Dana Style

March 2, 1998
A makeover at Dana Corp. accelerates its push to supply the emerging global automotive markets.

"It is born out of the notion that business is 90% about people and 10% about money."

Ironically, as Dana grows through acquisition, it can't help but challenge "the Dana style," a unique cultural factor and mind-set that Chairman and CEO Southwood J. (Woody) Morcott holds to be the key to the company's past growth and success.

"About 9,000 people have joined us in a relatively short period of time [6,000 left via divestitures]," says Morcott.

That means fully 20% of the employees have been with Dana for less than a year. Future success will depend on them acquiring the understanding that Dana style is much more than the motto "People finding a better way."

What is Dana style? In Morcott's words, "It is the total focus and dedication to the human aspect of business as opposed to the purely financial, and it is born out of the notion that business is 90% about people and 10% about money."

And, he adds, "The most important asset in your building is people, not machinery."

Morcott doesn't subordinate the money aspects because as he explains, "making money is the reason were in business, and if we do that well, all the people aspects will follow."

Dana style pervades the entire being of the company. To analysts such as Darren S. Kimball of Merrill Lynch it manifests itself in "a truly remarkable track record for retention of senior management and succession planning. Between its policy committee and its world operating committee, there isn't an executive with less than 22 years experience at Dana. On average, each committee member has 30 years of experience at Dana."

Morcott, who started with the company in 1963 on a sales track, is a product of a corporate philosophy that says there are only two ways of becoming a manager of people at Dana. One is by rising through the ranks from an entry-level position; the second is by being a manager in a company acquired by Dana.

"Dana is strictly a promote-from-within company, and we have a fierce devotion to that--it is part of the Dana style," Morcott asserts.

He became president of Dana North America in 1985, president of Dana in 87, and CEO of Dana in 89. He held four titles--chairman, CEO, COO, and president--until a year ago. Earlier in his career he served as plant manager of a piston-ring plant in Tipton, Ind.

By some standards, manufacturing backgrounds are exceptionally well represented in the Dana hierarchy, but "that is only because we have disproportionately more people in manufacturing than any other function," says Morcott. "And even those who are not from manufacturing initially, very often acquire manufacturing experience as they progress in their management career. We have a definite emphasis on cross-careering."

There is another ingredient for rising to senior-management levels. "It can't be done without living and working two years outside the U.S."

Morcott spent five years with Dana in Canada (and also had a two-year tour of duty as a military officer in Germany). In Canada he started as head of the distribution operation for Hayes Dana and then became president and chairman. Morcott believes that being exposed to other cultures is a valuable asset--enabling managers to learn about the different ways of viewing problems and issues from a global perspective.

Morcott's personal philosophy is to view a company's quality reputation as a direct reflection of the values of the CEO's office. "If you want to ramp it up rapidly, it really takes a commitment from the top guy. Seldom do you get that kind of improvement working from the bottom up. It really takes top-down to get an enormous change."

On the other hand, Morcott perceives continuous improvement and innovation as a key bottom-up activity. To give it a framework, he initiated a concept in which everybody in the 50,000-employee company would provide two ideas a month on how to get better, with the goal of implementing 80% of the ideas.

"Were up to 1.3 ideas per month per person."

He says the implementation rate is currently between 70% and 80%. He admits his initial purpose was "to determine which managers ran their plants based on the Dana style and philosophy of management as opposed to the old command-and-control.

"We started measuring the number of ideas submitted and found an interesting correlation," he says. "If a plant came close to two ideas per person per month where 80% were being implemented, you had a participative group of people, open-minded management, and trust between the levels and groups in the plant."

He says that people can't participate like that without demonstrating commitment to the plant.

Think of the power of 50,000 people each submitting two good ideas every month. That's 100,000 ideas a month on ways to get better. How can Dana do less than meet its goals?

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!