Fear can spread like cancer in any organization and, just like cancer, can cause great damage if it goes undetected for too long and is not dealt with quickly. Fear can be generated in a number of ways: rumors, macro-economic downturns, threat of job relocations and even a misunderstanding of what an executive says.
There is a natural fear of management by all employees. Company leaders must do everything they can to wipe out this fear if there is any hope for problems to be uncovered in order for improvements to take hold and be sustainable.
In the late 1980s, I had the privilege of being asked to lead the first dedicated improvement team for GE’s major appliance division. The business executives and I handpicked the team members to try and improve the odds of a successful outcome. The president of the division participated in the kick-off session and explained in great detail how he had high hopes for our success and would do anything he could to help.
Once the meeting was over, I gathered the team members together and asked them what they thought. After several minutes of silence (and much squirming in their seats), one of them spoke up and said, “We are all going to be fired soon.” I was shocked. Had they heard the same glowing, supportive speech I had heard? “Yeah,” said another team member. “He said, ‘Don’t worry. If this team is unsuccessful, the company will figure out a different approach.’ And since no one has attempted to do what we are being asked to do, the chance of failure is pretty high. So, we will soon be fired and they will bring in another team to replace us. I plan to get my résumé in order.”
This was a significant lesson for me. Even the best employees can let fear dictate their actions, especially when they are asked to do something new that is outside of their comfort zone. And once fear takes hold, teams become fractured and poor decisions become the norm as outlined in the following example (based on an actual set of events).
Bob hated attending his boss’s staff meeting. “I have a plant to run,” Bob thought to himself. “I don’t have time to waste listening to a bunch of reports that will not help us get any better.” Bob’s boss did not believe in collaboration so they usually spent most of the day listening to report after report after report. “I know there are plenty of things I can be doing to help our employees and our customers,” he thought as he settled into one of the chairs around the conference table. Bob recognized that the manufacturing plant he was leading had plenty of problems. However, they had launched a new improvement initiative six months prior that combined lean, Six Sigma, and teamwork, and the effort was finally starting to move the needle on several of their performance metrics.
“Before we get started with the staff meeting agenda,” Bob’s boss said to kick things off, “I would like to make an announcement from our parent company’s headquarters. They have decided we have way too many underperforming people working in our company and have asked each manager to force rank all of their employees from best performance to worst. This includes the shop workers as well as all of the administrative folks. Then, at the end of the year, the bottom 10% will be removed from the payroll.”
Bob’s peers looked unsettled and began to whisper to each other, asking if they had heard the boss correctly. “Will we be allowed to replace these workers?” asked one of the participants.
“Probably not,” said the boss. “The CEO figures that getting rid of the underperformers will not have that much of an impact on your overall performance. Oh, and by the way, this edict applies to this group as well. So, since there are 10 people on this staff, I will be forced to remove one of you at the end of the year.”
Bob noticed that everyone around the table began to fidget in their seats and look at their peers in a new way. The old joke came to mind about how to outrun a bear. It did not matter if you were faster than the bear; you just needed to be faster than the person standing next to you.
“I am going to make this easy,” said the boss. “Since all of you run various manufacturing operations, the first plant to miss their production output goal will result in that plant leader being rotated to the bottom of my list. Is that understood by everyone?”
Bob’s drive back to the plant after the staff meeting seemed longer than usual. As soon as he walked into the office, he was met by a large group of employees. One of them shouted, “So, how many of us are getting the ax?” Another shouted, “We heard that 50% of all employees are going to be let go by the end of the year. Is that true?”
“Please calm down,” Bob said as he tried to keep things under control. “Those are just vicious rumors, and we can’t let them get in the way of the great progress we are making on our improvement teams. The number will be much less than 50%.” Bob instantly knew he had said the wrong thing.
“Wait a minute,” shouted one of the employees. “If the number is less than 50%, then some of us ARE on the chopping block. What is the actual number?”
“Never mind that,” Bob said with a sigh. “Our focus will be to get better so our customers demand more of our product, and then we will worry about hiring people, not letting them go.” It took over 45 minutes before the crowd finally broke up and went back to work.
Later that month, Bob was in his office checking the production numbers to make sure their goals would be met. There were only two days left before all of the data needed to be turned in, and he wanted to make sure that he was not the first of his peers to be on the bottom of the firing list.
“Hey boss. Got a minute?” said Anna, Bob’s director of production.
“Sure. What’s up?” replied Bob
“The motor subassembly line just went down. It does not look good. The maintenance folks say that it will be at least 4 days before it is operational again.”
“What?” exclaimed Bob. “That means we will miss our production numbers for the month. There has got to be a ‘work around’ we can put into place.”
“Sorry, the main winders are down, and it is too late to get replacement parts. They promise me the machines will be back in operation by the first of next month.”
“That is unacceptable,” said Bob as a bead of sweat started to roll down his forehead. “We have got to hit the production numbers!”
“Well, we can’t ship product without motors,” said Anna. “And, I have exhausted all avenues. Not even overtime will help.”
“This is what we are going to do,” said Bob. “We get credit for making our production numbers when product gets placed on the truck for shipping. I want us to build up the product without the motor subassemblies, put the product into the shipping box and then load them onto the trucks. When we get motors after the first of the month, we will work a crew on overtime to take all of the boxes off of the trucks, install the motors, and put them back on the trucks.”
Fear-driven Cover Up
Now it was Anna’s turn to be incredulous. “What? Did I hear you right? We are going to cover up a major problem just so we can meet the production numbers?”
“You heard me… now make it happen.” said Bob.
Several days later, Anna checked on the progress of the operation to rework the units that were staged on the trucks without motors. “Things are going fairly well,” said the supervisor. “We were able to catch most of the product and add the motors.”
“Wait, what do you mean by ‘catch most of the product’?" asked Anna.
“Well, it appears that two of the trucks left before we got those motors installed,” replied the supervisor.
“Dang. That means over 200 units are going to get to customers with no motors. They are going to think we are idiots. But at least we made our production numbers for the month,” Anna said with a sarcastic shrug. At that moment, she realized that quality, lean, teamwork… all of the things they had been working on to improve, no longer mattered.
Crazy, Yes; Impossible, No
This example may sound pretty crazy, but there are several current cases in the media where fear has driven bad decisions by company employees. In a fear-driven culture, improvement and teamwork will be extremely difficult.
So, if the company executives want to develop a culture based on trust instead of fear in order for improvement (lean and Six Sigma) and teamwork to be successful, they will need to take a long look in the mirror and determine what they need to change about their own style and culture. Most improvement professionals agree that having the support of upper management is critical to success. However, what does it mean to have ‘upper management support’? Listed below are some suggestions:
Actions Really Do Speak Louder than Words: If an executive says, “Quality is critically important, but we better ship this product out today no matter what or heads will roll” or “Implementing lean is our top priority, but I have more important things to do than attend the training or the meetings,” then employees will realize that they have just experienced the ‘bait and switch’… an executive saying one thing and meaning something totally different. Company leaders should not be surprised when defective product is shipped or when no one attends the improvement training or meetings based on these statements. So, before launching any improvement strategic plan, leaders need to do some soul searching and ask if they are prepared to make this a priority. If not, it would be better to do nothing and avoid losing trust.
At the last IndustryWeek Manufacturing & Technology conference, a group of Toyota executives were asked, “How does Toyota keep their improvement culture going?” The answer was that all employees, including every executive and company leader, must dedicate one week a year to fully engage on an improvement team. They must then report to their boss what their improvement team accomplished to help eliminate waste and improve safety, quality and throughput. It is hard for an employee to grumble about going to a week-long improvement event when they know that their boss was able to figure out how to free up their own time to participate on one.
All-Employee Training Means All Employees: If the company leaders plan to launch a new improvement initiative, some sort of training probably will be involved. It is critically important to the success of this training that someone on the leadership team attend and participate in each class. This will send a strong message that this is an important part of helping the company meet the needs of their customers.
However, the executives need to keep in mind that the moment they walk into the training room, all eyes will be on them in order to try and decipher (through body language, comments and actions) if this is really a priority. So, if the executive walks in, ignores all of the other participants, sits down in the back of the room and opens a laptop to check messages, don’t be surprised if everyone else does the same thing and little of the training is absorbed. Instead, the executives need to free up the training time on their calendar and fully participate with the understanding that this is part of their duties of being a leader.
What You Measure is What You will Get: Once a group of leaders determines that the company needs to change direction in order to improve, they need to examine all of their key metrics to determine how each one will hurt or help their new strategy. This activity may require a neutral, outside person to help since many of the leaders may be too invested in an old metric to fully see how it might inhibit change. For example, most leaders have been taught that a critical metric for manufacturing is equipment and employee utilization. In a stable process, if demand is below capacity, utilization metrics will drive the building of unnecessary inventory and waste, which is in direct conflict to many of the lean teachings. A better use of the utilization metrics would be to measure how successful the sales team is at filling capacity (demand vs. output).
When Jack Welch was CEO of GE, he shared with me the following story. Shortly after becoming CEO, Jack walked through a plant lobby in order to go on a tour. He casually made a comment about how he disliked the way the lobby looked. Thinking nothing of the comment, he went on the tour. A few months later, he revisited this plant and was shocked to see that the lobby had been completely gutted and rebuilt at great expense. It was at that moment that he realized how much intimidation he generated as a company leader and that he needed to be careful with his words and actions.
Business leaders must constantly look for ways to build trust and eliminate fear if they want to see improvement and teamwork thrive. In a culture built on fear, employees will try to interpret every comment and gesture in order to guess what the leaders really want. In a culture built on trust, problems can be lifted up, discussed and fixed to drive real improvement. I have worked in both environments, and the ones built on fear were all about fire-fighting, back stabbing and finger pointing. The ones built on trust, leadership and teamwork not only accomplished significant improvement and customer satisfaction (with revenues and profits far greater than any cost-cutting initiative) but were also great places to thrive as an employee.
John Dyer is president of the JD&A – Process Innovation Co. and has 28 years of experience in the field of improving processes. He started his career with General Electric and then worked for Ingersoll-Rand before starting his own consulting company. Dyer can be reached at (704)658-0049 and [email protected]. See his LinkedIn Profile. He is on Twitter: @JohnDyerPI.