Scanlon October 2004 E-zine

Greetings!

This month we feature two articles about tools Scanlon companies use to assess their Scanlon process and Corporate Culture. To assess their Scanlon Process before a renewal of their plan S&L Plastics used the Network's employee satisfaction survey combined with employee interviews conducted by approved Scanlon consultant Ray Terwilliger. Thomson-Shore and Nicholas took advantage of the Hay Culture Survey to study their current and ideal cultures. All three member companies did this at no additional cost. Hay and Terwilliger donated their services. Many of our members are in competition with Asia. This E-zine features an article about how Trans-matic is facing the challenge. In this issue we introduce our readers to Praveen Gupta, a pioneer in Six-Sigma, and a friend of our Network. Praveen will be offering a greenbelt Six Sigma program to our members in the future and the Scanlon Foundation is exploring a project working with Praveen to bring his Six Sigma Business Scorecard tools to our members.


S&L Plastics Renews, "Suggests" Change

S&L Plastics Inc. is evaluating its Scanlon plan to verify its relevance for current business conditions and to make changes that will reflect the views of employees as well as recognize their contribution to productivity. The company has spent most of 2004 conducting a Scanlon audit and beginning its renewal process by utilizing Scanlon's principles, consultants and conferences plus the recent Hay Group survey. Headquartered in Nazareth, PA, S&L Plastics provides a diverse range of plastic processes and products to various international industries.

"We've had our Scanlon plan P.A.R.T.N.E.R.S. in place since 2001," said Todd Rosko, P.A.R.T.N.E.R.S. Coordinator at S&L Plastics. "It's now three years later and we decided it was the perfect time to utilize what was happening around us and start fresh."

S&L Plastics organized a new 20-person Scanlon team in January 2004 and, after attending his first Coordinator's Conference, Rosko decided to take advantage of the Scanlon tools at his fingertips to begin the company's renewal process for its P.A.R.T.N.E.R.S. (People Achieving Respect Through New Ideas, Education, Reliability and Solutions) plan.

The company first distributed the Scanlon Leadership Network's employee satisfaction survey to get a better idea of the areas in which they were succeeding as well as those that needed attention. More than 90 percent of the company's 130 employees responded. According to Rosko, S&L Plastics' "suggestion system was the biggest problem area," which was expected. While S&L Plastics previously had one core cross-functional team with representatives from each department that reviewed suggestions monthly and determined which to implement, suggestions are now handled departmentally with an employee's direct supervisor making the decision.

"Ultimately, we think that this will encourage more employee participation," said Beth Frey, Materials Coordinator and participation subcommittee member. (See Beth's "As I See It" article in this E-zine issue.) "If someone submits a suggestion today, they could have an answer tomorrow. I think this is definitely a positive change."

Network associate consultants Ray Terwilliger & Associates also generated an audit survey specifically related to S&L Plastics' Scanlon plan and conducted one-on-one interviews with a cross-section of about 10 percent of the workforce.

"We tried to liken this audit survey to an ISO 9000 audit because it is that important to S&L Plastics to make sure they are following Scanlon, focusing on its principles and getting employees involved," said John Sanders of Ray Terwilliger & Associates. "We received some great insight from both the audit surveys and the personal interviews and found that communication is key for S&L Plastics' employees." Ray Terwilliger & Associates' results found that the company has improved regarding communicating with employees, but still needs to consistently make this a priority. Sanders also noted that overall employees had positive opinions about Scanlon and its role at the company.

Other areas that employees feel are beneficial for S&L Plastics include identity programs that educate and train personnel about Scanlon and equity initiatives such as the P.A.R.T.N.E.R.S. lunch program, which allows every direct supervisor or manager to take one hourly and one salaried employee out to lunch each month.

"Our identity subcommittee is also working on a mentoring program and trying to finalize the details of that," said Rosko. "It's designed to help new employees through their 90-day probationary period by assigning a mentor on their shift to help them build their competency and confidence levels, answer questions and foster a personal working relationship."

Both Rosko and Sanders feel that combining a number of Scanlon resources helped S&L Plastics to focus its energy and efforts during the company's renewal process and would recommend other Scanlon Members utilize these tools as well.

Founded in 1946, S&L Plastics Inc. became a member of the Scanlon Leadership Network in January 2001 and implemented its Scanlon plan P.A.R.T.N.E.R.S. in August 2001. The company utilizes three main processes in its business, including injection molding custom components, extruding custom profiles and tubing, and extruding PE and PP sheet in various textures and gages. S&L Plastics is ISO 9001-2000 certified.


Symbiotic Relationship Links Scanlon And Six Sigma Business Scorecard



Since assisting with the implementation of Six Sigma at Motorola in 1986, Praveen Gupta, President, Quality Technology Company, and author of Six Sigma Business Scorecard: Creating a Comprehensive Corporate Performance Measurement System, has been teaching and providing consulting services for companies worldwide using his Six Sigma Business Scorecard, a measurement tool used to determine the corporate sigma level and, ultimately, assess financial performance. Gupta has been working with Scanlon President Paul Davis to formulate an action plan for offering Six Sigma and the Six Sigma Business Scorecard to member companies.

"The Scanlon principles are extremely helpful while implementing Six Sigma because gainsharing and employee participation act as catalysts to accelerate corporate profitability while creating opportunities for employees to share benefits," said Gupta. Gupta was involved in Six Sigma from the start at Motorola, the incubator for Six Sigma, where he later taught at Motorola University. While searching for the best lean simulations while conducting research, Gupta decided he liked those offered by Scanlon.

"Both Six Sigma itself and the Business Scorecard directly support the Scanlon philosophy," said Gupta. The Six Sigma Business Scorecard framework balances sales and purchase, management and employee roles, customer service and innovation for growth and execution for profitability.

"The Six Sigma Business Scorecard is a unique corporate measuring system because it links to both growth and profitability," he added. Gupta developed the Scorecard based on Harvard University's Balanced Scorecard, which he explains is outdated and hasn't kept pace with technology. "Times have changed in the last 15 years - it's time to change with technology," he said.

While Six Sigma has mostly been applied to the manufacturing industry, more human resources professionals are looking to benefit from Six Sigma initiatives. According to Gupta, a company's human resources department must support leadership and departmental activities, provide feedback and intellectually engage employees in achieving their personal and corporate objectives.

"We live and breathe the Scanlon values within our small group at Quality Technology," said Gupta. "Through measurements gathered using the Six Sigma Business Scorecard, we should be able to help other members of the Scanlon family, as well."


Hay Results Foster Positive Changes



In August the Scanlon Foundation and Hay Group collaborated and offered members of the Scanlon Leadership Network the opportunity to participate in an exercise to determine their individual corporate culture profiles. 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, the study has returned positive results for two member companies.

Thomson-Shore Inc. and Nicholas Plastics Inc. both took advantage of the opportunity to evaluate their overall business and take any necessary steps to improve for the future.

Myron Marsh, President/CEO of Thomson-Shore felt that Hay's approach, which utilized a bell-shaped curve and post-it notes to determine behavioral qualifiers, was different but extremely valuable. "This turned out to be a very thought-provoking exercise," Marsh said. "It came at a time when we were starting our planning cycle and the study personally helped me to really think about our organization's current culture versus what needs to happen to move the company forward."

The results found that Thomson-Shore is on-target with changing its current compensation process from an individual-based evaluation to a group-based one. Marsh notes that if Thomson-Shore wants to foster a team atmosphere, it needs to place more emphasis on team performances and less on individual accomplishments. "Our success is based on the achievements of everyone working together," he said.

"This was a very positive experience and the timing was perfect for us," Marsh added. "We confirmed that everyone on our leadership team was on the same page with how we see the company and its future. I'm happy the Network could provide us with such a great instrument."

Thomson-Shore plans to use its Hay study results to determine targeted actions for the upcoming years, choose measurable objectives and move the culture in a unified direction.

Carl Brown, Executive Vice President and COO of Nicholas Plastics also felt that the process helped to validate what most already knew. "We previously noted that our decision-making process and reaching group agreements was one area the company needed to work on," said Brown. "The Hay study confirmed such areas that we felt were obstacles for the company, which has helped us to focus our goals."

Brown also felt that the process helped Nicholas Plastics' senior staff to see one another's points-of- view and management styles more clearly. "We had a divergence in opinions and this gave us the opportunity to discuss those differences and reflect on them," he said. "Different isn't necessarily bad and it was very worthwhile for the company overall to acknowledge that diversity."

Within two weeks, Nicholas Plastics plans to review Hay's recommended action steps and proceed accordingly. "We want to use this to improve our company's future," Brown continued, "paying particular attention to the decision-making and communication systems that, in turn, improve our culture and the philosophies that drive it."

To take part in the study, a leadership team from each Scanlon member company participated in Hay's Targeted Culture Modeling(SM) process. Each team member completed 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. Once the current and desired cultures were defined, Hay used statistical analysis to clearly show the gaps between the two. Hay is currently using the results meetings to suggest action steps to bridge any gaps, including which cultural attributes need to be emphasized, down played or remain the same.


Trans-Matic Employs Scanlon Principles To Communicate, Share Company News

As the head of a smaller company hit hard by threats of outsourcing and competition abroad, P.J. Thompson, President and Chief Operating Officer of Trans-Matic Manufacturing Company, uses participative leadership and open lines of communication to keep his employees informed. A member of Scanlon since 1974, Trans-Matic, located in Holland, Michigan, produces high volume, custom, deep drawn metal stampings used in the automotive industry, the lock hardware industry and for use in small power tools.

"Based on principles set forth by Scanlon, we decided to communicate openly and candidly pertaining to China with our entire organization," said Thompson. Trans-Matic conducted multiple communication-oriented meetings with the "mid-management group", which included more than 40 individuals. By acting as an intermediary, the "mid-management group" disseminates information and communicates messages to employees. Some of the individuals from the group are currently working to determine system requirements, map out possible building specifications and study China's supply chain.

"Our philosophy is to continuously provide communication about all major areas of the business, both internally and externally," he added. The feedback from Trans-Matic employees is refreshing, said Thompson.

"Sharing both positive and negative information with our employees is our attempt to build a solid trust within our organization," said Thompson.

Trans-Matic, whose customers want multinational suppliers, is one of the many corporations fighting with Asian competitors for a share of the manufacturing market. According to the Wall Street Journal, Michigan alone has lost more than a fifth of its manufacturing jobs since 2000.

Thompson spends nearly a quarter of his time overseas pursuing possible leads for entering new international markets, and believes that Scanlon could also have a major impact on an operation in a different culture, like China, where, according to Thompson, working relationships really do matter. Using the Scanlon principles, said Thompson, Trans-Matic may be better prepared to approach opportunities and deal with company-wide issues.

"Scanlon guides just about everything we do from a management and leadership perspective," he explained. "As surprises continue to pop up, we've been able to inform our people at every step. I strongly believe that the Scanlon leadership process is what truly impacts organizational effectiveness. Scanlon really goes a long way - it's a great foundation for management."


As I See It - Mary Anderson

Mary Anderson works as a Molding Utility and has been with S&L Plastics in Nazareth, PA for nearly eight years. Mary has been involved with the company's Scanlon Plan since it was implemented in 2001 and is a member of the identity subcommittee. She most enjoys recruiting people to become involved with Scanlon.

"I really enjoy getting people involved - helping new employees understand the Scanlon principles or re-educating those who have been with the company," Mary said. "Before Scanlon, there seemed to be a 'that's-not-my-job' attitude, but now you see more people offering to help each other and are willing to participate even if something is not their responsibility.

"We're in the process of renewing our P.A.R.T.N.E.R.S. plan and are finalizing the company's mentoring program, which has existed in some form for many years but has never been formal. With the program, new employees will have a mentor during their 90-day probationary period. Right now, we have a lot of support from second shift and we're trying to recruit more people from other shifts as well.

"I think the most rewarding part of having a Scanlon Plan is that I feel like I'm accomplishing something."


As I See It - Beth Frey

Beth Frey, Materials Coordinator at S&L Plastics in Nazareth, PA has been with the company for seven years. She is a member of the participation subcommittee for S&L Plastic's Scanlon Plan, P.A.R.T.N.E.R.S. - People Achieving Respect Through New Ideas, Education, Reliability and Solutions, which was first implemented in 2001.

"Because I am part of the department that gathers information for calculating the Scanlon equity statistics, I have a much better understanding of what's going on with the company as a whole," Beth said. "I've been able to interact with more employees than ever before, learn about other departments and see how each employee contributes to the overall company.

"I think that our Scanlon plan has helped to increase communication throughout the company. Even though the suggestion process was a problem area, the participation committee recently changed the whole system as part of our renewal process and I hope that more employees will participate now.

"Plus, the company-wide quarterly meetings have been positive because they give employees the opportunity to hear company news first-hand, both the good and bad."