Scanlon November/December 2004 E-zine

Greetings!

At this time of year it has been a tradition of this office to send "Thanksgiving" wishes. We are very thankful for your support of our work which allows the Scanlon Leadership Network to continue to create better workplaces. We are thankful for our members, our volunteers, our consultant/partners, our suppliers and our friends. This newsletter contains stories on a unique training program at Wescast and the results of a culture study conducted by the Scanlon Foundation and the Hay Consulting Group. Scanlon Companies have much in common with the most admired companies Hay has studied for Fortune. Please download the powerpoint to find out more!


Scanlon Members Match World's Most Admired



Scanlon Leadership Network members and Fortune® magazine's Most Admired companies in the world both possess and are targeting the same top cultural attributes, according to the results of a collaborative effort between the Scanlon Foundation and the Hay Group. Earlier this year, Hay offered Scanlon members the opportunity to participate in a culture survey to determine individual corporate culture profiles.

"What's most remarkable is that the Scanlon and Fortune groups have very similar target cultures, but have arrived at this point through extremely different methods," said Brad Hill, Senior Consultant at Hay Group. "Whereas the Most Admired companies have done so through no concerted execution of one common strategy - each company did what worked best for them, Scanlon members arrived at nearly the same cultural perspective by deliberately weaving the four Scanlon principles of Identity, Participation, Equity and Competence into the very fabric of their organizations."

Designed to enhance members' understanding of corporate culture and the Network's unique contribution in creating a positive atmosphere, the study has returned positive results for members - finding that Scanlon companies are a perfect illustration of the ideal process culture and that they "do a terrific job of achieving their cultural goals," noted Hill.

When compared to Fortune's Most Admired companies, Scanlon members possess the same top three target attributes as this prestigious list, including maximizing customer satisfaction, encouraging teamwork and delivering reliably on commitments to customers. Scanlon companies round out their top five with continuously improving operations and demonstrating an understanding of the customer's point of view while the Most Admired companies list rewarding superior performance and gaining the confidence of customers.

The top five attributes that Scanlon companies wish to grow include capitalizing on creativity and innovation plus being flexible and adaptive in thinking and approach, both of which are also top attributes to grow among the world's Most Admired companies. The remaining three are attracting top talent, demonstrating an understanding of the customer's point of view and continuously improving operations.

When comparing the current versus target cultures of three groups of companies - the world's Most Admired, Scanlon members and typical businesses, Hay Group's results found that both Scanlon members and the Most Admired companies are three times closer to achieving their target cultures than typical corporations.

"The fact that the correlation between the current and target cultures among Scanlon members is three times stronger indicates that these organizations are further along in translating their vision into reality," Hill explained.

Furthermore, executives who participated in Hay Group's Most Admired study are in the 99th percentile regarding consensus around the current culture of their respective businesses, but only rank in the 38th percentile in terms of agreeing on the company's target culture. On the contrary, Scanlon member leaders are in the 87th percentile for current culture consensus and in the 95th percentile in terms of agreement on their target or ideal corporate culture.

"This statistic is very relevant because it shows Scanlon members have a strong understanding and group consensus about their existing culture and, more importantly, their ideal," Hill added. "Executing the changes necessary to achieve the desired culture is often a smoother process when the company's leadership holds such a unified position."

Overall, the results found that the cultures across Scanlon companies are very similar, with a high level of agreement and consensus about the top five attributes of both their current and target cultures. Top behaviors that are encouraged in Scanlon companies' current cultures include maintaining existing customer accounts and gaining the confidence of customers, while top activities that would be supported in their ideal cultures are maximizing customer satisfaction and encouraging teamwork.

"Once we developed an overall profile for each Scanlon company, we compared those profiles," said Hill. "The results show that the Scanlon principles affect and define member companies' cultures more so than any individual company leader. Even when leaders within a company did not have consensus with one another, their company profile or average was strikingly similar to the profile of every other Scanlon company. This proves that Scanlon's core concepts are a powerful philosophy and overwhelming force in each of these companies."

To take part in the study, a leadership team from each Scanlon member company participated in Hay's Targeted Culture Modeling(SM) process, which has been successfully applied at more than 600 companies worldwide. Each team member completed the one-hour culture 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 target cultures were defined, Hay used statistical analysis to identify consensus levels and 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.


Workshop Strengthens Skills, Satisfaction

With building relationships as its primary objective, Wescast Industries of Ontario, Canada has successfully implemented a comprehensive training program to restore employee morale and establish a more defined communication system through its Advanced Communication Skills Workshop. Wescast, the world's largest supplier of exhaust manifolds for passenger cars and light trucks, developed the program as a part of its Scanlon Plan, HEART (Helping Everyone Achieve Rewards Together), which began at Wescast in 1988.

In 2002 Wescast administered its 3rd annual Employer of Choice (EOC)/HEART Survey, which highlighted downward trends in the scores, specifically in employees' relationships with their leaders. Around the same time Wescast dropped from the list of the best companies to work for in Canada. Wescast's Scanlon plan served as a catalyst for creating the Advanced Communication Skills Workshop.

"After looking at the results of the EOC/HEART Survey, we asked ourselves 'Is there a compelling need to change?'" said Lin Munro, Director of Human Resource Development. "The resounding answer among leadership was a unanimous 'yes'," she added. Using Scanlon's principles of participation and communication as its foundation for the initiative, Wescast hired a consultant to help improve the overall culture at the company and to address employee concerns.

To date 305 Wescast unionized and salaried leaders have attended the two-and-a-half day Advanced Communication Skills Workshop, which trains leaders about interpersonal skills and conflict resolution using a basic model.

Through role-playing, question and answer sessions with senior management and other exercises, employees learned about human interaction and conflict resolution. By teaching people about tone and body language and to react with their mind instead of their emotions when a problem arises, said Munro, Wescast has created a more respectful workplace. What many employees like best, said Munro, is that they can apply these principles at home and in other situations.

"Our program is about collaboration and cooperation, which help build and maintain strong relationships between employees and their leaders," she added. "It's the participation principle - we're all learning how to better listen and understand other viewpoints. When we combined all of these ideas into one workshop, we found that morale went up."

The main goal now, said Munro, is to maintain the same enthusiasm that existed immediately after the launch of the program. Of 276 employees polled, 273 said they would recommend the Workshop to others.

"Just one month after the initial training program morale was up," said Munro. She explains that Wescast's challenge is to sustain the positive response and encourage leaders to continue using the new interaction skills.


Member Leaders Connect, Communicate At Annual Retreat



Relevant content, open discussions and camaraderie flourished during the Network's annual Leadership Retreat, held at Brook Lodge in mid-November. Led by Bill Main, President of Landscape Forms Inc and the executive host of this year's event, attendees took part in four primary discussions during the two- day refuge.

"Regardless of the business, leaders face similar challenges, such as satisfying stockholders, customers and employees, profitability and globalization," said Main. "The Retreat focuses on such thought-provoking topics in an informal setting designed for reflection and fellowship."

Two long-standing Scanlon advocates, Dwane Baumgardner, former President and Vice Chairman of Magna Donnelly Corporation, and Russ Scaffede, Senior Vice President of S2 Yachts Inc, previewed their upcoming book on leading in an age of lean manufacturing and discussed the correlation between lean manufacturing and the Scanlon Principles.

"In the past, Scanlon companies have struggled with how to match up lean and Scanlon principles," said Becky Fulgoni, Vice President for People at Landscape Forms. "Dwane and Russ did a great job demonstrating the synergy of these two philosophies. I was very excited to hear that presentation and am anxious to see their finished book."

The Hay Group presented the Cultural Impact of the Scanlon Commitment, which compared member companies to the world's most admired based on this year's culture survey results. (See the "Scanlon Members Match World's Most Admired" article in this issue.)

Executives also discussed international leadership as well as the impact of or a change in leadership within Scanlon cultures during two audience participation panels.

"With Landscape Forms considering sourcing options in China, I was hoping the international leadership session would reveal the one perfect way to approach that," added Fulgoni. "What I learned, however, was that every company had a different process that made sense for its particular situation. There is no one solution, which I thought was very interesting.

"This was one of the better conferences that I've attended," Fulgoni continued. "I particularly liked this year's format with a combination of presentations and panel discussions. As participants, it's important that we understand the strategic aspects of each topic and continue."

The Leadership Retreat is a unique networking opportunity for top leaders of Scanlon organizations to exchange views and information about management practices and the role of the Scanlon process in a changing business climate. It is held annually at Brook Lodge, a beautiful retreat center located in southwest Michigan that is conducive to relaxation and learning. It was the summer home of Upjohn founder, Dr. W.E. Upjohn. Members who would like videos of the presentations from the retreat or copies of the handouts may obtain them at no cost by contacting the Network Office.


Coordinators Prepare For Annual Conference

Scheduled for February 15-16, the Scanlon Leadership Network's 2005 Coordinator's Conference will be hosted by Spring Engineering & Manufacturing Corporation in Canton, Michigan. This annual event began in 1999 and is designed to offer networking opportunities to new and old members alike, provide a forum to receive tips from peers and exchange ideas.

"This is the first time that we've hosted the Coordinator's Conference," said Human Resource Manager Kim Nouhan, who is helping to coordinate the event. "I'm most looking forward to the opportunity to spend one-on-one time with other Scanlon members to learn more about them and their companies."

Attendees will be treated to a presentation about Spring Engineering, a manufacturer of custom-formed metal parts and assemblies for the automotive industry, and a tour of the company's 77,000 square foot facility - built in 2000.

Spring has won numerous Best Practice Awards for their innovative Scanlon process and they are widely benchmarked. They have also been ranked among the top 25 best places to work in the greater Detroit area.

In addition, Coordinators will learn how to use the Network's new internet based training system, to deliver training programs internally as well as to take advantage of training programs offered by the Network.


As I See It - Allison Letteau



Allison Letteau, HEART (Helping Everyone Achieve Rewards Together) Coordinator at Wescast Industries in Ontario, Canada, has been with the company for 11 years and has worked with its Scanlon Plan for more than two years. Allison most enjoys the monthly departmental meetings where floor employees, shift leaders and departmental managers come together to address complaints and bounce ideas off of one another. HEART was launched at Wescast in 1988.

"Through these discussions we're able to resolve a lot of 'hiccups' before they ever become a problem," Allison said. "We're able to get everything on the table and get perspective from people in all levels of our organization. By pulling different people together it creates the perfect setting to share concerns and ideas.

"Our HEART suggestion system also allows employees to submit ideas. We have ad-hoc teams that look at issues as they come up, and we also have work team meetings once a week that look at day-to-day issues. With the right resources in the room, you are going to see success.

"I think our Advanced Communication Skills Workshop is another excellent concept. It's so simple, yet it creates an awareness among employees that we can be successful if everyone is supportive."


As I See It - Tara Pipe



Tara Pipe, HEART (Helping Everyone Achieve Rewards Together) Coordinator of Wescast Machining Wingham (WMW) in Canada, has helped to facilitate the company's Scanlon Plan for the last three years. Tara began working at Wescast more than six-and-a- half years ago. One of the greatest aspects of HEART, said Tara, is knowing that Wescast really cares about employees' opinions.

"Who better to ask than the people who deal directly with the product every day?" said Tara. "When employees are able to share their viewpoint with senior managers, it's a win-win situation for everyone.

"Our Performance Improvement Team (PIT) meetings allow people to express their concerns in an organized setting. They leave knowing that their issue will be addressed and that their voice was heard. Management strives to keep in tune with what frustrates employees. Once those needs are heard and addressed, things seem to run so smoothly. They truly appreciate it.

"Before HEART, Wescast's leadership style was more autocratic, but now it's participative. Scanlon has really helped us build relationships and has had a significant impact at each level. While our Advanced Communication Skills Workshop teaches everyone at Wescast how to listen, Scanlon reinforces the fact that we truly need to listen."