October, 2008 ezine

Congratulations to Network Member Landscape Forms, who were just named one of the Top 15 Small Places to Work by the Wall Street Journal and Winning Workplaces! Read on to learn more about this honor. Also, you can learn how to create a winning workplace from The Leadership Roadmap, by Dwane Baumgardner and Russ Scaffede, which is now available at Amazon and Barnes & Noble. Scanlon ideas continue to be embraced by the Innovative community - don't miss your opportunity to network with entrepreneurs from around the world at The Ideas Enterprise Conference, where 2 Scanlon Consultants will be on an Innovation panel. Finally, Jahn Ballard continues to offer solutions to issues that all companies are currently facing. We thank thank everyone in the Scanlon Community for your continued support! Registration information for Scanlon Network Executive Leadership Retreat, "Compression", was emailed earlier this week. If you are a Scanlon Network executive and did not receive the information, please contact the office at 517.332.8927 or reply to this message! Full details are also available at the Network web site in the Events section, including the full manuscript of Doc Hall's new book, Compression. In This Issue Landscape Forms Recognized as one of the Top 15 Small Workplaces for 2008 Building a Winning Organization with "The Leadership Roadmap" Scanlon Consultants Speak on Innovation at the Midwest's First Entrepreneur Conference How can we Address our Current Crisis of Collective Will?

Landscape Forms Recognized as one of the Top 15 Small Workplaces for 2008 by the Wall Street Journal and Winning Workplaces Kalamazoo, MI - The Wall Street Journal has announced that Scanlon Leadership Network Member Landscape Forms is one of the Top 15 Small Workplaces for 2008, the second annual list of the best small workplaces in the U.S. The Top Small Workplaces list, compiled in partnership with Winning Workplaces, a nonprofit whose mission is to help small and midsize organizations create better workplaces, showcases exceptional employers, including private, nonprofit and publicly held organizations that have built workplace environments that foster teamwork, flexibility, and professional growth while providing an atmosphere and benefits that encourage employee loyalty. "These small businesses are leading innovators and role models for larger companies," said Larry Rout, editor of the Journal Reports, The Wall Street Journal. "At a time when most employers are cutting back on employee benefits it is important to recognize those organizations that are creating environments that encourage productive behavior and expanding programs to keep employees happy." "The Top Small Workplaces have been in business an average of 42 years and have demonstrated that they can survive difficult economic times," said Ken Lehman, Winning Workplaces' founder and board chair. "By building strong cultures and gaining employee commitment to the success of the business, these organizations have thrived in good times and weathered bad ones. It is at times like these, with our nation facing almost unprecedented financial and economic challenges, that the real mettle of a strong workplace is demonstrated." The Journal and Winning Workplaces began accepting nominations last fall, receiving 782 eligible nominations, which were pared down to 35 finalists. To select the 15 Top Small Workplace winners, a national panel of small business experts chosen by the Journal and Winning Workplaces judged the finalists based on specific metrics and qualitative assessments of their success in creating workplaces that nurture, challenge and reward employees. News articles, slide shows and videos about the selection process and winners are available on wsj.com. As part of its continuing coverage of this year's Top Small Workplaces, the Journal will be interviewing leaders of the winning companies every week in coming weeks on "Independent Street," WSJ.com's small business blog. Bill Main, President of Landscape Forms (pictured) stated, "We are thrilled to receive this award, and developing our business according to the Scanlon Principles has helped us get here. But this is also a reflection of our incredible workforce. We've invested heavily in each other's success, and I think the results speak for themselves. All of us at Landscape Forms look forward to continue learning from this proven method of creating and conducting business." Congratulations on this much deserved honor! Building a Winning Organization with The Leadership Roadmap "A powerful approach for building trust and a winning organization" Stephen M. Covey The Leadership Roadmap, written by Dwane Baumgardner and Russ Scaffede*, is now available on Amazon and Barnes & Noble. The book lays out a "concise, coherent, and comprehensive plan for marshalling all available resources and using the best of the available wisdom to build organizations that succeed over the long term". According to the authors, in any organization there are only 3 processes that really matter: 1. People 2. Lean 3. Innovation Lean and an Innovative culture are essential to building capacity. However, the truly critical piece is People. People drive all innovation and lean processes. Without the ability to tap into the full energy and creativity of all employees, significant progress cannot be maintained over the long term. The Scanlon Principles provide the guidelines leaders need to fully unleash employees' power. Integrating the leadership of innovation, lean and people processes is at the heart of achieving competitive advantage. The Leadership Roadmap helps you reach this goal with step-by-step plans, templates and tools. Baumgardner/Scaffede have also created The Leadership Roadmap: Business Model Beliefs, a booklet that boils down the book's big ideas to their essence and separates them from the implementation tasks. This booklet would be appropriate to use as an introduction to the principles of lean, innovation and Scanlon to your employees. If you are interested in obtaining copies of this booklet, please contact the Network office at 517.332.8927 or majel@scanlonleader.org. * Dwane Baumgardner is retired CEO of Magna Donnelly, President of the Scanlon Foundation, and a Scanlon Steward. Russ Scaffede is General Manager of Toyota Boshoku, former VP of Magna Donnelly, and a Shingo Prize winner. Together they have formed The Leadership Roadmap Institute. Two Scanlon Consultants to Speak on Innovation at Midwest's first Entrepreneur Conference The Ideas Enterprise (TiE) Detroit is hosting the first ever TiECon Midwest 2008, a two-day conference on Friday, November 21st and Saturday, November 22nd at the Westin Southfield. TiE, formed in Silicon Valley, is the world's largest nonprofit organization dedicated to entrepreneurship, boasting 52 chapters in 11 countries. Paul Davis, Scanlon Steward and Consultant, and Approved Scanlon Consultant Praveen Gupta will sit on an Innovation panel. The theme for the conference is "Succeeding in a Dynamic Global Market Place". With panels in 3 tracks on "IT", "Manufacturing" and "Emerging Industries", TiECon Midwest 2008 presents distinguished speakers from several reputed companies, all over the world. Sponsored by MicroSoft, TiECon Midwest 2008 aims to encourage candid discussions on industry trends and opportunities, facilitate networking amongst focus groups, and motivate aspiring entrepreneurs. This is a great place to connect with some of the leading minds of our time. This event ensures that the talent of tomorrow meets the talent of today. TiECon Midwest 2008 is an extraordinary opportunity for entrepreneurs to gain knowledge, derive inspiration, and develop a valuable network. To network with luminaries, listen to expert, form partnerships, build and expand your business, don't miss out this grand occasion at Westin Southfield on Friday, November 21, 2008 and Saturday, November 22, 2008. The conference will feature several keynote addresses, panel sessions and focused networking receptions. The conference will also encompass a business plan competition and an awards banquet during which business and community leaders will be recognized. An entertainment filled gala will conclude the two-day conference. Register today at the TiECon web site! How Can We Address our Current Crisis of Collective Will? by Jahn Ballard The current economic and environmental crisis challenges us to initiate what will need to be the greatest explosion of creativity, innovation and cooperation in recorded history. As the actual status of the earth's climate and biological situation have become more revealed, we are seeing the beginning of the same dynamic as the actual facts of the economic situation, which has been moving in the same direction for years. Only now is it being seen for the instability and destructiveness that has actually present for some time. One part of it, rarely mentioned in the commentaries, that helped put things over the edge, were the changes in bankruptcy law. Pushed through by the money-center banks in 2005, over the virtually unanimous objection of every bankruptcy judge in the country, this lead to even more risky credit card and mortgage activity. This is described in the forthcoming book from Bob Booth and Ed Morler, Good People, Bad Credit. As the events that led to the bank bailout become more unpacked, the role of poor to terrible transparency should emerge front and center as a key driver of their risk management failure. In fact, this recognition is essential, if a real conversation about positive change in objective economic reality is going to start. Within organizations, the almost universally absent transparency is how behavior and decisions create financial results. This is destructive across the board, perniciously undermining almost everything people are trying to accomplish at every level. This situation tends to be invisible to many, from the boardroom to operations team meetings, because it is a function of absence, not presence. In many cases, the story could be written as 'Good Companies, Bad Numbers'. This is a situation that Joe Scanlon addressed directly in his day, and with which Scanlon companies still struggle today. The pivotal fact, that standard financial data is fragmented and incomplete, means the objective facts of property and contract cannot be included in the thinking by all parties. In business conversations, and in the creative process of problem solving, not having an accessible and common-sense shared language often hampers optimal outcomes. This missing overall 'score' should be something that everyone can glance at as often as needed for an impersonal reference point to the discussions at hand. Doing business without that is akin to attempting to play championship football on a round field with no 50-yard line or yard markers, and goal posts that tend to move for no particular reason. Bowling through a curtain in front of the pins is a common metaphor used to describe the impact of current accounting and finance practice. All the participants on both the professional and the customer sides are unknowing victims of a divisive system they had no part in creating. It can be demonstrated with guaranteed predictability that a transformation of this invisible and incalculably destructive pattern of missing organizational practice and behavior can be launched in one day with an intact senior leadership group. Improbable as it may sound, providing a simple and scalable model of the economic reality everyone can understand will release unlimited enthusiasm and collaboration that has been blocked heretofore. Thankfully, all the information required to execute on the finance side is already imbedded in the existing data, and simply requires using the 50 years of resources that already exist to support the full implementation and use of Financial Accounting Standards Board regulation 95. With full linkage of the bank account to the accrual statements, it then becomes possible to employ the scientific method as a tool for collaborative maturing of the entire measurement system; so all stakeholders can support the base business model to evolve. According to Jim Huntzinger, founding thought leader of Lean Accounting (See Fresh Ideas: Accountants as Change Agents in the February E-Zine), the base business model is a crucial element in this situation. "I have found that a so-so executed "flow" business model will significantly outperform a very well executed "batch" business model. I have actually witnessed this from a plant/operation level. But to take the business model to its needed level, the leadership has to not just be on board; but understand functionally, and execute to the better business model. Very, very few realize this, let alone have the experience and knowledge to achieve this". This is especially true due to the issue Scanlon so directly addressed; the people doing the work have crucial insight that leadership does not know how to use. Jim's insights are now being demonstrated in both the service and public sectors as well. These non-manufacturing cases are now beginning to be chronicled in The Assocation. for Manufacturing Excellence's Target Magazine. The current-practice absence of a common sense, usable picture of financial reality, and evolving measurement maturity then contributes a fundamental instability to attempting genuine and sustained collaboration at virtually every level of the private sector, civil society and public institutions. Ever wonder why meetings tend to be so painful and unproductive so much of the time? There are two basic reasons. One is the absence of the impersonal and objective facts of the money, with the behaviors that are creating it, presented with relevant and practical transparency. The second is absence of virtually any collaboration on the design and execution of meetings by the people in them, to actually achieve consistently outstanding results with optimum use of the available wisdom and very efficient use of time. Any meeting or conference can be a direct experience of group genius, using a fusion of methodologies drawn primarily from the Technology Participation and Integral Operations Finance, plus use of World Café, Open Space Technology and the Collaborative Operation System, and with thorough pre-planning. A meeting can capture in writing all the available wisdom in the room, especially people's strategic insight and tactical clarity, ending with real-time documentation completed and available almost immediately. Unless and until meetings and conferences become collaboration exercises that deliver a directly felt experience by every participant of fully giving their gifts, not wasting their time, and receiving the gifts of everyone else's experience, effective and sustained development and execution of collective will will continue to elude us. We in the Performance Management Institute's network and at The Commons call for the further development and market-wide adoption of an Integrated Business and Institutional Leadership Structure. One that builds on the foundation Scanlon laid. One that provides a fundamental framework to address the twin challenges of practical transparency and sustained collaboration, and capacity to quickly transfer ability to execute to CEOs and their teams. This is an opportunity for the United States to resume its centuries-old role as the driver of new and unlimited possibilities for human beings to pursue their own destinies as they also steward the larger society of which they are part. We declare our willingness to use our Intellectual Property in collaboration with any individual or group that practices the values of Asset Stewardship on behalf of themselves and the whole society, along with a Fundamental and Behaved Respect for the ability of all human beings to engage their spirit in service to their enterprises, loved ones, the greater community and the whole. All power to those who care, Jahn Ballard James Carse, in his profound book, Finite and Infinite Games, challenges us to distinguish and choose the games we create and play. "There are at least two kinds of games. One could be called finite, the other infinite. The finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play. The rules of the finite game may not change; the rules of an infinite game must change. The rules of an infinite game are changed to prevent anyone from winning the game and to bring as many persons as possible into the play."

Sincerely, Your Scanlon Integrated Leadership Team: Wayne Lindholm, Larry Spears, Paul Davis and Majel Maes (writer and editor) Scanlon Leadership Network 2875 Northwind Drive, Suite 121 East Lansing, MI 48823 Phone 517.332.8927 Fax 517.332.9381 Email office @scanlonleader.org www.scanlonleader.org

September 2008 Ezine

In this e-zine, you will continue to learn about Compression with more details of the Scanlon Leadership Network's Executive Retreat. The article includes a helpful link to the introduction of Doc Hall's book of the same name, due to be published soon. Also, Jahn Ballard furthers his Retreat lead-up articles, which contain helpful tips and tools for implementing sustainable, Compression-oriented practices. In addition, we report out on two important events that the Network was recently involved with: The Lean Accounting Summit in Las Vegas, and the Business Innovation Conference in Illinois. Word of the value of the Scanlon Principles continues to spread! We thank thank everyone in the Scanlon Community for your continued support! In This Issue Scanlon Executives will Dive Deep into 'Compression' Building a Tacit Knowledge Capture and Leverage System to Support the Integration of the Scanlon Principles The People Side of Lean in Las Vegas The Business of Scanlon and Innovation

Scanlon Executives will Dive Deep into 'Compression' at Executive Retreat The business world is just starting to get a feel for how important the issue of sustainability has become. On December 15-16, 2008, Scanlon executives will get a rare chance to examine in-depth the challenges of sustainability and more by studying 'Compression' at the Scanlon Leadership Network Executive Leadership Retreat, which will be held in Lansing, MI. Coined by AME founder Doc Hall, the term Compression refers to how we can "globally create at least the same quality of life as in industrial societies today, while using less than half the energy and virgin raw materials, and cutting toxic releases to nearly zero." It takes sustainability to a whole new level. Doc has literally written the book on Compression, which will be published soon. The book will serve as the conversational springboard to a greater exploration of how these concepts impact our lives and businesses, and how employing the Scanlon Principles will help us march closer to the goal. Chapters from the Compression manuscript will be emailed bi-weekly to leaders from within the Scanlon Community. Reading the manuscript in advance will enable everyone to hit the ground running on December 15. Doc Hall will serve as the main presenter. David Veech, Executive Director of the Institute for Lean Systems, will facilitate. (See more about the Institute for Lean Systems) The Network is also thrilled to have secured a tour of Christman Co. in downtown Lansing. Christman, a commercial construction corporation, is a leader in sustainable/high performance buildings. In fact, they were awarded the worlds only double-platinum LEED (Leadership in Energy and Environmental Design) certification for their recently renovated headquarters. This will provide participants a close-up view of how Compression can be accomplished. The table of contents and introduction to Compression is attached here. Building a Tacit Knowledge Capture and Leverage System to Support the Integration of the Scanlon Principles by Jahn Ballard The 4th column in a series on Compression as the new reality that has replaced expansion, and how to function in this new world. To be explored in depth with the author of the book by that title, Robert "Doc" Hall in December at the Scanlon Executive Retreat. What if the tacit knowledge of every member of the team can be elicited, recorded and made transparently available to everyone? What would it mean for a business if the core knowledge of its people were accessible as a more and more coherent whole? One can only imagine the kinds of satisfaction, creativity, productivity and profitability generated in such a situation. However, if we agree that the consistent transfer knowledge is the core challenge as written in the Harvard Press book Deep Smarts, then we also have to accept Barry-Wehmiller CEO Bob Chapman's assertion that 'People-Centric Lean' is the only way to go, because all tacit knowledge is found in individual human beings. This is actually what people-centered lean practices are doing. Standard work evolves as existing and new tacit operational knowledge becomes explicit. Now, if we are to have a complete and sustainable transformation, the challenge is to apply lean principles to the domains of Strategy and Finance, plus all the back-office support functions, in addition to continuous improvement in Operations. In the August Scanlon E-zine (link?) I described how a 'Captain's Reality Check' could allow the CEO to lay out the border and the pieces of the multi-thousand piece jigsaw puzzle that is a business enterprise. I also briefly discussed the practice of Nimiwashi, which could be translated as 'preparing the soil for transplanting the seedling'. This highly developed set of practices for internal diplomacy among functions creates a policy environment where the groundwork for a decision is laid so thoroughly that when they actually get in the room to make the policy, the process is easy, rapid, and consistently optimized. JM Juran, one of the founders of Total Quality Management, noted in 1948 that "To be in a state of Self-Control, a person must know what is expected of them; know how well they are doing; know what resources/options are available to improve." If any of these three are lacking, Juran wrote, "a person can't be held responsible." Yet all too often enterprises hold people responsible without equipping them to be responsible. Gil Friend, founder of Natural Logic, says it this way - "To be successful, one needs to have AND know the: - Goals and Aspirations for oneself and one's organization - Results created and Metrics for measuring them - Resources to carry out the tasks and Capacity to do them This means fully integrated Strategy, Feedback, and Implementation/Execution." When, and if, in the 'C' Suites and manager's offices, North American companies figure out how to succeed at Gil's challenge, we will enter a new era of business self-management, and start to fully compete with the new standard Toyota Motor Company has set over the last few decades. Bill Hewlett got to the crux of the matter as clearly as anyone- "If you want me to tell you how somebody's going to behave, tell me how they are measured". In addition to the see-with-your-own-eyes reality of processes on the floor (known in lean circles as the Gemba), we also need a method to consistently discover the Organizational Design, Strategic, Operational and Financial Gemba as a whole. This see-with-your-own-eyes reality has to live in consistent and constructive conversation and collaboration among all the stakeholders in every discipline and reporting level of the organization. Or as Doc Hall would say, as a "functioning high-velocity learning culture." This kind of virtually-impossible-to-imagine cooperation and whole system stewardship of resources may only be able to happen if the people who lead and do the actual work become the drivers and co-architects of an evolving measurement system, with the CEO, CFO and senior leadership providing the environment in which it that continuous design and testing process can flourish. Laying the foundation efficiently and effectively for building a Tacit Knowledge Engine (capture and leveraging system) requires a launch sequence of highly focused whole system measurement design and dialogue. The first step is a 1 -2 day CEO (Captain's) Reality Check, which lays out the puzzle border in the form of a draft transparent model of how the organization's behavior becomes the financial results, as well as defines and prioritizes business mandates. Following that, in two half-day Measurement System Kaizens (collaborative problem-solving events), capacity for growing shared business acumen is developed through the people who lead operations and do the actual work. These people create together a model of how the enterprise is actually functioning, guided by the CEO and CFO's outputs from the Reality Check. As this is happening in the room, the CEO and CFO are drafting a 'sacred glossary' of shared language and core practices that add all the disconnects in hand-offs through the overall value chain, behavior scoring options and intangibles to existing language about core intellectual property, core capital, values & mission. Iterating the model as a team six times in weekly or monthly 'Huddles' sets up a working Key Performance Indicator (KPI) matrix in which hypothesis creation, assumptions definition and testing, and then KPI refinement, can be conducted using the scientific method. When the whole team creates its own model and define its own language, the connection of results to behavior begins to consistently be more clear to everyone, so it becomes possible to consistently leverage the biggest 'bang for the buck' on constrained resources as well as for aligned initiative to be taken at all levels, thus installing the foundation for whole-organization Nimiwashi. Further Development Steps are then prioritized and driven by launch sequence to fully execute the integration of Equity, Participation, Identity and Competence. These include: · Rationalizing the total company conversation through meeting grid and meeting map development, as well as facilitation specifications for a participative culture. · Specifying decision-support linkages to legacy IT infrastructure · Cascading basic acumen foundation through whole system practical transparency practices to all stakeholders - the floor and the board, the bankers, investors and accountants, and then the customers and marketplace as appropriate. Read Jahn's previous articles here: Compression: Dealing with a Changed World Compression: What is the Difference that will Make a Difference? Why Do a Captain's Reality Check? Jahn Ballard enables Owners/Entrepreneurs/CEOs and their senior teams to design their ideal jobs, focused primarily on fully leveraging the talent available and evolving the business' value. Employees spend more of their time doing what only they can do for the good of the enterprise, and their time overwhelm and distractions are transformed. The People Side of Lean in Las Vegas by Marge Holata-Burton, Director of Associate Involvement, SGS Tool Co. On September 15-17, I was given the honor of representing the Scanlon Network at their exhibit booth at the Lean Accounting Summit in Las Vegas. This 4th annual Summit focused on the "People" aspect of Lean. It was an excellent opportunity to discuss the values of Scanlon. I was impressed by the number of participants, probably 500 or more. I spoke with many attendees, especially after Bob Chapman's keynote address. Bob is the Chairman and CEO of Barry-Wehmiller and spoke primarily about the people side of Lean. He was a very motivational speaker and I could see that he really had the attention of the audience. He shared many great examples of Identity, Participation, Equity, and Competence at his company. Although he used different terms, I was able to convey to the many people that stopped at the Scanlon booth that the Network could help them turn their organization into one like Bob spoke about. Many people also grabbed the Network informational brochures. A lot of people took advantage of their Pre-Conference Workshops ... probably 200 or more. Considering these workshops were anywhere from $300 to $500, and the current economy, this spoke well of the session's value. I had the Scanlon booth set up early on this first day, so I was able to meet and greet many of the people attending them. I believe the Summit as a whole was very valuable, and all companies should consider sending a small "cross-functional team" to the event; e.g., a person from manufacturing, accounting, QA, and the like. In my opinion the company would get a lot more for their money than if they only send their accountants. The whole Lean issue needs to be embraced by everyone; getting more people involved would be of much more benefit. Opportunities to exhibit at events such as the Lean Summit are an excellent way to get the Scanlon organization out there in front of companies that are looking for any help they can get developing their people skills so desperately needed for "Lean" and many other organizational improvement programs. I appreciated the opportunity to go and represent Scanlon and work with Jahn Ballard, the Scanlon consultant from Performance Management Institute, Inc. (Marge and Jahn are pictured above) We owe great thanks to Summit organizer Dwayne Butcher (pictured right) for providing the opportunity! The Business of Innovation and Scanlon Studied at IIT On September 8 - 10, 2008 Innovation thought leaders and businesses from around the world gathered at the Illinois Institute of Technology (IIT), Rice Campus in Wheaton Illinois. The Business Innovation Conference brought entrepreneurs, engineers, executives, academia and government together to share their methods, challenges, and lessons learned as they collectively raised the understanding of the innovation process. (Praveen is pictured above left, with Brett Trusko of the Mayo Clinic) The conference was organized by Accelper Consulting, and hosted by the Illinois Institute of Technology. Praveen Gupta, the driving force behind the event, commented that "the conference turned out to be a great event because of the great speakers, the participant's hunger for learning innovation, and the academic environment at IIT. I salute everyone who invested their precious time and resources in promoting innovation and helping others better themselves." Praveen is a long time Scanlon supporter and Consultant, and is author of Business Innovation in the 21st Century. Scanlon Steward and Consultant Paul Davis led a breakout session on "Creating Cultures of Innovation", which has been a hallmark of Scanlon Members for decades. The Network's information booth was manned by Scanlon President Wayne Lindholm (pictured right), who spent many years working for 3M, which is widely considered one of the world's most innovative companies. Other conference attendees offered these opinions: "It was a smashing success! Not only was it extremely informative and useful, the caliber of the speakers was top notch and the networking opportunities were extremely beneficial." Milt Hayes, Director, CIT Planning, Abbott Labs "It was the very best business conference I have ever attended in my 35+ years in the business world. The speakers were truly business innovation experts as were many of the attendees. The atmosphere was genuinely optimistic. People were willing to share their successes and failures so that everyone could benefit." Terrence Luczak, Six Sigma Black Belt, formerly with Siemens Building Technologies "I felt like my synapses have been touched by a live wire. I went home buzzing every day with ideas I generated while I was at the conference." Brenda Hernandez, Allstate Network staff and consultants continue to spread the word on how to create innovative organizations. Praveen has launched the international journal of innovation, the Network's innovation Simulation was recently facilitated by Kim Johnson at Johnstech in Minneapolis, making learning about innovation fun and interactive. Paul Davis will be spreading the Scanlon message of innovation to the Prestressed Concrete Institute's International Conference, where he will be leading several workshops with the CEO's of the concrete industry on how to create truly innovative organizations. "It is interesting that people do not realize how truly innovative Joe Scanlon's ideas were and how innovative they still are. Almost all the experts on innovation mentioned how important it is to create trust in organizations for innovation to succeed. Scanlon methods are the most proven and innovative ways to build trust. That is why innovative companies from around the world are interested in Scanlon methods," said Paul Davis. The next Business Innovation Conference has been scheduled for Oct. 5 - 7, 2009 at the same venue.

Sincerely, Wayne Lindholm, Larry Spears, Paul Davis and Majel Maes Scanlon Leadership Network 2875 Northwind Drive, Suite 121 East Lansing, MI 48823 Phone 517.332.8927 Fax 517.332.9381 Email office @scanlonleader.org www.scanlonleader.org and Pete Hovde, Scanlon E-Zine Writer and Editor

August, 2008 Ezine

We have heard the voices of our customers, and now Scanlon Leadership Network is thrilled to announce the roll-out of the Lean Sim Lite™!. Read on below to learn how this updated,more travel-friendly lean manufacturing tool can help you take your lean training on the road. Brad Hill, Scanlon Certified Consultant, takes you further down the path of gainsharing with his July e-zine follow-up "Translating Readiness into Success". And Jahn Ballard continues his series of articles that dig into the timely topics of Sustainability and Compression*. We are also happy to report that the newest Network tool (the Innovation Simulation) and Network-supported resource (Creativity Central) are being tapped into with great success. *EVENT NOTICE: The Scanlon Leadership Network will be bringing you opportunities to focus on these issues at the Executive Leadership Retreat, which will be held December 15-16 in Lansing, MI. The Retreat is being strongly supported by AME's Doc Hall and Scanlon Approved Consultant Jahn Ballard, and will be facilitated by David Veech, Executive Director of the Institute for Lean Systems (www.theleanway.com). Keep a lookout for more information coming your way soon. We thank thank everyone in the Scanlon Community for your continued support! In This Issue Lean Sim Lite™ Now Available! Assess Your Readiness for Gainsharing (or the Health of Your Current System) - Part II: Translating Readiness to Success Why Do a Captain's Reality Check? First Innovation Simulation Conducted! Creativity is Central at SGS Tool Co.

Lean Sim Lite™ Now Available! We have the heard the needs of our customers and responded! The long-awaited update of the Lean Sim Machine™ has arrived. The Lean Sim Lite™ is the same as the original in form and function. It has simply been manufactured using lighter materials, making it much easier to use on the road. The Lean Sim Lite™ brings you these features and benefits: · It is finely crafted of lighter woods than the original's oak, and several of the components are now made of polymers in place of metal/wood, which greatly reduces the overall weight. · Including the Leader Guide, the unit weighs just 69.5 lbs. - which falls within the baggage weight limit of most airlines. · The entire unit comes in a large, hard-sided rolling suitcase, making it easier for 1 person to transport. · As an added bonus, the Nut Towers now come with pre-finished tops in gold, silver and black, for easy reference when running the simulation. For long-term use at one or a few close-by facilities, we still recommend the sturdy, long-lasting original Lean Sim Machine™. However, if you wish to take advantage of the Lean Sim Lite's™ transport capabilities, please contact the Network office at 517.332.8927 or office@scanlonleader.org to order yours today! 2008 Prices for Lean Sim Lite™ and original Lean Sim Machine™: Scanlon Leadership Network Members: $2900 Non-Network Members $5900 Assessing Gainsharing Readiness - Part II: Translating Readiness into Success by Brad Hill, Certified Scanlon Consultant Many organizations with an interest in gainsharing look to external benchmarking practices to determine if a competitor or admired organization's program can be applied in some fashion to their own organization. The effectiveness of gainsharing in your organization will not be related to outside successes, but rather to the culture and work environment at your organization. This article will help you assess whether gainsharing will improve business success in your current work culture, or what can be done to begin creating an improvement-oriented environment. In the July 2008 issue, we explored The Enablers of Successful Gainsharing Programs. Translating Readiness into Success Effective gainsharing programs successfully integrate business focus, process improvement, continuous communications and rewards. Business Focus Employees need to be aware of what ROI is, and need to recognize what factors drive ROI and which of these factors they can impact. The gainsharing payout formula should include factors under employees' control that drive ROI, and exclude factors outside of the employees' control. Create more superordinate goals. Changing from individual incentives to team or line incentives is a positive move. Of course, there are some "hard working" employees that may complain about "carrying the slackers." Companies need to drive out the "slacker" mentality, but they also need to drive out the "carrying the slackers" mentality. All employees need to focus on what they can do to help the overall system excel. This may mean placing some pressure on peers, creating a new process or exploring alternative areas where the slacker may have a greater chance of success. Companies must not give in to pressures for those individual rewards that may suboptimize overall performance. Create more superordinate goals that challenge employees to work as a team and to improve larger, more integrated work processes. Process Improvement Not only must each employee have line of sight to business success, but he/she must have accountability for improving the processes that they are involved in, and a mechanism for ensuring that improvement ideas are examined. Invest in training. Continuous Communications Employees must receive frequent communications on financial/operational successes, the status of their ides, and the link between their ideas and business success. Gainsharing programs must seamlessly communicate the "what", "how" and "why" behind the expected changes and the program's success. Factors such as performance management dimensions, business measures (such as quality, productivity, schedule performance, cost reduction), and process improvement techniques (Kaizen, Juran, quality circles or Deming), must be developed in unison and presented to employees as an integrated program. Following is an illustration of this message. · What are we trying to accomplish? Improved performance in key business drivers and an understanding by every employee of what they can do to impact these factors. · How are we going to get there? Kaizen, Juran or Continuous Process Improvement (or others) and a commitment to training employees in the competencies that will result in increased contributions. · Why will the organization and its employees invest in these efforts? The results of these efforts will mean more profit for the organization and more compensation to its employees. · Communicate the reasons behind the payout. Companies should establish closer ties between employee improvements and the program's payout. More important than the payout is the reason for the payout, and not that "productivity went up" or "costs went down", but why the business succeeded. Rewards Gainsharing payouts must be self-funded and tied to process improvements resulting from employee efforts and to the positive behavioral change that motivated these efforts. Don't view gainsharing as a pay plan. Gainsharing should be viewed as "a commitment to employee involvement that ties pay to improvements in total employee performance." The success of these programs is based fundamentally on the ideas that employees have for improving processes and the gains that these improvements generate. The pay element is a reinforcement tool that makes certain that employees are fairly compensated for their incremental thoughts and energies. Several years ago, a unionized division of a Fortune 100 organization voted in favor of a one-year, quarterly gainsharing plan pilot by the narrowest of margins. The pilot went four quarters without a payout. At year-end, the union voted on whether to renew the gainsharing plan. The outcome? Employees voted in favor of renewing the plan by a wide margin. Why? Since the introduction of the gainsharing program, supervisors and managers seemed to pay more attention to the efforts and ideas of the employees. Despite the program's compensation shortcomings, the work environment had significantly improved. Why Do a Captain's Reality Check? by Jahn Ballard The leadership at Toyota have a crucial practice - the question that they always ask in policy setting at the senior strategy levels - "What's the Gemba?". They want to know all the relevant facts of a situation before they decide what to do about it. Sounds like common sense, but how often do we actually do it? How many of you feel that having complete and relevant information from all levels so you can make a fully-informed decision is often a luxury you cannot afford? If that is the case some of the time, what is it costing you? Knowing the facts of the whole situation is also what Doc Hall of the Association. for Manufacturing Excellence (AME) is proposing as a crucial first step in dealing with the realities of Compression. (If you missed the two previous issues where I introduce this new book from Doc, you can check them out at scanlonleader.org in the Blog section.) In his last chapter, Doc points out the need for a comprehensive self-audit as a way to get at the Gemba. The Network will be hosting an Executive Retreat in December to explore Doc's provocative and challenging ideas in depth. One of the most crucial pieces of the Gemba is the actual economic status of the company at any given time. Most unfortunate is the fact that using standard financial statements to understand the economics of operating reality in a business is not what they were designed or intended to be used for. They provide a fragmented picture of the past that makes little or no sense from an operating perspective. Not only are they distracting from processes and unrelated to behaviors, they tend to separate people, and are almost never connected effectively what is really important to them. Finally, the link between financials and KPIs (key performance indicators) is often fuzzy, if it exists at all, making the connections to future-state cash flows and profit difficult, if not impossible, for the people who actually do work to know or understand. So if we agree that the Gemba is important, then what is the state of not just the financial system, which Peter Drucker in Managing in the 21st Century called "a 500-year old system in terrible shape", but also the rest of the measurement system financial measurement usually dominates? What would you use to get at that? In Dr. Dean Spitzer's book Transforming Performance Measurement, Jack Stack, Chairman of SRC Holdings and author of The Great Game of Business says " This book teaches how to accept reality . . .The reality that measurement usually does not provide timely and meaningful feedback to the people who need to know the results of their decisions and actions." One of the most powerful reasons that duplicating Toyota's performance has eluded the vast majority of US Companies attempting it is because we do not have a comprehensive and systematic environment for senior policy leadership to rigorously know the answer to the question - "What is the Gemba" I propose that the crucial first step is for the CEO to do his or her own 'Reality Check' from their unique perspective as the 'Captain of the Ship'. I have developed three self-assessments for the 'Captain' of the ship to start with to get at the overall situation as they see it now. They are the Organization Design, Leadership Capacity and Performance Measurement self-assessments, which I am happy to both share and go over with any CEO or GM that is interested with no strings attached. In addition, Dr. Spitzer's book has two powerful instruments for this purpose. One supports the assessment of Measurement Maturity and the other Organizational Trust. He and his publisher, the American Management Association have given me permission to use them to begin benchmarking around these two pivotal, yet often over-looked dimensions. If assessing the status of these domains in your enterprise could be of use, let me know to share them with you. In order to get at the Gemba, it is also crucial to take an integral view of the operations finance situation, for which purpose I have invented the Financial Dashboard in partnership with Chuck Kremer, CPA, and the Maryland Association of CPAs, which has a free four-period demo at www.financialdashboard.com, and the use the Financial Scoreboard, invented by Chuck Kremer, who is the lead author of the seminal book, Managing by the Numbers. Both of these Integral Operations Finance resources provide a toolkit for building a whole system view of the numbers, and help to provide links to the KPIs. I have also developed another dozen short instruments on my own and with colleagues to get overviews on Resource Utilization, Organizational Capacity, Personal Learning Styles, Ideal Worklife Vision, Financial Literacy levels, Cultural Resilience and a number of other dimensions. One could say that an organization is like a multi-thousand piece puzzle. The first step to having fun and succeeding in putting it together is lay out the border. I assert that it is crucial for the Captain to know their own picture of the border on their own terms first. Once they have the puzzle laid out for themselves, the improbable mandate is that they should not tell anyone about it. They will only really get at the whole Gemba if they then enable their people to go through a Discovery Process themselves as a group, with the Captain remaining silent virtually the entire time, and observing what happens when their people have the direct experience of confronting their collective reality by themselves. Speaking further about Transforming Performance Measurement, Jack Stack goes on further to discuss, ". . . the importance of dialogue. It also reaffirms my belief that successful organizations develop a special language, a language of numbers. Once you develop it, and as you build on it, the outcome is pride, self-esteem, teamwork and trust." Toyota's second crucial leadership practice they call Nimiwashi, which literally translated could be said as 'preparing the soil for transplanting the seedling'. They have a highly developed art of discovery and diplomacy the consistently creates environments where policy setting is graceful, easy, quick and usually exactly right for the context with which they are dealing. Next time we will explore briefly how to set Nimiwashi capacity-building in motion in any US business culture. Jahn Ballard enables Owners/Entrepreneurs/CEOs and their senior teams to design their ideal jobs, focused primarily on fully leveraging the talent available and evolving the business' value. Employees spend more of their time doing what only they can do for the good of the enterprise, and their time overwhelm and distractions are transformed. First Scanlon Innovation Simulation Conducted! Kim Johnson, a Scanlon associate consultant based in Minnesota, delivered the first Scanlon Innovation Simulation this week at Johnstech International, located in Minneapolis, MN. Johnstech is a leading manufacturer of test contactors used for semiconductor production testing and device characterization with a proven track record of new product development. Although Johnstech International has a highly effective technology team, Charlie Potter, Johnstech International Chief Technology Officer, realized the value in understanding innovation at a deeper level and invited Kim to facilitate the Scanlon Innovation Simulation for his product development group. Charlie and his team learned about the concept of 1 + 1 = 3 and the power and value that comes from synergy and innovation when the project team collaborates and works together solving problems and taking risks; the whole is greater than the sum of the parts alone! The Innovation Simulation is the latest proprietary application tool developed by the Scanlon Leadership Network, was demonstrated at our annual conference in Dearborn and is now available for your organization. We invite you to call the Scanlon office for more information on how this tool can energize your organization's innovation process. Creativity is Central at SGS Tool Co. Charlie and Maria Girsch of Creativity Central recently completed 5 Creativity workshops at SGS Tool Co. in Munroe Falls, OH. Charlie and Maria had presented a fun, energetic, and informational keynote at the Scanlon Annual Conference in May, and SGS was excited to tap further into the potential of unleashing the creative force in everyone. The workshops, presented to more than 300 SGS Associates, encompassed 2 days in order to cover all shifts. "It was a grand learning experience. We absolutely enjoyed the challenge and the response and would love to continue making an impact within the Scanlon community" says Charlie. (pictured) See the Creativity Central web site for more information.

Sincerely, Wayne Lindholm, Larry Spears, Paul Davis and Majel Maes Scanlon Leadership Network 2875 Northwind Drive, Suite 121 East Lansing, MI 48823 Phone 517.332.8927 Fax 517.332.9381 Email office @scanlonleader.org www.scanlonleader.org and Pete Hovde, Scanlon E-Zine Writer and Editor

July 2008 Ezine

We are thrilled that the Filene Research Institute has provided the Scanlon Community some free learning in the publication entitled "Building a Culture of Credit Union Excellence", which details the results of their credit union/Scanlon colloquium. The colloquium impressed upon the organization that if engaged employees are the critical ingredient for success, that a Scanlon process is a key to achieving that. As stated in the Executive Summary, "All types of organizations tend to get caught up in new management fads to grow their business, to engage their employees, or to innovate. The fact of the matter is that an idea born in a steel mill in the 1930's may be the wisest management lesson credit unions can apply to the challenges they face in the twenty-first century." Read on below, and then download the entire white paper to see the results of this in-depth study. Are you looking to implement a gainsharing program, or perhaps revamp your current one? Even if you're not at that point, you will want to read Certified Scanlon Consultant and Board Member Brad Hill's article below for valuable methods of assessing your current situation and state of readiness. Finally, we continue our exploration of Sustainability and Compression. The Scanlon Leadership Network will be bringing you opportunities to focus on these issues for the remainder of the summer and into the fall, including the Network's Leadership Retreat, which will be held in late 2008. The Retreat is being strongly supported by AME's Doc Hall and Scanlon Approved Consultant Jahn Ballard (If you didn't see Jahn's June article "Compression: Dealing with a Changed World", there is a link to it in the follow-up article below). We thank thank everyone in the Scanlon Community for your continued support! In This Issue Building a Culture of Credit Union (and Scanlon) Excellence Assess Your Readiness for Gainsharing (or the Health of Your Current System) Compression: What is the Difference that will Make the Difference?

Building a Culture of Credit Union (and Scanlon) Excellence: Major Report Published All organizations can now benefit from the results of a conference for Credit Union Leaders back in December at Loyola University in Chicago. The event, sponsored by Filene Research Institute, featured Scanlon Leadership Network and Watermark Credit Union, as well as other Network members. The event was a brilliant success with interest in Scanlon spread to other credit unions, and the recent publishing of a major white paper report by Filene Institute. The report, Building a Culture of Credit Union Excellence: A Colloquium at Loyola University Chicago, is an in depth capture of the proceedings of the conference. The nearly 50 page report is loaded with invaluable information for credit unions, as well as organizations in any industry. What you will find in the report: Chapter 1 Of Managers and Motivation Chapter 2 Creating a Culture of Innovation and Excellence Chapter 3 The Watermark Credit Union Experience Chapter 4 Lessons from Other Industries-Landscape Forms Chapter 5 Building a Culture of Credit Union Excellence Chapter 6 Conclusions and Next Steps The article is a real showcase piece for Scanlon Leadership Network because of the rich content contributed by some well known names in Scanlon circles; Professor Dow Scott from Loyola University; Chuck Cockburn, President of Watermark Credit Union; Bill Main (President) and Becky Fulgoni (VP for People/Operations) of Landscape Forms, and Paul Davis from Scanlon Leadership Network. All of these people were prominently recognized in the report by Filene Institute. You can read the report by clicking on the following link, by contacting the Scanlon Leadership Network at office@scanlonleader.org, or by contacting Filene Institute directly. Download "Building a Culture of Credit Union Excellence" Assessing Gainsharing Readiness by Brad Hill, Certified Scanlon Consultant Many organizations with an interest in gainsharing look to external benchmarking practices to determine if a competitor or admired organization's program can be applied in some fashion to their own organization. The effectiveness of gainsharing in your organization will not be related to outside successes, but rather to the culture and work environment at your organization. This article will help you assess whether gainsharing will improve business success in your current work culture, or what can be done to begin creating an improvement-oriented environment. Enablers of Successful Gainsharing Programs Although there are scores of factors that comprise your work practices, there are five that directly relate to the success of gainsharing. These factors are referred to as the enablers of gainsharing programs. Is the organization focused? The extent to which the organization has a clear business focus and consistent goals and direction will influence the success of the program. Through cascading goals, employees must understand how their individual ideas and actions contribute to overall business success. Does the culture support team performance? The degree to which accomplishment of objectives depends on integrated efforts among employees and departments will influence the success of the program. Not all employees belong on a team, but all employees can direct efforts toward improving business processes that transcend their individual area of accountability. Is the workforce empowered to initiate positive change? The extent to which employees are encouraged to use their initiative to take actions, to take risks, and to suggest improvements will influence the success of the program. Is there a willingness and ability to change? Successful change is dependent on trust and achievement motivation. The extent to which: 1) employees trust the organization and its management and supervision; and 2) employees are more motivated by the desire to get the job done than by fear of making mistakes, will impact the success of the program. Do human resource programs support performance planning/measurement? The effectiveness of measuring job performance and whether employees view the current compensation system as equitable and motivational will impact the success of the program. Strong positive responses in these five areas should encourage the organization to design an effective gainsharing program, regardless of any external "benchmark" findings. Supportive Employee Work Practices In order to determine whether gainsharing is likely to result in a positive behavioral change for employees, Tandehill developed a Work Practices Survey3. The survey is comprised of 64 questions which relate to the five enablers described above. Companies choose a couple of questions from each of the enabler categories, no more than fifteen in total (to limit completion time to 10 minutes), and distribute the survey to all employees who will potentially participate in the gainsharing program. Following are some excerpts from the survey. The numbers in parentheses are the percent of respondents in the normative database that agree with the survey statement. Business Focus Statements · I know how my job can impact the organization's financial results. (84%) · I am adequately informed about how well the organization is performing. (71%) Companies that fall significantly below the survey norms should consider developing a system of cascading measures. Companies above the norms should probably focus their efforts elsewhere. Team Dependence Statements · Teamwork is very important to the organization's success. (92%) · This organization encourages cooperative efforts. (49%) Companies that fall below the team dependence norms should consider de-emphasizing organization charts and job descriptions and begin focusing on business processes and supporting employee roles. The creation of super-ordinate goals will also encourage cooperation and create some immediate behavioral changes. Empowerment Statements · Management listens to my ideas for improving productivity/reducing costs. (37%) · Decisions often made at a higher level could be better made at a lower level. (61%) Companies struggling with empowerment must think through the roles of executives, supervisors and associates in an empowered environment, and that often means increased training levels with regard to coaching and feedback, presentation skills, meeting skills and process improvement techniques. The empowerment experts at Ritz-Carlton establish the 20 Ritz-Carlton Basics, rules for performance, but allow employees to great flexibility in solving customer problems. Trust and Commitment Statements · If I work harder, I will earn more at the organization in the long run. (37%) Not many companies have the level of trust and commitment we might expect. Unlike the other areas surveyed, there are no tools to alleviate distrust. Rebuilding employee trust may take years and is not accomplished with promises and edicts, but rather with consistent fair dealings with employees, and an environment that respects the dignity and contributions of all employees. To foster this commitment, employees must connect to a higher goal than accomplishing their job's objectives. Motivation Needs Statements · I have a lot of ideas on how to improve productivity in my area.(62%) Gainsharing is intended to motivate a behavioral change, and employees cannot be afraid of making that change. Ken Iverson, founder of Nucor Steel, taught his associates that there is more learned by making a mistake than by getting it right, so "go out and make a mistake." Nucor employees are motivated to get the job done. Individual Performance Management Statements · Supervisors/management lets me know if I'm doing a good job. (51%) · I have a good understanding of how my performance is measured. (57%) · The end results of my job are being effectively measured. (37%) Individual performance management does not imply individual rewards. In a team environment, individual recognition will probably make three people unhappy for every one person it makes happy. Although gainsharing is focused on group improvement, it must be built upon an individual performance management system that encourages the associate to develop the skills and competencies necessary for long-term success and survival at the organization. Gainsharing will reward business results, but the means to achieving those results will be associates attaining more skills, asking for more responsibilities, and striving to develop those competencies that will drive long-term business success. Current Pay Practices Statements · Current pay practices strongly influence my activities on the job. (33%) The enemy of effective pay programs is entitlement. Gainsharing programs typically have a targeted payout of $0. It is only if employee efforts create a quantifiable performance gain that there will be any sharing. Despite this stern warning, these programs pay out over $254/quarter on average and generate a 115% ROI for the organization. Comparing your organization's survey results to a normative database like the one above is an excellent way to obtain defensible, quantitative data on the areas your organization needs to improve. But it is also important to understand the "hows" and "whys" behind the numbers. A successful assessment should therefore also include employee and management focus groups built around the findings of the Work Practices Survey. In the August Ezine: Translating Readiness into Success Compression: What is the Difference that will Make the Difference? by Jahn Ballard "What is the difference that will make the difference?" "What day is it?" The great Gregory Bateson asked this first question over three decades ago, and it has stuck with me ever since. In a world where the endemic overwhelm, overlapping bottlenecks and cascading ambiguities not only dominate the work lives of CEOs and senior leaders, but is also dominating many people with line responsibilities as well, where does it all end? The short answer is - badly. [NOTE: If you did not see it, you may want to review " Compression: Dealing with a Changed World" from the last June Scanlon E-Zine for an introduction to a Compression view of sustainability.] Dr. Carl Frost loved to ask the second question, which in this day may require a different approach to answering than has worked in the past. In Compression, Doc Hall lays out in the first 5 chapters the situation we face in great detail, which will likely leave anyone who has not already seen it all laid out as a whole, and had a chance to come to terms with the enormity and degree of challenge we face, with a lot to heavy sorting out to do. The draft of the book is now available to review for any Scanlon Member. If you want to skip to the 'what do we do about it' part in the last two chapters, he encourages that so you can be fortified for the reality sandwich he has prepared. Doc's prescription is that we all must get very competent at creating what he calls 'vigorous learning and work organizations. Ideas for doing this come from the best operationally performing organizations today: servant leadership, professional attitudes, lean and quality concepts applied by all, the ability to do what is needed with minimal command and control, and with a communication network sized for vigorous humans' learning capacity." What day is it? I want to focus here on the crucial first step that is required before anything else will be successful - what Doc calls in chapter 7 the capacity for comprehensive organizational self-auditing. As Scanlon Steward Paul Davis says, "The primary Scanlon Principle is Identity. It is the ability to understand reality. A new reality is facing humanity. Doc Hall's term Compression describes many changes, from the end of cheap energy to the problems of pollution and waste. Others have viewed different aspects of the same set of challenges and written about 'cradle to cradle' 'green' or 'sustainability'. Scanlon organizations pride themselves on 'changing forever'." As always the first step to understand the world must be to understand ourselves, and how we got where are in the first place. I suggest we consider that perhaps there are pieces of reality that we have been missing all along, which is what allowed the current situation to get so far, and we still don't have a handle on it. I suggest that our capacity to measure is fundamentally flawed to such an extent that we don't have the capacity to comprehensively know what our reality is. In his seminal work, Transforming Performance Measurement, Dr. Dean Spitzer of IBM Research takes a hard look at the reality of our broken measurement systems, and lays out a path to rethinking how we drive and measure organizational success he calls Measurement Maturity. One the first and most crucial victims of our broken measurement systems is trust, perhaps the most foundational element of building an optimally collaborative culture. Unfortunately, even with the highest levels of mutual respect and individual competence, the insidious and continuous erosion of trust created by fragmented measurement processes remains a pernicious underminer of cultural coherence and cooperation. Dr. Spitzer and his publisher, The American Management Association, have kindly given permission to begin using several of the instruments in the book to help senior leaders with the heretofore difficult or impossible measurement issues to assess. If you would like to do a rapid and focused evaluation of either your organizational trust and/or measurement maturity levels, you can download the instructions here. In return, we will request you share your results with us as part of your Scanlon membership file, so we can contrast and compare to both other Scanlon members and other companies. Collaborative system audit as foundation for success-driving internal controls Evolving comprehensive measurement capacity must begin by first doing a thorough reality check. In the case of an entire organization, that must include both a complete picture of the organizations performance management framework and an overall view of the basic organizational design. Organizational Design is perhaps seen simply as how well both talent and assets are optimized to deliver value, and how the value proposition itself is structured and how it can evolve. This will include everything from the personal vision of the CEO, to the reporting and decision-making structure, the compensation design, the use of information technology, the energy and the resilience of the culture, plus how the disciplinary and functional silos have evolved and are being addressed. Included in the link above are also instruments for assessing organization design, performance management and financial coherence if you are interested in building your own reality checking resources. Next time we will briefly examine how to use a whole system audit to then install the capacity to actually "steer your ship" collaboratively through rapid prototyping of the business model; and how this creates a foundation for all key stakeholders to participate in evolving a transparent collective understanding of the whole system. In this way leaders can gain more power over reality by distributing influence. This creates the capacity to empower those who actually do the work to design the measurement system that provides them the feedback that can then direct their decisions and use time to sculpt together the reality you all want to create. * See The Lean and Green Summit web site to learn details of another of Doc's many projects (see sidebar), on which he is collaborating yet again with Jim Huntzinger and Dwayne Butcher, creators of the breakthrough Lean Accounting Summit. Jahn Ballard enables Owners/Entrepreneurs/CEOs and their senior teams to design their ideal jobs, focused primarily on fully leveraging the talent available and evolving the business' value. Employees spend more of their time doing what only they can do for the good of the enterprise, and their time overwhelm and distractions are transformed.

Sincerely, Wayne Lindholm, Larry Spears, Paul Davis and Majel Maes Scanlon Leadership Network 2875 Northwind Drive, Suite 121 East Lansing, MI 48823 Phone 517.332.8927 Fax 517.332.9381 Email office @scanlonleader.org www.scanlonleader.org and Pete Hovde, Scanlon E-Zine Writer and Editor

June 2008 Ezine

Sustainability and Compression - the first one of today's most charged topics. The second is destined to follow the same path. The Scanlon Leadership Network will be bringing you opportunities to focus on these issues for the remainder of the summer and into the fall, including the Network's fall Leadership Retreat. The Retreat is being strongly supported by AME's Doc Hall and Scanlon Approved Consultant Jahn Ballard (see article "Compression: Dealing with a Changed World" below). Compression is about the economic and ecological realities facing every person on the planet. As business leaders it is our responsibility to look out into the future and to help prepare our organizations to face reality. Dr. Robert 'Doc' Hall has equipped business leaders to respond to reality throughout his long career. He helped to create the Association for Manufacturing Excellence to help business leaders understand and respond to the challenges of lean. In his soon-to-be-published book Compression, Doc Hall outlines in detail the game changing realities of higher energy costs, globalization pollution, and population growth. Also participating in the Retreat will be leaders from MBDC, whose book Cradle to Cradle is helping organizations like Ford, Steelcase and Herman Miller respond to the environmental challenges of Compression. The Leadership Retreat is geared to top leaders who not only need to respond to the challenges of today, but also to prepare for the challenges of the future. Participants to the event will receive a prepublication draft of Compression, as well as Cradle to Cradle. Also in this issue, we are also proud that the Scanlon Principles have helped Landscape Forms become one of the nation's Top Small Companies. We congratulate Landscape Forms for achieving this distinction! Finally, the 3M GRIT was an integral part of the Scanlon Annual Conference and Innovation Simulation. Read on to see how this diverse group of innovators is using what they learned during their time with us, and to learn more about how the GRIT stays on the leading edge of the innovative community. We thank thank everyone in the Scanlon Community for your continued support! In This Issue Compression - Dealing with a Changed World Landscape Forms Named a Top Small Place to Work 3M GRIT: Innovation in Action!

Compression - Dealing with a Changed World by Jahn Ballard As if you didn't know, the world has changed. The real question is not whether it has changed, but how has it changed, and what can we do about it? There are some very obvious things on the surface that we can all see. Gone are the days of unlimited markets and growth opportunities, random diversification (M&A mania), or limitless natural and human resources. What is not so obvious is the degree of the issue. Do you know the total product/non-product (read:waste) ratio for the US Economy? How does 6% product, 94% non-product strike you? Surprised? How about 80% of that 6% becomes non-product within 180 days? What are the implications of the fact we throw away 98% of our material and energy inputs within 0 to 6 months? The Lean Manufacturing movement has struggled for more than two decades to replicate Toyota's waste reduction through continuous improvement culture. Sustainability is a topic that can no longer be avoided, even if you wanted to. However, as Bill McDonough points out in his seminal work, Cradle to Cradle with Michael Braungart, becoming less wasteful, or more 'eco-efficient' will not shift the fundamental patterns. It just makes them less bad. He calls for, and spells out some detail, a design revolution he calls 'eco-effectiveness', in which everything within everything, within everything, is designed to be a technical or ecological nutrient at the end of its life cycle. Doc Hall of the Association for Manufacturing Excellence has coined the term 'Compression' to describe the this global turning point in the reality of society, the economy and the marketplace. Doc defined Compression as "Globally sustaining at least the same quality of life as in industrial societies today, while using less than half the energy and virgin raw materials, and cutting toxic releases to nearly zero." In his upcoming book of the same title, he points out that expansion began with European colonization 500 years ago. Our present economic system and business legacies are descended from that expansion and from others that ensued, notably the industrial revolution and the computer revolution, starting in just the last 60 years. A very tall order The challenges to the old system are multiple, overlapping and ambiguous, so no silver bullet answer will be forthcoming. To meet these challenges, we need to learn the right things to do and how do them whenever needed. High productivity in the expansionary sense might not count for as much, depending on what needs to be done at the time. Doc proposes that "vigorous learning and work enterprises" that are mission driven, with a mission appropriate to Compression, is the direction we must go to cope with this overwhelming change. Guidance must come from pursuing the mission always, quality over quantity, with financial results as a performance specification, not goals in and of themselves. That which made the mess can't undo it We have come to the point where command and control in any form will no longer be workable, hence the endemic overwhelm, overlapping bottlenecks and cascading ambiguities that dominate the work lives of CEOs and senior leaders. As social, environmental and market disruptions continue to accelerate, any organization that cannot learn to distribute influence broadly to enhance decentralized control over their system will be struggling more and more. We will continue to explore in depth how this situation is changing everything, what is really changing, and what we need to do to respond to the challenges and leverage the opportunities in the following venues: · The Network's Leadership Retreat on Compression in late September · In the July issue of this E-Zine, and · The 1st Annual Lean and Green Summit in Boulder July 17- 18* Inherent in this situation is the current and continuing reality of what will most likely emerge as the most profound change in human life in the shortest period of time that humanity has ever seen. Next Issue: What is the difference that will make the difference? * See The Lean and Green Summit web site to learn details of another of Doc's many projects (see sidebar), on which he is collaborating yet again with Jim Huntzinger and Dwayne Butcher, creators of the breakthrough Lean Accounting Summit. Jahn Ballard enables Owners/Entrepreneurs/CEOs and their senior teams to design their ideal jobs, focused primarily on fully leveraging the talent available and evolving the business' value. Employees spend more of their time doing what only they can do for the good of the enterprise, and their time overwhelm and distractions are transformed. Landscape Forms Named a Top Small Workplace Scanlon Leadership Network member Landscape Forms has been selected as a finalist in the Top Small Workplaces 2008 competition. The contest, put on through a collaboration of Winning Workplaces and The Wall Street Journal, is an effort to identify exceptional small organizations - private, nonprofit or publicly held. To be eligible for consideration, each candidate must be a North American organization that: is independent - not a unit of a larger corporation has no more than $200 million in annual revenues has 500 or fewer employees has been in business at least five years Following Landscape Forms' nomination by Paul Davis and Majel Maes, Becky Fulgoni coordinated and completed a very extensive application. The application, according to Becky, is designed to identify organizations that are able to "create and maintain an employee-respectful and involving culture." The application delved into numerous areas and activities of the organization, such as company practices, employee suggestions, diversity, and much more. It also required a wide variety of references including customers, employees, and vendors. Following completion of the application, Winning Workplaces followed up with all references, judged each of the 406 applications they received for 2008, and selected 35 finalists, including Landscape Forms. The process now continues with Winning Workplaces talking to organizational attorneys, CPA's, and surveying every employee. While being selected as a finalist is a very high honor, 15 winners will be selected from the 35 finalists. These winners will be announced in October of this year and information on them, and all of the finalists, will be published in the Wall Street Journal. When asked how the Scanlon Principles helped Landscape Forms to achieve selection as a finalist, Fulgoni talked about many of the questions included on the application. She said, "I could write something about Scanlon for every question asked." This seemed to be an interesting reflection for her because she went on to talk about Scanlon as "not like the frosting on a cake, but rather like Scanlon being baked totally and integrally into it." She said, "You can't extract Scanlon from what we do. You can't talk about it as a separate entity." In other words, Scanlon Principles are the central, guiding principles of Landscape Forms. Every decision and activity in the company is tested against Scanlon Principles. It is clear to Fulgoni that top companies have to operate under a superior set of guiding principles. Based on Landscape Forms' selection as a finalist, the Scanlon Principles seem to have, once again, made the cut for excellence. You can read more about Top Small Workplaces 2008 competition at Winning Workplaces. 3M GRIT: Innovation in Action A number of the Twin Cities based GRIT attended the Scanlon Leadership Network Annual Conference in Dearborn in May. What is the "GRIT "? GRIT stands for Grass Roots Innovation Team and it was formed a number of years ago at 3M Corporation in St. Paul, MN. The GRIT gathers twice a month for what they term "Metalogues," which is different from a Dialogue, since it is composed of having a conversation amongst and between others. The GRIT has evolved beyond only 3M associates to include anyone who is interested in exploring and sharing new ideas about innovation. They hold a variety of events, but the heart of it is the Metalogue. A different topic is brought forth each time and a recent topic was a report-out on the experiences and learning from the Scanlon Conference. At the Conference, the GRIT was highly engaged and impressed with what Scanlon Leadership Network is doing. They had nothing but good to say about the pre-conference Inventor's Tour of Greenfield Village, reception keynote speech by Sarah Miller Caldicott (Thomas Edison's great grand niece) and conference keynoters Charlie and Maria Girsch of Creativity Central. Individual members shared their insights gained from breakout sessions. Most importantly, they offered feedback on the Network's new Innovation Simulation, which many of them helped facilitate. "I appreciated seeing the "figure it out" aspect of the simulation. I could see the energy level of the group rise as participants engaged in the design of the waiting area." "I think the Innovation Simulation is terrific. There is so much fit into it that can be learned in many different ways, strong on interaction and multiple learning style engagement features." "It was excellent that many different kinds of learning styles were implemented in the training: visual, auditory, kinesthetic, mathematic, musical, etc." "It does a great job of demystifying the innovation process and demonstrating that it is an everyday and everybody endeavor." They talked about their car trip out and back and how seven of them rotated between two cars. This provided them an abundant amount of time to bounce ideas and concepts back and forth; hours and hours of doing what the GRIT team does! On these trips, they used a "Yes, and" dialogue format. This means that whenever anyone shares any idea, responses are not to include statements like, "Yes, but . . . " etc. In other words, it is a very simple practice that generates more and more and more ideas that build rather than tear down. Melody Martin, a motivational speaker and first time attendee of the group, added three principles from one of her talks that complement both the GRIT's objectives and Scanlon philosophy. These are: 1. You are totally awesome! 2. You have more power than you claim or use. 3. You DO make a difference so what are you going to put forth into the universe? The GRIT meeting discussions and Melody's contributions reminded me of the Scanlon concept originally put forth by D.J. DePree that, "Every meeting with another person should be a fortuitous encounter." The components of a "Fortuitous Encounter" are: 1. Every person is a child of God. 2. Every person is competent. 3. Meeting someone should make a significant difference to both parties. Looks to me like the GRIT is an intentional, ongoing "Fortuitous Encounter." During the summer the GRIT founder, retired 3M scientist Dave Braun, returns from his home in Arizona and the group gathers for a monthly Jazz Nite. This occurs on the 4th Tuesday of every month, with a two hour Innovation Shop Talk before the music begins. The GRIT is also part of a Minnesota Innovators Network group that meets quarterly and is rotated among those in the network. This network has been around for about three years and some of the organizations participating are Carlson Companies, Mayo, Cargill, Ecolab, 3M, Thomson-Reuters and many other small to mid size organizations. All in the spirit of creativity and innovation!

Sincerely, Paul Davis and Majel Maes Scanlon Leadership Network 2875 Northwind Drive, Suite 121 East Lansing, MI 48823 Phone 517.332.8927 Fax 517.332.9381 Email office @scanlonleader.org www.scanlonleader.org and Pete Hovde, Scanlon E-Zine Writer and Editor

May, 2008 Ezine

What Day Is It for the Scanlon Leadership Network? The biggest news is that the day has finally come for Paul Davis to retire as your President and assume a new role as a part-time contract employee. His letter below outlines our current realities and the Network's plan for the future. Read on for a recap of the powerful learning experience that was the 2008 Scanlon Annual Conference, "Innovation: Catalyst for Growth". We take time out to congratulate the 2008 Frost Beacon Award winners, Bill Elrod (SGS Tool Co.) and Bob Mannon (Landscape Forms), as well as 2008 Master Entrepreneur Bill Demmer, CEO of Network Member Demmer Corporation. In this issue you will also learn more about our newest turnkey product, the Innovation Simulation. It is an exciting time of change for the Scanlon Community, and we thank you all for your continued support! In This Issue A Final Word, by Paul Davis Scanlon Conference 2008: Innovation from Start to Finish Frost Beacon Awards Presented at Annual Conference Innovation Simulation High-Flying Debut! Demmer Corporation; Excellence and Entrepreneurial Spirit A Final Word, by Paul Davis Dear Scanlon Members and friends of the Scanlon Leadership Network, Fifteen years ago, I became the President of the Network. The Network was at a crossroads, with the retirement of Dr. Carl Frost and Dr. Bill Greenwood. It was a fortuitous event for me, giving me a chance to work for a worthy cause with truly great business leaders. Now it is my turn to retire and to pass the torch to a new generation of Scanlon leaders. In this letter I would like to introduce you to the new team and to explain the direction that the Network is headed. Max DePree has written that the first job of a leader is to define reality, the last is to say "thank you" and in between to be a servant and a debtor. The reality of the Network is that we have made tremendous progress but we still have a long way to go. Scanlon is once again appearing in books and journals (we have chapters in the most popular compensation books, and have been featured in the Association for Manufacturing Excellence magazine Target). We recently published Scanlon EPIC Leadership: Where the Best Ideas Come Together. Our Members continue to be recognized as the most admired in their industries. We continue to add new programs and services. We continue to attract world-class organizations into our membership. However several years ago we realized that our historic business model was becoming less effective, and it has been going through a gradual overhaul. The old model of operating on the membership dues and conference receipts became less stable. Our organization became increasingly spread out. Many of our Members in manufacturing were struggling, a symptom that has only worsened over the years. When our Members struggle, so do we. This is why your Board created our Three Circle Strategy to and to allow us to compete with other not for profit organizations. The first part of this strategy was to diversify the Network's income. We started selling products and we continue to enjoy a worldwide income stream from sales of the Lean Sim Machine™, Hoshin Quick Start™ and books. Part two was creating the Scanlon Foundation, a 501(c)(3) supporting charitable organization. The Foundation is able to accept tax-deductible donations and supports individual members. This year the Foundation published the first Scanlon anthology in over fifty years. It has received a major donation to publish the works of Scanlon business leader John F. Donnelly. It supported a paid intern who worked one day a week through the spring to develop our Innovation Simulation™ that was featured at the Conference. The Foundation continues to build its reserves and support the charitable work of the Scanlon movement. The Foundation's President is Dwane Baumgardner, former CEO of Magna Donnelly and Scanlon Steward. The third part of our strategy is to develop Scanlon Consulting Services. I will be working one day a week to support this new area. Scanlon Consulting will offer consulting in leadership, corporate culture change, gainsharing, lean, financial literacy, and innovation. It will also house our first "Institute", the Leadership Roadmap Institute based on the book by Dwane Baumgardner and Shingo Prize recipient Russ Scaffede. The Institute will allow us to reach a new generation of leaders with the Scanlon message. Our new Integrated Leadership Team will consist of Wayne Lindholm, Larry Spears, Majel Maes and myself. Majel will continue to be employed by the Network on a full time basis. The rest of the team will be independent contractors, working one day a week. Wayne will be the first among equals. He is a former 3M Engineer, well versed in lean, Scanlon and innovation. He has experience with outsourcing, and global supply chain management. Wayne is tasked with growing and strengthening the Network. Larry is the world authority on Servant Leadership. He has authored and edited numerous books on the topic. His Dateline interview with Stone Philips was seen by millions. He built the servant leadership movement into a worldwide force for good. Larry will work with Dwane to build the Scanlon Foundation. Majel will continue to produce the Scanlon Conference and events, the Best Practices and other programs, handle the office logistics, answer your questions, and will be there for our Members and inquiries. I will be working to build the Scanlon Consultancy, will handle the employee satisfaction surveys and keep the computers humming. When not working for Scanlon, I will be helping my 91-year old dad. My cell phone is (517) 410-0646. This is a big change for all of us. I ask that you support the new team as you have supported me in the past. Life Magazine said that Scanlon Plans will no longer be news when we have licked the machine for liberty and democracy. We live in a time when most employees are not engaged at work, where investors question the integrity of the market, and where customers are not sure of the safety of toys and medicines. Scanlon offers a better way for us all to benefit from our free enterprise system. It's been an honor serving as your President. Thank you for all you have taught me. I continue to be a Steward and Advocate for the Scanlon way. I wish you the very best, and thank you for your continued support! Sincerely, Paul Davis "Change is a given - and is our only hope!" Dr. Carl Frost

Scanlon Conference 2008: Innovation from Start to Finish Dearborn, MI was the site of the 2008 Scanlon Leadership Network Annual Conference "Innovation: Catalyst for Growth", held at the Ritz-Carlton May 5-7. What could be a more appropriate site to wrap up a year of focus on innovation than Dearborn, home to Henry Ford as well as Thomas Edison's Menlo Park Lab? Scanlon Member companies have historically been some of the most innovative in each of their industries. Building on this foundation, the conference thoroughly explored innovation. Sarah Miller Caldicott (left), a great grand niece of Thomas Edison, presented a fascinating reception keynote based on her in depth research on Edison. Charlie and Maria Girsch of Creativity Central set the tone for the next day with a Conference opening keynote that immersed and engaged all participants in creativity. (Charlie pictured right in favorite Einstein tie!) The energy level was ratcheted up in time for a broad menu of breakout sessions all with a heavy dose of innovation. Then, all participants went to work innovating for Lockheart Martian, via the "hot-off-the-press" Innovation Simulation created by Scanlon Leadership Network. Wow!! From a family connection to Thomas Edison to building spaceships for Lockheart Martian, this conference was truly a unique and powerful experience! Celebration was another feature of the conference, as it is each year. At the reception, awards were presented for the Best Practices and Frost Beacon Awards. ALL of the best practices submitted are being compiled and published in the 2008 Best Practices book, available to all Member companies. The Frost Beacon Award is presented to people who have demonstrated outstanding application of the Frost Scanlon Principles in their work. Read more about this year's deserving recipients below. During the conference, this year's Scanlon Stewardship Award was presented to Bill Main, President of long-term Member Landscape Forms. In his acceptance speech, Main demonstrated the humility so often found in Scanlon leaders, as evidenced by his deep belief in the competence and potential of the people of his organization. And in the mold of a true Scanlon Steward, he talked of the future of Scanlon and how it needs to be shepherded by the people working in the organizations in addition to Stewards like himself. Company tours are another hallmark of the annual conference and this year was no exception. This time, participants had the opportunity to tour Greenfield Village on a preconference "Inventor's Tour." Right is shown Edison's main lab at Menlo Park. In addition, post conference tours took place at the Ford Rouge Factory and Scanlon Member Thomson-Shore. Another important component of the conference was the introduction of SCANLON EPIC LEADERSHIP: WHERE THE BEST IDEAS COME TOGETHER, edited by Paul Davis and Larry Spears. The book is an anthology of Scanlon thought and practice. Find out how EPIC Leadership can become an indispensable tool for learning Scanlon thought and practices by downloading the Fact Sheet, found in the side bar. The Scanlon Leadership Network Annual Conference 2008 was yet another example of the innovation and continuous drive to grow and improve of Scanlon Members and the Scanlon Community. Frost Beacon Awards Presented at Annual Conference Congratulations to Bob Mannon of Landscape Forms and Bill Elrod of SGS Tool Co. on receiving Frost Beacon Awards at the 2008 Scanlon Leadership Network Annual Conference. The Frost Beacon Award honors associates who have shown significant commitment to the Scanlon Principles and have made notable contributions to the success of the enterprise that employs them. This award recognizes those associates who demonstrate Joe Scanlon's assertion that, "The person doing the job knows it better than anyone else." The Frost Beacon Award winners are determined by each individual Member Company. Named after Dr. Carl Frost, the award recognizes those associates who shine like a beacon and lead the way for their fellow associates to follow. Here's more on this year's winners: Bob Mannon of Landscape Forms (left) participates in continuous improvement activities and leads his team to do the same. In his nomination, it was said that he "sets the pace" for his team and leads by example. He lives the Scanlon Principles on a daily basis by challenging his people to step out of their comfort zone and participate in continuously more meaningful ways. He praises his team members and helps them to learn from their mistakes. He thinks of his team before himself. When interviewed, Bob displayed the humility commonly found in Scanlon leaders. He said, "I have a great team. They make me look good." When asked what receiving this award means to him, he said merely "Someone saw we were doing a good job." He also described how he has learned leadership both on the job and in his personal life in serving as a coach for his children's sports teams. Bill Elrod of SGS Tool works in the maintenance area of the company. (Pictured on right - left is Tom Haag, SGS President/COO) Bill's nominator said, "Bill is being asked to take care of other associate's maintenance requests all day, every day. Bill understands the needs of other associates and makes the effort to assist so that they can have a safe, professional environment. He understands that to an associate, their job is the most important job at that time." Bill understands the importance of his job and how it affects other associates and departments. He knows that whether it is a small job, or something that requires more effort, it is very important to the one requesting the work. Bill, like Bob, displays a high level of humility. "Many people here deserve the award more than me," he said. When asked what the award means to him, he enthusiastically replied, "Someone appreciated me! It's a great feeling to be recognized." He went on to talk about his job in ways that made it clear that he is a worthy recipient. Bill tries to smile and be nice to everyone. He treats people the way he would like to be treated, and discussed how he is constantly looking out for the needs of the owners/investors, customers, and employees. Without using the word "equity," he clearly demonstrated that the Equity Principle is in play at all times on his job. Bill shared the following quote, which sums up what Scanlon means to him: "Teamwork-Together we achieve the extraordinary." Congratulations to both Bill and Bob on their well-deserved Frost Beacon Awards! Innovation Simulation High-Flying Debut! The Innovation Simulation, the newest product created by Scanlon Leadership Network, had a high profile debut at the Annual Conference in Dearborn this month. All conference participants were organized into teams to learn more about innovation through work for "Lockheart Martian", designing and building spaceships. The teams were expertly lead by volunteers from the Conference Planning Committee, workshop facilitators, and the 3M Grass Roots Innovation Team. The simulation was enjoyed by all as they learned important aspects of innovation such as the difference between creativity, invention, and innovation. Other objectives addressed by the simulation include the idea that synergy drives innovation, how the customer often provides innovation clues, the 10 types of innovation, and 12 leader actions that create a culture of innovation. The simulation includes video, teamwork, and other exercises to teach innovation concepts in a fun and engaging way. The product is turnkey in that it includes all of the videos, participant handouts, and a facilitator's manual that contains handouts and templates. In about 4 hours of training time, all of your employees will learn their roles in innovation. And best of all, the simulation is available free to all Scanlon Leadership Network Members, and Scanlon Foundation Members receive a discount. Non-Members can purchase the simulation for $695. Contact the Network office to get your copy today! Demmer Corporation; Excellence and Entrepreneurial Spirit Bill Demmer, owner of Scanlon Leadership Network Member Demmer Corporation, has been awarded Master Entrepreneur 2008 by the Greater Lansing Business Monthly. Demmer Corp., headquartered in Lansing, MI, also received the Entrepreneurial Award for Manufacturing. On the strength of their outstanding business practices, Demmer Corporation's workforce grew from 350 to 1500 in one year's time, December 2006 to December 2007. Sales increased tenfold in the same time to almost $600 million. Now that is growth! Demmer Corporation has a history of changing and adapting. The company was founded in 1951 by Bill's father, John, focusing on designing and building tools, dies, and special machinery. The company grew in size and complexity as they developed a higher level of competence in building larger special machines and automotive stamping dies. By the late 1960's, 90% of its sales were to the automotive industry. The 1970's and 1980's was a time of diversification into military production, which continues today, with Demmer being an industry leader in the production of heavy components for military vehicles. Future expansion markets include aerospace tooling and NASCAR, where they are already working with a group to design and build a common chassis and body system for entry-level racing teams. Demmer now operates nine plants in six different locations. Demmer is clear that growth and success of the magnitude they have experienced is only possible through a group effort. "If we're not a team, we're nothing" he states emphatically. The company develops skilled tradesmen, as well as training people in lean manufacturing systems, Total Quality Management and immersing people in process improvement. Bill Demmer has a high level of involvement in community and business organizations such as Rotary, Chamber of Commerce, Michigan Manufacturers Association (board member), and the Lansing CEO Roundtable. He clearly has a lot to offer all of these organizations. Demmer exemplifies Scanlon excellence and values, and makes a worthy contribution to the Scanlon Community. Congratulations on your well-deserved recognition, Bill!

Sincerely, Paul Davis and Majel Maes Scanlon Leadership Network 2875 Northwind Drive, Suite 121 East Lansing, MI 48823 Phone 517.332.8927 Fax 517.332.9381 Email office @scanlonleader.org www.scanlonleader.org

April 2008 Ezine

Scanlon Leadership Network Ezine Where the Best Ideas Come Together April 2008 In this E-Zine we honor the individuals and organizations that keep the Scanlon dream of better organizations alive. Bill Main has received as the 2008 Scanlon Stewardship Award. Under Bill's leadership Landscape Forms has been recognized as one of the top 100 Best Places to Work in Michigan. We also recognize the Best Practices award winners and thank them for taking the time to submit their ideas that help us all learn and grow. You do not want to miss the 2008 Scanlon Conference on May 5-7, in Dearborn, Michigan. Over 175 Scanlon delegates will assemble to study Innovation and Scanlon thought and practice. We are excited to report that we have just received word that Art Fry, inventor of Post-It Notes, will be joining the 3M Grass Roots Innovation Team's conference workshop panel. This panel includes such GRIT notables as: Bret Ludwig, 3M Advanced Research Specialist Teri Fick, Senior Toxicologist 3M Material EHS - Medical Department Mike Wiehe, 3M IT Project Manager Shawn Schow, 3M Financial Brand Anaylst Kim Johnson, 3M GRIT Essentialist and former 3M Teams, Project Management and Innovation Internal Consultant Cat Thompson, President Emotional Technologies 3M is considered one of the most innovative organizations in the world, and the GRIT knows 3M better than anyone else! The Scanlon Foundations' book, Scanlon EPIC Leadership: Where the Best Ideas Come Together is experiencing record sales. If you want to learn about Scanlon thought and practice from great Scanlon leaders, past and present, you'll want your own copy. We continue to offer pre-conference discounts. Order your copy today! In This Issue 2008 Annual Conference-Register NOW Bill Main of Landscape Forms is 2008 Scanlon Steward Best Practices: Golden Ideas (and Silver and Bronze) Scanlon EPIC Book Now Available! 2008 Annual Conference-Register NOW There is still time to register for the 2000 Scanlon Leadership Network Annual Conference. The conference will be held on Tuesday, May 6 in Dearborn, MI, with premiere events on May 5 and tours on May 7. You won't want to miss this one.The Scanlon conference will help everyone in your organization become a catalyst for innovation and growth. Innovation will be made practical and real. Keynotes by innovation thought-leaders will show you how to increase innovation in your organization and avoid innovation pitfalls. Tours of Edison's lab and the Wright Brothers bicycle shop will allow you to walk in the footsteps of the greatest innovators in history. Tours of the Ford River Rouge Plant and Thomson-Shore, Inc. will help you see today's innovative practices. The Conference is attracting innovators like Art Fry (the inventor of Post-It Notes) and Sarah Miller Caldicott, great grand-niece of Thomas Edison. Conference participants will experience the world premiere of the Innovation Simulation™ developed by the Scanlon Leadership Network to bring the lessons and research on innovation back to your workplaces. Animations, exercises, an innovation whitepaper, and an engaging simulation take the research on innovation and teach it in a fun and engaging way. A comprehensive leader's guide and a reproducible participant manual are all included, making the Innovation Simulation™ a turn-key training and development tool. Each Scanlon Network member delegation will be fully prepared to take what they learn back from the conference! Workshop sessions such as Scanlon 101, Servant Leadership, Kaizen, Complex Problem Solving, and Emotional Intelligence will help you develop personally, professionally and organizationally. And if all the formal, scheduled events aren't enough, the conference is always a great opportunity to talk to people from all of the other Scanlon Network member companies, from the CEO to front line associates. What a great way to experience what Scanlon is all about! More information? Download the Innovation: Catalyst for Growth Brochure Bill Main of Landscape Forms is 2008 Scanlon Steward Congratulations to Bill Main, President of Landscape Forms in Kalamazoo, MI as the winner of the 2008 Scanlon Stewardship Award. The Scanlon Stewardship Award recognizes outstanding Scanlon leadership. It is given to a deserving individual who has contributed significantly over time to the Scanlon Principles and the Scanlon Network, and has also demonstrated the Scanlon Principles in their profession and community. Past winners of the award include Dr. Carl Frost, Bill Greenwood, Dwane Baumgardner, Paul Davis, Dick LeVan, Pat Thomson, Buzz Kersman, Tim Tindall, John Chipman, Myron Marsh and D.J. Hugh and Max DePree. An interesting story about Bill is shared in his letter of nomination: Bill was introduced to the Scanlon Principles when he joined Landscape Forms in 1985. Some people are natural born Scanlon leaders, others grow into the role. Bill falls into the latter group! He tells a story from the late 1970's, long before his first exposure to Scanlon. He was stopped at a traffic light when an employee, who was supposed to be home sick, pulled up next to him. The guy was obviously dressed for an interview, so Bill rolled down his window and fired him before the light changed. The story is a great illustration that "Scanlon works" in developing people, an ideology that Bill has become firmly committed to. Landscape Forms tries to hire the best people; people accomplished in their fields, willing to work hard, and contribute to organization success. Bill believes in everyone's desire to do their best. He says, "It's our job to fill their tanks when they get here!" It works. In an interview with Bill for this article, he said he is "amazed at the energy and ideas" he sees every day at Landscape Forms. When asked what he has learned in his years of involvement with Scanlon, Bill shared what he sees as the fundamental belief necessary to lead in a Scanlon organization. He says it is crucial to deeply accept and believe that "this is NOT a zero sum game. The pie can get bigger for everyone if everyone is sharing both the gains and the pain." Personally, he credits Scanlon with providing him with a structure that is invaluable in leading a company. Without the Scanlon Principles, a manager or leader may intuitively see a problem in an organization, but may not have the language to adequately describe it and talk with others about it. Scanlon provides the ability to be descriptive of the problem, drastically increasing the ability to address the issue. What would Bill like to see for Scanlon's future? He said that the Scanlon concepts are in broader existence today than they have been in years past, but many of the companies using them are not part of the Network. He would like to see many more of these organizations engage and commit in a more formal way by becoming members of the Network. Bill would also like to see more resources attracted to the Network to enhance its growth. He describes the scenario of the Network changing from many members being large organizations, with substantial resources, to a group of smaller companies today. He says it is harder today for a large organization to commit to the Scanlon concepts and responsibilities of membership. Bill also talked of his early days of association with Scanlon. At that time, mid-eighties to mid-nineties, there was a lot of thinking and discussion of what have become formalized as the Scanlon Principles. He sees a danger in becoming static in this regard. He would like to see continuous application and development of the Scanlon Principles, especially as applies to the new problems of organizations, such as globalization. He wants to continue to see an evolution of the concepts. Another phenomenon that Bill discussed is Scanlon organizations that revert to more traditional ways of operating. It has become widely accepted that the primary reason this happens in a Scanlon organization is when there is a change in ownership or top leadership. He would like to see the Scanlon Network address this issue. Congratulations again to Bill Main, the winner of the 2008 Scanlon Stewardship Award. The award ceremony for Bill will take place at the Scanlon Annual Conference on May 6. Best Practices: Golden Ideas (and Silver and Bronze) The Scanlon Awards Committee recently announced the 2008 Best Practice Award winners. This year, there were four Gold, four Silver, and six Bronze medal winners. All of these winners will receive their awards at the Annual Conference Reception on May 5. Members of the Network will receive these best practices and all the rest of the submissions in the 2008 Best Practices Book that will be completed by the beginning of the summer. For a taste of what you will find in the book, keep reading! Lisa Kowalski of Meier Tool & Engineering in Anoka, MN submitted this year's highest ranked submission, and one of the Gold winners. Lisa said this practice came from an idea to expand on Administrative Professionals Day. They wanted to appreciate all associates instead of only Administrative Professionals. She says employees "have a blast" with the games and activities, and cross-functional teams and relationships strengthen. Read on for more details. Employee Appreciation Week Each year, Meier Tool holds a week of participative activities for all employees. The Human Resources Manager is the champion of the planning process, which includes all managers, including the President. The week starts with a participative (continental) breakfast at first break. Then the games begin. Each year they hold a scavenger hunt with daily clues at 8 am, a brunch and a Theme Lunch cooked and served by the managers, and a Friday award ceremony for the week's winners and non winners. Different games and events are used each year to change things up from one year to the next. At the Theme Lunch, the president is always the willing participant in taking the theme to the extreme, and giving a short "what day is it" speech that ties in with the theme. (Example: In 2007, it was a NASCAR theme and the president spoke about "Speed to Market") The extreme part came when he entered the room on a kid's race car, in a race car suit and helmet. Also, all the managers wear something to match the theme and the lunchroom is decorated. They hold a mixture of individual and team based events, such as a pine wood derby or a rubber chicken shoot. The owner (managers/leaders) of each game place all employees on a cross-functional team, give them the rules of the game, and let them go. Everyone participates and has a good time and everyone knows a co-worker much better by the end of the week. Here is a list of all of the award winners for 2008: Gold Employee Appreciation Week - Meier Tool & Engineering Show Trailer - Bradford Co. The Kaizen Advantage - SGS Tool Co. Back to the Basics - Wescast Industries Silver School Halloween Party - Landscape Forms Healthy Lifestyle Reward - SGS Tool Co. Review Meeting Format - Watermark Credit Union Supplier Day - Thomson-Shore Bronze Safety Team Success - SGS Tool Co. Good vs. Bad Newsletters (Illustrations of Service) - Watermark Credit Union Recruiting Communications - SGS Tool Co. Marathon Relay - SGS Tool Co. Open House Invitation - Watermark Credit Union Cafeteria Streaming Web Page - Wescast Industries Sincerely, Paul Davis and Majel Maes Scanlon Leadership Network 2875 Northwind Drive, Suite 121 East Lansing, MI 48823 Phone 517.332.8927 Fax 517.332.9381 Email office @scanlonleader.org www.scanlonleader.org SCANLON EPIC BOOK NOW AVAILABLE! Scanlon EPIC Leader fact sheet Scanlon EPIC Leadership: Where the Best Ideas Come Together is now available! Featuring a Foreword by Warren Bennis and an Afterword by Max DePree, this is the definitive book on Scanlon thought and practice. Contains classic original articles by Joe Scanlon, Douglas McGregor, Fred Lesieur and Carl Frost and new chapters by today's Scanlon thought-leaders. All proceeds go to support the Scanlon Foundation. $29.95 See coupon below for preconference discount! Quick Links Register Now for Conference Scanlon Consultancy Website Scanlon Network Website Scanlon Foundation Website

Save $4 Scanlon EPIC Leadership. Save $4.00 off the retail price of $29.95. The definitive book of Scanlon thought and practice. Order today and save. Save on shipping by picking up your copy at the Conference. Call (517) 332-8927 or email office@scanlonleader.org to reserve your copy. Offer Expires: May 2, 2008