Scanlon June 2004 E-zine

Greetings!

This E-Zine contains articles about Scanlon Leadership Network members Limerick, S & L Plastics, and Meier Tool & Engineering. The feature article is about the exciting Scanlon Foundation project with Hay Consulting on Corporate Culture.

Members Define Corporate Culture, Promote Ideal

In cooperation with the Hay Group, the Scanlon Foundation invites members of the Scanlon Leadership Network to participate in a corporate exercise designed to enhance members' understanding of corporate culture, the Network's unique contribution in creating a positive atmosphere, and the role of gainsharing within a corporate culture.

"My hypothesis is that the target culture for a typical organization in the US will be similar to the current culture of Scanlon companies," said Brad Hill, Senior Consultant at Hay, "and that more US companies are moving toward high-empowerment, process-based cultures - like those supported by the Scanlon principles."

Hay has a database of more than 400 organizations' corporate culture profiles. Years ago, the company formed a panel of experts to determine what high-empowerment companies deem as their current and target cultures and to establish a norm for the gainsharing culture.

Hay now plans to use the Scanlon companies' corporate culture results to gauge if a company is a strong candidate for a gainsharing program. Because Scanlon is so committed to gainsharing, Hill believes that having Scanlon members participate will lend more credibility to such a standard. In turn, the Network hopes to prove that Scanlon companies are functioning and thriving at a level that most US companies are striving to achieve.

To take part in the study, the leadership team from each Scanlon member company will participate in Hay's Targeted Culture Modeling(SM) process. Team members should have a stake in the organization's future, such as the CEO, vice president or department managers, with every opinion weighed equally. Each team member completes the one-hour culture sort (C-sort) exercise, ranking 56 attributes on a bell curve according to their personal definition of the company's current and desired corporate cultures. These attributes include behaviors such as maximizing customer satisfaction, encouraging teamwork, developing new products or services, and achieving budgeted objectives.

Once the current and desired cultures are defined, Hay uses statistical analysis to clearly show the gaps between the two and suggests action steps to bridge these gaps, including which cultural attributes need to be emphasized, down played, or remain the same. Every team member receives detailed results, including how their point-of-view compares to other team members - evaluating each individual against the group. Such comprehensive feedback allows the company to develop an effective, well-integrated plan to cultivate the desired corporate culture.

Additionally, Hay will assess the degree of consensus among company leadership versus the existing 400-company database.

While Hay normally charges $20,000 for this service, they will perform this organizational development analysis free of charge for Scanlon member companies. Hay distributed packages to Scanlon members, who have until July 5 to confirm participation and August 5 to complete and return the C-sort exercises for analysis.

Established in 1976, Hay Insight provides research- based diagnostic and consulting services for clients globally. Hay Insight services are supported by the Hay Group, one of the world's largest consulting firms specializing in the management of people. Founded in Philadelphia in 1943, today Hay operates in 30 countries and 72 cities with more than 9,000 clients worldwide.

Back To The Dogs



A Scanlon member since 1998 and arguably the most unusual company in the Network, Limerick Veterinary Hospital returns to the basics as it prepares to restructure its Scanlon Plan P.A.W.S. - People At Work Succeeding.

"We were a bit of a guinea pig," said Dr. Charles Koenig, President of Limerick Veterinary Hospital, which is located in southeastern Pennsylvania. "While most Scanlon members are in manufacturing, we are a service-based business and needed to adapt the Scanlon Principles and Processes accordingly. Our existing P.A.W.S. plan was effective at the time, but it's dated now. We need to refresh it and hope that this will prompt our employees to take a more active role once again."

As part of this reorganization, Koenig and Practice Manager Brad Hagmayer plan to encourage more involvement by selecting employee P.A.W.S. Plan managers.

"We have several employees that really understand the Scanlon Process and how it can benefit Limerick," said Dr. Koenig. "But they haven't had the opportunity to play a key role and keep things moving. It's important that more employees become involved in the day-to-day activities instead of just the owners and managers."

Limerick's management regularly reviewed financial records, but often employees were not informed and did not seem concerned because business was good. During the past few years since the 9-11 tragedies, the veterinary industry has been prosperous as more pet owners care for their animals as family members. Limerick has more than 50 animals enrolled in its daycare program and new options such as agility training are gaining popularity. Vacationers also continue to take advantage of short-term boarding for long weekend trips, which remain the norm.

"Trends have shown that more Americans have stayed closer to home in recent years and are spending more time with their families," Hagmayer noted. "Pets have become a large factor in this trend and we've been fortunate to reap the overall benefits."

While fellow Scanlon Members can see such tangible benefits and project sales figures on daily basis, it is more difficult to do so at a veterinary hospital. The number of animals cared for or how many surgeries will occur vary from one month to the next. As a result, Limerick's figures are determined quarterly, leaving employees feeling uninformed at times.

"We didn't have a payout for the first quarter of this year," Hagmayer explained. "Because we have been doing so well, that caught a lot of our employees off guard. Now, we recognize the importance of keeping everyone more up-to-date on the financial aspects of the business and we plan to address that in the revised plan."

Similarly, Koenig acknowledges that Limerick needs to give Scanlon time to work. "In my opinion, the suggestion system is one of the most important aspects of Scanlon," Koenig admitted. "As Dr. Frost said, 'Employees know their jobs much better than management.' We need to encourage our employees to evaluate their jobs often and recommend cost-cutting measures. After all, Scanlon is designed to improve their jobs and the company as a whole."

Once the new P.A.W.S. Plan managers are appointed, Hagmayer hopes to prove that Limerick's Scanlon Plan can be self-sufficient, with committee leaders representing all employees to ensure that everyone's voice is heard. "Our objectives for 2004 are to rewrite the plan and make it leaner," Hagmayer explained, "educate our new employees about Scanlon, support all employees in their suggestion efforts and keep them better-informed regarding the business."

Dr. Koenig, his partner, Dr. Robert Nicol, and Hagmayer hope to eventually share Limerick's P.A.W.S. plan with other veterinary hospitals. "Our Scanlon Plan is unique in that it can be packaged and marketed to its target market as is," said Hagmayer. "Veterinary hospitals function in fundamentally the same way throughout the industry and, from a business perspective, are geographically isolated. If our P.A.W.S. Plan were to exist in veterinary hospitals in every state, it would not harm our customer base.

"My goals are to first renew the plan, get it running well, further establish a self-sufficient employee base at Limerick, and then capitalize on everyone's hard work for the good of Limerick and veterinary practices nationwide," he added.

As for the future of Limerick, Dr. Koenig plans to retire, giving Dr. Nicol the opportunity to handle the hospital's daily operations - which has been the intention since Nicol started in 1985.
The hospital has also been working with Business Consultant Ron Bywaters, who is assisting with the human resources aspects of Limerick's plan, providing a new outlook to ensure the hospital continues to move ahead.

Located in southeastern Pennsylvania near Valley Forge, Limerick Veterinary Hospital has 28 employees working for the hospital and 20 who work for the boarding kennel operations.
Veterinary medicine is a rapidly changing profession as the strength of the human-animal bond makes pet owners more aware of the improved health care options for their best friends. Limerick Veterinary Hospital hopes to use the Scanlon Principles and Processes to strengthen their position in veterinary medicine and provide their numerous best friends with high-quality care.

S&L Plastics Wins Manufacturing Award



The Manufacturer's Resource Center (MRC) in April presented S&L Plastics with a Manufacturing Excellence Award in recognition of the company's pursuit of continuous improvement towards world- class manufacturing. This was the first year for the award.
S&L Plastics, located in Nazareth, PA, was one of four companies chosen of the nearly 200 that work with the MRC.

"Our Scanlon plan, called PARTNERS, (People Achieving Respect Through New Ideas, Education, Responsibility and Solutions) was one of the major factors that contributed to our winning the award," said John Bungert, President/CEO. PARTNERS has been in effect since July 2001.

"Even through hard economic times, I feel the Scanlon process was of great benefit to us," said Bungert. "PARTNERS provided the forum for us to communicate the pressures we were under due to the weak economy, giving us a shared perspective and moving us in the right direction."
S&L Plastics has worked with the MRC for almost 10 years in the areas of human resources, information systems, lean manufacturing and ISO 9000. Through both direct services and a network of consultants, the MRC provides assistance and funding for these programs. The MRC, which provides small- and mid-size manufacturers with consulting, education and strategic partnering, is one of seven Industrial Resource Centers funded by the Pennsylvania Department of Community and Economic Development as part of the National Manufacturing Extension Program (MEP).

As a result of the award, the Lehigh Valley Chapter of the Society for Human Resource Management (SHRM) contacted Bungert and asked him to give a speech at a chapter meeting, which he delivered in June. Once a year the SHRM invites a CEO to address the organization and share the progress the company has made in human resources. The presentation was titled "What Day Is It?"

"It was a great platform to introduce the Scanlon Principles & Processes to numerous individuals and organizations in the Lehigh Valley," said Bungert. "I am hoping that some took the next step to check out the network website and will seek to get their organizations involved."

Spring Engineering Showcases Seven Values, Wins Gold

Spring Engineering and Manufacturing Corporation earned an overall gold Best Practices medal for their Showcase Values program, an approach that the company has been using for a few years to continuously educate its employees. This is the first year that the company submitted the plan for Best Practices. Headquartered in Canton, Michigan, Spring Engineering produces custom-formed metal parts and assemblies for the automotive industry.

"We utilize Scanlon's four main principles of identity, participation, equity and competence, and have added three more - integrity, balance and respect," said Kim Nouhan, Human Resources Manager. "We address one of these seven values at our monthly, company-wide meetings and take the time to re- educate each other about our foundation, culture and values."

As part of Spring's ICE (Investors, Customers, Employees) Plan, the company focuses on one value per month at seven consecutive meetings a year. The monthly meetings are still held during the remaining five months. Management takes this opportunity to highlight a current circumstance, challenge or company issue and relate it to that month's value, as well as to communicate overall production, strategic, employee and customer information.

"For example, we continue to face new and exciting challenges and we needed to emphasize and focus on participation," Nouhan explained. "We defined participation, talked about its importance, and how and why it's mandatory. We have found that it is extremely important to continuously educate each other and, in the end, it shows through our employees."

Employees have been open to the changes and have embraced the additional values. These seven key words are ingrained into Spring Engineering's culture, which is apparent in daily conversations where employees at all levels use these values to further understand their personal role, what's happening with the company, and how the two intertwine.

Spring has incorporated the new values at yearly renewals or when it seemed fit. The respect value was implemented most recently. At the suggestion of Plant Superintendent Steve Wiggins, respect was defined, including employee input, and approved as the seventh value because "it ties all the values together. We will not be successful without respect," he said.

Established in 1952, Spring Engineering and Manufacturing Corporation has 85 employees and recently constructed a new 77,000 square foot facility in Canton, MI to accommodate future growth. Spring Engineering started the Scanlon Process in 1994 and its ICE Plan plays an integral role in maintaining high levels of quality, on-time shipments, and exceeding customer expectations.

As I See It - Jim Burri



Jim Burri, Chief Operating Officer, Meier Tool & Engineering, Anoka, MN, started at the company in November 2003. Jim recently attended the Scanlon Annual Conference in Kalamazoo, MI, where he was introduced to the framework and philosophy of Scanlon.

"I was extremely impressed with the conference," Jim said. "We had great discussions that focused on various issues that relate to our company."

Meier Tool & Engineering's GainSharing program has been in place for more than 10 years, and the company practices employee involvement and benchmarking.

"I like how Scanlon is set up, and how the concept ties together employees by encouraging involvement, communication and participation. All of these are philosophies that I have used throughout my business career," he added. Meier values personal and interpersonal success, outstanding customer relationships, operational excellence, innovation and open communication.

"Scanlon is the logical way to run a business. We treat people as valued contributors and we respect the customer. I am optimistic that we can incorporate the Scanlon philosophy even more into Meier's practices. In the future I'm sure that we'll be taking the Scanlon concepts and expanding on them."