NANYANG TECHNOLOGICAL UNIVERSITY

K6201 Foundations of Knowledge Management

Term Paper

MORE THAN A MOTORCYCLE: THE LEADERSHIP JOURNEY AT HARLEY DAVIDSON

ANTONY PRAKASH

TABLE OF CONTENTS THE HARD TIMES .......................................................................................................................... 3

THE AQUISITION ........................................................................................................................... 4

RAYS OF HOPE ............................................................................................................................... 4

STRATEGIC DRIVERS OF THE BUSINESS .............................................................................. 5

THE BEGINNING OF THE CHANGE PROCESS........................................................................ 5

MAKING CHANGE WELCOME ................................................................................................. 6

AGREEING ON A ROAD MAP FOR CHANGE .......................................................................... 7

JOINT VISION PROCESS ............................................................................................................ 7

A SUSPENSION ........................................................................................................................... 8

KEY OBJECTIVES OF KNOWLEDGE STRATEGY ................................................................. 8

AWARENESS EXPANSION ........................................................................................................ 9

THE BUSINESS PROCESS .......................................................................................................... 9

ASSESSING THE BUSINESS PROCESS .................................................................................. 10

PERFORMANCE EFFECTIVENESS PROCESS........................................................................ 10

KEY OUTCOMES OF KNOWLEDGE STRATEGY ................................................................. 11

PERFORMANCE EVALUATION AND CAREER DEVELOPMENT ....................................... 12

THE WHOLE PACKAGE........................................................................................................... 12

FROM ATTITUDES TO BEHAVIORS ...................................................................................... 13

KEY ACTIVITIES OF KNOWLEDGE STRATEGY ................................................................. 14

LIFELONG LEARNING............................................................................................................. 14

AWARENESS EXPANSION SESSION ..................................................................................... 15

LEARNING LEADERSHIP ........................................................................................................ 15

IN-HOUSE LEARNING CENTERS ........................................................................................... 16

LEARNING MAPS ..................................................................................................................... 16

HARLEY-DAVIDSON UNIVERSITY (HDU) ........................................................................... 16

DETERMINED TO COMMUNICATE ....................................................................................... 16

FIXING COMMUNICATIONS .................................................................................................. 17

PARTNERING............................................................................................................................ 17

LEARNING FROM EXPERIENCE - AAR ................................................................................. 18

THE LEARNING LAB ............................................................................................................... 19

THE PDL2T ................................................................................................................................ 19

CONCLUSION ............................................................................................................................... 19

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

- Charles Darwin

When we looked at Charles Darwin’s theory of evolution from the perspective of the

changes adopted by the businesses all over the globe, a realization dawned on us that the

most successful organizations have indeed been the ones most adaptive to change. The speed,

at which the world is moving on, makes change almost inevitable. Organizations which had

achieved great success in the past, have failed to sustain their success because of the lack of

changes in their strategies in response to the changing world. On the other hand some

organizations have risen from the jaws of failure because of the time and energy they had

spent in various efforts to bring change across the organization. This essay explains how

Harley-Davison managed to do it and also describes the corporate journey of Harley-

Davidson that included a series of changes that were brought in during the twelve year

period between 1988 and 1999 (Teerlink & Ozley, 2000).

The radical process changes that were implemented in Harley can also be considered

as the Implementation of Knowledge Management Strategy. So considering the

implementation of Knowledge Management Strategy as the heart of the organizational

change management, this essay is divided into four sections namely:

Strategic Drivers of the Business

Key Outcomes of Knowledge Strategy

Key Objectives of Knowledge Strategy

Key Activities of Knowledge Strategy

THE HARD TIMES

Harley-Davidson has always been synonymous with motorcycles that are more than

just a vehicle used for travelling. However, the journey was not a smooth one for the

company. Harley’s market share declined from nearly 80% of the 850cc+ category in 1973 to

a meager 23% in 1983. Beset by a high cost structure and poor quality, the company couldn’t

fight off its Japanese competitors on its own. In addition to these problems, the company

followed traditional ‘command and control’ approach thereby bringing in an attitude of

compliance instead of commitment among the employees.

THE AQUISITION

In the year 1969, American Machine and Foundry (AMF), headquartered in White

Plains, New York bought Harley and appointed a group executive located in White Plains to

oversee the motorcycle division. Harley-Davidson’s headquarters were unceremoniously

relocated to a white collar suburb of New York. Harley’s Milwaukee-based operations were

reduced to the role of a major components supplier to the York factory. AMF officials

assured their Wisconsin employees that the relocation of final assembly and other operations

to the York plant would not lead to layoffs in Milwaukee which proved to be untrue. As a

result of these changes, relationships between the union (PACE) and Harley Management

deteriorated and the union called a strike and the work stoppage lasted more than one

hundred days.

In the year 1981, Vaughn Beals, formerly AMF’s group executive for the Harley

division purchased Harley from AMF and brought back Harley to its birthplace. Beals and his

associates had purchased Harley from AMF with a leveraged buyout for $80 million. Though

Harley regained its former status as a private and independent company, the company carried

a staggering debt load as a result of the leveraged buyout.

Beals and his colleagues were convinced that the external threats to the company were

real enough-efficient Japanese competitors, declining markets and so on. But even more

responsible for the company’s woes were its employees, management and labor alike. They

realized that this was where change had to occur. The various efforts to stabilize and improve

the company were hampered by severely limited cash. In 1982, Harley chopped its overall

workforce by 40%. All remaining salaried employees took a 9% pay cut and agreed to have

their salaries frozen at the reduced levels for at least two years. Beals and his lieutenants

adopted a highly traditional command-and-control style of management. The company’s

managers focused on top-down fixes and short-term financial results.

RAYS OF HOPE

Beals and his colleagues after several notable product development failures

introduced the Evolution engine for model year 1984. This engine combined with the exciting

Softail product line, an elegant variation of the classic Harley look, stormed the marketplace

and began making money. Among the several special programs to help its dealers attract and

retain customers, the most significant was the Harley Owners Group created in 1983 as a way

of communicating more effectively with the company’s end users. It quickly grew into the

world’s largest motorcycle club. Manufacturing head Tom Gelb organized a group and

introduced them to three techniques borrowed from the Japanese: employee involvement

(EI), just-in-time material delivery and statistical process controls which served as the basis

of significant productivity improvements in the mid- to late 1980s. By 1986, all the relevant

financial measures had turned positive. Quality improved dramatically and the dealer network

was revitalized and growing.

Richard F. Teerlink (Rich) who was a member of Harley’s senior executives during

the early 1980s became the company’s President and Chief Executive Officer in 1988. Rich

set out on a path of inventing and institutionalizing a new approach to run Harley. He began

talking with the senior management to find alternatives for the command-and-control style of

management adopted by Beals and his colleagues.

STRATEGIC DRIVERS OF THE BUSINESS

One of Harley’s important strategic drivers of business is to foster a culture that is

committed to continuous improvement.

THE BEGINNING OF THE CHANGE PROCESS

As a way forward for the company, Rich along with Tom Gelb, Vice-President of

Manufacturing and John Campbell, Vice-President of Human Resources held some

discussions and concluded that employee involvement on a broader scale was needed to get

the best out of its employees. Employees had to feel a sense of ownership and deeper

involvement with the organization to take responsibility for leading the company. Since

Harley had a command and control approach until then, they wound up with people who

didn’t know what to do on their own. Rich, Tom and John sought expert advice from

consultants to discuss gain sharing and other organizational issues. They met Lee Ozley,

cofounder and president of Virginia-based Responsive Organizations, Inc. He had initially

worked with labour unions which gave him a perspective of organization from the union’s

perspective. Later, he worked with the organizations by serving in operating management

positions to gain their perspective of unions. Having worked with both groups, he was aware

of the dynamics of the groups which he used to become an arbitrator and mediator to solve

problems. This type of knowledge transfer which involves the transfer of very complex

knowledge that impacts large parts of an organization is called Strategic Transfer (M.Dixon,

2000).

The three Harley managers’ discussions with Lee led them to work as team working

at a root-cause level and come up with a tentative definition of a “leader”. Harley which

stated, leadership was the process of creating and sustaining an environment in which people

work together toward the achievement of common goals-and not because they have to, but

because they want to. Leadership was a process whereby everybody could make

contributions to the success of the company. In 1984, they had put together a booklet on

Harley’s “business policies” which tried to capture and codify the company value system. But

the effort was cut short because Harley was still effectively under the control of its prime

lender, which was in a position to dictate terms to the company. Lee was of the opinion that

it was important to avoid settling on a solution to a problem before the root causes of that

problem had been surfaced and talked about. Too often, he said, corporations attempted to

take solutions to their employees, rather than work with employees to solve a problem.

The shortcomings of command and control included a lack of acceptance of personal

responsibility, a focus on narrow tasks and duties, frustration, limited or narrow input into

problem solving and decision making, a not-my-job syndrome, and-most dangerous of all for

the company’s long-term health-compliance rather than commitment. When employees have

the opportunity to freely express themselves and describe their ideal organization, the vision

they come up with is often quite similar to that described by the organization’s leaders. If the

hopes, dreams, and values of an organization’s leadership differ too much from their own,

people either become compliant or leave.

MAKING CHANGE WELCOME

When an effective change process happens, it takes change a step at a time. People in

the process of large-scale organizational change lose track of the very real progress they have

already made. They get discouraged and lose faith in the process. Change is threatening and

in some ways, planned change is the most threatening change of all. So Rich was thinking of

ways to make the employees welcome change. Lee outlined a simple conceptual framework

he had developed which he labeled “the mathematics of change”:

Change = (E X M X P) >Resistance

E = Engagement; M = Model; P = Process

Engagement would arise when people see and understand the need to do things

differently. Model would provide everyone in the organization with a clear goal and if the

goal inspired people sufficiently, the model would reinforce engagement, thereby helping to

transform the shared goal into a reality. Process includes the ways of giving people the help

they need. This framework put authority over the change process where it belonged: in the

hands of those who would be most affected by any envisioned change.

Lee believed this framework would help people understand change, understand where

resistance to change comes from, and create the circumstances within which resistance can be

overcome. A change that is imposed through command and control not only creates anxiety,

it also creates a second kind of resistance: People don’t like change and especially they don’t

like being changed. But, Lee suggested looking at change in another way. He felt change

should be self-motivated rather than imposed.

AGREEING ON A ROAD MAP FOR CHANGE

In order to launch a successful process of change, the organization had to create new

vehicles for education and the sharing of knowledge. From the union’s perspective, getting

everyone focused on the long-term success of the company was the biggest challenge. When

Lee held his meetings with groups of second and third level managers, he encountered

surprisingly few challenges. Instead, he found a pervasive attitude of compliance. This

convinced Richard and his colleagues that they had put their fingers on a real problem at

Harley. The insidious effects of command and control at Harley were coming into view, and

the first and best evidence could be found among the ranks of management.

JOINT VISION PROCESS

The union-management relationship change started with envisioning a desired future

for the company. The individuals across Harley came together to create the ‘Joint Vision’. All

unions and management leaders were encouraged to come up with their vision of the future,

where they are today and how will they get from here to there. The only problem in the Joint

Vision Process up to this point was concerned with the assembly issue. Other than that one

tough issue, it came together very rapidly. All participants signed their names on the final

document which was later printed and distributed as a vest pocket-size, twelve page brochure

with the roster of signatures taking up the last four pages. It addressed twelve topics: financial

performance, quality, product, customer satisfaction, compensation, benefits, safety, health,

housekeeping, work environment and communication.

Before the Joint Vision Process began, Harley was organized in a very traditional and

hierarchical way. The meeting well suited information-sharing purposes but did not work

well for involving people in problem solving and decision making. Discussions tended to be

limited to a reporting function. People would ask minimal questions for the purpose of

clarification. Members tended to be very passive. All the problem solving and decision

making was deferred to the Executive Committee. The consultants made a series of

recommendations about how the committee could address its problems. First, a facilitator

trained by the Joint Vision Process was employed. Second, members had to speak their mind

at the table and not away from it. Third, members had to refrain from third-party attributions.

The Ops committee agreed to abide by the suggestions and a process of informal and

extensive coaching began, with the consultants coaching members of the Ops committee and

with the members of the committee coaching each other.

The joint groups in all of Harley’s Wisconsin locations continued to identify and

address barriers to the Joint Vision. Slightly less than a year into the Joint Vision Process,

Harley and its union had to reopen contract negotiations. They decided to approach it in a

problem-solving rather than adversarial mode. The two sides reached a new two-year

agreement with little acrimony.

A SUSPENSION

On February 26, 1990 the PACE Local Union 7209 requested a suspension of the Joint

Vision Process. The salaried and management people were frustrated with the overall lack of

progress and some even felt that the union leadership was not fully committed to the non-

traditional approach of the Joint Vision Process. However, there were quite a few take a ways

for the team including:

Union and management officials had learned a great deal about each other.

People could work together even in the absence of perceived crisis.

All agreed that success cannot be achieved by doing things the old way.

The people of Harley wanted the same things for their future.

KEY OBJECTIVES OF KNOWLEDGE STRATEGY

The key objectives of Harley were to make the employees have a sense of ownership

and deeper involvement with the organization to take responsibility for leading the company.

In order to accomplish their objectives, Harley conducted a series of awareness

expansion sessions and developed a new business process.

AWARENESS EXPANSION

A couple of months before the Joint Vision Process was abandoned, there was

considerable discussion about the shift taking place in the organization in terms of individuals

taking on more responsibility and how to make this shift reach the upper management. The

idea was to have both Harley-Davidson and Holiday-Rambler on the same level in terms of

organizational learning and change process. In October 1989, fifty-five executives attended

the “Awareness Expansion” session. Harley-Davidson Motorcycle Company (HDMC) and

Holiday Rambler (HRC) had very different businesses and their executives had never met

before for a working session. The outside presenters were a distinguished group. The

objective of the session was to share ideas and information, get better acquainted, and get

insights and concepts from senior management to help them do their work more effectively.

THE BUSINESS PROCESS

In the period between 1988 and 1991 the Awareness Expansion sessions, the Joint

Vision Process, the beginnings of organizational learning, and related initiatives released

energy. Those who had been pushing for this kind of organizational shake-up realized that

they needed to invent structures for channeling this energy in positive directions. The most

important of these channeling devices was the “Business Process”. Rich said that the real

value of the Business Process is that it provides an understandable framework for dialogue

within the organization. It ensures that everybody has the appropriate level of information, as

defined by them, to allow them to do their job to serve the organization.

The roots of the Business Process actually predated the Joint Vision Process.

Although the Joint Vision Process was suspended and later was transformed into other

structures, the Business Process emerged as an enduring tool in the larger reorientation of the

company. The organization was relationship-centered, and didn’t value discipline. The

Business Process was the first effort to instill some discipline and logic in the organization.

In December 1987, Rich prepared a three-year plan for the board of directors meeting.

It included a mission statement, operating philosophy and selected strategies. This approach

went on to become the foundation for the Business Process.

TAKING THE NEXT STEP

Rich was convinced that the people of Harley had to commit themselves to a

particular conception of the company – one that would focus on processes, actions and

behaviors rather than structures, and one that would concentrate on renewal rather than

survival. To accomplish this, people across the organization would have to understand how

what they were doing fit into a larger picture. They needed the tools to balance local

responsibility with the larger needs of functions, divisions and departments.

ASSESSING THE BUSINESS PROCESS

Over the course of several months, Rich and Jim spoke with more than 100 union

leaders about the means and ends of Business Process. Rich personally ran eight two-hour

sessions with Harley’s York-based employees. The idea was to change a whole culture, a

whole mindset. Harley’s senior leaders were convinced that only a thorough going process

which was taught to all, visible to all, and adhered by all would enable Harley to get through

the immense challenges that still lay ahead for the organization.

PERFORMANCE EFFECTIVENESS PROCESS

In order to ensure that each and every employee understood both the strategic and

operating plans and developed his/her own plan, Harley developed a process called

Performance Effectiveness Process (PEP). The PEP pulled together the work units and

individuals. It gave all individuals the opportunity to participate actively in determining how

their work units would function and how they themselves could make a difference in the

company’s fortunes. Part of the previous performance evaluation system that the HR staffers

carried forward into the PEP was a performance rating form. This form represented a real

impediment to changing the review and compensation system. The problem lay in the source

and content of the established performance measures. Historically, a few key Harley

executives had these measures, with additional input only from a small number of executive

colleagues and outside compensation specialists. The measures were presented in terms of

nonspecific traits and characteristics. So most of the employees were not aware of the

characteristics and traits they need to possess for them to be recognized and rewarded.

As there was a lack of clearly defined list of desirable behaviors, the leaders of Harley

decided to work with Lee to develop specific lists of expected behaviors. Drawing on a list of

more than 250 behavioral descriptors that Lee provided, based on his work with many

companies in previous engagements, the ad hoc group selected a list of 90 descriptors. In an

effort to test the validity and usefulness of this list of 90 descriptors, the group decided to

convert the descriptors into a data collection instrument, which each member would then use

anonymously to evaluate each of his nine colleagues. To ensure more reliable results, some

behaviors were recast as negatives. At the end of the data collection process, each of the ten

executives wound up with a pile of nine unattributed surveys, each of which evaluated his

behavior along 90-plus distinctive axes on a “never” to “always” scale. An outside data

analysis company was hired to process the data which compiled the results into one aggregate

survey. These discussions differed from previous methods and some of the key differentiating

factors were:

Respondents represented a broader peer population.

The individual leading to individual feedback review.

The participants themselves decide on which items they would receive feedback.

This process facilitated individuals to participate in defining their performance measures,

understand how their colleagues perceived them and they knew now how to improve their

performance in the eyes of their colleagues. This helped them coalesce as a team. The

summary version of the survey provided by the outside service bureau compiled the different

profiles into a single profile of the group and this allowed the group to focus on areas in

which the group as a whole either shone or seemed weak. The success of this mutual

performance review led to the adoption of a similar technique as part of the PEP system.

KEY OUTCOMES OF KNOWLEDGE STRATEGY

The key outcomes of Knowledge Strategy were the development of the final structure

of PEP which also provided the employees a path for career development.

PEP went through several iterations and it aimed to give every employee the opportunity

and the responsibility to influence what happened in the organization. It did so in the

following ways:

By having a complete and accurate understanding of how information flowed within

and across organizational units.

By participating in the dialogue during the development of work unit plans.

By participating in the meetings and formal presentations that finalized these plans.

By helping to define a desired performance on the individual level.

PERFORMANCE EVALUATION AND CAREER DEVELOPMENT

The HR department also tailored PEP to serve as the principal vehicle for career

development at Harley. Employee development plan had two objectives:

To provide for growth in one’s current position

To prepare for the future

The career development plan prepared as part of PEP provided the individual with

opportunities to work on both of these objectives at the same time. The group also adopted

the four stages of leadership model and its scope and complexity were:

Working with others

Contributing independently

Contributing through others

Leading through influence

In the spring of 1996, these competencies were introduced to all salaried employees

during the Leadership Business Module. The “upward-feedback” component was started in

1997 and till date, it continues to be used in many areas of the company as part of

performance evaluation.

THE WHOLE PACKAGE

As the leadership team continued their journey of restructuring the policies,

procedures and processes to make Harley the kind of organization they envisioned, they

realized their next step should focus on compensation. It is generally quite true that

compensation is an important motivation factor for employees to make them achieve their

goals. The discussions Rich and Lee had with other participants on motivation made them

reach a conclusion that the real challenge for Harley was not to motivate people because, all

human behavior is motivated and it might be just that the people may not be motivated in the

directions required for organizational effectiveness.

The Joint Vision Process helped the Harley’s leader to learn that most of their

employees wanted same things from their company. This phenomenon was not unique to

Harley and it was true for other organizations as well. This reality implied that if employees

felt the compensation system to be fair then alignment of motivations would not be difficult.

Harley’s leadership team was also aware that money alone wouldn’t persuade people to give

their best efforts to the organization. They knew that the employees cared about the

company’s products and reputation more than money. In order to better understand the

differences between the theory of existing compensation system and its reality, Rich, Lee and

other members of the leadership team decided to come up with points for the two aspects of

compensation system.

This discussion highlighted the gaps between the theory and reality of the existing

compensation system. So the leadership team decided that their next task was to come up

with a new compensation system that was better focused on reality. The team which was

responsible for changing the existing practices found their work to be challenging because the

new standards were much more complicated and they had to deal with recognition as well.

Harley’s leaders considered Performance Effectiveness Process (PEP) as a way of

aligning the individual’s efforts with that of the organization and they also saw it as the

foundation for the individual performance review and career development process. The first

purpose of PEP was to link the individual’s objectives to that of work unit’s plans which

would in turn be linked to the operating unit’s plans and finally to the organization’s

objectives. The second purpose was to help the employee understand how his/her

performance matched with the company’s expectations of his/her. The third purpose was to

help the individual shape his or her development. Harley’s HR managers separated the merit

increase announcement from the performance appraisal process feedback and the

development planning process. This change brought positive effects among the employees.

FROM ATTITUDES TO BEHAVIORS

Harley began its transition approach to compensation by focusing on an individual’s

behaviors rather than a person’s attitudes. Most supervisors assume that employees who often

create problems have attitude problems. Harley’s leaders decided to work with Lee on this

issue and after a series of discussions they reached the conclusion that they should focus

strictly on behaviors and leave out values, beliefs and attitudes. Once they arrived at a

consensus, Lee made a series of presentations to line managers and supervisors about how

they should look at supervision.

CAREER BANDING AND FORCED RANKING

Harley’s HR managers came across situation in which a salaried employee who

wanted to move into a new functional area realized that a move would yield him a lower pay.

So they came up with a career banding scheme which consisted of only six bands instead of

the seventeen pay grades that existed earlier. This was supposed to make employees move

sideways in the organizations without taking a salary hit. But to the leadership team’s

surprise, when career banding was brought into practice in 1995, employees didn’t receive it

well thinking that the company was taking away opportunities and career paths instead of

creating new opportunities.

THINKING ABOUT TOTALITY

Lee conducted a leadership training and development session in which the

participants generated a list of forty-nine steps for the different forms of recognition. Most of

the ideas were implemented and benefited from their positive impact. The forms of

recognition which were not received well earlier were received properly now because the

employees had participated in the process of generating the forty-nine forms of recognition

and that made all the difference.

KEY ACTIVITIES OF KNOWLEDGE STRATEGY

Harley established a number of activities and corporate institutes to implement their

knowledge strategy. They are:

Awareness Expansion Sessions

Harley Davidson Leadership Institute

Lifelong Learning Centers

Learning Maps

Harley – Davidson University

Harley – Davidson World Magazine

Rapid Information Delivery and Exchange (Intranet)

Eagles News Network

After Action Reviews (AARs)

Learning Labs

Product Development Leadership and Learning Team

LIFELONG LEARNING

Rich and his team strongly felt that if the company has to achieve success

continuously then it depended on the employees to agree to be learners throughout their

professional lives. Harley’s leadership group decided on a new educational path with a few

assumptions in mind. The assumptions led to the creation of new institutions at Harley

designed to foster teamwork, leadership and lifelong learning.

AWARENESS EXPANSION SESSION

The second awareness session was held in 1990 which enabled participants to hear the

same subject presented by speakers with different points of view. This session focused on

contrasting views of the organization and also included a factory simulation exercise which

helped the nonmanufacturing managers understand the difficulties faced by their

manufacturing counterparts. This made the participants feel that they are learning from each

other and increasing their understanding of respective businesses. So in order to make every

employee a teacher and learner, the executive committee selected five topics as the focus of

Awareness Expansion IV. The topics were assigned to groups of six to eight participants each

and were given the responsibility to make a presentation to the larger group. Most of the

groups made spirited presentations and they all agreed that it was a real learning experience

for them and the participants as well. This session demonstrated that Harley’s managers could

succeed at both teaching and learning. These were some of the important lessons that

managers learnt in the evolving Harley culture.

LEARNING LEADERSHIP

The awareness sessions helped its participants to gain a new level of understanding

and learning. But it was felt that the sessions had to reach many more people and more

frequently as well. In 1991, Harley established the “Harley Davidson Leadership Institute”

which would centralize all the learning and development initiatives that were happening

across the company.

In August 1991, a number of experts were interviewed and finally David Ulrich and

Ray Reilly, who were faculty members at the University of Michigan’s school of business at

that time, were asked to do a two-week program on leadership. The consultants felt that

Harley need a basic course in management skills and they came up with “Leadership

Fundamentals and Functional Excellence” course in 1993. The number of employees who

enrolled for the courses offered by the institute increased dramatically and the number of

programs offered by the Leadership institute also expanded dramatically that the institute’s

“Training and Development Catalog” consisted of more than 140 pages.

IN-HOUSE LEARNING CENTERS

During the 1980s there was a need to provide union members with opportunities for

learning. In 1988, Bob and Ron Lewandowski created the Capital Drive Learning Center with

a part-time instructional staff from Milwaukee Area Technical College. In 1991, Harley

received grants from the state of Wisconsin and created two “Lifelong Learning centers”.

Harley’s HR managers took many steps to involve large number of employees in lifelong

learning and they also invited family members to attend specific class offerings. They also

created a group called “Peer Network” which consisted of fifty trained employees who

encourage their peers to enroll in courses offered by the learning centers.

LEARNING MAPS

Rich and his colleagues decided that the company should start giving specific training

and education for all employees. They decided to adopt an approach called Learning Maps

which is a process that forces to ask some proactive questions that focus on core business

issues. The employees of Harley-Davidson developed such maps which addressed four topics

namely “Our Market”, “The Business Process”, “Our processes” and “The Money Cycle”.

HARLEY-DAVIDSON UNIVERSITY (HDU)

Harley depends on the skills of its dealers to build and sustain the overall market for

Harley products. Therefore Harley felt it was critical to develop the skills of the dealers. So

Harley-Davidson University was founded in the year 1992 and it was aimed to increase the

competency levels of dealers. The dealers were interviewed and found out what they wanted

and an educational seminar was built around that. As in the case of Leadership Institute, the

number of participants and the number of courses offered by HDU increases over the years.

DETERMINED TO COMMUNICATE

One of the most difficult challenges Harley faced throughout the twelve year journey

was the issue of communications. Though Harley spent a lot of time, money and energy on

the task of communicating with employees, communication problems were not solved.

Harley sensed that they had to find a new path for communication as sticking with the old

patterns of communication made no sense. Harley’s leadership team couldn’t determine what

the employees wanted to know and needed to know. So they recognized that a practical and

realistic approach to solve the issue of communication is to ask the employees what they

needed to know and wanted to know and give them the information.

Lee and Jim Paterson developed a simple worksheet to understand what employees

feel about the information they receive or do not receive. They also initiated a series of focus

group discussions. The surveys and focus group discussions revealed that the information

company was providing was perceived by employees as neither necessary nor valuable.

However the results generated by one of the questions in the data collection form were

enlightening. They indicated that people were actually interested in how company wide

information might help them in their own jobs and areas of responsibility. So Harley’s

leaders decided to hold “Town Hall” meetings at plant level and focus on less company wide

information and much more information of specific departmental interest. The tools and

techniques developed during the Joint Vision Process also helped managers and employees

engage in more effective dialogues. Plant Manager and other leaders revised the format as

suggested by employees and Town Hall meetings occurred more frequently. Managers tried

to focus more on face-to-face communications and less on written communications.

FIXING COMMUNICATIONS

A formal communications department headed by Kal Demitros was established in the

year 1996. Demitros and her colleagues focused on ensuring consistency of communication.

They started a new magazine named Harley-Davidson World which was published twice a

month with fresh news written in USA Today style. They deployed electronic bulletin boards

and also launched an employee intranet called RIDE which stands for Rapid Information

Delivery and Exchange. A network of employees were formed at each plant to provide and

review content for the magazine, electronic bulletin boards, intranets and other

communication channels. Computer terminals were set up in each plant to provide employees

access to RIDE.

Demitros brought in a new tool called the “Eagle News Network” which played

videos of Harley related information which included production, cost, quality data for

location, news about visitors to plant, etc. These screens were kept in lunchrooms and break

rooms across the company. With the help of all these tools Harley made tremendous progress

in communications.

PARTNERING

Harley had partnership with International Association of Machinists (IAM) and

United Paper Workers International Union (PACE) since the late 1970s when the company

started to face crisis. In 1994 Rich discussed with the presidents of IAM and PACE on how

Harley could solve its capacity problems. Rich wanted to enter into a true partnership with

PACE and IAM which would serve the interests of all the three parties. Rich and the

presidents of IAM and PACE formed a group that was called the “Joint Partnership

Implementation Committee” (JPIC).

In 1996, Harley announced that it would build a brand-new facility to meet the

growing demand and it would be designed and located by representatives from Harley’s

management, the IAM and the PACE. The JPIC’s subcommittee recommended Kansas City

as the location for the new plant and Harley’s board of directors approved the decision. The

construction of the new Kansas City plant was started on August 24th 1996 and the first

motorcycle was produced in the January 1998. The new plant found answers to new and

recurring questions with the help of principles articulated by JPIC.

LEARNING FROM EXPERIENCE - AAR

Harley-Davidson adopted and adapted the US Army’s learning from experience

technique called “After Action Reviews” or AARs. This involves transferring the knowledge

a team has learned from doing its task in one setting to the next time that team does the task

in different setting. This type of knowledge transfer is called Serial Transfer (M.Dixon,

2000).

The main goal of AARs is to understand the root causes of a problem rather than

focusing on quickly fix something. The steps in the AAR process employed at Harley are:-

Review the intent of the recent action

Reconstruct key events: What happened?

Discuss the lessons learned from that action

Define the action implications

Take action based on the implications

Share lessons with others

The outcome of this process provided a high-level snapshot of what went right and

what went wrong. It also provided an action plan for the people concerned to improve their

actions when they do the same task next time. All these efforts eliminated short-term fixes

and offered reasoned approaches to help the company improve their quality and develop

problem free launches.

THE LEARNING LAB

A learning laboratory is a workshop in which participants “train” less and “practice”

more. The participants learned new tools and applied them in a setting similar to their work

place. Though the learning lab session didn’t take off as much as Harley’s leadership would

have wanted, Rich felt that he saw signs of real progress as people were talking about it in the

work place.

THE PDL2T

In 1993, Werner, who was a former employee of General motors was hired to work

under the Vice President of Engineering Mark Tuttle. In 1995, Werner’s group established a

new group called “Product Development Leadership and Learning Team” (PDL2T). Werner

felt engineering group alone couldn’t deliver a new product. So they invited members from

the purchasing, service, manufacturing and other functional areas so that the new vision

would enjoy a broader base of ownership across the organization. PDl2T designed a Product

Development Center in 1995, where new designs and products were displayed and discussed.

CONCLUSION

The experiences shared by Harley through this book are valuable lessons that can be

applied to any organization who want to continuously evolve and improve in whatever they

do. If an organization wants to succeed, then it needs to make sure that everybody in the

organization knows what the company is trying to accomplish. It is quite natural for any

employee to feel he should be appreciated for the work he does and the difference he makes.

Harley realized that in addition to expressing appreciation through compensation and

benefits, they need to find out additional ways to say thank you. It was also evident from their

initiatives that it is equally important to give employees opportunities to develop their

competencies so that they could operate well when they decide to move to new roles. It was

because of all these measures that were taken during the twelve year journey, the employees

of Harley were committed to continuous improvement and took more responsibility for

making the company more effective and efficient. The different kind of environment created

by the Leadership team where employees can thrive and the efforts made by the employees in

response, helped Harley to get out of the slump and reach new heights.

References

M.Dixon, Nancy. (2000). Common Knowledge: Harvard Business School Press. Teerlink, Rich, & Ozley, Lee. (2000). More Than A Motorcycle: The Leadership Journey at Harley-

Davidson: Harvard Business School Press.