six years down the road,

while maintaining an adequate profit margin" (Whittford 1994, p. 10).

Throughout 1994, Chrysler sent 200 executives to Freudenberg-NOK plants to learn about
lean production and continuous improvement practices. While Chrysler is now implementing
GROWTTH practices in their own plants, they are encouraging its suppliers to do the same.
"We want to bring their system into our plants, " said Robert Eaton, Chrysler Chairman of
Freudenberg-NOK during an Automotive News interview. "They're the best in the Unites

States -- not the world -- but certainly in the United States" (Jackson 1994, p. 1).

To help fellow industry suppliers and the North American automotive industry in general to
increase its global competitiveness, Freudenberg-NOK recently teamed up with TBM

Consulting Group and Universal Management Concepts to form The GROWTTH Alliance,

61

a consultancy designed to help auto suppliers and American industry adopt lean systems.

"We're convinced that teaching lean methods to American workers and management is an
expeditious way to create global competitiveness in the North American Automotive
Industry," Day said. "The GROWTTH Alliance addresses this need. It creates a results-
oriented resource to assist manufacturers in adopting a corporate culture that can meet
automakers' and other consumers' demands for continuous improvement in terms of quality,

cost and service" (Freudenberg-NOK news release, 12/94).

This alliance combines the latest practices in lean systems, substantial expertise in shop-floor
workshops and training, and practical corporate-side experience in an American industrial
environment which can help a company to successfully implement and sustain lean systems.
"The alliance fills a crucial void created by a shortage of trained professionals in the principles

of lean, one-piece-flow manufacturing," Day said (F reudenberg-NOK news release, 12/94).

The Formation of GROWTTH

The idea of creating a lean systems program at Freudenberg-NOK began at the start of 1992
while Joe Day attended a board meeting at The Wiremold Company in Newington,
Connecticut. Day serves as Chairman of the Board at Wiremold, which manufactures housing

for electrical lines and multiple outlet units. The board had just hired Art Burn as Wiremold's

62

Il€ W

new president. Burn had left a company called Dannaker, where he had been a great
proponent ofDannaker's lean production program. One of Burn's first priorities at Wiremold
was to launch his own program. Day paid close attention as Burn did this, learning from him
how to convert not only a manufacturing plant from mass manufacturing to lean
manufacturing, but also how to educate employees so they can contribute and understand the

conversion.

Within four short months, Burn had already improved labor productivity in reducing the work
force by 26%, with a layoff and an early retirement package. Although one of the key
components of lean production boasts no one will lose their job as the result of a kaizen
project, many companies must first start to eliminate waste by getting rid of unneeded
workers. In these four months, Burn also freed up 30% of Wiremold's floor space and

improved gross profit margins by 3%.

Day was amazed at Burn's quick results, and was embarrassed that he hadn't taken firll
advantage of two Freudenberg-NOK plants in Georgia that were designed as lean production
facilities. The LaGrange plant was built in 1980 by NOK as a lean production facility, but
employed American workers who knew nothing about lean production. "That plant struggled
with one-piece-flow concepts from the day it opened. The workers never firlly understood

lean production, even though it worked," (American Supplier Institute Speech 1994).

Also, in 1989, NOK opened their second plant in Cleveland, Georgia, a $38 million one-

63

ti

piece-flow plant, which operated much better than LaGrange because management taught
employees how lean systems worked. "Lean principles were practiced with precision in
Clevelan "Day said. "Scrap rates were below 1%, cost of quality below 6%, and worker's
motivation was off the chart. However, in the years '89, '90 and '91, we were categorically
unsuccessful in transferring one-piece—flow concepts to our other plants" (American Supplier

Institute Speech 1994).

Day and his staff spent the following months examining the lean system in Georgia. What
they found were an abundance of cultural differences. What worked well for highly trained
Japanese workers, wasn't so easily adaptable to American workers and managers. "In a
nutshell, our problems had a lot to do with the vast differences between the deep rooted mass
manufacturing concepts of Western managers, and the new concepts of lean production
developed and perfected by an Eastern culture, " Day explained (American Supplier Institute

Speech, 1994).

While Day had encouraged his plant managers for months to visit the Cleveland plant and
learn about lean production, he had never formally trained his management, or made
converting to lean manufacturing mandatory in their plants. He finally realized that the

conversion to lean production couldn't and wouldn't happen until the commitment was made

by him.

Day made the commitment to himself and to Freudenberg-NOK and began a lean systems

64

program at Freudenberg-NOK. His goal was to maintain and improve the quality of
Freudenberg-NOK's products, to make processes more efficient, saving time and money, to
shorten lead times, to enhance customer relationships and to give his company a competitive

edge that very few companies in North America had.

\Vrth Freudenberg-NOK's GROW'I‘I'H program, one employee can perform everything fi'om
molding to trimming, assembling, inspecting and packing to shipping, one piece at a time. To
encourage communication and enhance comfort and efficiency, machines and operators are
placed in a U-shaped cell. Workers move from machine to machine, where mental and

physical skills work together.

"Our savings on everything from productivity and cycle time, to travel distance and work in
process, dramatically improve with the use of lean manufacturing," Day said (Joe Day

interview, 1 1/94)

Getting Senior Management on Board

Day was formally trained in the practices of lean manufacturing at Wiremold by Burnes and
by Shingijutsu, Wiremold's consulting agency. Day then formally trained the top eleven
executives who made up his senior staff. He realized that his program would never succeed

if the commitment didn't move from the top down.

65

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"Despite the proven benefits, some business executives see the conversion from mass to lean
as a luxury they simply cannot afford in terms of money, time and culture change," Day said
"As a CEO who wrestles with these same issues, I find that converting to lean systems is
actually the one thing our company has to do to ensure our future" (Day, Crain's Detroit

Business 1994 p. 7).

Since most of Day's senior managers had been schooled in the theory and practices of mass
production, they had to first be convinced that one-piece flow and continuous improvement
could actually work." I had to get all of my staff members to want to do this," Day said.
"There's a big difference in being told to do something and wanting to do it. I wanted my
staff to fully understand the savings and benefits of a lean systems program, because if they

did, they'd turn into great teachers, participants and proponents of the program."

To begin their education, staff members were sent to Wiremold in groups of three to
participate on kaizen teams and "learn religion" as Day says. They learned first hand the
power of kaizen, and the rapid rate at which improvements can be made. As staff members
returned fi'om their four day experiences, they were asked to talk to their own management

about what they had learned. "Spread the word amongst your people," Day said.

Three MIT scholars also inspired Joe Day to change the way his business ran. James
Womack, Daniel Jones, and Daniel Roos co-wrote a revolutionary book called The Machine

That Changed The World (1990). Conducting studies of the automotive industry all over

66

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North America, they found that the car makers and their suppliers were relying on
manufacturing techniques hardly changed from Henry Ford's mass production system, and
that these techniques were not competitive enough to compete with the new ideas pioneered

by the Japanese. Day made his entire staff read the book.

James Womack was then invited to speak to Day's staff. On that day, after Womack had
made a lengthy training presentation, Day asked his staff to buy in, which they all did

enthusiastically and without reservation.

"This commitment meant I and other top managers would participate in training and kaizen
projects right alongside workers on the shop floor, " Day said. "It meant we would walk the
floors and become co-equals, demonstrating that senior management is involved, and we are
ALL on the same team. It meant we had to help workers understand the benefits of lean
production, which we discovered would be difficult. Like management, many workers were
too used to the old ways. But by training them and putting them on kaizen teams and
recognizing their ideas, individually and collectively, we began the process" (American

Supplier Institute Speech 1994).

Getting Employee Buy-In

When employees hear the term "lean," it usually elicits the idea of corporate cutbacks,

67

including reduced employment. This was one of Freudenberg-NOK's biggest fears.
Management questioned how they could elicit a complete culture change, convince employees

that lean systems would work, and then ask for employee cooperation.

What management found at the start was great resistance. Freudenberg-NOK's solution to this
problem was built around communication, training and listening. Day advised managers and
supervisors to explain to employees WHY they were working in a different way. He thought
this would be much more motivating than telling them to make changes on short notice with
no explanation. The training and internal marketing of the program had a calming effect
among employees, as they slowly began to understand why as well as how changes were

being made.

Many employees doubted the program until they actively participated in it by becoming team
members on kaizen projects. "At first I was negative, " said Connie Jones, a press operator
and kaizen participant. "I'd look at the guys in the white lab coats and ask, 'Why are they
spending all that money and not getting any work done?’ Now I see what GROWTTH is all
about. We're saving lots of money and definitely doing a lot of work now to bring in more

business later" (Winter 1994, p. 68).

Some other kaizen team members said working as a group, rather than as an individual, was
a change of pace, and all agreed it was a change for the better. Workers who are skeptical

of the kaizen process at the start of a project often gain respect for other team members as

68

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results start to show. Most importantly, participating on a team really drives the program
home for employees. "Being a member of a team, gave me more of an understanding of
what's going on," said Jones. "You learn more than just your area of the factory. It makes
you less quick to criticize others, and better able to see the importance of your job as part of

the big picture" (Winter 1994, p. 68).

Freudenberg-NOK's effort to involve every employee in the program has come at a $2 million
price tag. To offset the costs of internally marketing and implementing GROWTTH,
Freudenberg-NOK has seen immediate paybacks in the millions. "The real growth is coming
from the program's self feeding cycle where lower costs and higher quality are attracting more
and more new business," said Mike Crosby, Executive Vice President of the Rubber Products
Division. "We have grown much faster as a corporation than the industry, increasing market

share in all sectors" (Whittford 1994, p. 22).

Part of starting a program like GROWTTH means companies must be willing to discover and
fix shortcomings that are revealed through continuous improvement efforts. This is part of

the commitment, one which Freudenberg-NOK made jumping in with both feet.

For example, TBM cited Freudenberg-NOK's reluctance to fully release power to its
employees as a primary factor in its failure during the late 1980's, when Freudenberg-NOK
was still running as disjointed companies under Freudenberg and NOK. Now, with

GROWTTH, middle managers are slowly beginning to let go and are involving employees on

69

a daily basis, and not just those on kaizen teams, as well as listening and acting on their
suggestions. "Most often, it's the workers on the shop floor who have all the answers to
production problems and ways to make improvements, but they never get asked!" said Day.
"Tapping the workers' knowledge and creativity through lean systems has been the most

powerfirl resource our company has ever known" (Day, Industry Week 1994b p. 4).

"Selfmanagement is the whole thrust," said Tom Julian, F reudenberg-NOK's superintendent
in Scottsburg, Indiana. "Each cell operator selects the job and schedule and tracks his or her
own scrap and production. As far as I can see, kaizen will not terminate any jobs, it will just

make openings for new ones" (Whittford 1994, p. 2).

At the onset of the program, Day guaranteed that no employee would lose his or her job as
the result of a kaizen project. He made this promise to every employee and has kept it. "To
make sure employees became involved, I had to ensure job security for employees whose
positions may be threatened by the process," Day said. "Otherwise there would be no
employee buy-in. Keeping this commitment isn't easy, but it can work. Improved
competitiveness wins new business which provides new job opportunities for displaced

/
workers" (Day 1994, p. 7).

In addition, employees are continuously cross-trained in different areas of production, so they
can be easily reassigned. Freudenberg-NOK also has an 8% attrition rate per year, while

business is growing at a rate of 12%-25%. As kaizen projects continue to free up floor space

70

in plants, this allows for capital investment and room for new business. Currently,
Freudenberg-NOK farms out a considerable amount of spring and rubber manufacturing and
metal machining work. This work is also manufactured within F reudenberg-NOK. Day plans
to create additional new jobs within the company as he begins to completely internalize

production in these areas.

As the implementation of the GROWTTH program has fallen into place over the past two
years, the communication and internal marketing efforts are given much of the credit. The
allocation of financial and personnel resources, and the planning and implementation of the
communications plan for GROWTTH has helped to create an understanding of the program
and lean systems. The communications effort has had a great impact on employees'

willingness to grasp and participate in the program.

Communicating The GROWTTH Program To

F reudenberg-NOK Employees

Communication is a fundamental component of the GROWTTH program. Because of the
role Day wanted communication to play, he promoted his Manager of Advertising and Sales
Promotion, Sharon Wenzl, to Director of Corporate Communications and put her on his
senior staff. Day figured that communicating GROWTTH would warrant almost 80% of

Wenzl's time. She was also given the budget to hire an assistant.

71

The communications effort began with the naming of the program and the design of the
program's logo. Both Day and Wenzl came up with the name GROWTTH, adding the second
"T" as a twist to the word. They then chose words to match the acronym, stressing the
reduction of waste and teamwork; the outcome was Get Rid Of Waste Through Team
Harmony. Once the name was decided, Wenzl hired a graphic artist to design the logo
(appendix A). The artist was instructed to create a picture that illustrated teamwork and
togetherness, as well as strength in numbers and success. Wenzl was then responsible for
creating a communications plan which had to include a method of introducing the program

officially to employees.

The Plymouth Office already knew about Day's plans to launch the program. He had asked
James Womack to come to Freudenberg-NOK a second time, but on this occasion Womack
was to speak to the entire corporate office about the theories in his book. Day announced to
the audience that the GROWTTH program was created in response to the hypotheses in
Womack’s book, and would follow the teachings of the Toyota Production System. Every
employee was given a c0py of Womack's book, The Machine That Changed The World and

was expected to read it cover to cover.

The program was officially introduced company-wide by Gary Johnson, Director of
Corporate Quality and Lean Systems Implementation, who was responsible for bringing the
GROWTTH program to life. Gary Johnson traveled to each Freudenberg-NOK facility

making a speech defining lean systems, Toyota's production system, and the vast difference

72

between mass manufacturing and lean manufacturing. Joe Day accompanied Gary Johnson

to every speech, as did that facility's divisional vice president and all plant management.

Johnson's speech was developed to help employees understand why and how Freudenberg-
NOK planned to convert all of the company's plants over to lean production. Johnson
answered many questions, and informed employees that they would be attending at least one
four hour GROWTTH training session every year, which would be one of management's
ongoing efforts to keep employees educated and informed of the changes happening in the

company.

At the end of Johnson's speech, every employee received a GROWTTH lapel pin to promote
and maintain awareness of the program. Employees also received a GROWTTH program
brochure called "Questions and Answers About Our Company Plan For GROWTTH"
(Appendix A). In the brochure, the following questions were answered: What Is
GROWTTH?, Why Do We Need This Program Now?, Who Will Be Involved?, How Will
GROWTTH Work?, Who Are The GROWTTH Managers?, What Are The GROWTTH
Benefits?, When Does The GROWTTH Program Get Underway?, and What Can I Do To

Get Ready For GROWTTH?

Sharon Wenzl created the brochure and used the question and answer format to get right to
the questions she felt employees would ask. Wenzl also included an insert in the brochure

called "Heading For Tomorrow." It included information on the following titled areas:

73

1. "First A Quick Look Back." This section briefly reminisced about the survival mode
employees had been operating in since the company's formation due to the recessional

economy.

2. "Some Well Deserved Thanks." Joe Day is quoted thanking employees for their talents
and their continuously impressive performances that have given Freudenberg-NOK their

current competitive position.

3. "We're Headed For Explosive Growth." Highlighted here is F reudenberg-NOK's goal to
stretch sales to $500 million by 1995, and to $1 billion by the year 2000.

4. "But Real Growth Requires GROW l' I'H. " The GROWTTH Program is stressed as being
the vehicle to make Freudenberg-NOK more productive, efficient and profitable, and to

provide employees more personal enrichment.

Freudenberg-NOK's Core Beliefs and Values and its Mission Statements are also included in

the insert as well as the company's corporate purpose.

The first facility to hear Gary Johnson's Speech was the Bristol, New Hampshire facility,
Freudenberg-NOK's only unionized plant. Joe Day decided it was important to launch the
program in Bristol and address the union first. At Johnson's speech, which he gave several
times because the 900 employees in Bristol were spread over three shifts, he also informed

them that during the upcoming week, Bristol would host the company's first kaizen teams.

Eight teams made up of Bristol employees and all eleven of F reudenberg-NOK's senior staff

74

members went to work to eliminate waste and improve productivity. Teams first underwent
the four hour training program conducted by TBM, which was actively involved at the Bristol

kaizen as well as numerous kaizen events throughout the first two years of the program.

After training, Wenzl outfitted all team members with white lab coats which had an
embroidered GROWTTH logo on the left chest, GROWTTH polo-style shirts, GROWTTH
caps, and stopwatches used for time studies. This merchandise, especially the lab coats, was
used as a visual tool to let plant employees know that kaizen teams were at work and to make

teams look and feel official.

During this first kaizen week, eighty white lab coats flooded the plant floor. Employees saw
that Joe Day was serious about the program when they saw him and his senior staff dressed
in jeans and lab coats pitching in and getting their hands dirty, too. Day and TBM personnel
also spent time with the union president that week covering details of the program and
convincing the president that GROWTTH would do more to insure job security and new

business than remaining a mass manufacturer would ever do.

Team presentations are always attended by plant management. This is a standard across the
company and is intended to show employees and teams that management is involved.
Employees are also invited to attend team presentations, and often up to 50 employees are

in attendance. Also, every kaizen team member is responsible for a part of the presentation.

75

Many team members have never spoken in public before and find the experience unnerving,
but with encouragement, they make it through the presentation. Team presentations are a
fundamental part of the kaizen experience, and can play a large part in employee's personal

growth and satisfaction.

After presentations, kaizen team members receive GROWTTH certificates awarding them for
their participation (Appendix A). This is standard throughout the company and is part of the
reward and recognition system. All certificates show the employee's name and are signed by
the plant's divisional vice president. At the Bristol kaizen, all team certificates were signed

by Joe Day.

The launch of the GROWTTH program was similar for all of the company's plants. After
Gary Johnson's speech, plants hosted their first set of kaizen teams which visually showed
employees what Johnson was describing. From plant feedback, senior management found
that employees were generally very receptive to the program. Each plant's GROWTTH
Office Coordinator, responsible for running the program in their plant, quickly began to

receive requests from employees who were interested in being on teams.

Throughout GROWTTH's first year, other ongoing programs were put into place. Wenzl
created a 10' x 20' GROWTTH display in the Plymouth office lobby for employees, customers
and visitors (Appendix A). The five-color display covered the What, Who, Why, and How's

of the program, and included oversized photographs of the first kaizen teams in Bristol.

76

The corporate newsletter called "The Inside Look" was replaced by the GROWTTH
Newsletter, which aims to update all company employees about the GROWTTH program and
company-wide kaizen results, as well as other important information like safety programs and
awards. Wenzl and Day felt that changing the name and the contents of the company
newsletter was an effective way to relay information about the GROWTTH program to

employees on a monthly basis (Appendix B).

Each company location was expected to issue monthly GROWTTH inserts to the company
newsletter which served to inform facilities about their own GROWTTH activities. The
GROWTTH offices and Human Resources departments could work together to write the
newsletter, but it had to be printed on a monthly basis. Wenzl provided each facility with
artwork and mastheads for local printers. Wenzl felt the facility inserts were a good way to
display photos of local kaizen teams as well as write-ups about the projects studied and the

results.

Wenzl made 4' x 6' four-color vinyl banners displaying the GROWTTH logo and sent multiple
copies to all Freudenberg-NOK facilities to hang in the shop floors and lobbies (Appendix A).
It was the goal of the Communications department to get every employee in the company to
at least know what the GROWTTH acronym stood for and to become familiar with the logo
throughout the program's first year. GROWTTH offices around the company were asked to
create GROWTTH communication boards to be frequently updated with information like

team projects, as well as upcoming projects and results.

77

As a new corporate culture was being created, the Communications department helped
educate and promote an understanding of the program. Exposing the logo, the white lab
coats, the GROWTTH shirts and caps, and employees certificates that were displayed in

offices and work areas were all thought to help with these goals.

The second full year of GROWTTH followed basically the same communications plan.
Kaizen teams continued to wear the GROWTTH merchandise during kaizen weeks, and
employees, some having been on several kaizen teams, began to wear their GROWTTH shirts
to work regularly. Nineteen ninety-four's kaizen shirt was switched from grey to black. The

GROWTTH cap also changed from white to black with a green bill.

Special focus areas for kaizen study in 1994 were communicated through the GROWTTH
newsletter as well as plant inserts and communication boards. All Freudenberg-NOK
employees were given white thermal mugs displaying the GROWTTH logo as another
giveaway to promote the program. Plants were asked to make sure all new hires receive a

GROWTTH pin and mug as well.

The Communications department created an annual GROWTTH participation award in 1994,
called The Horizon Award (Appendix A). All facilities received the award at the end of the
year. The awards were given to a Special employee at each facility by Joe Day during his
State Of The Business Speech. Year end results were engraved into each facility's award as

well as the facility's name and a thank you message for their involvement in the program.

78

Each location received two awards, one for the lobby area and the other for a high traffic are

like cafeterias or breakrooms where employees can see it.

The Communications Department, in an effort to further promote the program, created a
GROWTTH merchandise catalog full of novelty and clothing items, some displaying the
Freudenberg-NOK logo, and most showing the GROWTTH logo (Appendix A). All
employees received a copy of the catalog and several order sheets. Employees mail their
order forms directly to F reudenberg-NOK's supplier in Michigan. Plant management, Human
Resources and GROWTTH offices are welcome to place bulk orders through the
Communications Department in Plymouth. Bulk orders are often placed for employee kaizen
recognition and plant parties. GROWTTH offices often order catalog items to outfit many
steering committees, and to use as gifts for customers and visitors. The catalog was changed
at the end of 1994 to add new merchandise and discontinue some of the items that were not
big sellers. Of the original 36 items offered in the catalog, thirteen items were added and 11

were discontinued. GROWTTH catalog sales from 1994 totalled a surprising $65,000.

In 1994, staff members continued to participate on teams and attend team presentations.
Throughout 1993 and 1994, Joe Day was personally involved (not necessarily as a team
member) with over 100 kaizen teams. To wrap up GROWTTH's second year, Wenzl's
department made a proposal to Joe Day asking for funding to create a GROWTTH video to
show employee involvement throughout the company and thank employees for two years of

hard work. The video was to be an emotional tribute and an inspirational, uplifting and

79

ll

energizing piece to get employees revved up for 1995. Day approved the proposal.

The video was to be shown during Joe Day's State Of The Business Speech, his annual year-
end speech given to every facility. After previewing the video, Day was so impressed with
the emotional impact it had that he made the video the highlight of his tour. Every
Freudenberg-NOK facility was represented in the video which included eighty employee
photos, employee, customer and supplier testimonials, as well as excerpts from one of Joe
Day's speeches given to Chrysler's top 100 executives about GROWTTH. Day's tour
schedule was published in the GROWTTH newsletter so employees knew when he was
visiting their plants. Human Resource offices were told that one third of the audience

listening to Day's speech had to be from the shop floor.

The video was a tremendous success among employees. Many facilities continue to show the
video in break rooms, in cafeterias and during monthly meetings so employees who couldn't
attend the speech have the opportunity to see the video. Freudenberg-NOK's GROWTTH

consultancy is also using the video as an effective sales tool.

CHAPTER FOUR

FREUDENBERG—NOK'S
EMPLOYEE ATTITUDE SURVEY AND RESULTS

The Communications department, in conjunction with Joe Day and Dan Klaiber, Director
Human Resources, created an employee attitude survey which was developed as a vehicle to
help senior management understand employees' opinions, feelings and attitudes on issues such
as management, benefits and the GROWTTH program. Management's goal in conducting
the survey was to learn the degrees of satisfaction or dissatisfaction employees feel in these
critical areas of the business. After GROWTTH‘s second fill] year, Joe Day and Sharon
Wenzl were most interested in the survey's questions relating to the GROWTTH program;

if it was being understood, implemented well and generally liked by employees.

The survey included 31 questions (Appendix B). Questions asked for both factual answers
and evaluative answers. For the evaluative questions, employees answered using the following
formats; "rate your answer from strongly agree to strongly disagree," and "rate your answer
from excellent to poor." For the factual questions, (At which facility do you work, What is
your position in the company, How many kaizen teams have you been on), employes used the
format "mark the correct answer." Questions 13 - 15 asked for employee opinions

concerning company benefit programs, and results are not analyzed in this paper.

81

The survey was handed out to employees during the second week of June, 1994. Employees
were asked to participate by their local human resources offices on a strictly voluntary basis
and were told verbally as well as in writing that their results were to remain anonymous.
Once the survey was issued and employees were asked to respond in a timely manner,
employees answered the survey on their own time, during breaks, during lunch or after work.
Completed surveys were handed in to the human resources office which then mailed them to
the corporate office in Plymouth, MI. Out of 3,600 employees at Freudenberg-NOK, 2,883
responded, an 80% response rate (see Figure 1).

Figure 1
Respondent Profile

ll Hourly Sr. Mgmt Mid. Mgmt Sprvisr lProf. Clerical No Answer ll

H 1,201 37 120 194 l 496 187 742 ii

 

 

 

 

 

 

 

 

 

 

The communications department tabulated the results several ways to best take advantage of
the information they had: results were tabulated company-wide, company-wide broken down
by salaried and hourly employees, and by plant broken down by salaried and hourly
employees. In addition, results also showed answers broken down by who had and who had

not participated on a kaizen team.

With this particular breakdown, management wanted to see how participating on a kaizen

team affected how employees feel towards the GROWTTH program, as well as their relative

82

understanding of lean systems and other important company information like sales goals, and
the company mission statement. With these breakdowns, areas of high and low satisfaction
were quickly extracted. Regarding GROWTTH, information from several areas of the

program was revealed.

Employees' General Understanding of the GROWTTH Program

Employees rated extremely high in their general knowledge of the GROWTTH program.
Because many employees had not yet participated on kaizen teams when the survey was
issued, management questioned how well employees would rate in this area, however, results
showed that employees understood the general concepts of the program. Almost 70% of the
respondents indicated that they feel GROWTTH is the correct vehicle to help Freudenberg-
NOK remain an industry leader. Over 90% of respondents know that kaizen means
continuous improvement, 88% agreed (includes the answer "sometimes agree") that kaizen
teams are a good method to eliminate waste and improve productivity, and 73% knew that

Freudenberg-NOK's sales goal for the year 2000 is $1 billion.

Because the term "lean" suggests cut-backs or downsizing, management expected employees
to initially dislike the GROWTTH program. To management's surprise, 77% of respondents
said they feel the GROWTTH program increases job security (includes the answer
"sometimes agreee"). Of this 77%, 16.4% strongly agreed. This response demonstrated that

management and the communications effort had done their job of clearly explaining the lean

83

manufacturing concept.

How Employees View Senior Management's Role in GROWTTH

Two survey questions (questions 11 and 24) related directly to senior management. Question
10, which was directed at "management," can be considered either senior management or
middle management, therefore, it is hard to say how employees viewed the question.

Nonetheless, management's participation in the program received mixed results.

Joe Day expected a high response from employees for Question 24, regarding senior
management's role in the GROWTTH program because of the personal comrrrittment he and
his stafi‘ was making, but realized that at this stage of the program, he is more visible than his
senior management team. In addition, employees can view an active role by senior
management differently. Some might think participating on a team indicates involvement,
whereas others may think attending team presentations on a regular basis means playing an
active role, or even walking the plant floors inquiring about team's projects and progress.
Nineteen percent of respondents indicated they feel senior management plays a very visible
role in the GROWTTH program. Of these respondents, 27% had participated on a kaizen
team and 13% had not. Forty two percent said they play a visible role, and 24% said a
somewhat visible role. It should be noted that employees could have also viewed senior
management not as a collective group but as being only their division's most senior person,

or even just their facility's manager. Levels of participation among these individuals does

84

vary.

Question 11: "Senior Management Pays Attention to Ideas and Suggestions From People At
All Levels." Keeping in mind the different ways "senior management" might have been
interpreted by employees, only 5% said they strongly agreed, where 26% said they agreed and
40% said they sometimes agreed. Day and the Communications department thought this was
a great question to monitor whether or not respondents who had been on a kaizen team
agreed more to this question versus employees who had not yet participated on a team.
Because employees from all levels of the company are mixed together on kaizen teams,
coupled with the power kaizen teams are given to make important decisions, management
believed that employees who had participated on a team would more readily agree with this
question. But of the 71% of the respondents who answered some level of "agree," over half

of the respondents had not been on a kaizen team.

Question 10: "Management Keeps Us Informed Through In-Person Speeches, Newsletters
and Other Literature." Management hoped that employees would agree that the efforts they
were making to communicate to employees were impacting the workforce. i Eighty-eight
percent of respondents percent agreed this was true (11% strongly, 42% agreed and 35%
sometimes agreed). While employees always want to know more than they do, and
traditionally they feel left in the dark, management was pleased by this question's response and
felt that employees were generally satisfied with the amount of information they were

receiving from management. To Note: Low scores on this question could be the result of a

85

particular plant or plants whose management does not stress communication, as seen by the

results broken down by facility.

How Employees View Middle Management

The survey results in this area demonstrated that middle management could improve their
management, supervisory and listening skills, although overall results were quite good. While
it's common for middle managers to feel threatened by a continuous improvement program
or to suffer from a lack of understanding of lean systems as well as a lack of interest,
Freudenberg-NOK's middle management group received very favorable ratings from

employees.

Under the categories of agree or strongly agree, 68% of employees said they feel free to make
suggestions to their supervisors, 60% said their supervisor is willing to listen to employee
concerns, 45% said their supervisor lets them know when they've done a good job, and 66%
said their supervisor lets them know when they need improvement in some aspect of their job.
About 38% of employees said their supervisor keeps them informed about significant
activities happening around the company, and 37% said their supervisor’s boss gives them the
support they need. Several of these questions also received between 20% and 30% percent
of responses in the "sometimes agree" category, indicating that very few employees disagreed

or strongly disagreed with any of the above mentioned questions.

86

Management's Response to the Survey Results

Overall, management was very encouraged by the results of the attitude survey, especially the
number of employees who took the time and interest to respond. Joe Day wrote an article
for the GROWTTH newsletter once the results were tabulated. He was very honest in his
article summarizing all survey results, both good and less favorable. In his article, Day
welcomed all employees to approach their plant manager who had both a copy of the

company-wide results and the results of his/her plant.

While the Communications department used the survey results as the basis for Freudenberg-
NOK's 1995 GROWTTH communications plan, management used the results to make several
improvements. After Day discussed the results with the company's top 50 managers at a

management conference, the following decisions were made:

1. Middle management would receive additional training.

Although middle management received generally good ratings, the top 50 managers felt that
further development of management skills was important in the success of promoting new
concepts of lean manufacturing. The Corporate Human Resources group was put in charge
of assembling a management and supervisory training program to teach skills in effectively
listening to employees and providing action plans to help managers turn employees' ideas and
suggestions into policy. This same training course will address managing with fairness and

will help managers understand what effect unfair management practices have on the morale

87

of a workforce.

2. Facilities that consistently scored poorly in several areas of the survey would be
audited.

A couple of Freudenberg-NOK's facilities showed low scores in several areas including

managements skills and the fairness of management ( a small tool shop in New Hampshire and

a facility in Canada). The Divisional vice presidents of these facilities were assigned the

responsibility of finding out why employees felt the way they did and were asked to report

back to Day with ideas and recommendations addressing how to solve the problems.

3. Improved Training For GROWTTH Ofices.

The results fiom question 25, "How well do you feel the GROWTTH ofiice is carried out in
your facility?" gained the attention of the management team due to low scores. The mean
score was only 2.67 on a 4.0 point scale. Means ranged from 1.91 to 3.23 across the 13
locations. Taking into consideration the role the offices play in carrying out the GROWTTH
program, the cornerstone of Freudenberg-NOK's new company culture, it was troubling to
learn that not all facilities were viewed as positively as others. Through additional attention
to communication, problem solving, brainstorming and train the trainer skills, GROWTTH
office coordinators will become more well rounded leaders. The GROWTTH office
coordinators who were cited as needing improvement will have to meet specific goals and

objectives to help them come in line with the rest of the GROWTTH offices.

88

The issue of standardization was also addressed. GROWTTH omce coordinators were told
that all GROWTTH offices are expected to run exactly the same. The process of lean
production is a standardized process, and Day mandated that the training and carrying out of
the program be consistent across all F reudenberg—NOK facilities. As customers and suppliers
become more and more involved, the quality of the GROWTTH offices has to be consistent

across the board.

GROWTTH Communications Plan For 1995

After two full years of GROWTTH promotion, the Communications Department realized
their efforts had made a significant impact on the workforce based on survey results. In the
spirit of continuous improvement, the department wanted to build upon these successes with

a plan for 1995 to ensure that the communications effort remained an important part of

GROWTTH.

In creating Freudenberg-NOK's GROWTTH communications plan for 1995, the
Communications Department revised the original plan with new ideas and promotions that
would serve to help employees firrther their education in lean systems, maintain their interest
level, and keep the GROWTTH program visually alive. Based on this, the following plan was

created:

89

1. Update the Workforce With A Speech Delivered By Gary Johnson.

Because of employee turnover and the dramatic evolution of the program in two years, a new
speech will be developed to update the workforce. Because the GROWTTH program was
originally rolled out with a speech given by Gary Johnson at each facility, Johnson will revisit
each facility and deliver an overall update on the program, company-wide results and
individual plant results. A promotional item will be given to all employees to accompany the

speech.

2. Senior Management Kaizens.

All eleven staff members have been scheduled to participate on kaizen teams in May. The
April newsletter will include an article on senior management's continued participation in the
program, and list where each staff member will be participating. A follow-up article on the
results of the teams will be printed in June's issue of the newsletter with many candid photos
of stafl‘member—employee interaction. Joe Day will make a short speech before the training
starts at the plant where his kaizen team is scheduled. His comments will be video taped at
the request of all of the GROWTTH offices to be used as an educational/promotional piece

during training for all kaizen teams at all facilities.

3. Update GROWTTH Brochure.
The GROWTTH brochure will be updated in early 1995 to reflect the progress of
GROWTTH as well as new aspects of the program. Several photographs will be included

showing employee and guest participation. The supplier/customer relationship in lean systems

90

will be explained in detail so employees will better understand why customer involvement has

been so prevalent.

4. Outfitting Kaizen Teams.

Kaizen teams will continue to be outfitted for the visual awareness of team activity and
because team members like how the lab coats keep them from getting dirty out on the floor.
The kaizen hat is being discontinued as part of the standard kaizen attire because of lack of
interest as well as cost. A similar hat is available in the catalog if plants are interested. The
kaizen shirt is changing as it does each year for variety, fashion and cost considerations. The

black shirt with green and blue trim from 1994 is being replaced with a concord purple shirt.

5. The Horizon Award.

The design of the Horizon Award will change again for 1995 and the award will be given to
every facility for recognition of their dedication and involvement throughout the year. Joe
Day will again distribute the award to chosen employees during his State Of The Business

Speech tour.

6. Revise GROWTTH Newsletter.
The GROWTTH newsletter continues to be one of the most effective communication tools
for delivering company-wide information on a monthly basis. The survey results showed that

not all employees realize that GROWTTH is the cornerstone of Freudenberg-NOK's new

91

culture, so the masthead of the newsletter will now include "The Cornerstone Of Our
Company's Culture," to reinforce the point and show employees that GROWTTH is the most

important program at Freudenberg-NOK.

More employee photos will be added to each edition of the newsletter to make it more reader
fiiendly and to capture more employee interest from those who don't take the time to read the
articles. The Communications department will assume the responsibility of getting out into
the plants to take photos and report first-hand on GROW'I'I‘H activity or will coordinate with

GROWTTH offices for assistance in taking photos.

An employee guest column will be added to the newsletter which will include the employee's
picture, a brief bio and an editorial statement. The column will feature employees (preferably
hourly) who have participated on kaizen teams and have seen GROWTTH impact their daily
job. This column should bring a positive response from readers and a new perspective on the
program other than the editor's. Employee contributors will receive a GROWTTH gift as a

thank you for participating.

The year-end issue of the GROWTTH newsletter will be given to each employee at work as

well as sent to employees' homes so family members can read about the results of the program

for 1995. Sending this issue home will help educate employee families about GROWTTH.

92

7. Redistribute GROWTTH Banners.

At least two new 4'x6' GROWTTH banners will be sent to all facilities in 1995 promoting
GROWTTH, possibly with a new tag line. Ideas include: "The Automotive Industry
Benchmark," "Reaching Towards The Year 2000," "The Lean Systems Leader, " "Employees'
Ideas Make It Happen," and "Striving For The Future." The banners have helped to visually
familiarize employees with the GROWTTH logo and to promote the program. A poster

campaign might possibly compliment the new banners.

8. Create GROWTTH Displays For All Facilities.

Using the 10'X20' GROWTTH display in the Plymouth Ofice lobby as a model, smaller
10'x10' GROWTTH displays will be made for all Freudenberg-NOK facilities. Each display
will be a self-standing three-panel display. The middle column will display basic information
about the GROWTTH program, company-wide results, as well as reprint articles on the
program from major trade magazines. The left and right columns will be customized for each
location, displaying candid photos of employees on kaizen teams and facility results. The
displays will be located in high traffic areas; in plants, for example, near the time clock or in
break areas or lunch rooms. GROWTTH oflices will help the Communications department

coordinate this project.

9. Release Year-End Results To Local Newspapers.
Freudenberg-NOK will continue to reinforce internal activity with external publicity by

releasing year-end GROWTTH results to all newspapers local to Freudenberg-NOK facilities,

93

both company-wide and by facility. This is considered as much an internal promotion effort
as it is an external public relations effort. Freudenberg—NOK will continue pitching the
GROWTTH program to local newspapers and inviting reporters to personally experience the
process as team members. National trade magazine articles on GROWTTH will also continue

to be reprinted and distributed to all facilities for employees to read.

10. Update Merchandise Catalog.
The GROWTTH Merchandise Catalog will again be updated for variety and promotion of the
program. Funds have been allocated to reprint the catalog versus creating an insert page like

in 1994.

11. GROWTTH Open House Day.

This new event will be a celebration for employees and their families. The event is scheduled
for July and will be sponsored by each Freudenberg-NOK location with promotional help
from the Communications Department. Certain employees will receive awards from the plant
manager for their continued participation in the program. Food and beverages will be served
and there will be games for the children. Possible giveaway items include GROWTTH
balloons, fiisbees, keychains, buttons, and items fiom the catalog like t-shirts, coolers, pens,
and beach towels, all with the GROWTTH logo. A thank you speech will be made to all
attendees by either the plant manager, human resources manager or the GROWTTH office

coordinator.

94

12. GROWTTH Coloring Contest And Essay Contest For Kids.

April's issue of the GROWTTH newsletter will announce a GROWTTH coloring contest and
an essay contest for children of F reudenberg-NOK employees. For the coloring contest, an
outline of the GROWTTH logo will appear on the back page of the newsletter to be colored
in and mailed to the Communications department in Plymouth. Children between the ages

of 5 and 12 are eligible and entries from each age group will be chosen as winners.

The essay contest will be offered to older children, ages 13-18. The essay form will be
included in the newsletter, and children will be asked to define the GROWTTH program and
explain why they feel it is an important program, in no more than 10 lines. Several essays will

be chosen as winners.

Prizes will range from bikes and clothing items to crayons and markers for the coloring
contest. For the essay contest, savings bonds will be given to the winners as well as tours of
their parent's plant given by the plant manager. These contests will give employees an
incentive to educate their families and involve their children in the GROWTTH program, and

at the same time reinforce the importance of the program on themselves.

13. GROWTTH Popcorn Days.
Two GROW'I'I'H Popcorn Days will be sponsored on workdays by each facility in 1995, one
in May and another in October. The theme of the events will be "GROWTTH Keeps Popping

Up Amazing Results," and the Communications department will print popcorn bags with the

95

GROWTTH logo for all facilities. GROWTTH offices will organize the events, rent popcorn
makers and serve popcorn and coffee to all shifts, and will be available to answer any
questions employees may have about the program. Participation on kaizen teams will be
encouraged by the GROWTTH offices and sign up sheets will be available. The popcorn days
will be announced in the newsletter as a good opportunity to talk to the GROWTTH ofiices

and sign up for teams.

14. Revise Training Material.

The Shopfloor Kaizen Training Manual and the Team Leader Training Manual will be revised
to include Freudenberg-NOK's logo and the GROWTTH logo throughout, as well as
examples related to F reudenberg-NOK's products and processes. The manuals currently
show TBM's logo, and use examples from other TBM clients. Switching examples to
Freudenberg-NOK processes will make the training material more interesting and easier for
employees to understand. Using Freudenberg-NOK logos will give more ownership of the
program to F reudenberg-NOK (TBM has given permission). The manuals will be revised and

ready for use by the first of January.

96

CHAPTER FIVE
CONCLUSION

The evolution of the GROWTTH program has caused as much of a stir in the industry as
it has inside the walls of Freudenberg-NOK. From the inception of the program through
March of 1995, GROWTTH has made 16 million impressions on industry professionals
with more than 300 media articles written in trade magazines and newspapers. Twenty of
these media hits appeared in major national publications. This exposure is more of an
external rather than internal marketing and public relations aspect of the program' s
promotion. However, it reaffirms to Freudenberg-NOK's employees who see many of the
articles as inserts in the GROWTTH newsletter, how significant and important the
GROWTTH program has become as both a means of progress for Freudenberg-NOK as

well as a program for the industry to benchmark.

Like Jeanie Duck mentioned (1988), communication is not often a priority in companies
these days. With all of the corporate reorganization that's starting, communications can
not be left out if companies expect to carry off effective restructuring. This thesis
illustrates the effectiveness of a thorough communications program, one which is highly

supported by Freudenberg-NOK's CEO. When Freudenberg-NOK started GROWTTH,

97

it began a reorganization program whose success required 100% of its employees. This

success never could have happened without a communications effort.

Gary Vasilash, Editor-In-Chief of Production Magazine, has participated on a kaizen team
at Freudenberg-NOK and is a great proponent of the program as seen in the articles he's
written about his experience. Commenting on his view of the importance of
communicating GROWTTH he said,

"Directors of Corporate Communications tend to be invisible in stories about companies
and their programs. They tend to be facilitators or conduits of information. They don't
contribute to the information, they make it possible. Consequently, they are left out of the
picture. But in the case of Sharon Wenzl, (Director Corporate Communications) and
GROWTTH, there is a difference in that she is part of the program. In fact, she, in part,
contributed to the existence of the program. Although cellular manufacturing and one-
piece-flow tend to get the lion's share of attention vis-a—vis kaizen programs, the
importance of communications cannot be overstated. The people in Corporate
Communications must be aware of all of the elements of kaizen on a first-hand basis,
which means participating on teams and spending time in the facilities where kaizen
activity is being performed. In a story about kaizen, there is visibility of people like
Wenzl (Vasilash 1994, p. 3).

Drew Winter, an editor from Ward's Auto World agrees:

"Getting '1ean' to many companies is a euphemism for firing people and piling their work
on those who remain. At Freudenberg-NOK, a Plymouth, MI based supplier it means
growing the business without adding people or factory space. Teamwork and
communication are the keys - not layoffs, early retirement, or buyouts" (Winter 1994, p.
68).

The communications program has itself become an industry benchmark. Wenzl was asked

in October of 1994, to address the Motor Equipment Manufacturers Association (MEMA)

as its key-note speaker about Freudenberg-NOK's internal communications program.

98

Wenzl's department was also asked recently to serve as the benchmark for American Axle,
a large automotive systems components supplier, looking to improve its internal

communications program.

The survey results overall were very helpful to management in understanding what
employees know about the GROWTTH program and how employees feel about it. It also
helped management see that less than half of Freudenberg-NOK's employees had
participated on a kaizen team, a number that is much lower than it should be. Other
companies undergoing restructuring might frnd this case study interesting and helpful as
an example of one company's experiences with reorganization coupled with

communication.

Aside from the improvements companies can make by following the principles of lean
manufacturing, or the improvements which can be gained by a corporate reorganization
of any type, the fundamental basis of any such restructuring involves the efforts of
employees. Employees may be more enthusiastic when they understand not only the

"what" and "why's of restructuring but, more importantly, the "how." The case study
of Freudenberg-NOK's communications effort serves as an example of the power of

communication to motivate and educate employees who can make these change happen.

99

APPENDIX A

100

F reudenber g—N UK 's
GROWT T H Logo

 
     

l .1111

Get Rid Ot‘ Waste Through
Team Harmony

F reudenberg-N UK 's GRO W1 '1 H
Display in the
Plymouth, MI Headquarters

 

 

102

F reudenberg-N 0K
Kaizen Participation Certificate

 

 

    

Get Rid 01 Waste Through
Team harmony

SHANNON DAY
Has Successfully Participated in A
Kaiun Project Concerning 3’10“ “M338 X! 11

Your Commitment To The Growtth Program is Recognized As The
Driving Fort-e Behind The Future Success Oi Freudenbert-NOK

___m_.".“..L"_Y..1_1.______. 1994 W
Data

 

 

 

103

 

giesnons 8:

Answers About
Our Company
Plan For...

 

i 11.

Get Rid Of Waste Through
Team harmony

5.

- bros,

104

“The Cornerstone of
our Company’s Culture ”

Get Rid Of Waste Through Team Harmony

 

 

m

 

 

Ln.

 

 

April. 1995

 

 

What’s
IIISIIIB...
Freudenberg-NOK
celebrates Eanh Day
pg. 3
Freudenberg-NOK
Wins Saturn

Awards pg. 3
GROWTTH
Division's Newest
Cliem- Perri pg. 2
Manchester Improves
Safety 50% pg. 3

F reudenberg-NOK 's
New CAD/CAM/CAE
System pg. 4
Coloring 6: Essay
Contest! pg. 4

 

 

Jeff Iirisww is
one of five
Lean System:
Development
Engineers in
[he GROWTTH
Division. He
recently spent

lircrlilaling .

lwo kaizen

manufacturer 7
of rleerlng

 

Vblume L]

The GROW [TH Division: A look at
Freudenberg— NOK's Newest GROW I IH Venture

In January, Freudenberg-NOK launched into
the consulting business. developing the
GROWTH-l Division which will service both
automotive and general industry companies
interested in applying the concepts of lean
production. Here are some of the details of
Freudenberg-NOK's newest industry offer-
ing...

What Is The GROWTTH Division?

The GROW'I'I'H Division of Freudenberg—
NOK provides kaizen tools and training to
non-competing industry suppliers eager to
learn more about lean systems.

Why was the GROWITH Division C reared?

The GROWTTH Division was created as an
image entrancing and revenue generating busi-
ness to provide lean systems support. Currently.
there is a suong demand by OEM's on suppli-
ers to reduce costs. en-
hance product quality. im-
prove response time and
ensure better service. Very
few companies teach lean
systems processes today.
especially the hands-on
shopfloor training which
our GROWTTH Division
provides. "The demand
for lean systems training
is tremendous and the re-
sources are so limited."
said Rich Hnmcd.
GROWTTH Division
Business Manager. "The

105

 

Gary Johnson (right) is Vice President and Gen—

era!
6

Manager of Freudenberg-NOK's new

ROWTI'H Division which will educate and fa-
cilitate companies interested in applying the con-
cepts of lean production.

GROWTTH Division was set up to succeed since
it can fill this void ofexperiencc." Our division
staff is known for its extensive shopfloor expe-
rience and expertise.

Who Works In The GROWITH Division?

Gary Johnson- Vrce Pres. & Gen. Mgr.
Dcnita McLean- Executive Secretary
Rich Hamed- Business Mgr.
John Hart - Cost Engineer
Tom Faust- Operations Mgr.
Richard Dowden- Lean Systems Dcvpr. Eng.
Tom Andrews- Lean Systems Dcvpt. Eng.
Dan Weigcl- Lean Systems Dcvpr. Eng.
Jeff Bristow- Lean Systems Dcvpt. Eng.
Rex Rosenbergcr - Lean Systems

Dcvpt. Eng.

1 ontinued on p(I.4

Ruhb er & Plastics Neyyg.

 

 

Week of December 19. 1994

 

The Rubber Industry '5 International Newspaper

A people president

RPN names Day exec of year

 

 

The uliilitt/ lo tle‘ttl ttilh people is (is

pirrt'ltttsttble a t‘titttiittttlilt/ us Sugar or
coffee. Am! I pay "(Ui‘r’jtil' that ability
Iituti (int; “”1?!" illitll'l' lltr’ .smi

—.]ohn D. Rtx‘Atjlt'Ilm‘

By Marty Whittord
Rubber at Plastics News Start
Joseph C. Day. president and CEO of
Freudenberg-NOK General Partnership. has
junt that lcatlcrnhip trait. according to Day's

in.

'I think the thing that strikes me most in
I feel Joe is just outstanding at t'lllltllllUll-
eating He can conV‘t-y a message to almont
any group of people.’ naitl Michael J.
Crosby, president of Freudenberg-NOK}
Rubber Produttn Diiinit ll.

“(Day) has a lot ol energy. and he: hit:
that trait—«the ability to cnuruizc others
said John F. W-zlth. thalrman turd (‘ lit.) of
General Electnc (‘o

Welch worked mlli Day. 49. for about six
years ui GE's Plantit n Bunnie-xx Group and
said D35" lhld .tll llli't hatilt' It’rlniii n til gnarl
II arloinliip 10 vu- irn ago

“I have a great deal of
respeect for Joe and what he' s
don 'Plumley said "He has

$60 per year, 33.00 per copy

have a great deal
of respect for Joe
Day and what he 's

 

 

For his leadership abilities and the ongo-
ing sllt(t‘\\ of FreudenbergNOK. Rubber
d.- Plus-tit s- NM .5 has named Day its 19.94
Rubber Industry Exe( utiVe of the Year.

S‘inte taking the helm at Freudenberg
\‘0K in 198%, Day. who also senes as a
company director. has more than doubled
the- firm 5 nales to a projected $500 million
this year without adding a single employee
or a Niuarc foot of floor space.

Through his Get Rid Of Waste Through
Team Harmony continuoth improvement
program. Day in ea '11.; t e way for hin
mmpmty to hit its goal of $1 billion in sales
by the year 2000. Perhaps more importan ti-
h llL is nharing his firms blueprint to suc-
(L‘.\\' With other non- competing auto parts
make-rs and supplivrs through training sem-
lllzlrn and participation in kaizen projects.

Michael A. l’luntlcy. chairman and CEO
ol~ compcltitlor l‘lttrnley Companies Inc. and
Rl‘N's [Rubber Induniry Bxccuthe of
the Yi-arl. agreed with the selection of Day.

“I had even though: ttfn nominating him
it .yncll this yutr. but we re such ferocious
t‘nlllpt‘illill‘S Id just an soon let someone
i-lw notiiiiialr- hitn.

done. He has
become a driving
force for change in
our indust with
his lean production
nd how

his lean production approach
and how he has packaged and
marketed it to the customers'

Several companies claim to
understand and practice lean
manufacturing. but few have
been able to demonstrate itan
well as Freudenberg NOK,
according to Dennis \mg of
Automotive Consulting Group
Inc. so rves as maria i911
director for the Ann Arbor,
Mich
which sen es the technical and
manufacturing needs of auto parts suppliers.

«(n \ I‘ l.

\‘-’“Jl r r
the tasks they' re assigned.” Vimg said

“And tath takes a lot of courage on the part of a manager
because you ham to have great confidence in your employees."

Freudenberg NOK min conducted moret than 800 kaizen pro-
jectn at its 14 North American facilities or the past two yeah

The compan ysa said these projchZ'n

' bolstered productivity 52 perc

' cut the floor space required to r:pl'nlt)dut‘€ parts 3" percent:

' dropped the scrap rate 17

' reduced w-ork -in-progress inventory 85 percent, and

' cut workers compensation costs 35 percent through
ergonomic moves that also reduced product tmv 9] distance 6d

and marketed it to
the customers.
—Miehael A. Plumley
Plumley Companies Inc.

 

The impressive results have prompted Heudenberg-NOK' 5
Day to sch aminimum of kaizen projects for 1995

Not surprisingly, it was Day' 5 gift of conunurur afing tha t high

ghted the firm's fust kaizen effort. held in November 1992 at
the Bristol, N.H., facility. said A Gary Johnson, vice president
and general manager of Freudenberg-NOK‘s GROW'I'I'H
Division.

One of the plant's sfive kaizen teams had called on a mainte-
nance worker to move equipment which he already had moved
at least three timesd tiring the thre'eday project—" and it' s nota
light piece of equipment, 'Johrtson added. This time the team 3
request was to move the mac inery a couple of inches over—
back to a previous postfion.

“(The maintenance man) blew hlb stack." Johnson said. But
Day took him aside and explained oneeon-one the importance of
the process. from his oVerall lean production Vision to why the
machinery mm e was it ecessary in this partit ular situation.

‘Right now, the guy is one of the biggest champions (of the
GROW'I'I'H program) at the plant,‘ Johnson said. “And you need
thone oneconversrons from within the ' tho, (the Uni
dent) showed the relationship .Iocr tan mdmelop with anybody
from any strata “1t thin our to mpan'.

Before joining Freudenberg.- -NOK. Day served a: president of
Dexter Corp's Specialty Materials & Engineered Plantirs Group
from 1985 to 1988 and the firm‘s CH. Dexter Division from
1981) to 198;"). From 1966 to 1980. he hcld general man
merit. marketing and sales positions with GE's letics Busmcss
Group.

Day. who serves as a director for the Rubber Manufacturers
Association. also is chairman ot “Tremold Co. a I afford
Cniuicbibt‘d manufacturer of mm management and power con-
ditioning systems.

agn-

 

Reprinted from the December 19, 1994 issue of Rubber & Plastics News.
Entire contents copyright 1994 by Crain Communications Inc. All rights reserved.

 

106

AS SEEN IN

Nux‘unber 231" 1994

 

Grains

Detroit
Business

—4 .«W. .

GLENN TRIE S

REMADE IN AMERICA: Frencrbevg |\ OK Pres dev 1 ard CEO JC>TDII Da, _ J' the a .13 CI h1s company's

secms on the Me 10 p111! ' II

Path to

Chery-W01: 15 such as a OOLADIIQ

SUCCESS

is no secrets

Freudenberg’s risk rewarded

BY ROBERT SHEREFKIN
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107

Isa1c51r1’1ue yea's

 

TACTICS

A wcckly feature
on huwncss strategies

 

 

 

Freudenberg-NOK's
strategy:

I Lead and drrect "
tears 1.1.1111" Ieac
Ja1oar=~zse-sty1e conunual
Imp v ,:1WQWI to Study
parts craciuced by the

kaizen

 

1:: ml: a'w
I 84:11» Re, chents w11h

a1Icc1'11:11;111:= production

 

 

'32“? 1111113 base me
I A ;.. a 3111-195 from
13" :‘1'3’ 11%:"198 ’0 10m
I D :-." >1 1:! 6 percent

 

 

 

V.

APPENDIX B

108

 

i

 

 

Inter-Office 11
Communication

 

To: Freudenberg-NOK Employees

Attached is a 30 question employee attitude survey designed to measure current employee

attitudes about the business climate at Freudenberg-NOK. The survey will also provide

data for a thesis paper being written by one of our employees about effective change
management. Answering this survey is strictly voluntary. The results from the survey will
help F reudenberg—NOK understand how well company programs such as GROWTTH are

being perceived by our employees, as well as indicate areas for improvement.

Employee's answers will remain completely anonymous, and in no way can employees be
identified through answering the survey. You will indicate your voluntary consent to
participate in this study by completing and submitting the survey to your Human
Resources Office. If you decide to fill out the survey which will only take 5-10 minutes,

Freudenberg-NOK's management thanks you for your time and input.

109

Freudenberg-NOK Employee Questionnaire

1. Which of the following best describes your current position and current status with the company?

_ Senior Management _ Hourly

_ Middle Management _ Full Time

_ Professional _ Part Time
_ Supervisor _ Temporary
_ Clerical

2. Which of the following best describes the area in which you work?

_ Administrative
_ Sales/Marketing
__ Manufacturing

_ Engineering

3. At which FNGP site do you work?

__ Ashland _ Morristown
_ Bristol _ Plymouth
_ Cleveland _ Rushville
_ LaGrange _ Scottsburgl
_ Ligonier _ Scottsburg II
_ Manchester _ Shelbyville
_ Milan _ Tillsonburg

The following series of questions can be rated top to bottom from strongly agree to strongly disagree:
4. I feel free to make suggestions to my supervisor:

_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

_ Strongly Disagree

110

5. My supervisor is willing to listen to my concerns:
_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

_ Strongly Disagree

6. My supervisor lets me know when I have done a good job:
_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

_ Strongly Disagree

7. My supervisor lets me know if I need improvement in some aspect of my job:
_ Strongly Agree

__ Agree

_ Sometimes Agree
_ Disagree

_ Strongly Disagree

8. My supervisor keeps me informed about significant activities happening around the company:
_ Strongly Agree

_ Agree

_ Sometimes Agree

_ Disagree

_ Strongly Disagree

111

9. My supervisor's boss gives us the support we need:
_ Strongly Agree

_ Agree

_ Sometimes A gee
_ Disagree

_ Strongly Disagree

10. Management keeps us informed through in-person speeches, newsletters and other literature:
_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

__ Strongly Disagree

1 1. Senior management pays attention to ideas and suggestions from people at all levels:
__ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

__ Strongly Disagree

12. I have confidence in the fairness of management:
_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

_ Strongly Disagree

13. Our benefit programs meet most of my needs:
_ Strongly Agree

Agree

_ Sometimes Agree

_ Disagree

_ Strongly Disagree

112

14. The 401K program is an important benefit program:
_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

__ Strongly Disagree

lS. Containing medical costs is important to the future profitability of the company:
_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

_ Strongly Disagree
Please answer the following 4 questions relating to personal kaizen participation:

16. I have participated on a kaizen team (If you answer no, please go to question #19).
yes

no

17. I have been on the following number of kaizen teams:

1

_ 2
_ 3
_ 4
_ 4 or more
18. I have been a kaizen team leader or sub-leader:
__ yes

_ no

19. I would like to be on a kaizen team in the future:
_ yes

no

~

113

Please mark an X next to the answer you feel is correct:

20. The GROWTTH acronym is:

_ Get Rid 0 Waste Through Team Help

_ Get Rough On Waste Through Team Harmony
__ Get Rid Of Waste Through Team Harmony

__ Get Rolling on Waste Through Team Help

21. Kaizen is the Japanese work for:
_ Wrestling

_ Raw Fish

_ Continuous Improvement
_ Homeland

_ Manufacturing

22. Kaizen teams meet for:
_3 1/2 days

_ 2 days

_ 4 l/2 days

_ 5 days

_ 2 weeks

23. Kaizen teams are a good method to eliminate waste and improve productivity:

_ Strongly Agree
_ Agree
_ Sometimes Agree
_ Disagree

_ Strongly Disagree

114

24. Senior management's role in the GROWTTH program is:
_ Very Visible

_ Visible

_ Somewhat Visible

_ Not Very Visible

_ Not at All Visible

25.How well do you feel the GROWTTH program is carried out in your facility?
_ Excellent
Well

Fair

_ Poor
26. Do you feel the GROWTTH program is the best way to help Freudenberg-NOK remain an industry leader?
yes

no

27. The GROWTTH program increases my job security:
_ Strongly Agree

_ Agree

_ Sometimes Agree
_ Disagree

_ Strongly Disagree

28. One-piece—flow manufacturing is:

_ Manufacturing with water

_ Manufacturing components one at a time
_ Molding one part per mold

__ Making parts as fast as you can

__ Batch production

115

29 The cornerstone of our company's culture is:
_ Equality among employees

_ GROWTTH

_ Seals production

Sr. management's vision

30. As a company, F reudenberg—NOK plans to reach the following sales volume by the year 2000:
__ 600 million

__ 700 million

_ 800 million

_ 900 million

_ 1 billion

Results of this survey will be published in the GROWTTH Newsletter

116

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117

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119

MICHIGAN stars UNIV, LIBRARIES
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