IW Best Plants Profile - 1996

Feb. 14, 2005
A leap of faith to trust workers five years ago has made working at Wainwright more satisfying for management, too. The culture change has also greatly improved the company's performance. By Michael A. Verespej At A Glance Five-year cost reduction ...

A leap of faith to trust workers five years ago has made working at Wainwright more satisfying for management, too. The culture change has also greatly improved the company's performance. By Michael A. Verespej At A Glance

  • Five-year cost reduction 35%.
  • 90% metal-stampings yield improvement.
  • Scrap/rework as a percentage of sales: 0.89%.
  • Customer reject rate down 91% in last five years.
  • Order-to-shipment leadtime for stamped motor housings down 93%.
  • 1994 winner of Baldrige Award.
  • Recordable accidents reduced 82% in five years.
  • Product development cycle time reduced 70%.
  • Recordable accidents reduced 82% in five years.
  • On-time delivery: 98%.
  • Partnered with Arthur Andersen & Co. to share knowledge gained through a program called Accelerated Corporate Evolution.
Five years ago, plant manager Michael Simms was frustrated. He had read about empowerment, but didn't believe it would ever happen at Wainwright Industries Inc. Like every other worker and manager at the family-owned metal-stamping plant in St. Peters, Mo., he wore the company's uniform shirt with a Team Wainwright label outlined in black above the left pocket and his first name outlined in black above the right pocket. Yet, despite the uniforms (which the workers themselves had requested in 1984 and which management had decided to wear as well), "There was an uneasy feeling that people weren't part of the decision-making," explains Simms, who in 1979 had become the first member of the management team hired from the outside. "I developed a very bad attitude," says Simms. "I almost quit. I almost got fired. I even met with two other managers about starting our own company. I just didn't believe anything was ever going to change here," no matter how many times he and other managers went to seminars to hear what best-in-class companies did. All that changed one day in January 1991. Simms was at the Ritz-Carlton hotel in Clayton, Mo., with several other middle managers and the owners -- Chairman and CEO Arthur (Don) Wainwright, President W. Nelson Wainwright II, and Vice President David Robbins -- to listen to the vice president of IBM's Rochester operations, which had just won a Malcolm Baldrige National Quality Award. "I was listening," says Simms, "but literally drawing circles on napkins. Yet I did manage to catch these words: sincere trust and belief in people." He wrote the words on a napkin and passed it around the table, asking, "Do we have it? Do we know what it is?" "From that point on, we understood from our hearts that we didn't trust people," says Simms. "We realized that workers had trusted us for seven years [the workers had decertified their union by a 6-to-1 margin in 1984], but that we didn't trust them. We were selfishly controlling everything. We realized that middle managers were responsible for the trust factor and that they have to make trust happen." Or, as Don Wainwright says, "We realized that it takes three things to promote ownership: focusing on the customer, involving employees, and maintaining a high level of training. We also realized that we had been judging from the wrong value standpoint. I used to see a lot of people talking and think: Why aren't they working? Now I see people talking and think: Isn't that wonderful. They are communicating. That is the paradigm shift that occurred. We realized that people are responsible for managing themselves -- that they don't need micromanaging." As he points out, workers now determine whether they need new equipment, compare vendors, and tell top management what to buy. But that change didn't happen just because Don Wainwright, Simms, and others wanted it to. Management had to show workers that it trusted them. So it took two steps as an initial show of good faith. First, Don Wainwright stood up in front of all the associates at St. Peters and told them he had failed them by not having as much trust in them as they had in management. "We were trying to make decisions for them, and we told them that was wrong," says Simms. Don Wainwright also told the workers that he had been wrong to believe that "it is management's job to run the plant and tell you how to do your job." And he pledged from that point on to share information with the workers and do everything possible to support them when they told management how to improve the plant's operations. Second, the company simultaneously launched a training program -- an idea it had rejected in the past out of a fear that it would lose money if people were pulled off production machines. "We realized that we had to train if we wanted people to be involved," says Simms, "because trust only develops when employee self-confidence in decision-making increases." Significantly, Wainwright decided to begin by teaching basic math and vocabulary skills to employees -- on company time and on a strictly voluntary and confidential basis. "We wanted to teach individual skills that go home with the employees," says Simms. Why? "It is only when employees see that you are teaching them to be better people that [you] close the loop on the buy-in to the culture change. They see that the training is for them, and they begin to feel that they can make a difference." Wainwright also began to teach workers -- in groups of 10 to 12 -- interpersonal skills such as problem-solving, constructive feedback, how to listen, and why it is important to share information. The training changed the attitude of workers and management. Thus, when an 18-day strike at General Motors Corp. in early 1996 kept 50% of the St. Peters workforce from performing their regular jobs, Wainwright -- rather than lay anyone off -- had employees perform preventive maintenance, work on process improvements, and clean and paint. The admission by management that it had failed and the decision to train workers have changed Wainwright from a struggling supplier to the auto industry to a $30 million company that has doubled profit margins since 1991 and been honored by GM, Ford Motor Co., IBM Corp., and McDonnell Douglas Corp. for supplier excellence. Wainwright opened a second plant in Grand Prairie, Tex., in 1994. A related operation -- just-in-time sequencing for the automobile industry -- has been so successful since Robbins began expanding the business in 1990 that it moved two months ago into its own building five minutes away from the St. Peters plant. (Wainwright's sequencing operation acts as an extension of GM's nearby van-assembly plant. It receives and stores parts from GM suppliers, then packages them in kits for easy installation by GM or a van customizer, thus replacing 25 production tasks at GM. The plant ships to GM every 20 minutes, processes more than 45,000 parts daily, meets 1,800 weekly deadlines from GM, and has leadtimes of two to three hours -- with rush orders of 20 minutes -- even though it doesn't know what to package as a kit until electronically informed when a van enters GM's paint shop.) The leap of faith to trust employees spurred Wainwright to network with 16 previous Baldrige Award winners, inspired several reengineering efforts, and led to the use of new systems and measures:
  • A team of Wainwright associates reengineered, at a cost of $1 million, the way it makes housings for the automobile industry. The change permitted the company to use a precoated material, eliminate an outside supplier, reduce the cost of the product to the customer by 35%, cut cycle time 99%, and reduce order leadtime from 8.75 days to 15 minutes. Wainwright has increased its market share of housings for motors for power seats, power windows, windshield washers, and antilock brakes from 10% to 25% since 1991.
  • Another team of workers examined how another Wainwright product -- piston struts -- were cleaned. The team abandoned a problematic degreasing process. The shift to batch cleaning with a soap solution and drying agents eliminated disposal problems and increased the shelf life of the struts, which had been prone to rusting.
  • Wainwright began to ask customers in 1993 to give the company a monthly customer-satisfaction grade of A, B, C, or D. A year later it asked employees to grade their managers in the same way that outside customers grade Wainwright.
  • In addition, employee customer departments also rate their internal supplier departments on a quarterly basis. All customer ratings and internal scorecards are posted in what Wainwright calls its Mission Control room, where it holds customer meetings, training sessions, and career-development sessions. "The internal scoreboard is the most benchmarked process that we have," says Simms. "[Ratings and score cards] are posted in Mission Control where everyone can see them." Bad grades are bad enough, but it is the comments that lead to improvement, he says, "because you know you will get another score card in three months. One manager on his first report card got four Ds and the comment: 'He reminds me of Hitler!'" Wainwright also developed new pay measures to emphasize the equality among team associates. For example, the profitsharing plan was changed in 1991. The company now divides equally among all associates -- except the three owners -- 25% of all net income before taxes, after the amount is multiplied by the external-customer-satisfaction index rating. The money is placed in each individual's 401(k) plan every six months. The previous plan rewarded individuals quarterly in cash. Wainwright also replaced individual performance appraisals with career-development sessions that focus on the ways an associate can achieve his or her and the company's goals during the next six months. "The greatest lesson I learned was to never, ever measure an individual employee," says Don Wainwright. "Companies must be very careful so that individuals do not feel that they are being measured, compared, or pitted against another individual." In the same vein, the company equalized pay -- over a four-year period -- among associates with the same skills. All non-managerial jobs are posted, and a promotion-from-within policy has led to a cross-trained workforce where 65% of the workers have been promoted at least once. Wainwright has become Team Wainwright. "In the past, we knew where we wanted to be, but we [management] were walking it ourselves," says Don Wainwright. "We now have a team of 225 people walking and talking, working together, focused on the same goals. You look back and wonder how you survived the other way." The new way of doing things also has changed management's role. With less need to focus on day-to-day business, "We now have the time to react and plan for the future and position ourselves for the changes that are coming," says Don Wainwright. "We can develop partnerships with major customers and identify future business." "We are no longer just fighting fires," adds Nelson Wainwright. "We have more sense of control than when we tried to micromanage." Maybe just as important -- at least for Don Wainwright, whose father founded the company in 1947 -- is that he now enjoys coming to work more. "It's a lot more fun than it used to be."
    Little Ideas Add Up Wainwright's suggestion plan began to change in 1991 when plant manager Michael Simms began to review suggestions and ask workers what they could do to perform their job better every day. But it was still based on a value system that said, "Don't worry about the little things, hit the home run," says Simms. The old system came to a crashing halt when a maintenance worker -- after being called for a fourth time to weld a bracket that had vibrated loose from the leg of a press -- welded a second bracket and wrote it up as a suggestion. When Simms turned the "idea" down, saying the company was looking for big improvements, suggestions dried up. "We realized then that we don't reward people for doing their job better every day," says Simms. "We asked ourselves: Is there a better way? How do we get people involved daily on their own? We realized involvement is what's important -- not how big the idea is." In September 1993 Wainwright implemented its new plan, in which a suggestion counts only if it's implemented. "We told employees: 'Just do it and then tell us what you did,'" says Simms. "It is a new value system that small improvements add up and make a difference." Suggestions -- which had been between five and 10 each quarter -- skyrocketed to 260 in six months and now are more than 10,000 a year, an average of more than 60 per employee. "Now if a toolmaker sees a sharp corner when sharpening a die, he takes it off," says Simms. "Before he had to fill out a form to ask to do it." To further stress the importance of each idea, all associates who implement a suggestion are invited to a quarterly luncheon, and a random drawing is held each week, with the winner receiving an $80 gift certificate to the store, restaurant, or event of his or her choice.
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