Outside the Influence of Workers and Unions

1 AutoAutowww.onlineeducation.bharatsevaksamaj.net IndustryIndustry SocioSocio-- TechTech www.bssskillmission.in SystemSystem StudyStudy

Module 3: Implementation Simulation

Overview Expected outcomes

Simulation Structure Ability to balance short-

Simulation Exercise term and long-term priorities in leading systems change

Deeper understanding of interdependencies between social and technical systems

Awareness of the impact of strategic choices – with scarce resources – on performance outcomes

Automobile Assembly Plant Strategic Choices to be Made Each Quarter Over Three Years (12 rounds) Two Models

Current model in production

New model to be launched in Year 3 Six Major Strategic Choice Categories With Many Options in Each

Product Development (10 options)

Manufacturing Operations – Quality (12 options)

Manufacturing Operations – Workforce (23 options)

Manufacturing Operations -- Support Functions (17 options)

Supply Chain (14 options)

Customer Order Fulfillment (7 options) Limited Resources

Can only select 25 options in first quarter (number of options available for selection will change with the market over the three years) Balanced Scorecard Outcomes

Quality, Safety, Cost, Schedule, Launch Performance

Initial focus on Quality – First Time Through (FTT) performance (maximum possible is 100% perfect FTT)

Product Development Manufacturing Operations -- Support PD1. Co-location of engineering design teams Functions PD2. Training in team-based operations for M11. Preventative maintenance support teams design teams M12. Preventative maintenance procedures PD3. Machine tooling equipment strategy M13. Material flow systems PD4. Design for manufacture M14. Information system support PD5. Design for quality M15. Continuous improvement "kaizen" system Manufacturing Operations -- Quality M16. Targeted interventions M1. Quality control "andon" system M2. Quality inspection Supply Chain M3. Quality training S1. Supply chain value add M4. Quality dimensional control equipment S2. Supplier location S3. Supplier delivery flow Manufacturing Operations -- S4. e-commerce Workforce S5. Information transparency M5. Team implementation M6. Team leaders Customer Order Fulfillment M7. Team training C1. Customer delivery M8. Team leader training C2. Product variety -- new model M9. Supervisor/superintendent training C3. Product variety -- current model M10. Union-management partnership C4. Customer contact

PD1a=co-location of powertrain design teams for new PD1. Co-location of engineering model design teams PD1b=co-location of body/frame design teams for new model PD1c=co-location of interior design teams for new model

PD2. Training in team-based PD2a=training for all design teams in group process skills operations for design teams PD2b=training for all design teams in "lean" principles

PD3. Machine tooling equipment PD3a=flexible/programable tooling for new model strategy PD3b=vendor training in use of flexible/programable tooling

PD4. Design for manufacture PD4a=production workforce representation on design teams PD4b=current model engineers assists production process improvements

PD5. Design for quality PD5a=Design new product to incorproate in-station process control for quality

M1. Quality control "andon" M1a=installation of "andon" red/yellow/green buttons on system engine line M1b=installation of "andon" red/yellow/green buttons on final/trim area

M2. Quality inspection M2a=movement of inspectors from end of line to line-side support on engine line M2b=movement of inspectors from end of line to line-side support in final/trim area M2c=empowering operators to conduct in-station process control on engine line M2d=empowering operators to conduct in-station process control on final/trim area

M3. Quality training M3a=training for engine line in quality control principles M3b=training for final/trim area in quality control principles M3c-training for body shop in quality control principles M3d=training for paint shop in quality control principles

M4. Quality dimensional M4a=instalation of dimensional control equipment in body control equipment shop M4b=instalation of dimensional control equipment in paint shop

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 2 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 6 7 ManufacturingManufacturingwww.onlineeducation.bharatsevaksamaj.net WorkforceWorkforce www.bssskillmission.in StrategicStrategic ChoicesChoices M5a=restructuring engine line into teams M5. Team implementation M5b=restructuring body/weld shop into teams M5c=restructuring paint shop into teams M5d=restructuring final/trim area into teams

M6. Team leaders M6a=selection of team leaders for engine line M6b=selection of team leaders for body/weld shop M6c=selection of team leaders for paint shop M6d=selection of team leaders for final/trim area

M7. Team training M7a=team training for engine line M7b=team training for body/weld shop M7c=team training for paint shop M7d=team training for final/trim area

M8. Team leader training M8a=team leader training for engine line M8b=team leader training for body/weld shop M8c=team leader training for paint shop M8d=team leader training for final/trim area

M9. Supervisor/superintendent M9a=supervisor/superintendent training for engine line training M9b=supervisor/superintendent training for body/weld shop M9c=supervisor/superintendent training for paint shop M9d=supervisor/superintendent training for final/trim area

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 2 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 7 8 ManufacturingManufacturingwww.onlineeducation.bharatsevaksamaj.net SupportSupport www.bssskillmission.in FunctionFunction StrategicStrategic ChoicesChoices

M10. Union-management M10a=shared vision developed by union-management steering partnership committee M10b=establishment of a joint plant implementation team

M11. Preventative maintenance M11a=establishment of maintenance repair teams for engine line support teams M11b=establishment of maintenance repair teams for body/weld shop M11c=establishment of maintenance repair teams for paint shop M11d=establishment of maintenance repair teams for final/trim area

M12. Preventative maintenance M12a=plant-wide preventative maintenance schedule re-invigorated procedures M12b=shift-to-shift maintenance hand-off intervention

M13a=installation of material flow systems in engine line M13. Material flow systems M13b=installation of material flow systems in final/trim area M13c=establishing of "kitting" operation for targeted supplier parts M13d=establishment of parts "marketplace" for targeted supplier parts M13e=appointing supplier contact people on all production teams

M14. Information system support M14a=implementation of information tracking system for quality feedback M14b=implementation of information tracking system for work group issues M14c=implementation of bar-code parts tracking system for material flow

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 2 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 8 9 ManufacturingManufacturingwww.onlineeducation.bharatsevaksamaj.net SupportSupport www.bssskillmission.in FunctionFunction StrategicStrategic ChoicesChoices

M15. Continuous improvement M15a=establishment of a continuous improvement suggestion "kaizen" system system M15b=dedication of engineering resources to help implement suggestions M15c=dedication of maintenance resources to help implement suggestions

M16. Targeted interventions M16a=Targeted organizational development effort targeted at improving communication on performance measurables M16b=Targeted organizational development effort targeted at improving overall trust and respect in the organization M16c=Targeted organizational development effort targeted at improving the training support infrastructure M16d=Targeted organizational development effort targeted at improving the cost accounting infrastructure M16e=Team building efforts for the management leadership team M16f=Targeted efforts to prepare for executive visits M16g=Targeted efforts to benchmark other organizations M16h=Targeted efforts to prepare for benchmarking visits from other organizations

S1. Supply chain value add S1a=Supplier agreement provide engineering design support for new model S1b=Supplier assignment of contact peopl for production teams

S2. Supplier location S2a=Location 1-3 suppliers in "supplier park" near plant S2b=Location of 4-6 suppliers in "supplier park" near plant S2c=Location of 7-9 suppliers in "supplier park" near plant

S3. Supplier delivery flow S3a=Supplier agreement for more frequent deliveries in smaller batches S3b=Supplier agreement for in-line vehicle sequencing of parts

S4. e-commerce S4a=Agreement of 1-3 suppliers to use on-line pricing and logistics system S4b=Agreement of 4-6 suppliers to use on-line pricing and logistics system S4b=Agreement of 4-6 suppliers to use on-line pricing and logistics system S4c=Agreement of 7-9 suppliers to use on-line pricing and logistics system

S5. Information transparency S5a=Agreements with 1-3 suppliers on sharing process improvements gains S5b=Agreements with 4-6 suppliers on sharing process improvements gains S5c=Agreements with 7-9 suppliers on sharing process improvements gains

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 2 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 10 11 CustomerCustomerwww.onlineeducation.bharatsevaksamaj.net OrderOrder FulfillmentFulfillment www.bssskillmission.in StrategicStrategic ChoicesChoices

C1. Customer delivery C1a=Improvements in road and railway logistics system C1b=Begin migration from forcast planning to "pull" system for orders

C2. Product variety -- new C2a=Add 5 new options and features for new launch model model C2b=Add 10 new options and features for new launch model

C3. Product variety -- current C3a="Refresh" current model with 5 new options or features model C3b="Refresh" current model with 10 new options or features

C4. Customer contact C4a=Establish system for customer contact phone calls from workforce

Module 2: Passing the Point of No Return: Accelerated Implementation of a Lean Manufacturing System

Overview Expected outcomes

Case Overview Appreciation of the

Discussion Questions complexity in transforming a production system

Understanding of the “brownfield” challenge in the auto industry

Insights into leading lean manufacturing systems change initiatives – particularly in the auto industry context

A Core Challenge in the Auto Industry: Transforming “Brownfield” Operations

A History of Joint Initiatives

Initial Launch of a Lean Manufacturing System: The Challenge of the “Hope/Heartbreak” Cycle

Value Stream – Within the Plant and Across the Enterprise

Stability, Infrastructure and Continuous Improvement

Leadership

1. What do you see as the top three challenges in transforming an existing brownfield plant into a lean production system?

2. What are the top three strengths and the top three weaknesses in the transformation process undertaken in Riverside up to this point?

3. Do you think this plant has passed the “point of no return” – where it is harder to revert back to the old approach than it is to continue forward with the transformation? a. What are the biggest vulnerabilities of the change process, i.e., what events or process failures might derail the change effort and start it to revert back to the old approach? b. What would you do to address these vulnerabilities?

4. What systems changes are required in other parts of an enterprise to support a plant that has reached this stage of transformation?

5. Do you believe that a “brownfield” plant can end up just as capable in terms of lean manufacturing – or even more capable – than “Greenfield” plant that was designed to be lean from the outset? Put differently, what should our expectations for performance be for this plant?

Module 1: Integrating Social and Technical Systems

Overview Expected outcomes

Welcome and overview Awareness of shifts in social and technical The “big picture” systems over time Social and technical Understanding of the framework interdependency between Exercise: Focus on the social and technical Seven Wastes and the 5 systems S’s Identification of potential “guiding principles” for Sample Socio-Tech designing, implementing Implementation and sustaining change in Exercise: Cellular Design social and technical Socio-Tech Analysis aspects of new work

Conclusion systems

Social Technical Systems Systems

Craft Production Decentralized Enterprises Custom Manufacture Mastery of Craft Specialized Tools

Mass Production Vertical Hierarchies Assembly Line Scientific management Interchangable Parts

Knowledge-Driven Work Network Alliances Flexible Specialization Team-Based Work Systems Information Systems

Adapted from: “Knowledge-Driven Work: Unexpected Lessons from Japanese and United States Work Practices” (Oxford University Press, 1998)

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 3 19 SampleSamplewww.onlineeducation.bharatsevaksamaj.net SocialSocial SystemSystem www.bssskillmission.in TransformationTransformation InitiativesInitiatives

Socio-Technical Work Systems ...... Semi-autonomous teams 1950s-1980s Employee Involvement/QWL...... EI/QWL groups (off-line) Late 1970s-1990s Total Quality Management ...... Quality circles (off-line) Early 1980s-1990s Re-engineering ...... Work-out events (off-line) 1990s Six Sigma ...... Black belt let project teams (off-line) 1990s-present Lean Production/Enterprise Systems . . Lean production 1950s-present teams/Integrated product & Process teams

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 4 Social and Technical Systems Framework: 20 Socialwww.onlineeducation.bharatsevaksamaj.net and Technical Systems www.bssskillmission.in Framework: Delivering Value to Multiple Stakeholders

Social Methods Interaction & Processes Processes

Structure ++ Capability Equipment ++ Materials & & & New & Sub-Systems Motivation Technology Supply Chain Social Technical Systems Outcomes for Systems Multiple Stakeholders • Customers • Workforce • Shareholders • Suppliers • Society

Feedback

Social Interaction Structure & Sub-Systems Processes Structure Capability & Motivation Groups Structure Capability Individual knowledge, ++ & Organizations & skills & ability Sub-Systems Motivation Institutions Group stages of Sub-Systems development Communications Social Interaction Fear, satisfaction and Information Processes commitment Rewards & reinforcement

Selection & retention Leadership

Learning and feedback Negotiations Conflict resolution Problem-solving Decision-making Partnership

Methods & Processes Equipment & New Technology Materials & Supply Equipment + Materials Equipment and & New + & Chain Supply Chain machinery Technology Interchangeable parts Physical and mass production infrastructure Methods & Processes systems Information Job design/office Just-In-Time delivery technology design (JIT) systems Nano-technology, Work flow/process Synchronous material bio-technology, mapping methods flow systems and other frontiers Value stream mapping e-commerce of science Constraint analysis Statistical Process Control (SPC) System optimization and decomposition methods

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 7 23 Exercise:Exercise:www.onlineeducation.bharatsevaksamaj.net TheThe SevenSeven www.bssskillmission.in WastesWastes andand thethe FiveFive S’sS’s

The Seven Wastes The Five S’s

Over Production • Simplify or Sort

Waiting • Straighten or Simplify

Transportation • Scrub or Shine

Inventory • Stabilize or Standardize Processing • Sustain or Self- Motion Discipline Defects

How are social and technical systems interdependent when it comes to addressing the Seven Waste? How are they interdependent when it comes to the 5S’s?

WK1 WK2 WK3 WK4 WK5 WK6 WK7 WK8 WK9 WK10WK11WK12 WK13WK14WK15WK16 Team Vender FPS Work Group Error Building Technical Measurables Selection Proofing Work Group Training Training Training Training Coordinator Selection Social Path

FPS Measurables Finalized Preliminary Input/Feedback FPS Measurables Work Cell Work Cell System Design Input/Feedback Design Test Design Production SMF Inventory System Staffing Launch and Order Estimates Socio-Tech Path

Technical Path

Error Equipment Rack Proofing Equipment Vender Size Equipment Installation Vender Selection Calculation and Rack Installation Interviews Adapted from MIT Sloa n Fellows thesis by Sean Hilburt © Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 9 25 DataDatawww.onlineeducation.bharatsevaksamaj.net onon TechnicalTechnical MilestonesMilestones www.bssskillmission.in

100%

90%

80%

70%

60% Green 50% Yellow Re d 40%

30%

20%

10%

0% Aug-98 Sep-98 Oc t-98 Nov- 98 Dec- 98

Adapted from MIT Sloan Fellows thesis by Sean Hilburt © Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 10 26 DataDatawww.onlineeducation.bharatsevaksamaj.net onon SocialSocial MilestonesMilestones www.bssskillmission.in

100% 90%

80% 70% 60% Green 50% Yellow Red 40% 30% 20%

10% 0% Aug- 98 Sep- 98 Oct- 98 Nov -98 Dec -98

Adapted from MIT Sloan Fellows thesis by Sean Hilburt © Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 11 27 SocioSociowww.onlineeducation.bharatsevaksamaj.net--TechTech DataData www.bssskillmission.in

100%

90%

80%

70%

60% Green 50% Yellow Re d 40%

30%

20%

10%

0% Aug-98 Sep-98 Oc t-98 Nov- 98 Dec- 98

Adapted from MIT Sloan Fellows thesis by Sean Hilburt © Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 12 28 Exercise:Exercise:www.onlineeducation.bharatsevaksamaj.net CellularCellular ManufacturingManufacturing www.bssskillmission.in SocioSocio--TechTech AnalysisAnalysis

Step 1: Group Formation and Stakeholder Analysis Form small groups of 2-3 people (individuals at remote locations may link by phone), study the “current state” and “desired state” illustrations on a hypothetical cellular manufacturing intervention (next slide), and list stakeholders involved in your phase of this intervention. Note: Some groups will be assigned to “Preparing,” “Implementing,” and “Sustaining” phases of this intervention Step 2: Social Systems Identify the most important social system changes in this work system that are relevant to your phase of the intervention. Step 3: Technical Systems Identify the most important technical changes in this work system that are relevant to your phase of the intervention. Step 4: Integration and Guiding Principles Discuss ways in which the social and technical changes are or are not interdependent. Derive 1-3 “Guiding Principles” for implementing a systems change of this type.

Receiving, Injection Molding Center Incoming Inspection, 2 Current and Shipping 1 D D D L L State 13 MC 4 D D D L L Machining 3 Final 5 L L Assembly Center10 Center G G G M M 11 7 MC 6 G G G M M 12 8 Inspection and Heat 9 Component Subassembly Test Center Treat

Receiving, Incoming Inspection, Injection Molding Center Desired and Shipping D D MC

D MC State G M D M L G D L G G G M G M L Work Flow D L G G M G M L G G M G M L G G L G Heat D L M D D D M G Treat D D © Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 Source: Lean Aerospace- Initiat distributeWWW.BSSVE.INived Fieldbook through the Engineering Systems Learning Center, Engineering Systems Division, MIT 14 30 Revisitwww.onlineeducation.bharatsevaksamaj.net the Social and Te chnical www.bssskillmission.in Systems Framework

Social Methods Interaction & Processes Processes

Feedback © Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 15 31 ConclusionConclusionwww.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

A unique historical moment

The constant challenge and opportunity presented by social and technical interdependency

A fragile foundation for a global transformation

© Jwww.bsscommunitycollege.inoel Cutcher-Gershenfeld and Thoma www.bssnewgeneration.ins Kochan -- An MIT/Sloan Foundatio www.bsslifeskillscollege.inn Industry System Study - Module 1 - distributeWWW.BSSVE.INd through the Engineering Systems Learning Center, Engineering Systems Division, MIT 16 32 Appendix:Appendix:www.onlineeducation.bharatsevaksamaj.net JapaneseJapanese www.bssskillmission.inModelModel ofof ProductionProduction SystemSystem andand ““HumanwareHumanware””

J-I-T Production System Reduced Set- Up Time Low Low Skill Inventory Small Lot Price Cost Even Flow Growth Self- Low Buffer Stock Management Adaptability Low Labor of Work Profits Cost Standards Continuous High Adjustment of Low Labor Input Motivation Quality Defects Self- Inspection Human Control

Key Features Key Areas of Human Corporate System of Production Human Resource Resource Goals Outcomes System Involvement Effectiveness

Source HaruoShimada and John Paul MacDuffie, Industrial Relations and“Humanware” (Slaon School of Management Work Paper, September, 1986)

Module 3 Managing Transformations in Work, Organizations, and Society

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 34 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Today’sToday’s ParticipantsParticipants

• Students on campus and at a distance • Kaiser Permanente Partnership Leaders: – Leslie Margolin, Kaiser Permanente – Peter diCicco, Coalition of Kaiser Permanente Unions – John Stepp, Restructuring Associates • Cambridge University Faculty & Students • KP Case Co-authors: – Susan Eaton – Robert McKersie www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 35 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Today’sToday’s LearningLearning ObjectivesObjectives

• Understand the dynamics of strategic partnerships as they evolve • Learn from specific labor-management cases: – KP Partnership, Saturn, British Cases – Applying the Lessons to your organizations – In designing your next generation plant or facility – In managing your strategic partnerships outside the labor-management arena

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 36 www.onlineeducation.bharatsevaksamaj.netWhyWhy StrategicStrategic www.bssskillmission.in Partnerships?Partnerships?

• Cross-Firm Partnerships – Core Competency Business Models need Partners – Customer-Supplier Strategic Partnerships – Rapidly Changing Technology & Knowledge – Required for Global Market Access • Cross-Institution (Public-Private Partnerships) – Increased Interdependence--problems require joint action of firms, community groups, government…. • Labor-Management Partnerships – Employees are key Source of Knowledge – Traditionalwww.bsscommunitycollege.inWWW.BSSVE.IN Labor Relations www.bssnewgeneration.in no longer www.bsslifeskillscollege.in works…. 37 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in KeyKey AssumptionsAssumptions

• Multiple stakeholders

• Common and competing interests – Need for mechanisms to identify and pursue common interests – Need for mechanisms to surface and address conflicting interests

• Interests/Contextual Conditions evolve – Need for periodic recalibration

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 38 www.onlineeducation.bharatsevaksamaj.netSelectedSelected www.bssskillmission.in PrinciplesPrinciples ofof PartnershipPartnership • Trust and Respect

• Shared Vision

• Negotiated Change

• Joint Implementation and Governance

• Learning and Adjustment www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 39 www.onlineeducation.bharatsevaksamaj.netSelectedSelected TensionsTensions www.bssskillmission.in UnderlyingUnderlying thethe PrinciplesPrinciples IndividualIndividual InstitutionalInstitutional Trust and Respect

BigBig PicturePicture DetailsDetails MatterMatter Shared Vision

ForcingForcing FosteringFostering Negotiated Change

DialogueDialogue ActionAction Joint Implementation/Governance

ShortShort TermTerm LongLong TermTerm Learning and Adjustment www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 40 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

AA BriefBrief HistoricalHistorical TourTour ofof AmericanAmerican LaborLabor Relations:Relations:

1930s1930s--1970s;1970s; 1980s1980s--90s90s Future???Future???

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 41 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in NewNew DealDeal ModelModel----1930s1930s--70s70s

•• WorkplaceWorkplace:: – Tight, narrow job definitions, grievance procedure for input •• CollectiveCollective BargainingBargaining:: – Centerpiece of the system; “take wages out of competition” •• StrategicStrategic LevelLevel:: – Left entirely to management--outside the influence of workers and unions

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 42 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in EffortsEfforts toto Transform,Transform, 1980s1980s--90s90s

•• WorkplaceWorkplace:: – Participation, teams, flexible operations •• CollectiveCollective BargainingBargaining:: – Work rule flexibility, job security; new pay systems •• StrategicStrategic LevelLevel:: – Info sharing, consultation, joint governance, employee ownership • Current estimates: 1/3 relationships have significant efforts to change in place • Limitedwww.bsscommunitycollege.inWWW.BSSVE.IN by business-labor www.bssnewgeneration.in political www.bsslifeskillscollege.in impasse 43 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TheThe LargerLarger SettingSetting TodayToday • Union coverage has declined – 35% in mid 50s to less than 10% in private sector today • Still influential in some key industries, but growing slowly in the service sector – Approximately 50,000 public and private sector negotiations each year in the U.S. • Wide variations in quality of individual, local relationships – Some landmark “islands of innovation” and some bitter adversarial conflicts • National Level – Political Impasse on Labor Policy--Business vs Labor Gridlock www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 44 www.onlineeducation.bharatsevaksamaj.netTheThe KaiserKaiser www.bssskillmission.in PermanentePermanente ExperienceExperience • Leslie Margolin, VP, Workforce Development

• Peter diCicco, Chairman, Coalition of Kaiser Permanent Unions

• John Stepp, Lead Consultant and Facilitator, Restructuring Associates

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 45 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in DiscussionDiscussion Questions:Questions: PartPart 11 Your company is benchmarking Kaiser Permanente, Saturn, and other companies as it plans to open a new facility. You are on the planning team. – What lessons do you draw from these experience to date? – What, if any, features of the KP Partnership or of Saturn would you recommend adapting (not copying) in your new operations?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 46 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in DiscussionDiscussion QuestionsQuestions PartPart 22

Pick a Strategic Partnership relevant to your work setting (not a labor-management one)

• What lessons from the the labor-management partnerships apply?

• What are the two or three key changes in management practice needed to successfully manage various types of strategic partnershipswww.bsscommunitycollege.inWWW.BSSVE.IN over www.bssnewgeneration.in an extended www.bsslifeskillscollege.in period of time? 47 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in SummingSumming Up:Up: LessonsLessons fromfrom LaborLabor--ManagementManagement PartnershipsPartnerships

• Pivotal Events/Crises matter – Mixed motive relationships generate conflict – Need skills & agreed on norms for resolving conflicts • Transition Points are risky – e.g., leadership change • Exit Strategies & Rules Needed • Managing Partnerships: Value comes from quality of the network communications, information and horizontal resource flows • Management is a widely distributed task • Avoid “Islands of Innovation” – Support of surrounding institutions/organizations needed www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 48 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ManagingManaging IndependentIndependent ContractorContractor andand ProjectProject WorkerWorker RelationsRelations

Managing Transformations in Work, Organizations, & Society

Today’s Guest: Sara Horowitz, Executive Director, Working Today

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 49 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in OverviewOverview && ObjectivesObjectives

• Clarifying the Facts: Terminology; Trends, Myths & Reality in “Non-Standard” Work

• Explore What’s Needed to Make Project Work Successful—to individuals, firms, & the economy

• What new Labor Market Institutions are Needed to Support this Form of Work?

• Apply the Lessons—What do we need to do to manage this new form of work? www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 50 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in What’sWhat’s atat StakeStake Here?Here?

• Standard Job: – Steady wages & benefits; careers, training, security, retirement savings, social interaction

• Project Work: Two Contrasting Views – Risky, unsteady, and less protected – Innovative, autonomous, flexible, rewarding,--efficient response to changing labor markets and organizational forms

• Poses major policy and institutional design challenges: – Who is the employer? – How will traditional labor market functions be performed such as job matching, training, health and safety management, voice and representation, health insurance, savings… www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 51 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TypesTypes ofof “Nonstandard”“Nonstandard” WorkWork • The “Standard”– Long term full-time work with single employer = 70% • Part-Time = 17% and stable for two decades • Temporary Help from Agencies = 2-3% growing • Independent Contractors = 7% steady • On-call; day laborers & others = 1-2%

• Meaningless Term: “Contingent Worker”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 52 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TrendsTrends && ProjectionsProjections

• High Growth in 1980s-mid 90s: 15-30% per year – Business Services (Temporary Help Agencies) – Professional Services growing most rapidly – Specialized Sub-contracting Firms (Solectron) – Manpower: “The largest U.S. Employer”

• 1995-Present: slower growth:10-15% per year

• 2001: Staffing Industry = $140 Billion www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 53 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in FutureFuture Trends????Trends????

• Michael Dertouzos: Potential for 40% of the labor force “IT can be done anywhere…”

• Tom Malone & Rob Laubacher: The Dawn of the E-Lance Economy “By changing the way work is done, electronic networks may lead to a new kind of economy centered on the individual.”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 54 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in DrivingDriving ForcesForces

• Demand Side: – Variability in Product Demand – Availability of Lower Cost Labor – Need for Specialized Knowledge & Skill – Avoidance of Taxes, Unions, or Liabilities? – Case in Point: Contract Workers in Petrochemicals

• Supply Side: Desire for Flexibility; Autonomy & Independence; High Income

• Technological Enablers: Web as a search & matching engine and network building device www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 55 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Consequences:Consequences: WorkersWorkers Outcomes ICs Temps

Job Satisfaction Higher Lower

Preferences Independent job Standard job preferred: 84% preferred: 60%

Wages High Variance Lower

Fringes Purchase or Fewer: 26% health; spouse covered 10% pensions

Hours Men: Longer Fewer; more part- Women: Shorter time www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 56 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Consequences:Consequences: FirmsFirms

• Performance on Demand • Avoidance of Fixed Costs • Measurable, Observable Cost Savings-yes • Performance: Quality; Productivity??--Varies • Employee Commitment--Varies • Relationship across the Boundary?? Bottom Line: Depends on how well project and “permanent” interactions are managed

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 57 www.onlineeducation.bharatsevaksamaj.netConsequences:Consequences: www.bssskillmission.in LaborLabor MarketMarket FunctionsFunctions && InstitutionsInstitutions

• Rapid Growth of New Intermediaries: Manpower, Oxford, Aquent, Monster.com. • Ambiguity over “Who is the Employer?” – Case: Contractors & Safety in Petrochemicals • Training through project assignments • Individuals need time for job search & training • New Associations: Working Today; E-Lance Guilds; Informal Ethnic and Other Networks…

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 58 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in KeyKey LaborLabor MarketMarket FunctionsFunctions

Who, or What Institutions will Perform…

• Job Search & Recruitment—the matching process • Training and Development—the learning process • Supervision—the managing process • Mobility—the career process • Compensation & Savings—the income security system • Representation—the advocacy and voice process

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 59 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Today’sToday’s ExpertExpert

Sara Horowitz Executive Director of Working Today

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 60 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in DiscussionDiscussion QuestionsQuestions

• What are the biggest challenges you face in managing contract/project workers in your unit today, or in your past experience? • Your predictions: In the next 5 years, will there be more, less, about the same amount of project/contractor work in your unit? • What changes are needed to better manage project/contract work in your organization? • Is project work for you? – If you have done this type of work in the past, how would you describe your experiences? – Do you see this type of work in your future? Why or Why Not?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 61 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ActionAction AssignmentAssignment • Identify a 2-3 people in your organization whose work has shifted from more traditional employment relationships to part time or other new arrangements (also consider interviewing 1-2 supervisors who are supervising people who are working in part time or other new arrangements)

– Interview them to identify aspects of the shift that they find advantageous and aspects of the shift that they find problematic – Surface preliminary implications for your organization

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 62 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in SummarySummary PointsPoints

• Project Work is Here to Stay--will be an important part of the labor market--but probably not as big as some predict • Rapid growth of New Intermediaries • Cyclical--higher variance in outcomes • Outcomes Vary Widely Across types, business cycle, • Requires New Management Systems, Public Policies, & New Labor Market Institutions

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 63 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ManagingManaging TransformationsTransformations inin Work,Work, OrganizationsOrganizations && SocietySociety

Session 1 Managing the Changing Workforce and the Changing Nature of Work

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 64 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in WelcomeWelcome toto MIT!MIT!

• An Experiment in Life Long Learning Addressing the Challenges we face as – Managers – Individual Employees, and – Citizens: In: Managing Transformations in Work, Organizations, and Society

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 65 www.onlineeducation.bharatsevaksamaj.netGoingGoing BeyondBeyond www.bssskillmission.in McGregor:McGregor: SloanSloan’’ss 5050th AnniversaryAnniversary ProjectProject

• McGregor’s Theory X & Y – Do managers assume employees need to be controlled or empowered?

• Today’s Question – What should we assume? – Is a manager’s job only to maximize shareholder value? or – Is it a manager’s job to meet expectations of shareholders and other key stakeholders?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 66 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in 5050thth AnniversaryAnniversary ProjectProject (cont.)(cont.)

• Our task for the 50th Anniversary: Prepare a discussion paper exploring implications for the future of management – Throughout the term, we will be collecting 1-2 page “vignettes” as part of an “application notebook” on each course topic • Written by alums and students directly at the web site – based on personal experience – or written by students interviewing alums – Students (individually and in groups) will also have responsibility to do a more detailed analysis of one of the course topics www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 67 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TodayToday’’ss LearningLearning ObjectivesObjectives

• Understand how the role of work has changed over the years, how the workforce is changing, and what has remained the same!

• Explore: What are the key challenges these changes pose for management today, and in the future?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 68 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ThreeThree LevelsLevels ofof LearningLearning

Course materials aimed at building:

– Awareness • Introduction to concepts and ideas

– Working Knowledge • Skills to apply concepts and ideas effectively

– Expert Knowledge • Able to teach others to apply concepts and ideas effectively www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 69 www.onlineeducation.bharatsevaksamaj.netTrainingTraining TrainersTrainers www.bssskillmission.in && PromotingPromoting OrganizationalOrganizational ChangeChange

• You are here to learn and – in specific cases, to teach others!

• Be a transmission belt--from individual to organizational learning

• Be an agent of change & innovation!

– Ensure that appropriate leaders in your organization anticipate a steady flow of difficult questions coming out of each session www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 70 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TodayToday’’ss FormatFormat

• Course Design and Objectives (20 min) • Check in: Introductions (5 min.) • Framing Lecture: Work in Historical Context (20-30 min.) • Discussion/clarification (20 min.) • Break (15 min.) • Site Specific Discussions (30-40 min.) • Report outs and discussion (approx. 15-30 min.) • Summarize key themes and action assignment (10- 15 min.) www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 71 www.onlineeducation.bharatsevaksamaj.netCheckCheck In:In: NotNot www.bssskillmission.in youryour TypicalTypical MITMIT Class!Class!

• Engineering and Management Students in the classroom • Students enrolled at distance work sites • Peers at our students’ work sites • Alumni—on line, providing vignettes, ready to be interviewed • Industry Professionals from Leading Organizations at a Distance www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 72 www.onlineeducation.bharatsevaksamaj.netPresentationPresentation www.bssskillmission.in OverviewOverview

• Historical Context • Moral Foundations • Personal/Family Life • Models of Employment Relations Past and Present • Workforce Expectations: Past, Present & Future

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 73 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in WorkWork inin HistoricalHistorical ContextContext

How has work changed over the years? How is it being transformed by changing technologies, new ideas on how to organize work--on the factory floor, in offices, working at home or on the road, or in globally dispersed teams and organizations?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 74 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in AA BriefBrief HistoryHistory

• Medieval Days: Work was for the Serfs!

• Marx (Karl or Groucho??): “Do we work to live or live to work?”

• Today: Source of Identity, Economic Necessity, Social Contribution….

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 75 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in MoralMoral Foundations:Foundations: HistoricalHistorical

• Thomas Aquinas: A Source of Dignity

• Protestant Ethic: Achievement means a Healthy Soul--doing God’s Work!

• Catholic Social Teaching: The Living Wage and Social Justice

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 76 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in MoralMoral FoundationsFoundations forfor TodayToday

• Efficiency--contribution to society • Source of Dignity • Solidarity & Social Cohesion • Should support a Living Wage • Equal Opportunity • Voice and Democracy • Subsidiarity--solve problems locally

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 77 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in RelationRelation toto Family/PersonalFamily/Personal LifeLife

• Agrarian Family • Total Overlap

• Industrial Worker • Separation:7-3:30; 9-5

• Organization Man • Separation--total commitment with spouse at home

• Service/New • Blurred boundaries-- Economy 24/7; traveling technologies... www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 78 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in NatureNature ofof thethe TaskTask

•Agrarian • Self sufficiency •Craft • Skilled artisan • Industrial • Division of labor • Knowledge • Learning & adaptation • Social-Interactive • Emotional-customer service

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 79 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in RelationRelation toto EmploymentEmployment

• Pre-industrial • Self employment

• Hierarchical-- • Factory System employees & employers; labor as a factor of production

• The New Deal • Human rights at work

• Information • A strategic asset-- Economy knowledge work

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 80 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in HistoricalHistorical oror MultipleMultiple Functions?Functions?

If work must fulfill multiple functions, then we need institutions, practices, and policies that support and enable them-- in short we need a. . . HOLISTIC, SYSTEMIC APPROACH to managing and governing work!

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 81 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in A Holistic View of Work

Economic Function Individual Value

• security • dignity • standards • respect of living • identity • efficiency • voice • quality goods World • social & services of interaction Work

Place in Society

Family

Community Citizenship www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 82 www.onlineeducation.bharatsevaksamaj.netChangingChanging Social Social www.bssskillmission.in ContractContract atat Work?Work? • The Old Social Contract: Loyalty for Security – Male Breadwinner-Wife at home – Long term, full time job – Income, Security, Status increased with tenure

• Today’s realities: – Variability in job duration; increased insecurity – Risks shifted from firm to individual – Variety of job types—standard, contractor, consultant… – Diversity in workforce

• Is a new Social Contract Emerging??? www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 83 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TheThe ProblemProblem

Nature of work and the workforce have changed dramatically, but our institutions, policies, and practices for governing and managing work still reflect their origins in the industrial economy of the past

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 84 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in PastPast && PresentPresent

• Industrial Economy • Information Economy

• Domestic Competition • Global Competition

• Big Industrial Firm • Services--size varies

• Two groups: managers • Diverse groups with and workers blurred boundaries • Adversarial Relations • Mixed modes--conflict and cooperation • Male Breadwinner with • Men & Women at Work- Spouse at Home -varied families www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 85 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in OurOur ChallengeChallenge

Update practices, institutions, and policies to catch up with the changes in the workforce and in work--to meet the needs of the modern economy, and the modern workforce and modern families!

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 86 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TodayToday’’ss DiscussionDiscussion TaskTask

• Trace how work has changed in your family through 3 generations: Your parents, your generation, your children. • What values have carried over? What’s changed? • What shaped your views of work? • What is shaping your children’s views?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 87 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ReportReport--OutOut QuestionsQuestions

• What is the single most important factor shaping your expectations of work?

• How, if at all, will the expectations of your children have of work differ from yours?

• What are the implications of your answers to your organization and your role as leaders?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 88 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ActionAction AssignmentAssignment

• In your organization – or an organization you select:

– Identify one organizational policy or practice that is a clear “disconnect” OR a new “connection” when it comes to the changing needs and expectations of the workforce

– Conduct a “root cause” analysis (consider using the “5 whys”) to identify what accounts for the “disconnect” or the “connection”

– Be prepared to discuss this in class next week – also, if appropriate, enter this as a vignette on the web site www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 89 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in SummingSumming UpUp

• Work’s constants: Be “Multi-functional” • Interpretive-Meaning: We are what we do! • Work is a Social Process • Must have a Moral Foundation--or in the words of the Director General of the ILO, we must provide “Decent Work”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 90 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Beware:Beware: GenGen YersYers areare coming!coming!

• Grew up in age of prosperity--winner take all economy • Saw end of job security • “Latch-key” kids who want more for their kids • Comfortable using modern technologies • More accepting of diversity • More accustomed to rapid, constant change • More exposures to scandals, violence… • Less trust -- don’t count on social security. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 91 www.onlineeducation.bharatsevaksamaj.netTheThe CorporationCorporation www.bssskillmission.in inin Society:Society: ManagingManaging forfor SustainabilitySustainability

Session 2 of Managing Transformations in Work, Organizations & Society

Thomas Kochan & Joel Cutcher-Gershenfeld With Guests from: Ford, Hewlett Packard, MIT Sloan Fellows, MIT Sustainability Consortium

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 92 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in BackBack toto Basics:Basics: TheThe 2121st CenturyCentury CorporationCorporation

Can we achieve shareholder value and meet the expectations of other stakeholders?

Stakeholders: – Invest and put at risk their “capital” – Actively influence, contribute to enterprise success – Share the benefits and costs of enterprise outcomes

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 93 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in HistoricalHistorical Context:Context: AnAn AgeAge--OldOld IssueIssue

Early corporate charters: Serve the king; serve the society 20th Century: Need for large pools of finance capital—shareholder maximizing model evolved 1930s-60s: Management-owner separation 1960s: Corporate responsibility issues emerge 1970s: Japanese & German stakeholder models 1980s: Resurgence of “Investor Capitalism” 1990s: American model increasingly dominates

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 94 www.onlineeducation.bharatsevaksamaj.netWhyWhy areare wewe DebatingDebating www.bssskillmission.in thisthis Today?Today?

1990s Prosperity: Unequal Sharing? The Promise of the New Economy The emergence of global standards – ISO 14000 Rethinking Priorities after 9/11? Aftermath of Enron? Environmental Concern: Global Warming? Links between environmental sustainability and new workplace systems Another Historical Cycle?

QUESTION: WILL THIS JUST BE ANOTHER PHASE OR WILL IT CHANGE THE WAY WE MANAGE? www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 95 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ManagingManaging forfor SustainabilitySustainability

Is there a tradeoff between environmental and business objectives? Or Does incorporating environmental issues in strategic decision contribute to business performance?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 96 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

DEBORAHDEBORAH ZEMKEZEMKE

DIRECTOR, CORPORATE GOVERNANCE

[email protected]

February 19, 2002

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 97 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in CORPORATECORPORATE CITIZENSHIPCITIZENSHIP ROADROAD MAPMAP

Who We Are How We Behave What We Offer in the Marketplace

Transparency Business Triple Sustainable Performance Engagement Principles Bottom Line Strategies and Indicators Accountability Assessment

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 98 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ROBUSTROBUST BUSINESSBUSINESS STRATEGYSTRATEGY

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 99 www.onlineeducation.bharatsevaksamaj.netENCOMPASSESENCOMPASSES www.bssskillmission.in THETHE BROADBROAD DIMENSIONSDIMENSIONS OFOF TRUSTTRUST

Trusted Product Trusted Brand + Product quality + Ethical quality + Reliability + Accountability + Value + Values

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 100 www.onlineeducation.bharatsevaksamaj.netTOUCHESTOUCHES ALLALL www.bssskillmission.in ASPECTSASPECTS OFOF THETHE BUSINESSBUSINESS 20th Century 21st Century Corporate Public Policy Activity Corporate Public Policy Activity Mission – Defend Existing Markets Mission – Create New Markets

Following: Support lowest common Leading: Raise industry standards denominator industry positions Reactive: Respond to proposed Proactive: Anticipate, shape, and drive regulations or policy changes market and policy agendas Obscured: Keep company out of policy Transparent: Actively identify clearly limelight – non-disclosure, industry articulated public policy positions with associations, ambiguous language Ford brand, values Closed: Debate public policy safely Open: Invite external stakeholders into behind closed doors, or in industry fora policy discussions Narrow: Use policy participation to Broad: Act as corporate citizen when pursue company-specific objectives participating in multi-stakeholder public affairs dialogue = FORD FOLLOWS REGULATIONS = REGULATIONS FOLLOW FORD www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 101 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

WORDSWORDS

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 102 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

My name is Deborah Zemke.

I work at Ford Motor Company, the world’s second largest and one of the most successful makers of high quality automotive products and services.

We at Ford are deeply committed to the principles of sustainability…

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 103 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

My name is Deborah Zemke.

I work at Ford Motor Company, one of the world’s great polluters.

Nearly all of our products depend heavily on fossil fuels, a fact that means we’ve had a significant impact on the world’s climate.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 104 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

My name is Deborah Zemke.

I work at Ford Motor Company, a global corporation with a significant impact on the earth’s climate.

I’m here to say that the issue of climate change is no longer distant. It has a name and a face. Our name. Our face.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 105 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in 19991999 CORPORATECORPORATE CITIZENSHIPCITIZENSHIP REPORTREPORT

“SUVs contribute more than any other vehicles to the Company’s bottom line…Without SUV offerings, Ford likely would lose sales and profits…”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 106 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in 19991999 CORPORATECORPORATE CITIZENSHIPCITIZENSHIP REPORTREPORT “Among the stakeholders concerns •expressed The fuel are:economy of SUVs is less than cars… • SUVs can raise safety concerns for drivers and passengers in other vehicles… • SUV vehicles… used for off-road recreation can damage nature.”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 107 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in REACTIONSREACTIONS TOTO THETHE REPORTREPORT

• 83% of coverage was favorable • 33 of 35 articles conveyed Ford’s primary message about climate change • “Ford was credited with being proactive.”

• Source: CARMA, International

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 108 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in REACTIONSREACTIONS TOTO THETHE REPORTREPORT

Internet readers also responded favorably:

• 10% had heard of the report • Of those, 40% said it changed their opinion of Ford for the better

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 109 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

CULTURECULTURE

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 110 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in REGULATORYREGULATORY FOCUSFOCUS OFOF ‘70s‘70s && ‘80s‘80s

• “Ralph Nader is full of crap!” • “Airbags are a bunch of baloney.” • “The government is crying wolf.” • “I haven’t changed one whit. I said airbags are a lot of baloney and I’ll stick to it.” • “The Carter administration doesn’t know its ass from its elbow about auto industry problems.”

-- Henry Ford II (kept a small needlepoint pillow in his office – ‘Screw Airbags’) www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 111 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in REGULATORYREGULATORY FOCUSFOCUS OFOF ’70s/’80s:’70s/’80s: CONTRIBUTEDCONTRIBUTED TOTO LOSSLOSS OFOF CARCAR MARKETMARKET

% 100

90 Domestic Share

80 Compromised Product Downsized 70 Passive restraints 34% (In dustry) Drivability 60 Performance issues Quality 50 Compromised

40 design

1910 20 0 40 50 60 70 80 90 2000

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 112 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

STORIESSTORIES

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 113 www.onlineeducation.bharatsevaksamaj.netMARKETMARKET PRESENCEPRESENCE www.bssskillmission.in OFOF HEVS:HEVS: TOYOTA’STOYOTA’S PROJECTIONSPROJECTIONS

2.9M Vehicles by 2010

0.6

n s Toyota’s Public Claims 0.5

illio Extrapolated

M 0.4 Projection

0.3

0.2

0.1

2001 02 03 04 05 06 07 08 09 2010 www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 114 www.onlineeducation.bharatsevaksamaj.netFINANCIALFINANCIAL www.bssskillmission.in IMPACTIMPACT ONON MARKETMARKET SHARESHARE LOSSESLOSSES

Assumptions • Advanced technology vehicles capture 10% of the overall global market over the next ten years • The “Leaders” (Toyota, Honda, and VW) will capture market share from the others

Possible Outcomes • A 1.6% loss of global market share • Equivalent to a $4.5B contribution loss in 2010 alone*

*At $2.8B in contribution per global market share points www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 115 www.onlineeducation.bharatsevaksamaj.netIT’SIT’S BADBAD FORFOR www.bssskillmission.in BUSINESSBUSINESS TOTO BEBE PICKETEDPICKETED BYBY PASTORSPASTORS

• “We’re preparing pledge cards to circulate in churches, synagogues, and mosques around the country…putting together a kit on how to hold SUV protests.” • “We’re encouraging people to not check their faith at the door of dealerships.”

Reverend Dan Smith United Church of Christ, Hancock, MA July 20, 2001 – National Public Radio www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 116 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

Climate Change: Marketing Perspective www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 117 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

RELEVANCERELEVANCE

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 118 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ROUGEROUGE RIVERRIVER HERITAGEHERITAGE PROJECTPROJECT

• Historic past • Employee involvement in planning • Lean manufacturing • Restorative of the natural environment • Learning laboratory • New icon

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 119 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in CLIMATECLIMATE CHANGECHANGE INTERNALLYINTERNALLY

Products Plant & Among the Operations leaders Lowest GHG per unit

RECOGNISED AS CLIMATE LEADER Marketing Purchasing Brand of Aligned supply choice chain GHG targets

Policy Leading with proactive solutions www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 120 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in CLIMATECLIMATE CHANGECHANGE EXTERNALLYEXTERNALLY

Plant & Operations Lowest GHG Product !!! per unit

RECOGNISED AS CLIMATE LEADER Marketing Purchasing Aligned supply Brand of chain GHG targets choice

Policy Leading with proactive solutions

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 121 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in THETHE LEADERSHIPLEADERSHIP CHALLENGECHALLENGE

• Possess a strategic vision of sustainable value creation

• Behave with courage, honesty, integrity

• Create radical and innovative solutions

• Act as strong and unambiguous advocate

• Inspire others to follow

• Be commercially successful

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 122 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

DEBORAHDEBORAH ZEMKEZEMKE

DIRECTOR, CORPORATE GOVERNANCE

[email protected]

February 19, 2002

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 123 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TheThe SustainabilitySustainability Consortium:Consortium: OverviewOverview andand 22 CaseCase StudiesStudies

Hilary Bradbury, Case Western Reserve John Carroll, MIT ([email protected]) John Ehrenfeld, MIT Peter Senge, MIT and Society for Organizational Learning

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 124 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in TheThe SustainabilitySustainability ConsortiumConsortium

Voluntary organization of about 12 large companies (e.g., Shell, Nike, DTE, Xerox) Focus on sustainable business practices Linked to Society for Organizational Learning (use of dialogue and other learning tools) Sustainability concept has broadened from environmental concerns to include economic, social, and political issues

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 125 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ConsortiumConsortium ActivitiesActivities

Meet twice a year for 2 days, hosted by a member company (rotating hosts) Organized by 2 consultants who maintain the network, convene the meetings, and facilitate interaction Over time, evolved a structure including a Steering Committee, annual fees, project reports, and needs and offers that self- organize into projects

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 126 www.onlineeducation.bharatsevaksamaj.netWhyWhy DoDo Companies/PeopleCompanies/People www.bssskillmission.in ComeCome toto thethe Consortium?Consortium?

A few global companies can “set the standard” or “lead the charge” as happened for quality Values-based, personal value congruence Networking, personal relationships Meet “thought leaders”; idea leadership Opportunity to reflect; use of organizational learning tools Share best practices, real experiences Specific projects and collaborations Engage their organizations

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 127 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in DocucomDocucom HistoricalHistorical CaseCase

Landmark “green” product and process Why was the personal engagement of employees in this work so “off the scales?” Shift from reverence for leader to “cascading” the leadership Vision quest experience resonated for years Learning from experience required shifts from: – Reasonable engineers to high positive affect – Social networks as an oasis – Pride – past to future focus – reason to reverie (hopes and dreams) – knowledge and power external to self to internal www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 128 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in OnlyOnly aa LocalLocal Success?Success?

Despite commercial success and reduced environmental impact, other business lines did not adopt new innovations Concern that heavy emphasis on recycling would hurt their competitive position Some key project leaders have left the company and spread innovation elsewhere

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 129 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in GreenLeaseGreenLease CaseCase

Manufacturing company got national attention for concept of turning product into service, reducing material content and discard But few sales! Why? Collaborative inquiry involving multiple SoL Consortium companies and researchers in facilitated teleconferences Examine challenges in moving from “concept to capability”: operational challenges and cultural challenges

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 130 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in GreenLeaseGreenLease ResultsResults

Learning for providers and customers alike Engineering-based firms may be biased toward seeing all challenges as technical in nature Customers locked into budgetary routines and maintenance contracts that suppress innovation Charismatic leader provided little structure for implementation; managers and sales force resist Need for collaborative innovation, yet innovative companies may be predisposed to believe: “We can make this happen.”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 131 www.onlineeducation.bharatsevaksamaj.netWhatWhat IsIs DistinctiveDistinctive www.bssskillmission.in AboutAbout thethe Consortium?Consortium?

Cross-organization, cross-sector, cross-level: person-person, company-company, person- company, company, society, etc. Complexity of sustainability challenge Voluntary, values-based, self-organizing Friendships rather than business agreements Use of distinctive learning practices Complementary roles for corporations, consultants, researchers (e.g., GreenLease) www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 132 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

HP Sustainability

HP’s efforts towards environmental sustainability

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 133 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in HP Sustainability HP’sHP’s visionvision

Be the recognized leader in inventing environmentally sound and sustainable solutions for the common good.

“We intend to provide leadership in this ecosystem of people and organizatins to encourage environmentally sustainable, inclusive business and public policies.” Carly Fiorina, CEO, Hewlett-Packard Company www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 134 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in HP Sustainability milestonesmilestones

1991 – Product Stewards assigned to every product line 1992 – HP establishes LaserJet toner take-back program 1997 – All HP LaserJet products Blue Angel certified 1999 – HP introduces industry’s first inkjet printer with duplexing capability 2000 – HP releases the industry’s first line of inkjet printers to be Blue Angel certified 2001 – HP wins Green Cross Millennium Award 2001 – HP offers product recycling to customers via two recycling centers in California and Tennessee accepting both HP and competitor equipment for a nominal fee

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 135 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in HP HowHow dodo wewe taketake actionaction towardstowards thatthat Sustainability vision?vision?

•Joining you today is a group from HP’s DeskJet design division – Product Stewards, Engineering and Customer Assurance Managers – looking at product and packaging recycling strategies

•Our biggest challenge: translating the vision into action at the individual product level, while balancing: •Our shareowners’ need for business results •Our customers’ need for the best products.

•However, we are starting to see some changes in the business environment that are providing more tangible motivation for our organization…

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 136 www.onlineeducation.bharatsevaksamaj.netThreeThree trendstrends wewe www.bssskillmission.in seesee inin thethe DeskJetDeskJet businessbusiness environmentenvironment Today Future Environmental leadership “because we Inundated with information and choices, need it to get “because it’s consumers will rely heavily on brand as a good the right thing decision making guide. Likewise, successful to do? employees companies will have a brand that employees and market are enthusiastic about. share” Direct financial impact Environmental Governments are increasingly passing financial Environmental legislation making what were external impact- only costs will be environmental costs internal: take-back when we do internalized in requirements, waste fees, energy something the firm…and usage limits, etc. “wrong” the product Customer needs and wants Customers will Environmental Environmental impact will rise in importance as purchase more impact is a low- a purchase criteria, explicitly for institutional ranking customers and implicitly for consumers. As from Purchase consumers retire more electronic goods, the companies that criteria disposal of packaging and product will become they trust anwww.bsscommunitycollege.inWWW.BSSVE.IN important part of to www.bssnewgeneration.intal customer experience. www.bsslifeskillscollege.in 137 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in HP Sustainability ChallengesChallenges –– whywhy wewe areare herehere todaytoday

• How do we drive sustainable thinking throughout the enterprise?

• How can we make intelligent trade-offs between long- term sustainability and short-term business concerns?

• How do we leverage sustainable products and business models into competitive advantage?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 138 www.onlineeducation.bharatsevaksamaj.netSmallSmall GroupGroup Activity: Activity: www.bssskillmission.in AnalyzeAnalyze thethe followingfollowing setset ofof principlesprinciples

Guiding Principles at Toyota

1) Be a company of the world 2) Serve the greater good of people everywhere by devoting careful attention to safety and to the environment 3) Assert leadership in technology and in customer satisfaction 4) Become a contributing member of the community in every nation 5) Foster a corporate culture that honors individuality while promoting teamwork 6) Pursue continuing growth through efficient, global management 7) Build lasting relationships with business partners around the world www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 139 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ApplicationApplication AssignmentAssignment

Identify ways that your own work has (or has not) changed in the last five years as a result of sustainability issues

Identify one co-worker whose job is likely to have been transformed by sustainability issues and one whose job is unlikely to have changed – Interview each to find their own view on what has or has not changed

Analyze the data and draft a vignette if appropriate – What do these data from this small sample tell us about the larger issues of sustainability in your organization?www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 140 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in SummingSumming UpUp

Corporate Purpose is Not Pre-determined Management Assumptions Affect Nature of Stakeholder Interactions—Back to McGregor Are we Entering an Era of “Transparency”? – Expectations for corporate citizenship rising – Management’s challenge: Engage and manage mixed motive stakeholder relations for mutual gain – internally and externally – Stakeholders’ challenge: Engage and manage corporate relations for mutual gain – Broader challenge of isolated innovations versus sustained transformation www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 141 www.onlineeducation.bharatsevaksamaj.netThe Changing www.bssskillmission.in Workforce: Implications for Work & Family Integration

Module 4 – Course 15.343 Managing Transformations in Work, Organizations, and Society

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 142 www.onlineeducation.bharatsevaksamaj.netCheck-In From www.bssskillmission.in Module 3: Strategic Partnerships Application Assignment:

• Pick a Strategic Partnership relevant to your work setting (not labor-management)

– What lessons from labor-management partnerships apply?

– What are the two or three key changes in management practice needed to successfully manage various types of strategic partnerships over an extended period of time? www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 143 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Today’s Guests

• Beth Boland, Partner, Mintz, Levin, Colin, Ferris, Glovsky & Popeo

• Mark Byers, Director, Student Life Counseling, Harvard Law School

• Mona Harrington, Program Director, MIT Workplace Center

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 144 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Today’s Objectives

• Explore How Work and Family are Related • Discuss “State of the Art” Practices • Outline the Elements of a Systemic Approach • Focus on What Managers can and need to do! • Discuss Practices in Your Organization— today and your vision 5 years from now • Identify Changes Needed to Get There

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 145 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in “I wish there were more flexibility, especially in our production environment... this year alone I lost three excellent employees. They had each become single parents for one reason or another...,It just breaks my heart. Traditionally production has been a male-oriented thing, where one partner stays at home with the children and the other one works crazy schedules…the world is changing, but the schedule is not.”

Source: P. Monique Valcour and Rosemary Batt, “The Family-Responsive Employer: A Definition and Empirical Test,” in Phyllis Moen, Couples and Careers: Adaptive Strategies over the Life Course,

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 146 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Our View: A Systemic Strategy

• A Dual Agenda: Integrating Work AND Family Life • A Holistic Approach – Individuals & Families – Employers – Unions and Professional Associations – Community Groups – Government--local, state, and federal

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 147 www.onlineeducation.bharatsevaksamaj.netA Holistic www.bssskillmission.in Approach to Work & Family Responsibilities

Governments Firms

Work Family

Community Groups Unions & & Professional Intermediaries Assns. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 148 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Traditional Image of Work & Family

• A Male “Breadwinner” with a Wife at Home Attending to Family and Community Affairs

• Today less than 25% of all married families fit this image

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 149 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Visible Changes in the Workforce

• 60% women work • Women account for 48% of the workforce • 75% mothers with children work • 65% mothers with children under 6 work • Hours of work up 24% for married women; 8% for single mothers since 1969 • 25-30% of households provide elder care; projected to double in next 10 years

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 150 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in So, Why is it so Hard?

• Cultural Barriers to “Putting the Issue on the Table” – A Private Matter – A Family Matter • Piecemeal Approaches have Dominated--No Single Actor Can Solve the Problem Acting Alone

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 151 www.onlineeducation.bharatsevaksamaj.netHidden Assumptions: www.bssskillmission.in “The Ideal Worker”

• Hours of work signal commitment & productivity • Fulltime work, ready to move, critical to career development • Family care is women’s work and role • Family issues are private and personal--not the responsibilities of business www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 152 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Employers

• The First Group we Turn to for a Response

• Acting out of Self-Interest--to make it easier for more people to work more hours--produces: The Family-Friendly Employer

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 153 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Employer state of the art practices • Flexible hours 70%

• Part-time option (for some) 80-90%

• Child care 20%

• Paid time off for family reasons 25-39%

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 154 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Evidence: Practices in Use

• Considerable growth in “family friendly” practices on the books • Mostly for high level, scarce employees • But, consistent findings of: – Low use rates – Negative consequences feared if used www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 155 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in The Legal Profession as a Case Study

Expert Panel Beth Boland

Mark Byers

Mona Harrington

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 156 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Discussion Questions

• Discuss the current state of work and family practices and benefits in your work site.

• Outline the vision for work and family outcomes for your organization in five years

• List two most important changes in your organization needed to realize this vision www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 157 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

Moving Forward: Can we jumpstart a Collaborative, Systemic Approach?

Or Are we Doomed to Replicate the old Battle Lines ?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 158 www.onlineeducation.bharatsevaksamaj.netA Holistic www.bssskillmission.in Approach to Work & Family Responsibilities

Governments Firms

Work Family

Community Groups Unions & & Professional Intermediaries Assns. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 159 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Government Policy Agenda

• Paid Leave—flexible and linked to private practices • Reduced hours—flexibility in scheduling • Addressing Basic Economic Needs of Working Families – Living wage – Health coverage – Child care – Education and training • Employee voice—reform of labor laws • Creating State Work-Family Councils and a National Working Families Summit Source: Integrating Work and Family Life: A Holistic Approach, Sloan Foundation Work Family Policy Network, 2001. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 160 www.onlineeducation.bharatsevaksamaj.netWhat else www.bssskillmission.inis needed from Employers?

• Get to the root cause--work design-- challenge hidden assumptions • Work on changing the culture • Give employees & co-workers a voice in shaping policies, schedules, implementation • Work with other “actors” with a stake in the issue!

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 161 www.onlineeducation.bharatsevaksamaj.netUnions & Professional www.bssskillmission.in Assns: What Else is Needed?

• Organize, Recruit for Work and Family • Get more Women into Leadership Positions • Work in Coalition with Community Groups • Work Together with Local Employers • Encourage Experimentation in Public Policy • Build a Positive Workplace Culture • Support Quality Part-Time Work Policies www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 162 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Action Assignment

• Identify a policy in your organization that has been designed to address work/life issues – educate your self on the specific provisions or intent of the policy • Interview 2-3 people who should be able to benefit from the policy – in order to better understand how the policy works in practice (at least for this limited sample) • Be prepared to discuss lessons learned

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 163 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Summing Up

• Work with other actors--systemic approach • Challenge traditional, hidden assumptions • Put the dual agenda on the table • Involve the workforce--shared control • Develop a collaborative workplace culture • Experiment with local solutions

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 164 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

CourseCourse 15.343:15.343: ManagingManaging TransformationsTransformations inin Work,Work, OrganizationsOrganizations andand SocietySociety

MITMIT SloanSloan SchoolSchool ofof ManagementManagement

BethBeth I.Z.I.Z. Boland,Boland, Esq.Esq. Mintz,Mintz, Levin,Levin, Cohn,Cohn, Ferris,Ferris, GlovskyGlovsky andand Popeo,Popeo, P.C.P.C. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 165 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in CHANGECHANGE ININ WORK/LIFEWORK/LIFE ATTITUDESATTITUDES

•• 70%70% ofof allall menmen agesages 2121--3939 wantwant toto spendspend moremore timetime withwith familiesfamilies andand areare willingwilling toto sacrificesacrifice paypay toto dodo so*so* •• WorkWork--lifelife balancebalance isis concernconcern forfor lawyerslawyers withwith oror withoutwithout children:children: 71% of both men and women lawyers with children report work/life conflict 56% of men, 62% of women lawyers without children report work/life conflict** •• 15%15% ofof attorneysattorneys agesages 5151 yearsyears oror moremore havehave elderelder carecare responsibilities**responsibilities** * Source: 2000 Radcliffe PubPol Insititute www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in** Source: www.bsslifeskillscollege.in Catalyst 166 www.onlineeducation.bharatsevaksamaj.netTOPTOP REASONSREASONS www.bssskillmission.in FORFOR SELECTINGSELECTING CURRENTCURRENT EMPLOYEREMPLOYER

100% Females 80% Male s

60% 45% 42% 39% 43% 40% 34% 33%

20%

0% Work/Life Intellectua l Orga nization's Balance Challeng e Repu tation www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 167 www.onlineeducation.bharatsevaksamaj.netWORK/LIFEWORK/LIFE www.bssskillmission.in CONCERNSCONCERNS ANDAND ATTRITIONATTRITION

•• 90%90% ofof partpart--timetime womenwomen inin MassachusettsMassachusetts lawlaw firmsfirms reportedreported availabilityavailability ofof partpart--timetime optionoption affectedaffected decisiondecision toto come/staycome/stay atat firm*firm* •• 40%40% ofof allall womenwomen inin MassachusettsMassachusetts lawlaw firmsfirms whowho leftleft reportedreported partpart--timetime policypolicy and/orand/or implementationimplementation affectedaffected decisiondecision toto leave*leave* “Ripple effect”: 30% of those had never worked part-time

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in* Source: WBA Study 168 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in COSTSCOSTS OFOF ATTRITIONATTRITION –– LAWLAW FIRMFIRM ASSOCIATESASSOCIATES

•• 43%43% ofof menmen andand womenwomen associatesassociates leaveleave beforebefore thethe endend ofof 3rd3rd year*year* •• CurrentCurrent consensus:consensus: “hard”“hard” costcost ofof losinglosing midmid-- levellevel associateassociate == $200,000$200,000 -- $250,000**$250,000**

* Source: NALP www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in** Source: Altman, Weil 169 EVOLUTIONEVOLUTIONwww.onlineeducation.bharatsevaksamaj.net OFOF WORK/LIFEWORK/LIFE www.bssskillmission.in INITIATIVESINITIATIVES -- 1991*1991*

Pre-Stage I Stage I Stage II Stage III

STAGE COMPANIES

Pre-Stage I 62 (33%) Few policies, barely aware of issues Stage I 86 (46%) Several policies, but not a packaged response; seen mainly as a woman’s issue with a focus on child care. Stage II 36 (19%) Integration of policies, packaged response. Pre-Stage III 4 (2%) Most policies incorporate an holistic approach; innovative programs address gender equity, life cycle and community intervention.

*Source: Reference Guide to: Work-Family Programs www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.inFamilies and Work Institute 1991 170 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in DESIGNINGDESIGNING SOLUTIONSSOLUTIONS

OverarchingOverarching Principles:Principles:

•• Achieving work-life objectives will markedly improve attention and commitment of professional employees •• CEOs are the most powerful force in achieving work-life objectives •• The most effective approach is through cultural and organizational changes - not pinpoint problems/solutions •• To create enduring change, a multi-year work-life strategy is essential

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 171 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in DESIGNINGDESIGNING SOLUTIONSSOLUTIONS (cont’d)(cont’d)

CreatingCreating MeaningfulMeaningful Objectives:Objectives:

•• Include key professionals in defining the business case for a work-life effort at your firm •• Customize objective(s) considering your firm’s work environment, culture, and current status of work-life integration •• Sample Objectives To better understand the work-life and dependent care needs of the firm to develop a work-life strategy To improve the retention of professional employees

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 172 www.onlineeducation.bharatsevaksamaj.netDESIGNINGDESIGNING SOLUTIONS SOLUTIONS www.bssskillmission.in (cont’d)(cont’d) PossiblePossible ActionsActions andand InitiativesInitiatives forfor ConstructiveConstructive SustainableSustainable Change:Change: I. Communications and Dialogue Examples II. Assessment Examples III. Initiatives to Create Enduring Cultural Change A. Challenge and Reframe Underlying Assumptions B. Review and Revise Management Practices C. Review and Revise Work Design D. Participate in Knowledge Sharing and Benchmarking IV. Measurement and Evaluation www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 173 www.onlineeducation.bharatsevaksamaj.netBESTBEST PRACTICES:PRACTICES: www.bssskillmission.in DELOITTEDELOITTE && TOUCHE’STOUCHE’S WOMEN’SWOMEN’S INITIATIVEINITIATIVE AccomplishmentsAccomplishments • Initial firm-wide assessment with periodic re-assessments • Mandatory training on “Men and Women Working Together” • Work redesign efforts involving clients (e.g., 3-4-5 schedule) • Access to key visible work assignments • Flexible work arrangements formalized and promoted • Ongoing evaluation with customized metrics www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 174 www.onlineeducation.bharatsevaksamaj.netBESTBEST PRACTICES:PRACTICES: www.bssskillmission.in DELOITTEDELOITTE && TOUCHE’STOUCHE’S WOMEN’SWOMEN’S INITIATIVEINITIATIVE

LessonsLessons • Make sure senior management is front and center • Make an airtight business case for cultural change • Let the world watch you • Begin with dialogue as the platform for change • Use a flexible system of accountability • Promote work-life balance for men and women

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 175 www.onlineeducation.bharatsevaksamaj.netWOMENWOMEN www.bssskillmission.in ININ BUSINESSBUSINESS

WAGES 7.60 MBA ENROLLMENT 6.60 BUSINESS OWNERSHIP 5.88 LINE/STAFF RATIO* 5.60 KEYNOTE SPEAKERS 3.88 COMPANY SIZE 3.25 CORPORATE OFFICERS 2.78 CORPORATE BOARD SEATS 2.66 VENTURE CAPITAL 1.10 CHARITY FUND-RAISING CHAIRS 0.00 AVERAGE 3.95

* Line positions have profit-and-loss responsibility. Staff jobs provide support for line positions. Data: The Committee of 200 Annual Report on Women’s Clout in Business A score of 10 indicates parity. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 176 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

CourseCourse 15.343:15.343: ManagingManaging TransformationsTransformations inin Work,Work, OrganizationsOrganizations andand SocietySociety

MITMIT SloanSloan SchoolSchool ofof ManagementManagement

BethBeth I.Z.I.Z. Boland,Boland, Esq.Esq. Mintz,Mintz, Levin,Levin, Cohn,Cohn, Ferris,Ferris, GlovskyGlovsky andand Popeo,Popeo, P.C.P.C. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 177 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in KnowledgeKnowledge WorkWork && KnowledgeKnowledge Management:Management: IntegratingIntegrating ITIT && HumanHuman CapitalCapital inin thethe 21st21st CenturyCentury CorporationCorporation

Managing Transformations in Work, Organizations, & Society

15.343 – Spring 2002

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 178 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in CheckCheck In:In: ActionAction AssignmentAssignment • Here is last week’s action assignment: – Identify a policy in your organization that has been designed to address work/life issues – educate your self on the specific provisions or intent of the policy – Interview 2-3 people who should be able to benefit from the policy – in order to better understand how the policy works in practice (at least for this limited sample) – Be prepared to discuss lessons learned • What did you observe?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 179 www.onlineeducation.bharatsevaksamaj.netWelcomeWelcome toto Today’swww.bssskillmission.inToday’s GuestsGuests && IndustryIndustry ParticipantsParticipants

• Our Expert Panel – Larry Prusak, Exe. Dir., IBM’s Institute for Knowledge Management – Wanda Orlikowski, Professor, MIT Sloan School

• Industry Teams from: – Ford – Qualcomm www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 180 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Objectives:Objectives: KeyKey LearningLearning PointsPoints

• A Deeper Understanding of: – Role of Knowledge in the Economy and your Firms

– What Types of Knowledge are Critical to Success

– Role of IT in Knowledge Management

– Organizational Strategies for Using, Capturing, & Sharing Knowledge

– Your Role as a Knowledge Manager

• Food for Thought: Will human capital challenge finance capital’s power in the 21st Century Corporation?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 181 www.onlineeducation.bharatsevaksamaj.netStrategicStrategic CorporateCorporate www.bssskillmission.in Assets:Assets: AA BriefBrief HistoricalHistorical TourTour

• Pre-Industrial • Land, Minerals, Water

• Industrial Revolution • Large Pools of Capital

• Expanding Markets • Marketing, Management • Information Economy • Human Capital, Knowledge www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 182 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in AA NationalNational PolicyPolicy Issue:Issue: 21st21st CenturyCentury LiteracyLiteracy

“The ability to read, write, and compute with competence, think analytically, adapt to change, to work in teams and use technology”

Source: A Nation of Opportunity. Report of the 21st Century Workforce Commission, 2000. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 183 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in WhatWhat Knowledge?Knowledge?

• Physical: Healthy Bodies, Minds, & Families • Technical: Today’s “Basic Skills” • Analytical: Ability to Solve New Problems • Communications: Read, Write, Speak, Teach • Group/Team: Ability to Lead & Participate • Interpersonal: Interact with “Customers”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 184 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ThreeThree PuzzlesPuzzles fromfrom GMGM • 1980s: $50 Billion High Technology Strategy: – Only to still be the high cost manufacturer

• 1982: NUMMI as a Learning Strategy – 20 Year Knowledge Transfer Path from California: • To Eisenacht, Germany in 1996 • To Lansing, Michigan in 2000

• Saturn: 1985 Learning Laboratory – 2000: Isolated island of innovation; now getting reintegrated with GM www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 185 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in LessonsLessons LearnedLearned

• High Performance comes from Integration of Technology & Human/Organizational Systems • Learning/Transfer Occurs in Networks • Life Long Learning: Going Beyond Rhetoric Requires – Stable Funding—Boeing/IAM Fund – Partnerships Across Education & Industry – Supportive Organizations & Families – Learning Communities • Open Question: Will Human Capital Challenge the Power of Finance Capital in Knowledge Based Firms?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 186 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in KnowledgeKnowledge Management:Management: TheThe NextNext FrontierFrontier

Larry Prusak & Wanda Orlikowski

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 187 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ValueValue ofof KnowledgeKnowledge ManagementManagement

Value of knowledge management depends not on knowledge or on IT, but on the use of knowledge by an organization’s members

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 188 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in UseUse ofof KnowledgeKnowledge inin OrganizationsOrganizations Use of knowledge in organizations raises important issues, such as: –– powerpower –– cultureculture –– controlcontrol –– visibilityvisibility –– dependencedependence www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 189 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in IssuesIssues inin UseUse ofof Knowledge:Knowledge: PowerPower

Power in this firm is your client base and analytical ability. ... That is definitely the case in professional service firms. Now if I put all my information in a Notes database, I lose power… I’m trying to develop an area of expertise that makes me stand out in this firm. If I shared that with you, you’d get the credit not me, and I would lose.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 190 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in IssuesIssues inin UseUse ofof Knowledge:Knowledge: CultureCulture

What we hear is “The information is on Lotus Notes. It’s your responsibility to find it.” But two things predominate our culture. Everybody is very busy, we haven’t any time to think, let alone search through hundreds of databases. And we are a research culture, where the real work is “bench work.” So the perception is that if you are using IT, you are not doing something important.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 191 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in IssuesIssues inin UseUse ofof Knowledge:Knowledge: ControlControl

What makes me worried about using Notes is that I might be cited by someone who hasn’t talked to me first. I’m worried my information will be misconstrued, that it will end up in say, Wichita, Kansas, being cited “... as per Paul Brown in New York,” and used and relied on inappropriately. In Notes, I can’t retain personal control over how people use my information. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 192 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in IssuesIssues inin UseUse ofof Knowledge:Knowledge: VisibilityVisibility

There is a hesitancy in putting information in a Notes database because it becomes very public information. I’d be fearful that I’d put something out there and it was wrong, and somebody would catch it, and it would reflect badly on me.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 193 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in IssuesIssues inin UseUse ofof Knowledge:Knowledge: VisibilityVisibility

People are uncomfortable putting out their ideas because they’re afraid of having them shot down. There was one early incident where a scientist put an idea out on an R&D discussion database, and a VP wrote back something like “That’s inappropriate ...” The scientist was publicly embarrassed and this has intimidated others from posting their ideas.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 194 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in IssuesIssues inin UseUse ofof Knowledge:Knowledge: DependenceDependence

There is a lot of dependency on the knowledge databases and that's not entirely good. Sometimes you go into these databases, search for something, not come up with anything, and then feel like: “Oh god, what do I do now?” It can be paralyzing.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 195 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in KnowledgeKnowledge ManagementManagement inin PracticePractice • Value of knowledge management depends on how well an organization supports effective use of knowledge

• How does an organization deal with issues of power, culture, control, visibility, dependence? – incentives, rewards, norms, work designs, resources, processes, www.bsscommunitycollege.inWWW.BSSVE.INtraining, etc. www.bssnewgeneration.in www.bsslifeskillscollege.in 196 www.onlineeducation.bharatsevaksamaj.netTheThe GlobalGlobal DiffusionDiffusion www.bssskillmission.in ofof KnowledgeKnowledge-- DrivenDriven WorkWork SystemsSystems

• Structure • Primary, Secondary, Reverse

• Strategy • Piecemeal, Imposed, Negotiated

• Process • Knowledge Creations -- Virtual Knowledge as the Fragile Foundation for Global Diffusion

Source: “Knowledge-Driven Work: Unexpected Lessons from Japanese and United States Work Practices” (Oxford University Press, 1998) www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 197 www.onlineeducation.bharatsevaksamaj.netDiscussionDiscussion Task:Task: www.bssskillmission.in EnhancingEnhancing BuildingBuilding KnowledgeKnowledge Mgmt.Mgmt. SystemSystem

• Brainstorm: What are the top three critical knowledge bases/skills needed for success in your operation in the next five years?

• Do a Strategic Analysis – What IT resources are needed to support use of this knowledge? – What organizational & human resources are needed? – How well is this knowledge being used today? – What are the key barriers to use/capture of this knowledge? – What changes are needed to overcome these barriers? – Potential Partners: What external partners do you need to work with in order to be successful?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 198 www.onlineeducation.bharatsevaksamaj.netSummingSumming Up: Up: www.bssskillmission.in BecomingBecoming aa KnowledgeKnowledge LeaderLeader && ManagerManager • Redefine & Broaden Definition of Knowledge • Insisting on Basic “Literacy” in Education • Opening New Portals to Jobs--Career Planning • Life-Long Learning, NOT “School to Work” • Redefining Labor Costs as Human Capital? • Capturing, Sharing, Using Knowledge of Others • Building & Managing Partnerships

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 199 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in ActionAction AssignmentAssignment • Identify a two examples of knowledge resources that are critical to the operations in your workplace – One should be a critical knowledge resource that is well supported by the Information Technology infrastructure and valued in tangible ways by the organization – One should be a knowledge resource that is equally critical knowledge resource that is not well supported or valued • Analysis what would account for the differences observed

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 200 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in NextNext StepStep--NextNext WeekWeek

Going from Knowledge Workers & Knowledge Management to:

Integrating Technology and Social Features to Build Knowledge-Driven Work Systems

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 201 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

Managing Diversity for Business and Personal Success

Managing Transformations in Work, Organizations, and Society

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 202 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Key Issues for Today

• How do we gain competitive advantage from the diverse backgrounds, knowledge bases, and cultural experiences present in today’s workforce?

• What is the relationship between diversity and performance? Diversity and satisfaction?

• How can we manage diverse teams to product positive organizational and personal results?

• What are the elements of a systemic organizational approach to managing diversity?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 203 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Learning Objectives

• Identify the Elements of a Systemic Approach to Managing Diversity • Benchmark your Organization’s Efforts • Explore Your Role as a Manager of a Diverse Team • Develop an Action Plan for Building Skills for Managing Diverse Teams/Groups

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 204 www.onlineeducation.bharatsevaksamaj.netDiversity--Some www.bssskillmission.in Visible Elements

• Gender • Race • Ethnic • Age • Cross Cultural – look around!

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 205 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Some Hidden Aspects of Diversity

• Cognitive--how we approach problems • Discipline or Function--different knowledge; different solutions • Cultural--norms of interaction & communication • Multiple identities--woman, engineer, mother, project leader…..which one do others see? Which one comes out?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 206 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in The Rhetoric Today

“The Business Case” for Diversity – Talent Shortage – We need to reflect our customers – Diverse teams produce better results

Lew Platt, former CEO, Hewlett Packard

How did we get here?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 207 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in A Brief Historical Tour

• 1960s-70s • New Legal Requirements; Civil Rights Pressures; Affirmative Action

• 1980s • “Valuing Diversity”: Training Focused on Attitudes and Sensitivities

• 1990s-present • The Business Case: Expected to accelerate rate of progress

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 208 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Prior Evidence

• Legal/social pressures improved formal organizational HR practices but had little effects on attitudes, behaviors, or “subtle” discrimination

• Few sustained effects of “valuing diversity” training

• No consistent relationship between demographic diversity and team performance www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 209 www.onlineeducation.bharatsevaksamaj.netDiversity Research www.bssskillmission.in Network Project

• Industry-Academic Partnership – BOLD Initiative – Multi-university research Network – Field Studies in Companies • qualitative histories • quantitative analysis at team/group levels • Focus is on a “business case” analysis -- diversity-group process-performance outcomes

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 210 www.onlineeducation.bharatsevaksamaj.netElements in a www.bssskillmission.in Systemic Model: Benchmarking

• Commitment from the Top • Commitment embedded in Org. Values & Strategies • Dedicated Resources--Accountable Prof. Staff • Management Accountability-Link to Perf. Reviews • Broad Communication-Info Exchange • Strong Fairness/Compliance System/Procedures • Diversity Training that Reaches All--Effectively • Mentoring & Career Development Supports • Diversity Committee/Identity Groups • Evaluation, Measurement of Effects/Progress www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 211 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

Fannie Mae as a Benchmark?

Let’s take a look….

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 212 www.onlineeducation.bharatsevaksamaj.netBeyond “Best www.bssskillmission.in Practices” Human Interactions • Perspectives: – Legal Requirement – Labor or Product Market Necessity – Opportunity for Learning • Skills & Capabilities for Leading & Working in Diverse Settings

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 213 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

The Research Model The Effects of Diversity on Group Processes and Outcomes

Organizational Culture Business Strategy Human Resource Policies

Diversity Group/Team Processes Outcomes

Cultural Communications Performance Demographic Conflict Satisfaction Technical Cohesion Turnover Cognitive www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 214 www.onlineeducation.bharatsevaksamaj.netEvidence--Building www.bssskillmission.in from the Studies • Historical Context: Diversity achieved through sustained effort, external pressure, mgmt. commitment • External pressure necessary, but not sufficient--a learning/integration perspective also needed • HR systems/decisions must sustain diversity through critical transitions in business--growth, mergers, layoffs, top management shifts, etc. • Group dynamics and leadership are critical processes that determine whether diversity produces positive or negative results: – communications – conflict management – cohesion

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 215 Additionalwww.onlineeducation.bharatsevaksamaj.net Considerations: www.bssskillmission.in Alternative “Perspectives” Toward Diversity”

• Legal Requirement

• Labor or Product Market Necessity

• Opportunity for Integration & Learning

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 216 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Four Case Studies

• Two Information Processing Firms • A Financial Services Firm • A Retail Chain

All large firms with national reputations for a longstanding commitment to diversity

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 217 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Case 1: Information Processing Firm

• Different types of diversity have different effects on group processes: – gender & information diversity--positive – racial & educational diversity --negative • Training focused on management of group processes reduce these negative effects • Constructive group processes have positive effects on diversity • Business strategies focused on customer service enhanced the positive effects of diversity and of group processes on performance--competitive organizational culture reduced the positive effects of diversitwww.bsscommunitycollege.inWWW.BSSVE.INy www.bssnewgeneration.in www.bsslifeskillscollege.in 218 www.onlineeducation.bharatsevaksamaj.netCase 2: Financial www.bssskillmission.in Service Branches

• Few direct effects of diversity on performance • Effective group processes positively associated with sales revenue, productivity, and customer sat. • No evidence that group processes mediated the diversity—performance relationship • Some evidence to support the “integration & learning” perspective as a moderator of racial diversity and performance • Follow-up study of specific teams planned

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 219 www.onlineeducation.bharatsevaksamaj.netCase 3: Information www.bssskillmission.in Processing Firm

• Team Level: No significant negative or positive effects of team diversity on either team processes or performance when teams were analyzed without regard to organizational context.

• District Level: Mixed Evidence: – Greater gender and ethnic diversity associated with higher team cooperation – In some instances, regions with more diversity performed better. In other instances, they performed more poorly.

• Additional analyses at the district level revealed that the effects of team diversity depend upon the amount of diversity within the district. – Service Teams: Team gender diversity improves team processes & performance in districts with high gender diversity – Sales Teams: Team ethnic diversity improves team processes and performance in districts with high ethnic diversity

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 220 www.onlineeducation.bharatsevaksamaj.netCase 4: Branch www.bssskillmission.in Stores of a Retail Chain

• Focus was to test relationship of workforce diversity—customer diversity link • No relationships between workforce and customer diversity observed • Some small, positive effects for racial and gender diversity on sales performance. But this was outweighed by positive effects of percent male and percent white on performance

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 221 www.onlineeducation.bharatsevaksamaj.netPreliminary Conclusions: www.bssskillmission.in Is the glass half full or half empty?

• More evidence for lack of significant direct diversity performance relationship • Some evidence that racial (ethnic) diversity may still have some negative effects on group processes or performance • Negative effects may be reduced or eliminated by training focused on group processes • Some support for an “integration & learning” perspective • Some indications that diversity in the larger organization helps diverse groups perform well www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 222 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Evidence--Building from the Studies

• Historical Context: Diversity achieved through sustained effort, external pressure, mgmt. commitment • External pressure necessary, but not sufficient--a learning/integration perspective also needed • HR systems/decisions must sustain diversity through critical transitions in business--growth, mergers, layoffs, top management shifts, etc. • Group dynamics and leadership are critical processes that determine whether diversity produces positive or negative results: – communications – conflict management – cohesion www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 223 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Some Managerial Implications

• Modifying the “Business” Case (next slide)

• Importance of Group Process Training

• Need for a more Analytical Approach to Diversity Management

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 224 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Revised Statement of the “Business Case” for Diversity

Diversity is a reality in both labor markets and product markets today. To be successful in working with and gaining value from this diversity requires a sustained, systemic approach and commitment, a perspective that views diversity as an opportunity for all in the organization to learn from each other, a supportive and cooperative organizational culture, and group leadership and process skills required for effective group functioning.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 225 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in The MIT Case

• President Vest: Commitment with Understanding – Visible leader in legal battle for diversity in admissions – Financial support for minority hiring; created Campus Committee on Race Relations; supports women’s study… – Understands need to work to gain value from diversity

“The tensions introduced by diversity into the academic community are very real. We need to find ways for our differences of experience, culture and perspective to enrich, rather than divide our community…”

Source: 1992-93 President’s Report

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 226 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in MIT, contd.

• Mgmt. Accountability--still working on this! • Communications--Active MLK day; Women in Science • Compliance Systems--very decentralized to departments • Training--voluntary--some good examples; low coverage • Mentoring/Career Supports--very decentralized; spotty • Diversity Committees/Identity Groups: CCRR; Women in Science; Women in Engineering; Women in Sloan… • Evaluation-Measurement--studies underway on undergrads, faculty, and staff--part of the MIT culture • Informal Culture and Process Skills: Still Problematic

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 227 www.onlineeducation.bharatsevaksamaj.netQuestions www.bssskillmission.in for Discussion

• What are the 2-3 strongest aspects of your organization’s diversity efforts? • What aspects are most in need of improvement or development? • How skilled are teams/groups in gaining value from their diversity? • What 1-2 steps can you take to increase the potential for the groups/teams you work with to gain value and personal satisfaction from their diversity?

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 228 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Summing Up: Managerial Implications

• Difficulty of testing the “business case” rhetoric-- lack of data; gatekeeper resistance

• Need to shift from “business case” rhetoric-- evidence does not support that simply increasing diversity will automatically or naturally translate into better performance

• Evidence suggests it takes conscious organizational/ managerial actions, a systemic approach, to translate diversity into positive organizational and personal outcomes

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 229 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Actionable Implications/Changes Needed

• Stop using or change “Business Case” rhetoric • Educate top management regarding need for sustained commitment--consequences of failure to do so as businesses go through crises & build systems that protect against top management shifts in commitment • Shift training from “valuing diversity” to building skills in leading and participating in diverse groups/teams • Demand the data--be more analytical!

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 230 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Action Assignment

• Discuss with 2-3 other people the current state of diversity with respect to gender and race in your organization. Try to do so with a mix of people of different races and men and women. Consider the following questions: – Is your organization taking a systemic approach to promoting and managing gender and racial/ethnic diversity? What are its strengths/weaknesses? – What type of “diversity training is provided? Does it focus on the group process skills and leadership needed to translate diversity into positive organizational and personal results? How effective it is? – What is your vision for how diversity should be managed in your organization in the future? www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 231 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

Transforming Regional, National, & International Institutions

Managing Transformations in Work, Organizations, and Society

Today’s Guests: Annette Dixon, The World Bank John Grierson, The Kennedy School of Government

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 232 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Today’s Objectives

• Place Public Service in Historical Perspective

• Explore New Roles for Government Agencies

• Understand Challenges in Managing Change in Government Organizations

• Explore Strategies for Making Public Service an Attractive Career Option

• Explore Role of “Customers” as Partners in Transforming Government Organizations www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 233 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Public Service over the Decades

• Depression-1950s: A Respected, Secure Job • 1960s: Kennedy, Space, Poverty…A Career with a Strong Social Mission • 1970s: Vietnam, Watergate— • 1980s: Reagan/Thatcher attacks on “big government” Public servants as “bureaucrats • 1990s: “Reinventing Government”? • Currently: Reawakening of Importance of Public Service – September 11th –Enron – Globalization—Development, Employment Stds. www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 234 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Successive Generations of Reform

• Landed Gentry Patronage System

• Patronage System Civil Service

• Civil Service Reinventing Government

• Reinventing Government ??

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 235 www.onlineeducation.bharatsevaksamaj.netGovernment: www.bssskillmission.inSome Traditional Views • Regulator—protecting rights • Mediator—balancing interests • Service Delivery—providing common services where markets fail (defense, environment, etc.) • Separate-autonomous actor

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 236 www.onlineeducation.bharatsevaksamaj.netSome Alternative www.bssskillmission.in Views of Government • Partner—public private partnerships • Complement to market and private institutions • Service provider—with customers • Learning organizations—seeking to transform internal practices and learn from private sector experiences • Model employer

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 237 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Case Examples

• Today’s Guests:

Annette Dixon, The World Bank

• John Grierson, The Kennedy School of Government

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 238 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Discussion Questions

• What can be done to encourage young people to see government service as an attractive career? – We will those in government roles and and studying government to give short recruitment speeches (2 minutes each).

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 239 www.onlineeducation.bharatsevaksamaj.netAdditional www.bssskillmission.inCase Example: Aerospace Industry • End of the cold war, rise of global competition, acceleration of new technology • Monuments and misalignments • Islands of success • Lean enterprise value at three levels • Value creation at the level of an industry and its institutions

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 240 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Lean Enterprise Value: Insights from MIT’s Lean Aerospace Initiative (Palgrave, 2002) Co-Authors: Earll Murman Thomas Allen Kirkor Bozdogan Joel Cutcher-Gershenfeld Hugh McManus Deborah Nightingale Eric Rebentisch Tom Shields Fred Stahl Myles Walton Joyce Warmkessel Stanley Weiss Sheila Widnall www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 241 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Value Creation Process

Value Value Value Identification Proposition Delivery

Adaptation

Dynamic and iterative

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 242 www.onlineeducation.bharatsevaksamaj.netValue Creation www.bssskillmission.in and Levels of Enterprise

Value Phases

Value Value Proposition Value Delivery Identification Enterprises

Program/ Most lean principles Platform and practices have been focused here

Corporate Opportunities Government

National International

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 243 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Enterprise Stakeholders

Acquirers/ End Users/ Retail Distributors Customers

Shareholders Strategic Value Phases Partners

Value Value Value Identification Proposition Delivery

Workforce Suppliers

Unions/ Society Associations

www.bsscommunitycollege.in www.bssnewgeneration.in www.bsslifeskillscollege.in Note:WWW.BSSVE.IN “C ustomer Acquirers” in Aerospace would be comparable to “Dealers” in the Auto Industry 244 Enterprisewww.onlineeducation.bharatsevaksamaj.net Example: www.bssskillmission.in JSF Program

Centralized Control Rapid Decision Making

BAE SYSTEMS

NG ACS JSFPO Decentralized Flexible Execution JSF Repositioning Team LM Major n Aero Critical s io Supp s m liers e is t s M y LMIS le S ic s h m e te Status at a V s World Class Tr y ain S Glance Metrics in frame Team g Support Air

www.bsscommunitycollege.in www.bssnewgeneration.inSou rwww.bsslifeskillscollege.ince: Tom Burbage, Lockheed WWW.BSSVE.IN Martin Aeronautics 245 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Leadership Skills for the 21st Century

Managing Transformations in Work, Organizations, and Society

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 246 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Today’s Objectives

• Discuss Your Favorite Leaders—what do they have in common?

• Examine the Sloan Leadership Model

• Learn from leading-edge research and practice

• Use 9-11 as Case Study of Crisis Leadership

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 247 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Warren Bennis on Leadership

“While leaders come in every size, shape, and disposition-- short, tall, neat, sloppy, young, old, male, and female--there is at least one ingredient that every leader I talked with shared: a concern with a guiding purpose, an overarching vision. They were more than goal-directed. As Karl Wallenda said, ‘Walking the tightwire is a living; everything else is waiting.’

Leaders have a clear idea of what they want to do--personally and professionally--and the strength to persist in the face of setbacks, even failures. They know where they are going, and why. Senator Howard Baker said of President Reagan, whom he served as Chief of Staff, ‘He knew who he was, what he believed in, and where he wanted to go.’ ”

– Source: Bennis, “Managing the Dream: Leadership inWarren the 21st Century.”

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 248 www.onlineeducation.bharatsevaksamaj.netFive Core Leadership www.bssskillmission.in Capabilities: Adapted from the “Sloan Model”

Visioning Enabling

Analyzing Inventing Relating

Adapted from: D istributed Leadership Workshop Group, Deborah www.bsscommunitycollege.in www.bssnewgeneration.in www.bsslifeskillscollege.in WWW.BSSVE.INAncona, Tom Malone, Wanda Orlikowski, Peter Senge – July 2001 249 www.onlineeducation.bharatsevaksamaj.netFive Core Leadership www.bssskillmission.in Capabilities: Adapted from the “Sloan Model”

• Visioning – Fostering individual and collective aspiration toward a shared vision • Analyzing – Sense-making and strategic planning in complex and conflictual settings • Relating – Building relationships and negotiating change across multiple stakeholders • Inventing – Inventing new ways of working together – social and technical systems • Enabling – Ensuring the tools and resources to implement and sustain the shared visions Adapted from: D istributed Leadership Workshop Group, Deborah www.bsscommunitycollege.in www.bssnewgeneration.in www.bsslifeskillscollege.in WWW.BSSVE.INAncona, Tom Malone, Wanda Orlikowski, Peter Senge – July 2001 250 Keywww.onlineeducation.bharatsevaksamaj.net Elements in www.bssskillmission.inthe Sloan Leadership Model

• Catalyzing Action – Change & implementation – An ongoing process of individuals working interdependently— not a single position or person

• Contingent – Each context and historic moment is, in important respects, unique

• Change Signature – There is no one way to be a leader—your leadership signature must fit your values, competences, and style

Bottom Line: Leadership requires integrity and courage www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 251 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Selected Leadership “Disconnects”

Visioning Enabling

Analyzing Inventing Relating

• Imposed vision

• Acting on assumptions – not data

• Discounting or disregarding key stakeholders

• If it’s not broke, why change?

• Forced internal competition for resources www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 252 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Modes of Learning about Leadership

• Cognitive Learning

• Modeling Others

• Practice

• Feedback

• Reflection--Learning from Experience www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 253 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Leading Edge Theory and Practice

Special Guest: Robert Thomas

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 254 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Crisis as Context

• “As weather shapes mountains, so problems make leaders” (Warren Bennis) • Leaders use their experience to “grow in office” – Teddy Roosevelt: Described as a “clown” before becoming president – According to Walter Lippman, FDR was “a pleasant country squire who wants to become president” • Adversity & failure are laboratories for learning www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 255 www.onlineeducation.bharatsevaksamaj.netCrisis Leadership www.bssskillmission.in Principles: Anne Stevens, Ford Motor Company on Response to 9-11 • Focus on it--set aside all other issues • Take Charge but seek alternative perspectives/ideas • Be Visible • Communicate--frame the issue(s) clearly--How should people interpret, think about the event? • Ask others to support a common effort • Prepare for negative/backlash reactions-crises bring out the best and the worst in people • Plan for returning to normal activities--ask what needs to change; what should continue as before? • Learn from the experience--do a review; personal & organizational www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 256 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Examples from History

• WWII: The War Labor Board • Kennedy and the Cuban Missile Crisis • James Burke, J&J’s Tylenol Crisis • Saturn’s Vehicle Replacement • Aaron Feuerstein, Malden Mills Fire • Ford/Firestone SUV/Tire Debates • Leadership from the Grass Roots: – Gandhi, – Caesar Chavez and California Farm Workers – Civil Rights Movement – Anti-war Movement in Vietnam era...

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 257 Leadingwww.onlineeducation.bharatsevaksamaj.net Large-Scale www.bssskillmission.in Systems Change

• Relationship-Centered • Work-Process- Systems Change Initiatives Centered Systems – Strategic Alliances Change Initiatives – Joint Ventures – Taylorisim, Industrial – Labor-Management Engineering and Work Partnerships Redesign – Customer-Supplier – Socio-Technical Systems Partnerships Redesign • Outcome-Centered – Worker Participation and Systems Change the Human Relations Initiatives Movement – Quality Initiatives (Total – Team-Based Work Quality Management, Six Systems Sigma, etc.) – Lean Initiatives (Lean Manufacturing, Lean Enterprise, etc.) www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in– K nowledge www.bsslifeskillscollege.in Management 258 www.onlineeducation.bharatsevaksamaj.netLeading Large-Scale www.bssskillmission.in Systems Change (cont.)

• Structural, Policy and • Technology-Driven Market-Driven Systems Change Systems Change Initiatives Initiatives – Information Technology – Organizational (Personal Computers in Restructuring the Workplace, – Process Re-engineering Enterprise Resource – Mergers and Acquisitions Planning Systems, e- – Privatization business, etc.) – Regulation and De- – Material and Method- Regulation of Markets Driven Transformations – Research and Development Commercialization www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 259 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in Action Assignment

• Identify an individual who has served as a mentor for you or whose leadership skills you admire – Conduct an interview (in person or by phone) around 1-3 core leadership dilemmas that this person has faced, the ways they addressed the dilemmas and lessons learned.

www.bsscommunitycollege.inWWW.BSSVE.IN www.bssnewgeneration.in www.bsslifeskillscollege.in 260 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

Passing the Point of No Return:

Accelerated Implementation of a Lean Manufacturing System

By Joel Cutcher-Gershenfeld, MIT

Note: The names of organizations and individuals have been masked for confidentiality while the draft is under review. T his is not for circulation or distribution in any form – it is only for pilot use at MIT for educational, feedback and assessment purposes. The study neither represents what is purely “best” or “worst” practice – it is a presentation of complex system realities in order to help depend understanding of these issues.

Introduction and Overview

The Riverdale Assembly Plant of the Autoco Company is in the process of passing what can be thought of as the point of new return in the implementation of the Autoco Manufacturing Systems (AMS). For many individuals at all levels of the organization it would be harder to return back to the mass production way of operating than it would be to continue in the implementation of lean manufacturing principles and practices. For example, as one area manager commented, “a year ago I would have fought you tooth and nail if you wanted to take away my safety stock; now, I would fight you just as hard if you tried to put it back in.” Similarly, an hourly team leader commented, “I thought long and hard before deciding to seek the team leader position. I really wasn’t sure if it was consistent with my role as an alternate committeeperson for the union. Now that I am in the role, however, I can’t imagine not having team leaders in the plant.”

This is a pivotal situation in the auto industry. In North America there are some new auto plants that have been established from the outset with new, ”lean” manufacturing systems. Commonl y termed “greenfield” plants since they are typically build in open green fields,WWW.BSSVE.IN these plants often benefit from having newly hired workforces and management teams all trained to operate the new manufacturing system. Most Japanese “transplants” (Japanese owned facilities established in North America) are greenfield plants. They utilize lean principles and practices, such as, a team-based operation, just-in-time delivery of components, worker-led statistical quality control, preventative maintenance, and material flow. However, most of existing North American auto plants are not like this. They are termed “brownfield” plants, with most having operated for many decades on the basis of a mass production work system. The challenge facing Riverdale and these other plants is to transform their operations in ways that will allow them to achieve the quality, safety, cost, flexibility and other benefits enjoyed by the newer plants – while still maintaining production and attending to historical traditions and practices.

www.bsscommunitycollege.in www.bssnewgeneration.in www.bsslifeskillscollege.in 261 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

Historical Context

The Riverdale plant dates back more than half a century, with the workforce represented by the Metal Workers Union (MWU). The plant population has fluctuated over the years with a peak of over 7,000 employees and a current payroll of around 3,500 employees.

There is a long history of joint, union-management activities at Riverdale, beginning with the joint skilled trades apprenticeship program and the joint safety program, which have been in place for many decades, it was not until the early 1980s that joint activities expanded to include Worker Participation (WP) and joint training. The Worker Participation Groups (WPGs) were voluntary, with one in each department of a plant. The joint training activities were initially begun to serve displaced workers laid off from the auto industry, but quickly expanded to include training programs for active workers. In the early 1990s a Total Preventative Maintenance (TPM) initiative was also begun on a joint basis. The mid 1990s saw the first program to involve hourly production workers in the design and development of a new car model, which led to notable improvements for some components.

Despite this long history of joint activities, there were many complex tensions in the Riverdale plant. For example, during the mid 1990’s there was a world-wide restructuring of Autoco under which many of separate joint activities for safety, worker participation, preventative maintenance, quality and other managers were all centralized. Instead of having separate joint governing committees for each activity this plant and others in this company were urged to combine the activities under the auspices of a single, plant-wide joint steering committee. Though there was a clear logic to support the move, most of the champions of the joint activities experienced the shift as reduction in commitment to their individual initiatives.

Also, the plant is located in an old industrial area, with a highly diverse workforce. In the late 1990s, a series of sexual harassment lawsuits served as a “wake-up call” to union and management leadership alike. The resulting settlements involved extensive training in diversity and respect for the entire plant population as well as the establishment of a plant-wide diversity council. Initial Launch ofWWW.BSSVE.IN a Lean Manufacturing System It was during the mid to late 1990’s that the plant first began implementation of the Autoco Manufacturing System (AMS) – a version of lean production developed by this company. In 1996 a set of union and management AMS coordinators were trained. In 1997 the entire plant was shut-down for a plant-wide “town hall” meeting in which management leaders, projected on large video screens, announce the launch of the Autoco Manufacturing System. The body shop was selected as the initial pilot implementation area, with extensive resources concentrated on the training of newly formed Continuous Improvement Teams (CITs). A central Plant Implementation Team (PIT) was established with union and management representation.

In 1998 the plant sought to expand the effort to other parts of the plant, including the engine line, the paint shop, and the trim/final assembly areas. The central Plant Implementation Team was disbanded – with the members each assigned to separate departments. Unfortunately, there were a series of management personnel moves

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around the same time that led to a nearly complete turnover of the Plant Operating Committee, including the Manufacturing Manager, some of the Area Managers responsible for the production departments and Managers responsible for Human Resources, Quality, Maintenance, Finance and Material Handling.

When a new plant manager arrived in 1999, he found newly forming Continuous Improvement Teams around the plant, but without many resources devoted to supporting the teams. For example, weekly team meetings would be held, but there were few mechanisms to handle requests for information, maintenance support and other forms of assistance from the teams. The many former joint activities had been combined into a single forum, but each only had enough time to give a brief status report before some “hot” issue would take over the agenda in the meetings. The members of the Plant Implementation Team were feeling isolated in their respective departments. Front-line supervisors and superintendents were told to become more participative managers, but the pressure to “make the numbers” in production were undiminished. Throughout the plant, people who had built up their hopes for the new initiative were disappointed by the results – a “hope/heartbreak” cycle all too familiar to management and labor alike.

Accelerated Implementation of AMS

Two related, pivotal events took place in the year 2000. First, the plant was awarded a new model to replace its current product – with the launch of the new model scheduled for in 2003. Second, the plant was picked to be one of a select group of plants (spanning all the major product lines of the company) in which implementation resources would be concentrated to accelerate the implementation of the Autoco Manufacturing System. This would be a test as to whether a lean production system could be implemented in an accelerated way in a brownfield plant.

The first responses just involved an intensification of previous activities. A training “bubble” of workers were hired to back-fill for different areas of the plant as the entire workforce was training in group process skills, basic equipment maintenance, and a reinforcement of the sexual harassment and diversity training.

While there were still many of the voluntary Worker Participation (WP) program groups in the plant,WWW.BSSVE.IN the focus shifted to Continuous Improvement Teams (CITs) with a mandatory half-hour meeting per week. The new plant manager was under pressure from some corporate executives to move the plant quickly to an entirely team-based structure. He resisted, however, stating that the maintenance and other support resources could only provide 16 new teams with the level of support needed.

Working together on a joint basis, the union and management leadership reached an agreement to establish Team Leaders for newly established CITs. There were not, however, sufficient resources to hire additional Team Leaders for all the CITs. There were some new hires, but others moved into these roles from existing positions in the factory, such as repair and inspection positions. The need to establish the Team Leader role had long been recognized by union and management leadership, but there were always political pressures associated with this concept (Would the Team Leaders just become a “straw boss?” Would the restructuring the existing positions take away highly preferable jobs?).

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The union and management leadership attended a lean “boot camp” run by the central corporate AMS office which included various simulation exercises, briefings and the chance to “shadow” team leaders for a few hours in lean manufacturing settings. As one Area Manager reported, “the boot camp was a real eye opener.”

Understanding the Value Stream

In addition to accelerating previous activity, there were new initiatives. First, the plant conducted a value stream map in the motor line area. This highlighted certain “constraint” operations that were bottlenecks in production. As part of this process, the hourly and salaried workforce conducted a series of “waste walks,” identifying over $60 million in potential improvement opportunities. As CITs begain to address some of these opportunities parts of the production line were changed – with in-process inventory removed and the overall “footprint” of the operation reduced. As the plant’s manufacturing manager observed, “We soon realized that we had to re-do the value stream map. With each improvement, the operation changed and the old map no longer applied. We ended up revisiting the value stream map every two or three weeks in some areas.”

As the value stream method spread to other parts of the plant, a growing number of suggestions emerged to change line-layouts – from hourly and salaried employees. Where the changes had a potential impact on jobs, the local union and management leaders become directly involved. Although a potentially controversial situation, the tensions were somewhat reduced when an early redesign effort ended up creating new positions in the plant in which it was established that the “kitting” of certain parts could be brought into the plant and done by employees on partial disability leave. This represented a net gain of jobs for the union, a constructive employment opportunity for certain employees, and an aid to efficiency for management.

A parallel set of value stream maps were conducted for the plant as a whole – covering external suppliers and delivery systems. The plant-wide value stream map was integrated with the new product development efforts. It quickly became clear that the “lean” requirements of the new product were going to be difficult to achieve given the geographic spread of the supply-chain. This led to a unique plant proposal, which was for the creationWWW.BSSVE.IN of supplier park adjacent to the plant. Constructing the proposal was a delicate process. The corporate Purchasing function initially resisted the idea as cost prohibitive. The plant and the new product engineers had to construct a business case regarding the benefits associated with the additional lean capability. Concurrently they had to meet with city officials to address a range of tax abatement and site improvement issues. Key executive champions at the Director, Executive Director and Vice President levels were all involved in this effort, which culminated in the 2001 joint announcement with the city of the planned supplier park.

Bridging across the value stream were over a dozen design teams, many of which reached out to actively engage production operators and managers. The focus was on ensuring the manufacturability of the new designs. There was some variation across the design teams in the lever of involvement of manufacturing, as well as some variation in the level of understanding of lean production principles. While the level of integration does represent important progress, there is not an enduring set of mechanisms

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designed to ensure that this type of upstream manufacturing involvement characterizes all product development efforts.

During 2001, the implementation of new material flow systems was significantly accelerated. This included the establishment of “marketplaces” for large components and commodity items, as well as line-side racks and other storage set-ups to ensure minimal in-process inventory and ergonomic presentation of parts and components. Pressure was also brought to bear on external suppliers to ship smaller batches on more of a “just-in-time” basis, with some even delivering parts using what is termed “in-line vehicle sequencing (ILVS). Unfortunately, there was not a direct correspondence between the suppliers who shifted their operations and the parts of the plant changing its material flow operations. As a result, some suppliers ended up having to sort through the increased cost of delivering many small batches that the relevant area of plant couldn’t fully utilize. As well, other parts of the plant were ready for this sort of support from suppliers, but the suppliers were not ready to provide it. Even where there was a match between the internal plant flow capability and the external supplier flow capability, it did not always match the areas where the new Continuous Improvement Teams (CITs) and Team Leaders had been established.

Despite the many complications in coordinating material flow improvement efforts, the plant has made significant improvements in reducing the number of days of inventory on hand. It has also achieved the highest rating for material flow practices in an assembly plant – based on the internal, annual corporate assessment process.

A key innovation in the plant has been the development of a systematic method for addressing quality concerns prior to making the shift to a full “andon” system, which are a series of buttons by each work station where workers can press a yellow “caution” or a red “stop” button to signal quality concerns. The red button stops the full assembly line – so having a transitional system is essential since the result otherwise could be highly disruptive to production. The key to the transition involves a shift from having inspectors at the end of each production line to having line operators responsible for their own first- time through quality.

Infrastructure, Stability, and Continuous Improvement AlthoughWWW.BSSVE.IN the focus of “lean” principles emphasizes customer “pull” and material/product “flow,” there is a prior level of stability needed before either flow or pull can occur. The reduced inventory and other lean practices can become significant liabilities if the work system is unstable. Prior to stability, however, the parties identified the need to strengthen what became termed the joint infrastructure.

Addressing infrastructure issues was not easy. Both union and management leadership had to learn to see gaps or “disconnects” in a constructive, non-blaming way. In fact, sustained attention to these social infrastructure issues did not really begin until early in 2001 – when the Plant Manager and the local union Bargaining Committee Chairperson co-led a series of sessions on infrastructure. Participating in these sessions was the Plant Operating Committee, the Plant Bargaining Committee and the Plant Implementation Team.

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For example, the parties learned at one of these sessions that there was no existing forum or process to ensure that requests for maintenance support from Continuous Improvement Teams. Both production and maintenance managers could have been blamed for this “disconnect.” Instead, the parties enlisted support from all key stakeholders to form a short-term “Kaizen Shop” to handle CIT requests, with the focus then shifting to the overall alignment of maintenance support operations.

In this context, the plant-wide joint steering committee had to shift away from just being a forum for status reports on various joint activities. Instead, it had to take on responsibility for constructing joint visions, strategic planning and coordination of implementation activities.

With maintenance and leadership support increasingly clear, the plant set about to ensure the placement of Team Leaders with Continuous Improvement Teams throughout the plant. During the year 2001, 88 Team Leaders were appointed, for example, in the final assembly areas (44 on day shift and 44 on afternoon/evening shift) and approximately half to one quarter as many in each of the other production areas – such that most work areas in the plant are now team-based operations, with Team Leaders.

The importance of a re-invigorated joint infrastructure was illustrated by efforts to move from a containment approach to quality to more of an in-station approach. A group of external consultants with experience in a Japanese transplant operations introduced a mechanism to improve the visual presentation of job procedures for quality, safety and other matters. This was done with input from front-line workers, but did not involve the union’s health and safety representative, quality representative, or job security/time study representative. Needless to say, this oversight temporarily halted forward progress on the new visual display mechanism and created a new set of trust issues for the parties to work through.

Another key aspect of the infrastructure and stability involved the capability of front-line supervision and middle managers. All of these individuals has been promoted to their managerial roles based on their hard-driving approach under a mass production system. There were key gaps in their interactive skills, as well as in their substantive knowledge of lean manufacturing principles. In response, the Plant Manager and the Lean Manufacturing Manager began a series of 30-45 minute single-point lessons for each area of theWWW.BSSVE.IN plant. The participants included Superintendents, Supervisors, Union Committeepeople and Team Leaders.

Conducted at the shift-overlap time on a different day of the week for each area of the plant, they prepared these lessons on a range of relevant topics. In each case, there was the expectation that the material would be applied on the job and the participants would be able to return a week later prepared to discuss lessons learned. As the manufacturing manager commented, “these single point lessons were like a lear jet taking off – they really accelerated out efforts.” She further reported that the participants would show up a week later with carefully prepared presentations summarizing their application efforts – motivated by hearing the single point lessons from their bosses rather than a specialized trainer.

Despite the reported value of these sessions, there are still significant challenges facing plant. For example, in the early fall of 2001, the corporate Vice President for Vehicle

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Operations conducted a regular visit to the plant and expressed concern about the continuous improvement efforts of a number of the Teams – based on the lack of detail posted on the work area visual display boards and subsequent conversations with operators, supervisors and middle managers. There was particular concern – shared by plant management leadership – around the capability of many of the front-line supervisors and superintendents to reinforce and drive the new work system.

During 2001, plant safety was the focus of a major case-management initiative, as well as other targeted safety improvement efforts. The results were dramatic, with a reduction of 378% in lost time cases and 375% in what is termed the severity rate. Worker Compensation costs were also reduced by approximately 62%.

The J.D. Power quality metric improved by 14% from 2000 to 2001, which is an indicator of initial product quality assessed through customer surveys. Customer satisfaction numbers remained essentially unchanged during this time period, however.

A final, almost intangible aspect of the changes taking place in this plant has involved leadership – at many levels. At the corporate level, the Vice President for North American Vehicle Operations conceived the accelerated implementation strategy and then reinforced the effort with regular visits and coaching support for everyone from the managers to front-line operations. The Director for Manufacturing Operations championed the use of value stream and quality operating principles, as well as the supplier park. The International Union has provided strong support for the efforts to create new jobs in the location, as well as appropriate caution in the need to link improvement efforts with the existing joint infrastructure. The Plant Manager has established the highest ethical standard on issues of integrity and respect, driving performance while valuing knowledge. The Manufacturing Manager has become a coach and mentor for people all across the plant, always reinforcing learning about lean principles and practices while maintaining the discipline needed to run a large automobile assembly plant. The local union leadership has embraced continuous improvement in the work system as central to long-term job security and growth in this location. And a generation of new leaders is emerging across the plant.

Conclusion The storyWWW.BSSVE.IN of the Riverdale Assembly Plant is still unfolding. Substantial gains have been made in the way this work system operates. For many key stakeholders it would be unthinkable to go back to the older, mass production approach. At the same time, there is much to be done before this transformation is complete. A key question remains – will a “brownfield” plant that completes the journey to becoming a lean production system end up stronger than a “Greenfield” plant that has operated this way all along?

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Discussion Questions

1. What do you see as the top three challenges in transforming an existing brownfield plant into a lean production system?

2. What are the top three strengths and the top three weaknesses in the transformation process undertaken in Riverside up to this point?

4. What systems changes are required in other parts of an enterprise to support a plant that has reached this stage of transformation?

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futureworkT rends and Challenges for Work in the 21st Centur y

WWW.BSSVE.INEx ecutive Summar y

LABOR DAY 1999

A REPORT OF THE UNITED STATES DEPARTMENT OF LABOR ALEXIS M. HERMAN, SECRETARY www.bsscommunitycollege.in www.bssnewgeneration.in www.bsslifeskillscollege.in 269 www.onlineeducation.bharatsevaksamaj.net www.bssskillmission.in

erhaps the best place to gain a glimpse of We are living in a new economy—powered by the future of work is in the newspaper. Not technology, fueled by information, and driven by P the front page—but the want ads. knowledge. And we are entering the new century A few decades ago, employers were in search with opportunity on our side. of typists, switchboard operators, mimeograph The American economy is the strongest in a repair technicians, keypunchers and elevator generation—perhaps in history. Unemployment is operators. Newspapers even had separate job list at a 30-year low. We have created more than ings for men and women. 19 million jobs since President Clinton and Vice Today’s want ads are seeking Webmasters. President Gore entered office. The sea of budget LAN operators. Desktop publishers. And many red ink has been turned to black. Wages are up, job seekers no longer turn to the want ad pages productivity is rising, and inflation is in check. but to the Web pages. They find their jobs on the Internet. futurejobs: Just a few decades ago, business magazines cel some of the fastest growing ebrated the latest office technology—cutting edge occupations for the future equipment such as electric typewriters and dicta- phones. Today, it is more like digital phones and Computer Medical assistants personal digital assistants. engineers We are living in a world few could have Paralegals imagined 50 years ago. What will the workforce Computer support specialists Personal care and workplace look like half a century from now? and health aides We can begin to tackle that question by Database administrators examining where we have been, where we are, and Physician assistants where we are going. That is what futurework: Data processing trends and challenges for work in the 21st century equipment repairs Residential counselors seeks to do. Dental hygienists Securities and It is designed to inform readers—policy financial sales workers makers, scholars, employers, workers, trade Desktop publishing unionists, and advocates—to provoke questions specialists System analysts and to stimulate dialogue. Futurework also recognizes that even though we are celebrating the last Labor Day of the twentieth century, the twenty-first century workplace is already here. WWW.BSSVE.IN

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Even in today’s dynamic economy, there are Globa futurefacts: some things that remain important. There are three Increa changes in population pillars providing stability in workers’ lives: the typ Rising economic security over a lifetime—so a places, 1995 worker can have food on the table, a roof over deman White 73.6 head, health care when needed, and a secure alizatio more o Black 12.0 income for retirement. A work and family balance—the resources and export Hispanic origin 10.2 the time to enjoy family life and meet the needs of (may include members of any race) children and aging parents. STAB Asian and Pacific Islander 3.3 Workplaces that are safe and fair—free from American Indian 0.7 health hazards and from discrimination and other R e unfair employment practices. s The ability of workers to meet these needs will a

be substantially determined by major changes in A 2050 the workplace and workforce of today and fa tomorrow. These changes include: White 52.8 W Diversity th Hispanic origin 24.5 By 2050, the U.S. population is expected to increase ( a (may include members of any race) by 50 percent, and minority groups will make up Black 13.6 nearly half the population. Immigration will Asian and Pacific Islander 8.2 account for almost two-thirds of the nation’s popula Worki in the American Indian 0.9 tion growth. The population of older Americans is expected to more than double. One-quarter of all econom Americans will be of Hispanic origin. Almost one in for the ten Americans will be of Asian or Pacific Islander force w descent. And more women and people with disabil The new ec But amidst this prosperity comes concern. ities will be on the job. open m Families are working harder. Parents are stretched Technology to the for time. According to Bureau of Labor Statistics The use of computers and the Internet in work- supply data, real wages fell through the 1980s and early places will become more pervasive and the 1990s, and just recently recovered their average The functions performed using computers will dramati emplo value from 1980. Some Americans have not been cally increase. The influence of technology will go brought into the workforce. And workers young global beyond new equipment and faster communica opport and old wonderWWW.BSSVE.IN whether they have the skills to stay tions, as work and skills will be redefined and ahead in the workplace of the future. reorganized.

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re Globalization The challenge of destiny and diversity—as three Increased global competition will continue to affect employers hire from a more diverse pool of workers the type of work being done in American workin the future, creating new opportunities for eco o a places, creating new high-skilled jobs and lessening nomic growth but also raising the potential for r demand for low-skilled work. The impact of glob persistent discrimination and inequality. alization on all Americans will continue to grow as Futurework will outline these challenges in more of the economy is involved in producing broad strokes. This executive summary is an intro and exports or competing with imports. duction. eds of STABILITY + CHANGE = ? SKILLED, NOT STUCK m Our nation is enjoying high rates of productivity other Rising The challenge growth thanks in large measure to technological economic of being skilled security over not stuck in the innovation. As that trend continues, it will lead to ds will a lifetime new economy higher incomes and improved standards of living— helping more Americans meet the need for in A work and The challenge family balance + of flexibility and =? economic security. family During the Clinton–Gore administration, more Workplaces than 19 million new jobs have been created—a rate that are safe The challenge crease ( and fair )(of destiny and ) of growth more than twice that of the previous up diversity decade. High-technology industries account for one million of these new jobs. E-commerce generated opula- Working families will continue to pursue stability $300 billion in revenues last year—approaching the ans is in the midst of these dynamic changes in the size of the automobile industry. f all economy and population. Three major challenges Real average wages in the high-tech industries one in for the twenty-first century workplace and work- increased 19 percent since 1990, compared with a der force will result: 5 percent average increase for the private sector as a isabil- The challenge of being skilled, not stuck in the whole. The average high-tech job pays 78 percent new economy—as technology and globalization more than the average non–high-tech job— open more opportunities for those who have access $53,000 compared to $30,000. to the tools to build their skills, but reduce the Even for those workers who do not sit in front rk- supply of lower-end jobs. of a computer or program a robot, more and better The challenge of flexibility and family—as technology can mean higher productivity and amati- employers seek more flexibility to compete in the higher wages. will go global marketplace and workers pursue more Technology also has fundamentally changed a- opportunities to spend time with their loved ones. work as we know it. For instance, assistive tech WWW.BSSVE.INnology has opened new opportunities for people with disabilities. From large screen monitors to

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choose low-skilled workers at lower pay in other highes who are the working poor? parts of the world. And technology has rendered degree More than 9 million working Americans were living in poverty in many jobs obsolete here at home. that re 1997, and one-quarter of those worked full-time, year round. fast as Nearly 60 percent of the working poor are women—and minority New economy, new challenge In All of these factors have contributed to rising women are more than twice as likely to be poor as white women. 38 per inequality in the U.S. labor market. From the late Almost 3 million poor workers were in families with children uate. 1970s through the mid-1990s, the gap in earnings under age 6. Ten percent of people with significant disabilities worke between the top and bottom wage earners grew working full time fall below the poverty rate. falling substantially. Re Though the trend of rising inequality that we educat the ten occupations with the experienced for almost two decades finally began to 20 yea reverse during the late 1990s, the current earnings seen th highest earnings gap remains much larger than it was 20 years ago. per we The top 10 percent of full-time workers now Physicians Physicists and astronomers high-sc average almost $1200 per week in earnings while (from Dentists Engineering, natural science, the bottom 10 percent average only $275. And Tw and computer and information according to the Bureau of Labor Statistics, the real Podiatrists systems managers enter c earnings of men in the bottom group fell by 22 same o Aircraft pilots and Optometrists percent during this period. with d flight engineers Some middle-aged workers are losing the secu Aerospace engineers rate ac Lawyers rity they once had. During the first half of the ago. T 1990s, the job tenure of older male workers have n Petroleum engineers declined. Displaced workers with more education double fared considerably better than their less-educated In counterparts. gradua voice recognition software to alternative keyboards Workers who want to climb higher, need skills whites and telecommunications systems, technology is and training to do it. percen removing barriers for people with disabilities. highes But technology combined with rising globaliza Skills are the ticket 90 per tion is also presenting new challenges. As the In the information-based, skills-intensive economy lower— number of high-paying jobs increases, well-paid, of the twenty-first century, one thing is clear: fastest low-skilled jobs are becoming harder to find. knowing means growing. M Globalization has made it easier for businesses to While many workers will continue to be in Hispan occupations that do not require a bachelor’s degree, Ameri WWW.BSSVE.INthe best jobs will be those requiring education and training. In fact, the 20 occupations with the

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her highest earnings all require at least a bachelor’s red degree. Throughout the economy, occupations futurefacts: that require a college degree are growing twice as weekly earnings by education

fast as others. Dollars In 1979, the average college graduate earned $1000 38 percent more than the average high-school grad e late uate. Today, it is 71 percent. Less-educated $800 nings workers of all racial groups—particularly men—are $821 w falling behind in earnings. $758

Real wages for men without post-secondary $600 t we education have declined significantly over the past $621 gan to 20 years. Men with only a high-school degree have $548 $558 $479 nings seen their wages fall by nearly one-fifth (from $679 $400 $462 ago. per week to $559) while wages of men without a $337 high-school diploma have fallen by nearly one-third hile (from $555 per week to $383) since 1979. $200 nd Two out of three high-school graduates will he real enter college this fall. But not everyone has the 0 22 same opportunity. Fewer than 10 percent of adults 1979 1998 with disabilities have graduated from college—a Usual weekly earnings for full-time worker 25 and over (1998 dollars) secu- rate achieved by the general population 30 years Less than a high school diploma Some college or associate degree he ago. The percent of adults with disabilities who High-school graduates, no college College graduates, total have not completed high school is more than ation double that of adults without disabilities. ated In 1997, for the first time ever, the high-school college attendance. This means that these minority graduation rates for young African-Americans and groups lack access to many of the skills that higher skills whites were statistically on par at 86 percent and 88 education provides. percent, respectively. Asian-Americans have the For the three out of four American workers highest high-school graduation rate—more than who do not have a bachelor’s degree, skills still 90 percent. High school completion rates were far play an important role. While most of the fastest nomy lower—62 percent—for young Hispanics, the growing jobs will require a college degree, the fastest growing segment of the population. majority of jobs being created today—from home More African-Americans, whites, and health aides to desktop publishers—require less in Hispanics are attending college. However, African- than an associate’s degree, but often require other degree, Americans and Hispanics continue to lag behind in skills. Lifelong learning for workers will become n and WWW.BSSVE.INmore important as a result.

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America does not face a worker shortage Hispan futurefacts: but a skills shortage. The challenge is to invest in percen unions and higher wages the workers who are already participating in the Union

Dollars workforce, and to identify and tap into untapped than n $800 labor pools. their h found $700 Total $699 Men Prepared not “jobsolete” high-p $659 Women $600 Whether it is by empowering workers with cutting- percen Black $596 edge high-tech skills, providing downsized workers $578 $573 Hispanic $500 $540 with transition assistance, or helping young people FLEX $499 get a foothold on the career ladder—our funda For th $400 $430 and H $398 mental challenge is equipping all Americans with the tools to succeed in this new economy. We need they w $300 $350 to make sure no worker becomes “jobsolete.” does n $200 The demand for skills is bringing about women changes in the way some unions and employers neithe $100 engage in collective bargaining. Technology, and The ti the skills needed to master it, are taking their workin 0 Union Nonunion rightful place on the negotiating table. In some years— industries, such as telecommunications, the issue is familie Usual weekly earnings for full-time workers not job security, but employment security and pro W viding incumbent workers with education and with fa Skills include cognitive (hard) skills and commu training opportunities to gain the skills they need for the nication (soft) skills as well as education credentials to stay ahead in the changing workplace. babysi and job-related skills. In many instances, there is a Regardless of his or her skill level, it is essen with th mismatch between the skills jobs require and those tial to make work pay for every worker. No one attend that applicants possess. More than 20 percent of who works full time should live in poverty. appoin adults read at or below the fifth-grade level. Raising the minimum wage and expanding the vital ch A 1996 American Management Association Earned Income Tax Credit are two policies that In survey of mid-size and larger businesses found that have helped make work pay. househ 19 percent of the job applicants taking employer- Collective bargaining historically also has friend administered tests lacked the math and reading skills played an important role. In 1998, unionized percen necessary for the jobs for which they were applying. workers overall earned nearly one-third more than next fi That percentage increased to almost 36 percent in nonunion workers and were more likely to earn 1998—probably reflecting tighter labor markets and health and pension benefits. African-American the rapidlyWWW.BSSVE.IN rising demand for skills. union workers earned 45 percent more than nonunionized African-Americans. Unionized

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Hispanics made more than half again as much—54 t in percent—as their nonunion counterparts. futuretime: he Unionized workers typically have higher skill levels the real workday ped than nonunion workers, which also contributes to their higher wages. In addition, a 1997 study 5:30 a.m. get up/get dressed/exercise found that productivity in unionized firms with high-performance work practices was about 10 6:30 a.m. make: breakfast, school lunches, grocery list tting- percent higher than in comparable nonunion firms. 7:30 a.m. get kids up, dressed, and fed rkers eople FLEXIBILITY AND FAMILY 8:00 a.m. drop off kids and dry cleaning a- For the vast majority of working families, Ozzie with and Harriet are demographic dinosaurs. For others, 9:00 a.m. on the job . . . 12 e-mail messages waiting for reply e need they were always a myth. Today, Harriet usually 1:30 p.m. meeting at daycare center (your child is biting!) does not stay home. Nearly three out of four women with children are in the workforce. Often, 2:30 p.m. back on the job . . . 8 voice-mails waiting ers neither Ozzie nor Harriet get home by 5:00 p.m. and The time that married women with children spend 5:00 p.m. forward office calls to cell phone working outside the home nearly doubled in 30 5:30 p.m. pick up child from school aftercare me years—translating into 22 fewer hours per week sue is families can spend with their children. 6:05 p.m. pick up other child, pay late pickup fee at day care d pro- Workers seeking to balance sufficient earnings d with family time are stretched. They are searching 7:00 p.m. make dinner need for the time and flexibility to be there when the 8:00 p.m. do: dishes, homework, laundry babysitter doesn’t show. To make arrangements ssen- with the caregivers for their aging parents. To 8:30 p.m. bathe kids one attend the parent-teacher conference or the doctor’s appointment. And as we look to the future, the 9:00 p.m. read work memos to kids as bedtime story he vital challenge of child care and elder care will grow. 9:30 p.m. fold laundry/fall asleep hat In 1996, almost 20 percent of American households provided informal care to a relative or Every day, more working parents are “buying time”—hiring friend age 50 or older. Futurework finds that this others to perform household services like lawn care, child care, percentage is estimated to more than double in the and housekeeping. And it is not just the higher wage workers than next five years. that are buying. A California agency lists a plumber, a pizza parlor manager, and a cashier among its clients for child care and rn domestic help. an WWW.BSSVE.IN

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In the twenty-first century workforce and more t futureoffice: workplace, there will be no such thing as “women’s meet f In a recent survey, more than 100 engineers were asked to issues.” As futurework shows, these are working sense o describe—using current technology—the workplace of the future. family issues. Men and women will share equally mail, e Their predictions: in the challenges of managing family and work do we ergonomic keyboards and voice-activated data input/retrieval time. This new mindset will dramatically affect the interac way we work and the way we view work in the What more working from home using teleconferencing and e-mail twenty-first century. more fingertip control and less brute force “Just healthier workplaces friendlier to the environment Technology: the virtual office never closes Worke The good news is that technology is allowing ilies. E workers to take the office everywhere. That’s the in the bad news, too. With e-mail, pagers, laptop com O futuretemps: puters, and mobile phones, work is no longer arrang from kelly girl to kelly chemist confined to one setting, it is pervasive. The virtual an em In 1946, Russell Kelly began a business that became Kelly Girls office never closes, opening the potential for abuse if fits, tr Services, Inc. Nearly 100 percent of its revenues came from employers require homework above and beyond the often g placing secretaries and clericals in temporary jobs. Today, as Kelly normal working hours. We need to make sure that differe Services, Inc., the firm comprises a range of temporary help, workers use technology—not the other way around. In specialized leasing and contracting companies in 19 countries. Technology can give workers flexibility, but a sched In 1998, roughly 20 percent of its revenue was generated by access presents another big challenge. finds t professional and technical placements including biologists, lawyers, The home office is becoming more common- arrang accountants, chemists, and computer analysts. place. Half of all homes had a personal computer The ag in 1999. But even though the Internet can be to “jus accessed anywhere, not all Americans have equal busine Combined with the responsibilities of child access to the Internet. As information technology mome care, these obligations add up. So do the costs to expands, the information divide continues to Ro employers. Family caregiving costs the economy widen. arrang more than $11 billion in lost production each year. A July 1999 Commerce Department report some f As baby boomers grow older, and life expectancy found that between 1997 and 1998, the gap in Am rises, more Americans will find themselves “sand Internet access between those at the highest and and ar wiched”—caring at the same time for their children lowest income levels grew by 29 percent. Whites are ind and their aging parents. While women in particular are more likely to have access from home than are (1.3 m are affected by this phenomenon, they are by no African-Americans or Hispanics from any location. numbe means alone in the “sandwich generation.” As technology continues to spread, questions WWW.BSSVE.INemerge: What are we losing as a society? What is the effect on social relations? Work, after all, is

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d more than just a job or paycheck. It is where we men’s meet friends, share ideas, and build a common futurejobs: ng sense of purpose and a social network. With voice alternative work arrangements ually mail, e-mail, and computer networks, how rk do we preserve the human network and the social ect the interaction that work has helped to facilitate? Independent contractors he What takes its place? 6.1%� On call workers 1.6%� Temporary help agency workers 1.0%� “Just in time” workers Contract firm workers 0.6%� s Workers want a greater ability to care for their fam

ilies. Employers want greater flexibility to compete Traditional arrangements 90.1%� he in the global market. m- One result is that the traditional work arrangement—a full-time, year-round job where rtual an employer usually provides a worker with bene buse if fits, training, and/or a pension upon retirement—is d the often giving way to something fundamentally that different. ound. In addition to the traditional way of modifying from 1995 to 1997, considerably faster than the 2.8 ut a schedule through part-time work, futurework percent growth in traditional employment. finds that millions of workers are in alternative For many employers, these arrangements make mon- arrangements that don’t fit the traditional model. sense. They can be less costly, and heighten uter The age of “just in time” production has given rise employers’ ability to respond to market forces. e to “just in time” workers—employees whom a Workers, too, may be attracted to the mobility and ual business can hire on a moment’s notice to fill a choice associated with nontraditional jobs. In some logy moment’s need. cases, these arrangements may provide the flexibility Roughly 1 in 10 workers fits into an alternative they need to juggle work and family obligations. arrangement. Nearly four out of five employers use For example, slightly more than half of women ort some form of nontraditional staffing arrangement. independent contractors combined their working in America’s alternative workers number 13 million arrangement with their work at home raising chil nd and are a mixed group. The majority (8.5 million) dren. Roughly one in four independent hites are independent contractors. A growing number contractors worked part-time compared to one-in- n are (1.3 million) are agency temporary workers. The five traditional workers. ation. number of agency temps increased by 10 percent Full-time, independent contractors earned ions more than average traditional workers, but agency at is WWW.BSSVE.INtemp workers earned less. Agency temps’ average is weekly earnings ($329) are the lowest of all nontra

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ditional workers’ earnings and are two-thirds of families. The challenge will come in ensuring that W traditional workers’ average earnings ($510). In future workers who prefer nontraditional options society addition to earning less, temp agency workers are have on-the-job protections. Today, many do not. find o more likely to be young, female, and minority. Today’s nontraditional workers receive less every e While alternative working arrangements can training and fewer benefits. Only seven percent of world. help those who choose a nontraditional form of agency temp workers receive employer-provided emplo healthcare benefits, and just one in ten is eligible every l futuretech: for an employer-sponsored pension plan. talizin from e-mail to v-mail Nontraditional work arrangements can raise will po practical and legal questions about the statutory from t As technology enables workers to decentralize their work, “clocking protections available to workers. Workers may be Am in and out” may become a thing of the past. Workers may rarely be unsure of their rights, and firms may be unsure of more p in the office and work hours may no longer be from 9-to-5 o’clock. their obligations. Government agencies, in turn, and pe Some futuretech products: will need to understand the nature of a work larger v-mail—image and sound on a wireless arrangement before deciding how best to enforce a mainta computer screen accessible anywhere; particular law. capital v-phone—real time images along with audio; Ensuring access to benefits for nontraditional workers without causing employers to drop cov Closin satellite conferencing—with participants erage for traditional employees may present The n from various locations worldwide; another challenge. And providing traditional jobs already “drop in” offices for face-to-face meetings and for those nontraditional workers who want them expand chatter around the water cooler. may be the hardest task of all. gaps b The goal is to create a balance between the examp need to furnish workers with fair wages and bene the lab employment, a majority are not in these arrange fits and the ability to care for their families, while pay ga ments by choice. In fact, 59 percent of agency providing employers the flexibility they need to be shrink temps would prefer a traditional job. In addition, competitive in the global economy. twenty many temps who work part time would prefer to progre work full time but are not offered that option. DESTINY AND DIVERSITY the ave In the next century, nearly one out of two cents f Empowering workers with choice Americans will be a member of what today is con it’s 76 In the twenty-first century, the most successful sidered a minority group. America will be many Th workers will be those who are able to choose the faces and many races with no one majority group reason employment relationship that gives them sufficient in the workforce. The question is not whether workfo wages and benefits, and ability to care for their there will be change but how we manage that women WWW.BSSVE.INchange so that all may benefit. It is not so much a choice as a challenge.

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that We live in a uniquely multiracial, multiethnic and attaining higher education levels as more oppor ions society—and it is becoming more so every day. We tunities have been made available. And we have not. find our roots in every corner of the globe—and translated our national promise of civil rights into s every existing and potential market throughout the the daily practice of effective antidiscrimination ini ent of world. Capitalizing on America’s diversity will give tiatives and affirmative efforts to include everyone in ed employers a competitive advantage. We speak the workplace. But, of course, barriers remain. ible every language. We know every culture. And capi talizing on our diversity and immigration trends aise will position us to compete and win everywhere— workers with disabilities are more likely to: ory from the global marketplace to the corner market. have two jobs be America’s workforce of the future will include work part-time because they cannot find full-time employment re of more people of color, older Americans, women, rn, and people with disabilities. The availability of be self-employed larger pools of workers creates the opportunity to earn less from their own incorporated businesses orce a maintain economic growth by tapping new human earn less per hour, per month, and per year capital resources. onal ov- Closing the gap The narrowing of gaps in society shows that we are Not there yet While the wage gap has diminished, it hasn’t disap jobs already making some of the right choices about peared. Women and minorities continue to earn hem expanding opportunity for all Americans. Wage less than their white male counterparts. The earn gaps between the sexes and across racial groups, for ings of African-American and Hispanic women are he example, have narrowed. As more women enter only 65 and 55 percent, respectively, of white men’s bene- the labor market and spend longer hours there, the average earnings. while pay gap between men and women has lessened— White women earn about 75 cents for every to be shrinking by more than one-third in the past dollar earned by white men. About 40 percent of twenty years. African-Americans have also made that pay gap can’t be explained by differences in progress, albeit over a longer time period. In 1940, experiences, skills, or the jobs held by men and the average African-American man earned only 40 women. It appears to be largely the product of cents for every $1 earned by a white man. Today, stubborn discrimination. con- it’s 76 cents. Barriers not only affect wages in the workforce, any These gaps are declining for a number of but also the path to becoming a part of it. Even in oup reasons. Women are spending more time in the this booming economy, people are being left behind. er workforce and gaining work experience. Both The unemployment rates for African-Americans women and people of color are gaining greater skills and Hispanics have declined to historic low levels in uch a WWW.BSSVE.IN the past two years. But the unemployment rate of

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African-American men is still twice that of white employers can’t afford to underutilize any segment of H men. For African-American teens, unemployment the American talent pool. Moreover, people who are they n has fallen dramatically over the past 6 years but ready to work today are consumers who are ready to workp remains around 25 percent or higher. Three out of buy tomorrow. There are billions of dollars in who in four working-age people with disabilities who want unmet demand in left-out urban and rural areas. worke to work are not working. And half of the total Our nation is in the midst of a period of his —doe Native American workforce is unemployed. toric economic progress. The key to continued stuck i growth without inflation is in making sure that rity gu futuretalk: every American can share in that prosperity. From make “web”sters dictionary central cities to rural areas to suburbs to Native to the American communities—the better more of us do, in the browser hyperlink surfing the better all of us do. emplo digital Internet url Our diversity is our destiny. Recognizing and H dot java webcasting capitalizing on that reality may be one of our their f e-commerce link web page greatest challenges. But it’s also our greatest emplo e-mail search engine web site opportunity. ensure e-tailing server www not lef HTML SMTP XML WHAT DOES THE FUTURE HOLD? porary We know that workers need rising living standards relegat *Check futurework’s glossary for definitions. over their lifetimes, a balance between the demands temps of work and family, and workplaces that are safe and lev The demands of the future will require and fair. We also know that major trends will increas increased efforts to include these workers who have sweep across and radically change the landscape of proces been left behind and have not shared in our pros workplaces and the makeup of the workforce in the W perity. It will also require successfully integrating twenty-first century. Futurework details the extra- to soci millions of immigrants into the workplace. ordinary diversification of the workforce, the standa explosive growth of technology, and the pervasive throug Tapping America’s potential impact of growing globalization. How will future worke As we enter the twenty-first century, it is increasingly workers strive for and attain economic security, nation clear that tapping into the talents of all of America’s work-family balance, and safe and fair workplaces? the ba available workers isn’t just good values, it’s good Futurework does not try to provide all the Th business. As our population becomes more answers. Instead, it presents the trends, examines help m diverse—and global competition expands— their combined implications and asks the ques future tions that we expect will help shape the debate cymak over labor policy for the twenty-first century. familie WWW.BSSVE.INHere are some of them: tively with c

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ment of How do we ensure that workers get the skills who are they need to succeed in the twenty-first century ten facts affecting futurework ady to workplace? Will employers hire and train workers Baby boomers make up almost half (47%) of who initially lack skills? What happens to the the workforce today. as. worker laid off from a manufacturing job at age 55 his- —does he get training in new technologies or is he Young women are enrolling in college at a higher ed stuck in lower-wage jobs like groundskeeper, secu rate (70%) than young men (64%). at rity guard, and warehouse stock clerk? How do we Young people hold an average of nine jobs before age 32. From make sure that people with disabilities have access Employed mothers with children under age 13 miss an ve to the technologies that facilitate their participation average of 6.4 workdays a year due to family-related issues. us do, in the workplace? How will e-commerce impact From 1969 to 1996 families, on average, experienced employment? a decrease of 22 hours a week (or 14 percent) of g and How can workers find the time they need for available parental time to spend with their children. r their families, while at the same time ensuring that employers can get the job done? How do we Small businesses employ about half of the nation’s ensure that those with lower educational levels are private sector workforce. not left behind by the digital economy? Will tem E-commerce revenue for 1998 was estimated at D? porary and other nontraditional workers be $300 billion—almost the size of the U.S. auto industry. dards relegated to permanent second class status, or will In five years, almost half of all workers will be employed mands temps become more like independent contractors in industries that produce or are intensive users of afe and leverage higher compensation? Will workers information technology. l increasingly rely on the collective bargaining With more than 1600 corporate training institutions pe of process to provide higher wages and better benefits? already established, the number of “corporate universities” in the Will we manage the change in the workforce could surpass the number of traditional universities xtra- to society’s advantage? Will global competition lift by the year 2010. standards for people working and living asive throughout the world? Will businesses invest in American workers get only seven hours of sleep every uture workers who have been left behind to ensure the night . . . 365 hours a year less than recommended. ty, nation’s continued prosperity? Will we bring down One in three adults say that their work has been affected laces? the barriers to success for all Americans? by feeling drowsy on the job. e The answers to these and similar questions will mines help map the landscape of the future of work. For es- future workers, employers, labor unions, and poli te cymakers, preserving the constants for working families is the goal, and managing change effec tively is the challenge. TWWW.BSSVE.INogether, we can proceed with confidence.

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Draft Revised 11/8/00

Integrating Social and Technical Systems: Lessons from the Auto Industry Thomas Kochan & Joel Cutcher Gershenfeld

Integrating social and technical systems requires a new way of thinking. Yet, for the majority of the last century the social and technical aspects of work have been artificially divided. Practitioners would routinely segment social and technical issues into separate functional domains, such as engineering and human resources. Even within a domain there would be segmentation – a social domain such as training, for example, would be divided into technical training and “soft” skills training. Scholars developed equally segmented disciplines, organized around technical or social science specialties and sub-specialties.

Periodically over the past fifty years, scholars and practitioners have explored the integration of social and technical systems – noteworthy exceptions to the dominant trend. For example, a group of scholars between the 1950s and 1970s developed what they termed a socio-technical approach to work design (Emery and Trist, 19??). In this article we build in these and other past efforts at integration in order to offer a framework for instruction on the changing nature of work and organizations. Our aim is to describe the nature of social systems with sufficient clarity to facilitate collaboration and action among people trained in both technical and social sciences. We use examples from the auto industry to illustrate the analysis and to motivate classroom simulations set in that context.

One of the most challenging tasks facing engineers is how to integrate technical, political and social dimensions of a complex system. Nowhere is this better illustrated than with respect to the task of designing work systems. Whether the focus is on production, design, service or other work functions, the designing of work systems requires the integration of technical process requirements, complex social interactions and the variousWWW.BSSVE.IN political dynamics that arise in any organizational context. For the designers of new work systems, a new, integrative approach is required. As Thomas P. Hughes observed in Rescuing Prometheus:

“System builders preside over technological projects from concept and preliminary design through research, development, and deployment. In order to preside over projects, system builders need to cross-disciplinary and functional boundaries—for example, to become involved in funding and political stage setting. Instead of focusing upon individual artifacts, system builders direct their attention to the interfaces, the interconnections, among system components.." (p. 7)

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The designers of work systems have not, historically, been systems builders. Work system design has its roots, in part in the field of industrial engineering – where the focus was on job design. Beginning with the early research by Fredrick Taylor, the principles of Scientific Management were all aimed at finding the “one best way” to design work to achieve both high levels of productivity and worker satisfaction. This “scientific” approach to job design was the core theory that enabled the rise of mass- production work systems. It remains today a leading example of the dramatic impact that social-science research can have on society.

Yet, the very ideas that were so instrumental to success in the last century are, today, a barrier to future progress. Over the past thirty years, research on human motivation and social interaction has discredited core assumptions inherent in this approach. Moreover, the emergence of a global, knowledge-driven economy demands forms of integrated, systems thinking that are the antithesis of Taylor’s segmented, reductionist theory (Drucker, 19??). Instead of breaking jobs down into discrete, component parts, the challenge today is to understand how dynamic sets of tasks interact together. Indeed, Nadler (1992) sees the effective integration of technical and human aspects of complex systems is a defining feature of industrial engineering today.

In focusing on work systems, we will be able to build robust theory around the inter-dependence of the technical and social features of work. Further, we anticipate being able to develop practical tools for putting this theory to use in work settings. This close look at the auto industry is designed to outline the elements of such a theory and to illustrate the types of tools and practices that might be used to implement it.

While we focus on work systems, the ideas developed here may apply to a broader set of engineering and management systems. As the quote from Thomas Hughes suggests, the field of Systems Engineering emerged out of recognition of the interdependenceWWW.BSSVE.IN among the technical, political, and social dimensions large scale projects such as the SAGE missile defense project of the 1950s and other industry, government, and university projects (Hughes, 1998). Thus, it may be worth considering whether these ideas apply to a broader set of challenges engineers and managers face as well-not just limited to work design.

We use the experiences of the auto industry to illustrate how concepts and practices of work design have evolved over the past two decades. This industry has served as a learning laboratory for both researchers and practitioners as it experimented with alternative ways for improving productivity and quality, and responding to the interests of multiple stakeholders that share power in the industry. Considerable empirical evidence has been generated to date by researchers who have assessed the effects of what are commonly called “knowledge driven” or “high performance” work systems (Walton,

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1974; Cutcher-Gershenfeld, et. al., 1998; Appelbaum and Batt, 1994; Ichniowski, Kochan, Levine, Olsen, and Strauss, 1996; Osterman, 2000). In what follows, we outline how the problem gained salience in industry over the past twenty years, review different approaches to addressing it and the evidence for their effects, and then provide an interactive case designed to illustrate how these tools might be used in different industry settings.

The Problem: Circa 1979

In 1979 NBC produced a documentary titled “If Japan can do it, why can’t we?” It focused on the growing awareness that Japanese manufacturers, and Japanese automakers in particular, were producing and selling products of higher quality with higher productivity than many of their American competitors. Thus began a decade of soul searching over why this was the case that generated a host of responses aimed at closing the productivity and quality gap. No industry felt this pressure more than autos, and no industry tried more different things or received closer scrutiny from the public and from academics.

General Motors was the first to respond aggressively to the Japanese challenge. Its answer to NBC’s question was, yes the U.S. industry could do it too, but in its own way—with heavy investment in the most modern, advanced technology money could buy. Over the decade of the 1980s, GM spent upwards of $50 billion on advanced technologies in its plants. Visitors to some of GM’s high technology plants such as its Hamtramck facility in Michigan, or its Wilmington, Delaware plant could see the wizardry and complexity of the automated tracking systems that guided parts to their appropriate spot on the assembly line and the high-tech robots. Too often, however the robots were standing idle, under repair, or in some cases moved off the assembly line for real workers to get the job done the old fashioned way. As a result GM learned a lesson, one that two MIT students would later quantify. The lesson was that you can’t simply automate your way to high productivity and quality. At the end of the decade after spending $50 billion, GM was still the highest cost car manufacturer in America.

NUMMI and its Legacy WWW.BSSVE.IN Why did the investments in technology not pay off? Part of the reason may have been that the automation was premature and poorly designed. It was too rigid to adapt to variations in product specifications and it simply automated inferior production systems and practices. But a set of case studies conducted by a Japanese colleague visiting at MIT at the time suggested a deeper reason. In 1986 Haruo Shimada teamed up with MIT graduate student John Paul MacDuffie and visited the Japanese “transplants” of the Honda, Toyota, and Nissan (auto assembly plants) in the U.S. that had opened in the early 1980s. Their objective was to understand what was different about the production and human resource/labor relations practices of these plants compared to traditional American plants. Their key insight was that the starting assumptions of engineers who built these production systems were fundamentally different.

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American engineers saw the hardware features of technology and production systems as separate from their human features. The American engineers’ conception was that the human features were sources of unpredictable variance that should be minimized. Japanese production engineers on the other hand viewed technology as embodying both hardware and human features. Shimada used the term “humanware” to describe this approach to technology and borrowed a phrase from another Japanese scholar who saw humans not as a source of error variance but as a force for “giving wisdom to the machines.”

Figure 1 illustrates the interdependent technical and social/human dimensions of the production system they saw in these auto plants (Shimada and MacDuffie, 1986). Skills, motivation, and flexibility/adaptability were seen as the three key human features that supported the just in time production and inventory control, in line quality control, and other aspects of the technical components of the production system. In turn, supportive human resource practices dealing with selection, training, job assignment, and labor relations were needed to achieve and sustain the required worker attitudes and behaviors. They suggested that performance of this system was highly dependent on these human dimensions, and thus they describe it as fragile, compared to more robust systems that built in a variety of technical or organizational buffers such as inventory, separate inspection, and large repair that made the production process robust in the face of human error or some other breakdown in any single step in the supply or manufacturing process.

While Shimada and MacDuffie’s case studies provided the initial qualitative understanding of Japanese transplant production and human resource practices, the first hard data showing the results of these systems came from John Krafcik’s case study of New United Motors Manufacturing Inc (NUMMI) and his comparisons to other U.S. plants. NUMMI is a joint venture between GM and Toyota that was set up in 1982 to produce compact cars for both companies. Toyota was to manage the new organization in a former GM plant in Fremont, California that had been shut down two years earlier. Fremont had the reputation as one of GM’s worst plants in terms of productivity, quality, and labor relations. This was a two-way learning experiment. For Toyota, it was a chance to see if a U.S. workforce and a U.S. supply base could support what was coming to be knownWWW.BSSVE.IN as the Toyota Production System (TPS). For GM, it was a chance to learn more about this new production system.

The NUMMI story is so much a part of industrial folklore in the auto industry (Adler, 1992; Levine, 1995; Wilms, 1996) that we need only summarize the punch line here. Within two years of the restart of this plant under Toyota’s management, production system, and labor relations, the same union leaders, largely the same workforce, and with the same relatively old technology had become the most productive and highest quality auto producer in the U.S. The data displayed in Figure 2 illustrate this finding. This is a table that was generated by John Krafcik’s research at the MIT International Motor Vehicle Research Program for his Master’s thesis in 1988. We have used this table numerous times in courses with Senior Executives at MIT, some of whom were from GM or other parts of the auto industry. Showing these data, reinforced the

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notion that a “picture is worth a thousand words.” Time and again executives who were skeptical of the powerful difference high trust, participative, flexible, secure, well trained and properly led workers could make came over to accept the reality. Labor-management relations, when combined with a production system that emphasized quality, flexibility and continuous learning, and integrated technology and human resources, could produce, in the U.S. what Krafcik called “world class manufacturing,” what Paul Adler (1992) called a “learning bureaucracy,” and what later (accurately, but perhaps unfortunately) was labeled “lean production” (Womack, Jones, and Roos, 1990).

While the NUMMI results were impressive and good for teaching, two questions remained unanswered. First what actually accounted for these differences? Was there some single “silver bullet” feature of the NUMMI design that could be replicated elsewhere with the same results? Or was it the full NUMMI model that mattered, and if so, what are the key features of the model? Second, to what extent are these results generalizable, either to other auto plants or to other industries? A decade of research has now addressed these questions.

John Paul MacDuffie (MacDuffie, 1995; MacDuffie and Pil, 1997) built on the Shimada and MacDuffie case studies and the Krafcik methodology for comparing productivity of assembly plants by conducting an international assembly plant study. They found that indeed the results generalized and that again worldwide, it was not the most automated plants that produced the highest productivity and quality but those that integrated flexible automation with flexible work systems and supportive human resource practices. Moreover, they showed that it was the joint effects of systems that “bundled” together the elements in Figure 1—both the technical and social/human features that produced these results.

Meanwhile similar evidence for this “bundling” or “system” effects were appearing in studies of work systems and human resource practices in other industries. Joel Cutcher-Gershenfeld had earlier documented this in his study of traditional versus transformed workplace practices in the office products industry (Cutcher-Gershenfeld, 1991). Over the course of the 1990s, similar results were published from studies in the steel, apparel, metalworking, trucking, airline, and semiconductor industries (Ichniowski, Kochan, Levine,WWW.BSSVE.IN Olson, and Strauss, 1996). The terms “high performance work organization” or ‘knowledge based” work systems, became the popular labels used to characterize these systems. Their common feature was that the combination of elements outperformed the individual elements.

More recently, the same basic set of results has begun to appear in studies of the information technology and work systems. For most of the 1990s, an apparent productivity paradox puzzled researchers and frustrated managers who were investing large sums in IT systems only to achieve disappointing results. MIT economist Robert Solow captured this frustration with his often quoted statement that “you can see information technology everywhere but in the productivity numbers.” Recent work by Bresnahan, Brynjollfson, and Hitt (1999) have begun to unpack the paradox, producing results that replicate the earlier findings with manufacturing technologies and work

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practices. They find that high productivity is a function of the joint investments of IT with innovations in work systems and human resource practices.

So the bottom line of this line of research suggests that by attending to these micro social and human resource aspects of work systems and integrating them with the appropriate technical or hardware tools and resources, “world class” levels of productivity and quality can be achieved.

The Organizational and Institutional Components of Work Systems

So is the story now complete? In some traditional approaches to industrial engineering the answer would be yes and manufacturing engineers and managers would be trained to go into plants and check off the different social and technical features discussed above, adapt their features to the idiosyncratic elements of the particular environment, and attempt to implement these practices. Indeed, a great deal of such behavior can be found in industry today, including in the auto industry. But most such efforts fail in implementation, or if implemented, fail to achieve the high-level performance results expected. MacDuffie and Pil,(1997), have shown, for example that the later adopters of this production and human resource practices did not reach the same performance levels as the earlier adopters. Moreover, they and others (Kochan, Lansbury, and MacDuffie, 1997) have shown that despite the efficiency claims of lean production, it has not spread to all parts of the global auto industry nor are its principles applied in the same fashion in all settings where they are used. In a study of the cross-cultural diffusion of knowledge-driven work systems, Cutcher-Gershenfeld and other members of that research team found that diffusion was not successful when it was done on a piecemeal basis or when all the features of a work system were imposed at once. Only a negotiated process of diffusion was effective – where all the stakeholders were able to learn from the existing system, but adapt it to match the unique characteristics of the new location (Cutcher-Gershenfeld, et. al., 1998). In other words, the act of developing or adapting the new work system is instrumental to its success.

To understand the variations in work systems, we need to consider the broader organizational and institutional features that influence the design of work and employmentWWW.BSSVE.IN relationships. Particularly, we need to consider where work systems fit in the strategic objectives of the key stakeholders that share an interest in them and the political and cultural contexts in which work takes place and build these into our theory and tools of work design. In short we propose that these organizational and institutional features are also critical elements in work systems.

Strategic Considerations

The above discussion assumes that the task of work system design is to optimize productivity and quality. Clearly these are critical performance criteria. But work is a central activity and concern for multiple stakeholders and each will bring its own interests and priorities to bear on how work is designed and how work is actually done. Broadly speaking, any work system must effectively address the interests of at least four

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major stakeholders – customers, shareholders, the workforce and society. Work systems are, after all, only one component of a broader set of strategies that compete for resources and priority within complex organizations. Gaining and maintaining top management support for investing in the development and sustainment of these work systems is not guaranteed. Indeed, within organizations competition for such resources and managerial priorities and attention is itself a contested political process (Thomas, 1994).

The strategic challenge is particularly vivid in the case of the Fiero car – a product of General Motors. In the mid 1980s, this car pioneered a new market segment for small, affordable sports cars. It quickly drew competition from the Toyota MR2 and the Mazda Miata. In the face of declining market share, corporate infighting (with Firebird, for example, over increasing Fiero performance), and other factors, the product was cancelled. In field interviews that were happen to have been conducted on the factory floor on the day the product cancellation was announced, the response was uniform. The anger and disappointment was less about the product being cancelled than about the lack of value placed on the capability of the workforce. People commented that they had an effective team-based work system, they had mastered the use of composite plastics in auto bodies (which had never been done before), they had hourly workers making daily customer contact phone calls, and they understood the concept of continuous improvement. The dominant feeling was anger that a new product wasn’t awarded so as to keep the workforce together – placing a value on the investment in capability that had been made (on the part of the corporation, the union and the individuals). Simply put, the Fiero story illustrates a massive blind-spot in strategic decision-making when it comes to valuing work system capability.

The pattern of diffusion of lean manufacturing and high performance work systems in the U.S. auto industry illustrates this point. The most rapid adoption of high performance work systems in the U.S. auto industry occurred in the late 1980s and then slowed to a halt in the 1990s. The NUMMI data, substantial gaps in quality performance, the recognized threat of Japanese competition, and the growing attention to quality principles led to significant diffusion in the earlier period. But by the early 1990s, development of new hot selling products became the dominant profit producer for U.S. auto companies. Attention and priorities shifted to getting these products to market quickly. ForWWW.BSSVE.IN Chrysler it was the minivan. For Ford and GM it was the growth in demand for trucks and Sport Utility Vehicles that became the profit generators and gained management attention and resources. Resources (both financial and managerial support) for innovation in manufacturing work systems primarily focused on the products themselves, though there was also an upsurge of interest in product design innovations, such as “platform design” and “concurrent design” systems.

Political Issues: The Multiple Stakeholders, their Interests, and Power

Managers are not the only interest group that cares about how work is organized. Nor do they have the power to always implement work systems unilaterally. This was the fallacy of Scientific Management, that the conception of how to do the work could be separated from the people who actually do it. Just setting up incentives to gain

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conformance with the engineer’s conception of how the work should be done assumed that all the relevant knowledge resided with the expert. As we know, it’s not that simple. Any complex system involves multiple parties, each of which approaches the task with their own interests in mind. Whether these interests are all aligned or whether there are tradeoffs is an empirical question (and perhaps can be influenced by the design), one that needs to be explored in the design, testing and implementation, on on-going deployment phases. Moreover, all those involved do not possess the same amount of power to press their interests or priorities. Thus, all phases of the design, implementation and on-going deployment of any complex system are influenced by these political features and must be taken into account. Again the auto industry provides a vivid illustration of this point.

Consider Saturn. Saturn is a division of GM that was created with two objectives in mind: to build small cars profitably in the U.S. and to provide jobs for U.S. workers. It was motivated by the realization that GM could not build small cars profitably with its traditional organizational structures and labor relations practices. Consequently, in 1983 GM and the United Auto Workers (UAW) created a joint study committee to take a clean sheet approach to both organization design and labor relations. Out of this “Committee of 99” as it was known came a design that called for a team-based organization in which workers and their UAW representatives would share decision-making with management at all levels and across all functions of the organization. The work organization system was based on a set of 30 work unit functions that each team would perform, many of which traditionally had been carried out by supervisors or middle managers in traditional GM plants.

While the Saturn system benchmarked NUMMI and Toyota, the system was based on very different assumptions than what came to be known as “lean production.” High levels of power and authority were vested in the teams, and a partnership structure was employed instead of a traditional management hierarchy. Saturn’s task and job design represent a synthesis of a European socio-technical approach with the lean production system. Saturn teams have greater decision-making autonomy than lean production teams. While most lean production plans rely on job cycles of about sixty seconds cycle times at Saturn vary considerably and can extend up to six minutes as moving platforms carry workers along the assembly line while they perform their designated operations.WWW.BSSVE.IN In fact, there were predictable tensions as the principles of lean manufacturing impacted on the Saturn system in form of reduced in-process inventory and increased interdependency among teams. The autonomy enjoyed by teams was eroded and concern over GM’s commitment to this model heightened. This original design has recently been under review by a joint task force and is likely to revise the team structures to move in the direction of lean production teams in an effort to reduce costs and improve quality and cross team coordination.

Saturn’s work system and organizational design would not have been chosen if workers and union representatives had not been part of the original design team or the partnership structure and process that implemented and managed the operations. Worker interests were built into the system right from the earliest stages of the design process and the goals of the system reflected the interests of the multiple stakeholders

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involved. This continues to be the case, as Saturn now moves into its second generation of products and organizational history (Rubinstein and Kochan, forthcoming).

Cultural Features

Culture is used in many ways in the social sciences, often in such a general way so as to loose any analytical meaning or value. Yet to ignore the cultural contexts in which a system is embedded dooms any efforts to change it. We adopt a very specific definition of culture here to capture the basic underlying assumptions and values that influence the meanings parties attach to a phenomenon, in this case, to work systems (Schein, 1985; Ancona, Kochan, Scully, VanMaanen, and Westney, 1999). While the term is popularly used to reflect cross national variations (Hofstade, 1980) organization theorists have long recognized that the culture of any given work setting also reflects the unique traditions and norms built up in different organizations (Schein, 1985) and sub- organizational units or occupations (VanMaanen and Barley, 1984).

The importance of culture can be illustrated by stepping back and reviewing the evolution of this term “socio-technical” systems and then looking again at current examples in the auto industry.

The term “socio-technical” work systems grew out of a series of experiments conducted in Scandinavia and Britain in the 1950s at the Tavistock Research Institute. These experiments were also designed to find ways to organize and design work systems to maximize satisfaction and productivity. The most famous experiments took place in the British coal mining industry. The primary defining feature of this effort came to be the use of semi-autonomous or autonomous work groups. Volvo’s Kalmar and Udevalla plants in Sweden were designed around these principles as were several of the plants in the U.S. which gave rise to the concept of “high commitment work systems” (Walton, 1974).

Subsequent research on the nature and diffusion of Japanese work systems in the U.S. highlighted a distinction between what can be termed “lean” teams and “socio-tech” teams. The lean model generally involves smaller, more interdependent teams – with few social or technicalWWW.BSSVE.IN buffers. By contrast, socio-tech teams are generally larger and more autonomous, which is enabled by both social and technical (Cutcher-Gershenfeld et al, 1998). Figure 3 summarizes the differences this group observed in plants that adopted lean production teams and those that adopted socio-technical system teams.

A second example is the difference between teams in Korea and Germany. The plants surveyed in both of these countries in the second round of the international assembly plant survey reported very high levels of team activity. Yet a closer look at actual work processes in Korean and German plants showed few similarities in actual processes (MacDuffie and Pil, 1997). Korean work teams continue to reflect the strong authoritarian managerial culture and management style that is embedded deeply in Korean society whereas the types of teams found in German auto plants vary depending on the extent to which the group work model favored by the German Metalworkers

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Union IG Metal or the more lean manufacturing model adapted by managers experienced in the NUMMI system (Jurgens, 1997; Roth, 1997).

All these examples are simply meant to illustrate the point that work systems in general, and in this case, teamwork specifically, mean different things in different cultural settings and reflect the accumulated experiences and power relationships that characterize each setting. As such they need to be viewed as part of the system itself. Failure to understand the values, traditions, and meanings that underlie these features dooms efforts to change them or to introduce new system features into these settings.

A final feature of the culture of work systems needs to address, namely the often implicit or unstated assumptions that underlie work design. This is best illustrated by recent research on work and family issues (Bailyn, 199x; Williams, 1999). In a recent project Lotte Bailyn and her research team worked with several engineering and sales work groups to identify options for altering how they worked in way that would both meet their project performance objectives and reduce the stresses employees were experiencing because of long hours. By questioning the implicit assumption that there is a linear relationship between hours at work and productivity, the parties identified ways to reorganize their work and time allocations in ways that achieved their objectives.

This assumption is engrained in the design of not only the work systems found in these units but in many professions. It is especially prominent in the training and early stages of careers in law, medicine, consulting, and research-oriented universities. Recognition of the effects that this feature has on women, has led Joan Williams to argue that this implicit assumption about the “ideal worker” (one available for long hours and full time commitment to work and career over all stages of one’s working life) represents a subtle but systematic form of discrimination. Holding to this assumption leads to work designs that reinforce this image and make it a self-fulfilling prophecy.

Is this assumption still viable today given the diverse make up of the work force and the increased number of hours that households are contributing the paid labor force? Whether work can or will need to be designed to accommodate more diverse life styles, family and personal responsibilities, and technological possibilities is an open question that goes wellWWW.BSSVE.IN beyond the standard manufacturing environment. Work systems intersect with other institutions and social systems such as family life, community concerns, environmental concerns, etc. Thus it is important to treat work design as an open system subject to influence by a variety of factors that may need to be incorporated explicitly into the design process.

In summary, work systems have both hardware -- technical features -- and a set of social features that reflect micro elements of human and work group motivation, educational and skills, and the sub-system elements that make up human resource or employment systems. In addition work systems are influenced by and a part of the broader strategic, political, and cultural features of the organizations and institutional settings in which they are embedded. Ultimately any core theory of engineering systems

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must attend to the social and technical dimensions of a system, which are both distinct and interdependent.

Instructional Tools, Modules, Simulations, Roadmaps, and Fieldbooks Work in Progress

Design, implementation, and on-going management of work systems must take the social, technical and political features into account if they are to achieve the objectives the different stakeholders expect from them. The question, therefore, is what tools and other materials are helpful in designing and managing systems that incorporate these features? We turn first to a case that illustrates how this might be done, again drawing on the evidence from the auto industry. Then we review materials currently under development in the MIT’s Lean Aerospace Initiative that can serve as a valuable resource for this effort.

The MIT Auto Case

The MIT Auto Case was developed in the mid 1980s (Whipple and Kochan, 1991) to support the decision-making processes of teams of students assigned to decide where and how to develop and manufacture a next generation project (called the X100) for a mythical company, Michigan Motors, Inc. (MMI). The software tool supporting the case was built around the data and empirical findings of Krafcik’s NUMMI results and MacDuffie’s results from the first round of the international assembly plant survey as well as the results of the Clark and Fujimoto (1988) study of product development processes in the auto industry.

The case put classroom participants (executives, MBA’s or LFM students) into groups and assigned them the task of choosing a strategy for where and how to design, purchase components, and assemble the X100. They could design it solely within MMI in the U.S. or form a strategic alliance with a Japanese or European auto company. They could choose to buy components from suppliers in the U.S., Japan, Europe, Korea, or Mexico, with the attendant costs and coordination challenges associated with these different settings. Finally, they could choose to assemble the car in one of four locations..(aWWW.BSSVE.IN high-tech plant in Michigan, a lower tech plant in the Sun Belt, a new greenfield plant they would create from the ground up, or a plant in Mexico). Once they selected a site, the team needed to choose a manufacturing and automation strategy and level of investment and a set of work organization and human resource practices. Once these choices were made, the software program would calculate a set of expected outcomes: net present value of the investment, productivity (hours per car), quality (defects per car), time required to get the car to the market, and number and location of jobs created. These outcomes were meant to map the interests of the different stakeholders—company executives, investors, customers, and employees.

This case proved to be highly successful in generating discussion and analysis of how the social and technical features of the task of choosing a strategy and designing and building a new product fit together and influenced the results. Since the analytical model

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underlying the software was built on the empirical evidence from the auto industry research, the exercise had strong validity and believability to students and executives.

Our idea is to build on this case by generating an updated case using the full body of accumulated evidence on the effects of social and technical features of work systems and their effects on key stakeholder outcomes. The original auto case is a useful platform to build from, although it was designed for a DOS based environment and therefore needs considerable work.

The Lean Implementation Fieldbook, Road Map, and Self-Assessment Tool

The auto case served as an excellent analytical and decision-support tool for the group exercise. But it was not a guide to implementation of the choices or strategies chosen. Additional tools are needed to support this key phase of the process. To do so we draw on some of the work currently underway in MIT’s Lean Aerospace Initiative.

The member organizations of MIT’s Lean Aerospace Initiative have highlighted the importance of integrating social and technical systems – both of which are central to any lean implementation initiative. Indeed, representatives from industry, labor, government and the university have been working together in this consortium on three related sets of implementation products. These include a Lean Self-Assessment Tool (LSAT), an Enterprise Lean Roadmap, and a Lean Implementation Fieldbook, each of which are discussed below. While all three products have been primarily designed for field use, they have strong potential for instructional purposes as well. The focus here is on the Fieldbook – which could be adapted as a general implementation guide for large- scale systems change. Additional detail on the Fieldbook and the two companion products is included in the Appendix.

The Fieldbook emerged in response to a series of six implementation workshops held by LAI between 1997 and 1999. The aim was to capture common lessons learned and implementation tools across the various workshops. What emerged is really two integrated products – the first is a series of defined implementation activities so that a defined enterpriseWWW.BSSVE.IN can, in effect, draw its own implementation roadmap. The second is a toolkit of instructional slides and related materials that can be used in training, briefings and for other learning/application purposes.

The first part of the Fieldbook is organized around the following three categories: Part I Understanding, Part II Implementing, and Part III Sustaining. The materials are all in presentation slide format – to facilitate field use. The slide feature briefing materials, exercises and activities for doing a stakeholder map, organizing an implementation team, conducting a current-state and future state value stream map, and other practical aspects of implementation. Attention is paid to both social and technical aspects of implementation. The Lean orientation is woven throughout the Fieldbook, but that does not diminish its broader applicability.

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The second part of the Fieldbook, which is termed the Toolkit, features instructional slides on a wide range of manufacturing and product development concepts, including: Andon, Cellular Manufacturing, Critical path planning, Design for Manufacture and Assembly, Design of Experiments, Five S, Integrated Product and Process Development, Just In Time (JIT), Kaizen, Kanban, Poka-yoke, Process Failure Modes Effect Analysis, Process Flow Mapping, Production Flow Analysis, Quality Circles, Quality Function Deployment (QFD), Risk Management, Root Cause Analysis, Setup reduction, Six Sigma, Statistical Process Control (SPC), Suggestion Systems, and Total Productive Maintenance. These materials are useful for introductory briefings on these topics and as a reference source.

The Fieldbook is not a cookbook or reference book on any of the above topics – it is a collection of briefing slides and related exercises and activities. In the context of MIT teaching, the Fieldbook has to potential to be a common reference source for instructional slides and activities on implementing large-scale systems change (perhaps posted and updated electronically with availability to all ESD faculty). As well, it can be a useful tool for graduates to bring with them back into their organizations in order to apply many principles covered during their studies at MIT. There is a small working group of industry, labor and government practitioners who have helped to develop these materials and they are willing to continue to work on this product – perhaps with additional input from EDS faculty outside of LAI.

WWW.BSSVE.IN

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Appendix

The Lean Self Assessment Tool (LSAT) currently under development at LAI is organized around maturity matrices for each of the following categories:

0.0 Lead And Continuously Improve The Enterprise 1.0 Provide Financial Control, Analysis, And Support 2.0 Provide Hr Capabilities And Admin. Services, Facilities 3.0 Provide Information Technology Solutions 4.0 Manage Quality Systems 5.0 Manage Technology Innovation 6.0 Define Program Requirements 7.0 Provide Program Management 8.0 Acquire New Business 9.0 Design And Develop Products 10.0 Manage Supply Chain 11.0 Produce Product 12.0 Provide Life Cycle Support

The structure of this tool is still evolving – with the aim of ensuring that the tool fosters integration across the value stream, not just excellence in each category. As well, it should be noted that there is a U.K. LAI consortium that has developed its own lean self- assessment and both consortia are in dialogue about linkage opportunities. This current mix of topics (or the next versions that are sure to evolve) provides an indication of many possible education applications – each of which would illustrate social and technical interdependencies. This could include field studies of self-assessments, analysis of the tool as a classroom assignment, critical thinking about the dilemmas for the various stakeholders when it comes to assessment processes of this type, and exploration of the global dynamics as international assessment standards emerge.

The Lean Enterprise Road Map has already been used by Professor Nightingale in her graduate seminars. The Road Map is designed around eight elements at the enterprise level, which are as follows: WWW.BSSVE.IN Adopt the Lean Paradigm Focus on the Value Stream Develop Lean Structure and Behavior Provide Enterprise Level Focus Implement Lean Initiatives Focus on Continuous Improvement Enterprise Strategic Planning

These elements are organized into short and long cycles, with detailed commentary on key considerations at each stage in the journey. While the model is still in early stages of field use, it has already proven a valuable tool in stimulating dialogue on enterprise-level thinking about lean implementation. It should be noted that similar roadmaps are also

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under development for Manufacturing Operations, Product Development, and Supply Chain Integration.

The Lean Implementation Fieldbook is features presentation slides with information, exercises and activities on each of the following topics:

I. Understanding

1.0 Strategic Direction 1.1 Identifying champions 1.2 Building a strategic direction team 1.3 Conducting a stakeholder analysis 1.4 Exploring the scale and scope of the defined enterprise 1.5 Determining core competencies 1.6 Constructing a lean vision 1.7 Clarifying the definition of “lean” 1.8 Assessing business realities 1.9 Evaluating risk 1.10 Understanding history, culture, and environment

2.0 Current State 2.1 Production Operations Value Stream 2.2 Product Flow 2.3 Process Map 2.4 Product Development Value Stream 2.5 Product Flow 2.6 Information Flow 2.7 Value Flow

3.0 Future State 3.1 Production Operations Value Stream 3.2 Product Flow 3.3 Process Map WWW.BSSVE.IN3.4 Product Development Value Stream 3.5 Product Flow 3.6 Information Flow 3.7 Value Flow

II. Implementing

1.0 Stability 1.1 Implementation Team(s) and Champion(s) 1.1.1 Formation 1.1.2 Calibration 1.1.3 Implementation Strategy 1.1.4 Business Case

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1.1.5 Sense of Urgency 1.1.6 Metrics 1.2 Social System Stability 1.2.1 Partnerships 1.2.2 Labor-management, customer-supplier, etc. 1.2.3 Team-based work systems 1.2.4 Performance feedback systems 1.2.5 Communication and information systems 1.2.6 Reward and recognition systems 1.2.7 Dispute resolution system 1.3 Technical Systems Stability 1.1 Product definition systems 1.2 Design analysis and verification systems 1.3 Systems for tooling and launch 1.4 Quality systems 1.5 Maintenance systems 1.6 Material systems 1.7 Production systems 1.8 Environmental systems 1.9 Value stream integration

2.0 Flow 2.1 Production operations 2.1.1 Theory of constraint 2.1.2 MRP and ERP alignment 2.1.3 Performance feedback systems 2.2 Product development 2.2.1 Flow of information 2.2.2 Value stream coordination 2.2.3 Value stream hand-offs 3.0 Pull 3.1 Production operations 3.1.1 JIT training WWW.BSSVE.IN3.1.2 Just-in-time delivery 3.1.3 Kanban 3.1.4 Hejunka 3.2 Product development 3.2.1 Question pull versus information push 3.2.2 Product focus visual information pull system 3.2.3 Value stream integration 3.2.4 Toyota Production System (TPS) 3.2.5 Dell Order-Delivery System

III. Sustaining

1.0 Continuous Improvement

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1.1 Data-driven improvement 1.2 Learning cycle and learning curves 1.3 Current state/future state realignment exercise 1.4 Operations and support functions 1.5 Self-assessment matrices 1.6 Problem-resolution methodologies 1.7 Appeals systems audit 1.8 Crisis intervention methods 1.9 Systems change implementation 1.10 Improvement methodologies 1.10.1 Brainstorming 1.10.2 Problem solving models 1.10.3 Process improvement models 1.10.4 Design of experiments 2.0 Organizational Learning 2.1 Knowledge hand-offs 2.2 Leadership turnover 2.3 Multi-skilling 2.4 Empowerment capability building 2.5 Systems thinking 2.6 Implementation strategy debates 2.7 Knowledge management 2.8 Research partnerships

For each of the above topics, there are 1-3 instructional slides – often with explicit directions for how to support/lead the particular activity or exercise. In most cases, the material is relatively generic – applicable for many different types of large-scale system change.

In addition to these materials on implementation, there is also a companion tool kit included in the Fieldbook, which features instructional slides and reference material on the following:

•AndonWWW.BSSVE.IN •Cellular Manufacturing •Critical path planning •Design for Manufacture and Assembly •Design of Experiments •Five S •Integrated Product and Process Development •Just In Time (JIT) •Kaizen •Kanban •Poka-yoke •Process Failure Modes Effect Analysis •Process Flow Mapping

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•Production Flow Analysis •Quality Circles •Quality Function Deployment (QFD) •Risk Management •Root Cause Analysis •Setup reduction •Six Sigma •Statistical Process Control (SPC) •Suggestion Systems •Total Productive Maintenance

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References

Adler, Paul, , “The Learning Bureaucracy: The New United Motors Manufacturing Inc.,” in Larry L. Cummings and Barry M. Staw (eds.) Research in Organizational Behavior, vol. 15, Greenwich, CT: JAI Press, 1992, pp. 180-205.

Ancona, Deborah, Thomas Kochan, Maureen Scully, John VanMaanen, and Eleanor Westney, Managing for the Future: Organizational Behavior and Processes (2nd edition), Cincinnati, OH: Southwestern, 1999.

Bailyn, Lotte, et al,

Bresnahan, Timothy F., Erik Brynjolfsson, and Lorin M. Hitt, “Technology organization and the demand for skilled labor,” in Margaret Blair and Thomas Kochan (eds.) The New Relationship, Washington, D.C.: The Brookings Institution, 1999, 145-84.

Cutcher-Gershenfeld, Joel, Michio Nitta, Betty Barrett, Nejib Belhedi, Simon Chow, Takashi Inaba, Iwao Ishino, Wen-Jeng Lin, Michael Moore, William Mothersell, Jennifer Palthe, Shobha Ramanand, Mark Strolle, and Arthur Wheaton; with Cheryl Coutchie, Seepa Lee, and Stacia Rabine), Knowledge-Driven Work: Unexpected Lessons from Japanese and United States Work Practices. New York: Oxford University Press (1998).

Hofstade, G., Culture’s Consequences. Beverly Hills, CA: Sage, 1980.

Ichniowski, Casey, Levine, David, Thomas Kochan, Craig Olson, and George Strauss, “ What works at work: An Introduction,” Industrial Relations, 1996.

Jurgens, Ulrich, “Germany: Implementing lean production,” in Thomas A. Kochan et al, (eds.) After Lean Production. Cambridge: MIT Press, 1997, 109-16.

Kochan, Thomas A., Russell D. Lansbury, and John Paul MacDuffie, (eds.) After Lean Production. Cambridge: MIT Press, 1997. WWW.BSSVE.IN Krafcik, John F., “Triumph of the lean production system,” Sloan Management Review, Fall, 1988.

Levine, Reinventing the Workplace. Washington, D.C.: The Brookings Institution, 1995.

MacDuffie, John Paul, “Human resource bundles and manufacturing performance: organizational logic and flexible production systems in the world auto industry,” Industrial and Labor Relations Review, 48, January, 1995, 197-221.

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MacDuffie, John Paul and Fritz Pil, “Changes in auto industry employment practices: An international overview,” in Thomas A. Kochan et al (eds.) After Lean Production. Cambridge: MIT Press, 1997, 9-44.

Roth, Siegfied, “Germany: Labor’s perspective on lean production,” in Thomas A. Kochan et al, (eds.) After Lean Production. Cambridge: MIT Press, 1997, 117-36.

Rubinstein, Saul and Thomas A. Kochan, Learning from Saturn. Ithaca, NY: Cornell/ILR Press, forthcoming, 2001.

Schein, Edgar H. Organizational Culture and Leadership. San Francisco: Jossey Bass, 1985.

Shimada, Haruo and John Paul MacDuffie, “Industrial Relations and Humanware,” MIT Sloan School of Management Working Paper, September, 1986.

Thomas, Robert J. What Machines can’t Do. Berkeley: University of California Press, 1994.

VanMaanen, John and Stephen R. Barley, “Occupational Communities: Culture and control in organizations,” in Barry M. Staw and Larry L. Cummings (eds.) Research in Organizational Behavior. Vol. 6, Greenwich, CT: JAI Press, 1984.

Walton, Richard E. “Work innovation in the United States,” in

Whipple, Benjamin C. and Thomas A. Kochan, “Bringing research to the classroom: the case of MIT’s Auto Case,” MIT Management, Winter, 1991, 27-33.

Williams, Joan, Unbending Gender, 1999.

Wilms, Welford, Restoring Prosperity: How Workers and Managers are Forging a New Culture of Cooperation, New York: Times Business, 1996

Womack, James,WWW.BSSVE.IN Daniel Jones, and Daniel Roos, The Machine that Changed the World. New York: Rawson, 1990.

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What do we really want? A manifesto for the organizations of the 21st Century

The MIT 21st Century Manifesto Working Group* Sloan School of Management Massachusetts Institute of Technology

MIT Initiative on Inventing the Organizations of the 21st Century Discussion Paper

November 1999 WWW.BSSVE.IN * The MIT 21st Century Manifesto Working Group includes the following MIT faculty members: Deborah Ancona, Lotte Bailyn, Erik Brynjolfsson, John Carroll, Tom Kochan, Don Lessard, Thomas Malone (chair), Wanda Orlikowski, Jack Rockart, Michael Scott Morton, Peter Senge, John Sterman, and JoAnne Yates.

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What do we really want? A manifesto for the organizations of the 21st Century

In many ways, today’s organizations are working very well. But few institutions anywhere -- be they educational, governmental, community, or business institutions -- are serving societies' and invididuals’ needs as well as they could. In particular, business institutions, while arguably the healthiest of society's institutions, are operating far short of their potential to contribute broadly to societal well being.

Today’s firms are more technically capable and more economically efficient than ever before, and free market efficiencies are being realized in more and more countries around the world. In many cases, however, these highly efficient organizations are not achieving what we humans really want. The current organization of economic activity is intensifying economic inequity. It is eroding critical environmental systems. And it is generating unsustainable stresses on people, even those "succeeding" in the system. We believe that it is even growing increasingly dysfunctional from the vantage point of traditional economic effectiveness in a world where competitive advantage depends on generating and sharing knowledge and managing increasingly complex interdependencies and change.

For example, we believe that the increasing divergence between the "haves" and "have- nots" within countries and around the world cannot continue without morally troubling inequities and, perhaps, major social disruptions. We believe that the energy-intensive patterns of production and consumption fostered by the current organization of economic activity cannot be sustained without significant breakdowns in our natural environment. Finally, we believe that even the people who are most successful in these organizations often find their lives increasingly unsatisfying. For many, the conflicts between their work, their family, and the rest of their lives seem almost impossible to reconcile. Others find, as have many before them, that the material things they buy do not actually make them any happier. In short, today'sWWW.BSSVE.IN remarkably efficient organizations may be taking us, ever more rapidly, to a place where we don't really want to go. The solution to these problems, therefore, is not a purely technical one. It is, at its root, a question of values. We cannot hope to create better organizations without a sense of what we mean by "better," and we believe there is a strong need today for clear thinking about this question: What goals do we want our organizations to serve? In particular, we believe that business organizations— and the societal, economic, and other institutions within which they are embedded— should evaluate themselves by a broader set of criteria than the narrow economic criteria often used today.

At the same time, the problem is not purely one of values either. Even people with the same values may differ about how best to achieve them. We need, therefore, to learn as much as possible from today's novel organizational experiments and from existing

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theories about organizations and economic systems. Just as importantly, we need imagination to envision new possibilities for achieving our values. For example, by dramatically reducing the costs of communicating and coordinating, new information technologies make it economically feasible to organize human activities in ways that have never before been imagined.

In many countries around the world, today’s political debates already include discussions of what values our organizations should achieve and how best to achieve them. The authors of this document have personal views that range widely across the political spectrum. We all believe, however, that it is important— and possible— to think about these issues at a level that goes beyond today’s political debates. We hope that, by appealing to deep human values and imagining new possibilities, it will be possible to reframe today’s political debates in important new ways.

We believe that the world of business and of organizations is now entering a period of significant changes— changes that many people believe will be as significant as those in the Industrial Revolution. We believe that this time of transition presents a historical window of opportunity -- a time in which the choices we make will have a dramatic effect on the world in which we, our children, and our grandchildren will live.

We wish to set forth here, therefore, the reasons for our beliefs. We also wish to issue with this document a call to reflection about what we as individuals and societies really want, a call to imagination about radical new possibilities, and a call to action in making the choices that face us as wisely as possible.

What isn't working?

Toward environmentally sustainable organizations

One of the most obvious examples of how today’s industrial activities cannot be sustained indefinitely comes from the phenomenon of global warming. There has been significant disagreement for years about whether global warming is a reality. In 1995, however, theWWW.BSSVE.IN widely respected Inter-Governmental Panel on Climate Change (IPCC) published a report documenting a broad scientific consensus that global warming is, in fact, a reality. Even though there is still much uncertainty about the details of the phenomenon, the report concluded that human activities--such as the production of carbon dioxide--have led the average temperature of the earth’s surface to rise over the last century, and if unchanged are likely to lead to continued temperature rises in the future.

One might expect large oil companies to be among the last to publicly agree that global warming is a problem. But, John Browne, the CEO of British Petroleum, gave a recent speech in which he says that BP has reached the point where they take the potential dangers seriously and are actively beginning to address them:

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“We must now focus on what can and what should be done, not because we can be certain climate change is happening, but because the possibility can't be ignored. If we are all to take responsibility for the future of our planet, then it falls to us to begin to take precautionary action now.”1

In another response to the same report, over 2500 economists including eight Nobel Laureates endorsed a statement agreeing with this conclusion and saying that:

“The most efficient approach to slowing climate change is through market-based policies. In order for the world to achieve its climatic objectives at minimum cost, a cooperative approach among nations is required -- such as an international emissions trading agreement.”2

In this area, therefore, there is a clear need to invent new forms of production and new forms of organizations to use resources in ways that can preserve, rather than destroy, the physical environment of our planet.

Toward socially sustainable organizations

In the US, the differences between high- and low-income segments of the population have increased significantly in the last two decades. In fact, some observers believe that these economies are becoming increasingly stratified into two tiers: a privileged economic elite of “haves” and a broad mass of economically disenfranchised “have nots”.

In global terms, too, the differences between “haves” and “have nots” are becoming much more apparent. While the economic differences between emerging market countries and industrialized countries may be decreasing in real terms, the explosive growth of television, international travel, and other forms of communication have made people in the developing world much more aware of the differences than they were before.

Of course, these trends are not caused (and cannot be reversed) by the actions of individual organizations alone. They emerge from complex economic and social systems of which businessWWW.BSSVE.IN organizations are only a part. However, many people believe that these trends cannot continue without morally troubling inequities and, perhaps, major social disruptions. There appears to be a clear need, therefore, to invent organizations— and social systems within which they operate— that can be both economically efficient and also widely perceived as equitable.

Toward personally sustainable organizations

In the United States today, many people feel that their work lives and their personal lives are out of balance. In many jobs, for example, the average number of hours worked per week has increased, and in many families, both adults now have demanding jobs outside their home. The reasons for these changes are complex, but their result is that even many

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of the people who are most successful in their work organizations often find their lives increasingly unsatisfying.

What do we really want?

In a sense, all the problems we’ve just described result from designing and operating organizations based on a narrow set of goals. For instance, many managers of today’s publicly held companies believe that they are legally required to try to maximize the financial value of their current shareholders’ investments, and to consider other goals only insofar as they ultimately affect this one.3 We should not be surprised, therefore, to see organizations that are financially successful but whose actions have undesirable consequences for their societies, their employees, and their physical environment.

The basic problem here is that today’s financial measures alone are not enough to reflect all the things we really think are important. But without explicit ways of recognizing other things that matter, it is very easy to forget (or underemphasize) them. In fact, as concepts like the Balanced Business Scorecard suggest, explicitly attending to a broader range of non-financial evaluation criteria may even lead to better financial performance, too.

To have any hope of creating better organizations, therefore, we need to think clearly about what goals we want our organizations to serve: What do we really want? One way to do this is to think first about who we mean by “we”: Whose interests are being served? Business philosopher Charles Handy helps answer this question with his list of six kinds of "stakeholders" of an organization: (1) customers, (2) employees, (3) investors, (4) suppliers, (5) the environment, and (6) society as a whole.4 By considering the interests of each of these different groups, we can identify— and make more explicit— the goals we would like our organizations to serve.

For example, how would companies operate differently if there were widely available measures of how well they created “good” jobs for people who would not otherwise have them or of how well they prepared their workers for better jobs in the future? Or what if organizationsWWW.BSSVE.IN designed work processes by considering from the beginning how employees could best integrate their work lives and their family lives instead of designing work process first, and then trying to balance family needs afterwards.

A key need here is to find new ways of explicitly considering broader criteria of organizational success. In some cases, this will mean quantitatively measuring things not currently measured (such as the quality of jobs created). In other cases, it will mean bringing a new qualitative perspective to bear on evaluating and redesigning individual organizations (such as integrating work and family concerns in new ways).

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Imagining new possibilities

We are, of course, not the first to point out the importance of using broader, non- financial, criteria in evaluating businesses and other organizations. For example, there has been significant recent interest in Europe (especially in Britain) in the concept of “stakeholder capitalism”, which explicitly takes into account the interests of the stakeholders listed above. In the US, there has also been recent interest in defining broader measures of economic well being than simple Gross Domestic Product (GDP).5

Much of this previous work, however, has focused on what governments can do about the problems. While we believe that governments and laws will inevitably play an important role in solving (or exacerbating) these problems, we think it is also vital to consider what other people and organizations can do. We are particularly interested in what businesses and other organizations can do without explicit government intervention.

We also believe it is important to be both as reality-based and as creative as possible in imagining new kinds of organizations to better satisfy our real goals. To illustrate the kinds of thinking we believe are needed, we briefly describe in this section three examples of new organizational possibilities that have emerged in our work in the MIT Initiative on “Inventing the Organizations of the 21st Century”.

“Guilds” for independent contractors

If, as many observers believe, more and more people effectively become independent contractors in fluid project-based “virtual” organizations, where will they go to satisfy many of the human needs that are satisfied today by large organizations? Where will they go, for instance, for a sense of financial security, identity, companionship, and learning? We have developed a detailed scenario for one possible answer to this question:6 They may join independent organizations that do not produce specific products but, instead, provide a stable “home” for their members. We call these organizations “guilds”, evoking the crafts associations of the middle ages, and we assume that they could provide various forms of health and unemployment insurance, social networking, educational opportunities, and other services. We believe that there are a number of WWW.BSSVE.INorganizations today from which such guilds could grow: professional societies, unions, college alumni associations, temporary help agencies, religions, or neighborhoods.

Public measures of social value created by companies

What if there were widely available measures of the value of “good” jobs a company created? Some organizations are already using surveys to rate companies in terms of how good they are as places to work. More elaborate financial measures could be created, for example, by comparing the income and benefits workers received in their current jobs to the income and other benefits they would receive in their next best alternative jobs.7 How would such measures affect the behavior of workers and companies?

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Some steps in this direction are being taken by companies, like Interface and Nike in the US and Shell in Europe, that are exploring seriously what it would take to manage by a “triple bottom line” of economic, social, and environmental impact.

Integrating work and family concerns, not balancing them

We often assume that the needs of work and family are in conflict and that we must trade off one against the other. In a recent study at Xerox, however, an innovative project tried to help employees integrate their work lives and family lives, instead of designing work processes first and then trying to balance family needs afterwards. This approach led an engineering team, not only to have more time with their families, but also to complete their project sooner and with higher quality than comparable projects in their organization.8

What can we do?

Many people believe that the economic and social changes we are now undergoing are as important as any that have ever occurred in human history. Whether they are right or not, we all have opportunities to make choices about what our future will be like.

As nations and as societies, we constantly answer questions like: What values do we honor? What legislative policies will we enact? As organizations our choices include: What products will we sell? How will we organize ourselves to produce and sell these products? What kind of working environment will we provide? How will we interact with our social and physical environment? And as individuals we make choices like: What kind of work will we do? What kind of organizations will we work for? How will we treat our fellow humans, at work and elsewhere?

The choices we make today will create the world in which we, and all our children’s children, will live tomorrow. We hope, with this document, to stimulate you to think about these choicesWWW.BSSVE.IN as deeply, as creatively— and as wisely— as you possibly can.

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References

1 John Browne, Speech given at Stanford University Graduate School of Business, May 19, 1997.

2 See the following World Wide Web site maintained by a San Francisco based organization called “Redefining Progress”: http://www.rprogress.org/pubs/ecstat.html.

3 Even in today’s world, corporate directors have more latitude than they usually assume. In the US for example, corporate officers are legally allowed to do what is in the best interests of their shareholders, broadly conceived, including the non-economic interests of current shareholders and the interests of potential future shareholders.

4 Charles Handy, The Age of Paradox (Boston: Harvard Business School Press, 1994), p. 153.

5 For example, see the following World Wide Web site for information about the Genuine Progress Indicator (GPI): http://www.rprogress.org

6 See the following papers:

Malone, T. W. & Laubacher, R. J. The Dawn of the E-lance Economy. Harvard Business Review, September – October 1998, 76 (5), 144-152.

Robert J. Laubacher, Thomas W. Malone, and the MIT Scenario Working Group, Two Scenarios for 21st Century Organizations: Shifting Networks of Small Firms or All-Encompassing "Virtual Countries"? MIT Initiative on “Inventing the Organizations of the 21st Century Working Paper No. 001, January 1997. (Available at the following web site: ccs.mit.edu/21c/21CWP001.html)

Robert J. Laubacher and Thomas W. Malone, Flexible Work Arrangements and 21st Century Workers’ Guilds MIT Initiative on “Inventing the Organizations of the 21st Century Working Paper No. 004, October 1997. (Available at the following web site: ccs.mit.edu/21c/21CWP004.html)

7 This idea was suggested by Don Lessard.

8 Lotte Bailyn, Joyce K. Fletcher, and Deborah Kolb. Unexpected Connections: Considering Employees’ Personal LivesWWW.BSSVE.IN Can Revitalize Your Business. Sloan Management Review, Summer 1997, 38, 4, 11-19.

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