Importance of the coalition team in changing company culture

 

Successful case presented by ILTSA in Show & Tell of October 2013
Johannesburg, South Africa

 

 

1. Coalition Team

 

The coalition team to generate the change required in the Industrias Lácteas Toni (Toni Dairy Industries) initially only comprised Edward McIntosh, General Manager, Magaly Polo, HR Manager and Luis Fernando Ceballos, Production Manager; later it included Byron Díaz, Assistant Production Manager and finally the team was completed with the inclusion of Guillermo Guerra, Continuous Improvement Engineer.

 

2. Guayaquil

 

Guayaquil, located in South America in the country of Ecuador, is known as the “Pearl of the Pacific”, has 2,684,016 inhabitants, a surface area of 345 km2 and is a city full of history and tradition, founded in 1538. Currently it is the country’s main port, considered one of the most important on the South Pacific coast, as, thanks to its location and infrastructure, it offers many facilities for international trade. Guayaquil is a dynamic cosmopolitan city, with clearly differentiated seasons (dry and rainy), surrounded by a dry tropical forest and mangrove swamp, washed by the mighty Guayas River and full of warm and hospitable people. This city has a cross section of cultures from the entire country and world as it is a land full of opportunities and which welcomes everyone as an equal.

 

3. Why we approached Mini business and MDW®

 

“The alarms bells started ringing and it was evident that there was a need for change, something had to be done and quickly. In the beginning we were not clear what to do, but if there is something that characterises us as a company, when faced with a problem, as difficult as it may seem, we always find a solution. It was then that we started to search for something that we did not yet know, that we required, but there was no doubt in our minds that we knew someone in Ecuador or around the world could offer us a solution. Our HR Manager, who was living and breathing the culture and climate of the organisation at that time, will give you the full story.”

Magaly’s Interview

In the organisation informal communication began to emerge, generating unfounded rumours and threatening the good working atmosphere, including the appearance of negative leaders, who endeavoured to establish a permanent culture of dissatisfaction. As a result of this the achievement of company indicators, which had already been seriously affected, and the concern for excellence in our operations were not a priority for the ILTSA worker.

We asked ourselves: Why was the discontent of our workers increasing? How do we promote self-motivation in each one of the employees? Were there other types of motivation over and above the extrinsic ones?

In the search for the answer to these questions, we resorted to a change in the organisational climate of 2010 and we found that two of the weakest aspects were Communication and Leadership, therefore the task was focussed on identifying a management system which would make it possible to strengthen these categories giving greater prominence to the operations section, where there is also supposed to be interdependence and shared responsibilities. We had some options but we ended up choosing CDI from amongst others owing to the following attributes:

  • Instil in the employees a sense of pride and belonging in what they are doing or in what they are achieving.
  • World class tools and techniques to provide direct drivers of improvement in service to internal clients.
  • Measuring capacity in order to focus on key factors and monitoring of performance in terms of progress made.
  • Focus on the operations section because empowerment there is not an illusion – it is a competitive requirement.

The Mini-business system helped us to increase our productivity, authority and responsibility of key people who work closely with the client or final product, have the capacity to make decisions and search for solutions. The self-managed teams represent for Toni an organisational design focus: these teams ensure that those in charge teach, coach, develop and facilitate, more than simply managing and controlling. The self-managed teams form part of our work philosophy where high individual and group performance is required.



 

4. Results obtained after the application of MDW®

 

We were always confident that the path we had chosen to change the prevailing situation in ILTSA was correct, and to this we added a new challenge, which is to convert our company into a world class organisation. Last year we were invited by CDI to present our progress but we felt that it was not yet the right time. Nevertheless, today we are proud to be able to demonstrate what we have achieved in this period of time. Let us take a look at some indicators which corroborate what has been stated and which indicate that we are on the right path.

Indicators


 

Improving the efficiency of our process lines, involving the front line in the reaching of the plant objectives, implementing the planned innovations amongst other things, is the only way to achieve an improvement in the fulfilment of the Production Plan, which in one year increased the total earnings by 6%, 19%, in 2012 and after adjustment of the target by the Plant Management for 2013, we obtained our best average of 98.05%.




 

One of the World Class principles is to do more with less effort – we found that some activities were poorly allocated and this caused excessive delays and poor quality work.

By taking ownership of our results we were also able to identify those who were prepared to help convert our company into a World Class company – we had a few lows – today we are convinced that they were necessary.

Some people are afraid when an initiative like this is introduced – one of the results was the dismissal or release of people, nevertheless we send a clear message in this regard – those who cannot align themselves with ILTSA’s vision may not or should not have a place in our organisation.




 

One of the most significant achievements was greater production with less people, obtaining excellent results. As we improved the indictors of machines and people in the organisation, they began to feel that they had participated in and forged these results.

Many lines were restructured and we streamlined teams with only indispensible labour. The support of General Management and the Plant Management was crucial in providing additional resources.

The growth in Kg per person from 2009 to 2010 was only 3%, the following year we had spectacular growth of 21% and in 2012 our productivity




 

Within the company it was very difficult to accept that an indicator in red or out of control was really an excellent opportunity for improvement and not a problem without a solution. We tried to justify the unjustifiable and wasted our time in doing so. Involving two of the main elements associated with Production, such as Maintenance and Quality Control was a key factor, as it strengthened Team Work, one of our other main values. Once the defect had been discovered we started improvement actions, special Kaizen Projects per Department and learnt that it was possible to convert an undesirable situation into an optimum one. We even found ourselves in a process of strengthening our problem-solving skills as we know that our priority is to find the root cause of the problems and not solve problems simply for the sake of solving them.

The indicator may initially be confusing, but for us it is proof that we must make visible our weaknesses in order to make us strong in the future because we already know where our Achilles heel is.



 

For Industrias Lacteas Toni the mental health of its employees is fundamental in reaching its objectives – the enjoyment of holidays by our personnel was something that had not been realised – for two consecutive years we had to suspend our staff’s leave, this occurred in 2010 and 2011.

By including the enjoyment of leave as a Personnel Indicator in Production Level 3 we were in the position to define a plan to ensure 100% fulfilment.

In 2013 the accumulated target for the month of August was 67% – we are happy to indicate that the value reached is 7 points above the objective.


 

Innovation is one of the values of our organisation, the same as that which appears on all communication posters of Industrias Lacteas Toni. We always mentioned that we are innovators but we have never had a clear measure of how good we were in this regard, where the innovations came from, and if they were only under the authority of top and middle management. We also did not ask ourselves what impact it would have on all of us to know what our people had contributed.

We admit that in the beginning we were a bit sceptical about the enormous challenge of showing what we were extolling. After a shaky beginning we can tell you with pride that Industrias Lateas Toni is in essence Innovative and has always been made up of great talent, thanks to CDI for helping us to get the best out of our people.


 

Absenteeism of personnel is a subject, which has an enormous impact in the fulfilment of the organisation’s objectives. Production improved its efficiency level but on occasions it is not 100% efficient.

Firstly we focussed on establishing the evaluation parameters of all aspects of Absenteeism. We worked closely with HR and the medical department; once the structure had been defined we informed the entire personnel of the new rules of the game and started with evaluations. In the first year we obtained a reduction of 1.03 percentage points.

We knew that we had won a first battle but we were conscious that we had to obtain much more, because this impacted greatly on the organisation’s results, but we already had a new plan in mind.

As new mini businesses were added to Module 1, we had more resources involved in the Continuous Improvement, and it was then that we requested the intervention of the HR Department, which began to play the role of facilitators of the Level 1 mini businesses in order to improve the evaluation of that which we call integral responsibility.

The results may be seen; as at 31 August 2013 we have obtained a reduction of 0.88 percentage points.


 

Of the 8 categories evaluated in the determination of the Work Atmosphere existing in Industrias Lacteas Toni, LEADERSHIP AND COMMUNICATION are values which do not concur with the planned objectives, results which ended in greatly affecting the final percentage of the Work Atmosphere.

One year after commencement with MDW, in 2011, we obtained an increase in 4.6 percentage points in LEADERSHIP and 15.3 percentage points in COMMUNICATION. The 2012 results also corroborated our progress in these 2 categories with respectively 7.6 percentage points and 7.1 percentage points.

Today we state with pride that we obtained an increase of 22 percentage points as an improvement in our Working Atmosphere, our people are motivated, today their opinion is also heard and they are convinced that we trust them to turn us into a World Class company.



 

5. 5S

 

We started with the application of the 5S tool a year ago after training with our consultant Rosa. In the beginning we thought that there was an obstacle that we could not overcome and this was the limited space of our plant. We were of the opinion that we would not be able to free up a greater area than that which we had.

I am pleased to say that on 21.1 we moved tons of rubbish and we continue every month to carry out the S1 in a scheduled manner. In S2 the teams are cleaning and furthermore they are working with their mentors to constantly improve their cleaning matrices and methods. In S3 the teams have put in a lot of effort in identified areas – all of which is beneficial to them. Currently we are in S4 with 16 MODAPTS projects.

The areas where we are applying the 5S are:

  • Production
  • Maintenance
  • Quality Control
  • HR
  • Management

Due to the excellent and visible results for 2014 we will continue to apply 5S with the other 65% of our company.


 

6. Lessons learned

 

During these years of application of the methodology we have made the right decisions, which have made us victorious and win the different battles. Similarly we launched various training methods which means that each new area of the company starts its adventure with the methodology and today we want to share them.


 


 

Fear of showing red indicators

During the mini business drive most of them had the tendency to only measure green indicators, avoiding the red ones – coincidentally these were vital to each area or process.

Training: After making several changes and considerations by the team we understood that each red section is an opportunity for fantastic change, which is proven and must be analysed on the basis of 3P initially

Progress before perfection

Some mini businesses in the beginning took more time than expected (approximately 45 days) because they were trying to make everything “perfect”, this delayed the formal start of the mini business methodology.

This symptom also affected the coalition team and our multi-level meeting was delayed for almost two months in order for everything to be “ideal”.

Training: When the mini companies are in their launch phase it must be ensured that the teams have all the necessary tools, a place to meet, note pads, markers and indicators with clear goals and alarms, without this meaning that everything has to be perfect, the latter being the main idea which must be made known to leaders, coaches and master coaches. As the team advances, they themselves progress on all fronts always accompanied by good addressing.

The added value of the multi-level meeting lies in the information that is shared and all the progress that the teams show their colleagues so that new ideas for improvement emerge.

Progress in the face of perfection is an important part which must be remembered at all times in continuous improvement.

Step-by-Step

At the time of starting the level 1 and 2 mini production businesses, opportunity was given to area supervisors and process leaders to propose indicators to their respective teams, as they are very well acquainted with their operations. After two failed attempts we realised that in the beginning the indicators must for the most part come from level 3 for the following levels.

After one year of revisions the level 2 and level 1 teams are able to propose high yielding indicators for their areas.

Training: The first indicators of the mini businesses must mostly come from level 3 to level 2 and 1 teams. After their application and analysis for a specific period, there will be several proposals for new forms of measurement mainly focussed on continuous improvement on the basis of training initiated.

Promote intrinsic motivation.

After almost one year of having started with the methodology, some teams started to decrease and did not present the enthusiasm that they had at the start. There were comments that the methodology is better received when there is a financial boost, obviously we seek better routes through recognition.

Lesson learnt: We realised that personal and public recognition for a job well done must be made at all time and at any place. Today we know that telling our workers that we are proud of their progress, their ingenuity and their commitment, are key to keeping them “hooked”, this has a much more powerful effect than a simple financial boost.


 

7. Future plans

 

We are conscious of the fact that we have achieved positive results but that there is still a long way to go.

The following steps in our continuous improvement process include:

1. Problem solving module: Our strategy is based on a system of recognition for junior, bachelor, senior and master levels, in accordance with the understanding and application of different problem solving techniques, so that we are capable of conducting an analysis of the identification of the main cause and not only the middle management levels.

2. Leadership compromising module: We are conscious of the fact that a company not only requires a few leaders, our desire is to develop the compromised leadership and focus on the vision of the organisation of all the ILTSA members.

3. New Plant: As part of our growth we are in the process of constructing a completely new industrial plant. A more secure and modern plant, more in the line of what we would like.


 

8. Anecdotes

 

Improvement is possible.

From the instant that we planned our multi-level meeting we knew that we would have to appeal to the pride of our people when the results were not those expected. Many ideas emerged from everyone in order to achieve it such as the “NOAS” slogan; we also thought of the symbol of the thumb’s down sign or a replica of the toilet symbol, until after much thought and debates, the majority opted for the slogan “Improvement is possible because We believe in You.” To be truthful not everyone was convinced that this type of non-aggressive recognition would produce the results we were seeking.

The slogan “Improvement is Possible because we Believe in You”, is the manner in which ILTSA recognises that a mini business is not meeting its monthly outputs, in our case application of the vertical alignment of targets and 5S.

The focus of this recognition is that although the results have not improved, from the General Manager through the Master Coach, Facilitators and finally the Coach we are present to assist the leader and the entire mini business to reverse this situation. The main objective is not to remonstrate or ridicule, but on the contrary, to support them and to leave a clear message, with responsibility and commitment it is possible to generate surprising results in a short time.

After the first results of our multi-level meeting there was no doubt and all remained convinced that the assistance that we had created was the ideal, no team wanted to receive this “assistance” from the Managing Director or Master Coach and those who received it went to a lot of trouble not to get it again – we also had teams who having earned “Improvement is Possible because We believe in You”, in the following month became the winners of the best mini business.

 

9. The opposition bench

 

In one of the many MDT-4 meetings, the general manager noticed that many of his ideas or requests were immediately met with the answer “No, It is not possible” and this disturbed him because he could not get them to avoid replying “automatically”, without first considering that that which he was asking was a challenge and an excellent opportunity to dispel some myths and remove obstacles.

In one of the MDT-4 revisions and in the face of Edward McIntosh’s comment, Rosa proposed the idea of a type of “Presentation list” of those whose first reply is “No” in response to a request made…. We started to develop the idea and agreed that the objective was to generate more positive thoughts in the MDT-4 and it was when we created the booklet called “Opposition Bench” attempting to recreate typical assembly sessions where the opposition, which is not objective, is clearly identified.
This booklet is in MDT-4 and has two rules of the game so that the photo of the team member is entered or removed from this book:

This booklet is in MDT-4 and has two rules of the game so that the photo of the team member is entered or removed from this book:

  • 1. The participant’s photos is entered in the book if the team member uses as main reply “No, it is not possible” in the face of a request from MDT-4.
  • 2. In order to be removed from this book the team member must present a formal analysis of the request demonstrating the viability or not of the said request.

 

EAT in families


 

As has been shown previously through the methodology we are achieving amazing results. Changing the culture of our people, developing in them behaviour, which reflects the company values, is a great adventure. The team leaders and members have learned that that which has been acquired with the methodology is applicable at home; this is the case of Mr. William Carpio.

William’s team, the 7 Kaisers, have won the prize of best mini business twice – obviously he is very proud of what has been achieved and as would be expected, shares his success with his wife Jenniffer. She identified that this behaviour can also be beneficial to him at home and rapidly embarked on a strategy, which surprised us.

Jenniffer challenged William to replicate at home what he did in his mini business. This man accepted the challenge which consisted of introducing new concepts in the house, dealing with priority actions required in the home and taught his wife and children how to apply 5S; with much joy and satisfaction William stated that he had completed the challenge and that his family was happy with what it had learned and the new contribution to the home.

We are convinced that the best people are those whom we love because they are the ones who make our products and we continue to achieve this with MDW®.

Thank you very much

Document drawn up by: Byron Díaz (Eng.) and Guillermo Guerra (Eng.) with the approval of ILTSA for the exclusive use of Competitive Dynamics International©

Copying strictly prohibited without the authorisation of Competitive Dynamics International©.