XEL Learns Teamwork Requires Work
XEL Communications is a small firm with 180 employees that supplies circuit boards to companies like its former parent GTE as well as several of the Baby Bell companies. To succeed against large competitors like Northern Telecom and AT&T, owner and CEO Bill Sanko decided his company needed to have quick turnaround on orders and be more responsive to customers. Stated Sanko: "We needed everybody in the building thinking and contributing about how we could better satisfy our customers, how we could improve quality, how we could reduce costs."
Sanko developed a vision statement to help bring this about. Part of that statement included the phrase, "we will be an organization where each of us is a self-manager." From this goal, VP of manufacturing, John Puckett designed the plant for cellular production, with each cell staffed by teams who could manufacture several different circuit boards. That was in 1988.
By 1993, the company had completely rebuilt itself around teams and was being cited as a role model by dozens of other companies and was featured in a video on team-based management produced by the Association for Manufacturing Excellence. Visitors at the plant would see charts on the wall tracking attendance, on-time deliveries, and other measures of team performance. After five years of self-managed teams, cost of assembly has dropped 25 percent, inventory has been cut by half, and quality level has improved by 30 percent. And the all-important cycle time, the amount of time from start of production to delivery of final product, had dropped from eight weeks to four days. Still, XEL has learned that team-based structures also make special demands on a company and its management, and they have learned several lessons that any company going in this direction should be aware of. These include:
- Hiring and training new people is more difficult in a team-based environment. The problem is that team members want to have a say in who gets hired, and yet they have little time to do the interviewing. The company also needs to find people not only with technical abilities but who also feel comfortable working on team rather than on their own. It also takes a while for a new person to bond with other team members and learn his or her role. Because a team's success depends on everyone performing, there can be extra pressure on new people.
- Team building does not proceed neatly from one stage to the next. While the forming, storming, etc. model is useful, it does not always hold true. Sometimes teams slip back, and this can have consequences throughout the company. At XEL, the stockroom team broke down. Puckett received complaints from its customers, other teams, and he found out certain members were cheating on their time cards. Puckett had to intervene and actually disbanded teams in this part of the company, bringing in a supervisor to take over. His goal, though, was to work himself out of job by reestablishing the best practices demonstrated by another successful manufacturing team.
- Managers need skills no MBA program ever taught them. With self-managing teams, managers must know when to intervene and when to back off, as shown by performance indicators. Three skills Puckett has discovered are what he calls (1) diplomacy, the job of managing relations among teams, which can get sticky sometimes; (2) monkey managing, the fine art of not allowing someone else's monkey, or problem, to jump onto your back; and (3) innovation triage, which means that managers must encourage and reward innovation but make sure teams don't go too far and adversely affect other parts of the plant.
- Employees need skills they never had before. Employees need to learn skills such as statistical process control, as well as learn how to do several of the team's jobs, so they can fill in for one another and make sure there is no breakdown in production. Employees also need a kind of attitude that makes them care about the quality of their work and the motivation to set their own priorities rather than waiting for someone else to do it for them.
- Compensation and performance reviews have to change. Pay can no longer be based on individual performance. XEL created a reward program based on the acquisition of skills, the performance of the team and profit sharing. The company also went to a peer review program where team members evaluate one another in terms of their contribution to the team's performance.
Source: John Case, "What the Experts Forgot to Mention," Inc. September 1993, pp. 66-77.
