First Up -- Diamonds in the Rough

A trip to Pennsylvania shows continuous improvement offers much more than just improved efficiency.

A recent Towers Perrin survey found that only 21% of companies expect to increase hiring in 2010, while 37% plan either targeted or more broad-scale reductions in head count. In the still tenuous recovery that is progress, since only 3% said they increased hiring in 2009.

For those who will remain employed, they shouldn't expect 2010 to be a stellar year for compensation. Some 17% of companies say they will institute or continue a salary freeze into next year, while 11% will increase their reliance on contract workers, and 26% will cut back on overtime.

Even with this continued hunkering down, many employers are concerned about the possibility of losing their best-performing employees. "Companies need to have a sharp focus on their pivotal employees right now," said Ravin Jesuthasan, Towers Perrin managing principal. "A lot has happened over the past year; employees have had their pay frozen or reduced; some have seen their bonuses disappear, and many have watched their friends and colleagues suffer through layoffs. When the economy turns, this critical talent may well remember the actions their company took during the downturn and make the decision to leave."

Given the dire layoffs in manufacturing, that might seem to be less of a threat than in some other sectors, but the fact is that no company wants to deal with the loss of reliable, highly trained employees. What can you do to help lay the groundwork with your workforce so that your company is a place employees want to come to, not one they drag themselves to each morning, afternoon or night?

I came away with some insights on just that issue after a lunch with leaders at Philips Respironics' plant in Murrysville, Pa., one of our 2009 Best Plants winners that we are profiling in this issue and on our Web site. During the lunch, I had heard much discussion of the facility's various programs designed to "Enable, Empower, Engage" the workforce. Plant leaders discussed their efforts to encourage employees to solve problems and come forward with ideas for improvements, and how they had adjusted their own management styles to mentor rather than provide all the answers. No less than 15 employee teams in the plant are working on the quality of products and processes, plant safety and plant culture. An average of eight new improvement ideas are implemented daily in the plant.

Finally, I had to ask: Isn't the constant drive for improvement exhausting? "There are times when you do feel exhausted, but hopefully not all of us at the same time," answered Sharon Bratton, manager of engineering control services. "That is the reason why you need teamwork, to pick each other up, to bridge the gap until you can get to the next thing that gets you jazzed."

Suzanne Angelicchio, a human resource business partner, observed: "If you are banging your head against a wall, that is exhausting. But if you are making progress, you are encouraged. You get that adrenaline: I made a difference today; I made that job I do easier.'" She added: "I have seen companies that drive themselves into the ground with continuous improvement because they really aren't supporting it. It is exhausting to people to come up with ideas and not have them be allowed to be implemented."

So an essential underpinning of continuous improvement is continuous encouragement -- encouragement that comes not just from a single manager but from a culture that reinforces the effort to do better at every level on both a formal and informal basis. If culture is, as one consultant put it, "the way things are around here," then companies are well served to emulate Philips Respironics and build a culture that encourages and rewards employees who actively contribute to improvement efforts. Continuous improvement allows employees to tap into their creativity and builds a sense of purpose and teamwork. As Angelicchio noted of the many talents in the Philips Respironics workforce, "We have a lot of diamonds in the rough here and we just need to polish them off and use them."

Steve Minter is IW's chief editor. He is based in Cleveland.

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