1. Leadership 4

1a Leaders develop the mission, vision and valuesand are roles models of a culture of excellence.

Management Model Development

Our management model has been developed in line with MCC, FagorElectrodomesticos S. Coop. (FED from now on) and its 7 BusinessUnits.

FED’s Strategic Thinking of 1992 established the commercial,industrial and social strategies and the MISSION of the industrial areaof FED, which were approved by the General Assembly in May 1993.

In 1997, the Management Model established by MCC was circulatedto all the co-operatives in the co-operative group, including FED.

On the basis of this model and the experiences of FED, afterextensive Thinking on the part of the Executive Committee, FED’sManagement Model was developed in 1998. This model waspresented to all the people in the Cooking Business Unit by means ofinformation sessions given by the Managing Director of the BusinessUnit.

In 1999, two years after FED was restructured into 7 Business Units,the Managing Director of the Cooking Business Unit decided toestablish a Management Model for the Cooking Business Unit in linewith that of FED. This decision was taken in the belief that ourbusiness unit was sufficiently consolidated as a management unit andin order to reach maturity in terms of its development. A team wastherefore set up for this purpose made up of most of the Business Unitleaders: Managing Director, all the members of the BusinessManagement Board, Area Managers, Maintenance Managers, SharedServices Managers and the President of FED. After 8 full days ofThinking to analyse the most important achievements and deficienciesof the Business Unit since it was set up, this team established theBusiness Unit’s Management Model, starting with its raison d’être:

“To achieve maturity in our development as a Business Unit, goingfrom a limited vision of the Business Unit (manufacturing) to a broadervision, consolidating the shared services in the Unit”.

“A proactive attitude is required from all the people in the BusinessUnit to do this, in order to enable us, by means of greater co-ordination in management and empowerment, to get closer to themarket, by analysing and responding to all the requests andsuggestions put forward by members of the organisation and to feelourselves a Business Unit in all aspects”.

This Management Model was developed and reviewed by means ofthe P01 process: “Strategic Management” (sub-criterion 2.c). So, theBusiness Unit’s Model published in 1999 was reviewed in theStrategic Thinking carried out in 2000 and is included in our StrategicPlan 2001-2004. 26 people from different areas of the Business Unittook part in it, and our vision was adapted to the take-over ofWrozamet, thereby bringing our policy and strategy into line withthose of our partners (sub-criterion 1.c).

As the Cooking Business Unit is a co-operative enterprise, itsmanagement model is impregnated with the co-operative values thatemerged from the Basic Principles that came out of the Co-operativeCongress.

Our Management Model, in accordance with that of FED, establishes"profitability" and "job creation" as its Basic Objectives. The first isestablished as a basic objective for survival and the second as asocial commitment to the community.

Lean CompanyInternal ManagementCustomer Satisfaction

LeadershipDevelopment

Internationalisation

BusinessStretegies

Profitability

Job Creation

BasicObjetives

ManagementStrategies

Solidarity and interco-operationDemocracy

Job

Co-operative Values

VISIONWE ARE GOING TO BE : THE LEADERS IN BUILT-IN APPLIANCES WITH

THE FAGOR BRAND IN THE SPANISH AND PORTUGUESE MARKET,LEADERS IN THE POLISH MARKET

AND THE POINT OF REFERENCE IN THE BUILT-IN APPLIANCES SECTORIN EUROPE

MISSIONWe are a business unit of the Fagor Electrodomesticos Co-operative,

which sells and manufactures products and services aimed atimproving the quality of life in the home .

Figure 1.a.1

To achieve our vision, the Model includes two types of strategies, whichare the basis for establishing the objectives to be pursued in theStrategic Plan:• Business strategies: WHAT we have to do.• Management strategies: HOW we should do it.This Model was spread by the leaders throughout the wholeorganisation, using different means, to create a Cooking BusinessUnit awareness and act as a transmission source for the wholecompany (sub-criterion 1.d).

Our Managing Director also takes part together with the BusinessUnit’s Production Manager and Human Resources Manager in themonthly meetings of the Social Council (sub-criterion 3.d). At thismeeting information is provided about the Business Unit’s results andtargets, and relations are established with the social representativeswho bring up any concerns of the work force as a whole.

The aim of these activities is to exercise one of the Co-operativeValues which is DEMOCRACY, and is established in the ManagementModel as “The equality of all members to serve as representativesand participate in an active way in the development of the BusinessUnit”.

Involvement and empowerment

If something has changed in the Cooking Business Unit since theFED's restructuring project in 1997 it is people involvement andempowerment. These aspects have been achieved by building upmutual trust between the leaders and the rest of the organisation. Toachieve this it was necessary to change the way jobs were organisedand carried out.

With the restructuring of FED into different Business Units, it is theManaging Director who leads the changes in the Business Unit. Thefirst significant step was to locate his office right in the middle of thefactory and to have all the members of his Management Board by hisside. Then all partitions were taken down to link departments andmake communication easier.

5 1. Leadership

On the shop floor, the change consisted of going from people whocarried out a job and were familiar with a specific post, to people whoare organised into Self-managed Teams (subcriterion 3.c) with targetsand relations with customers and suppliers, capable of analysis andproblem solving. They look for the solution to problems close to wherethey are discovered and occur. The members of the Self-managedTeams therefore receive training about the products, processes, dataanalysis tools, problem solving, etc. This training is given by theBusiness Unit leaders.These teams are led by a Team Leader who is in charge of givingencouragement and co-ordination, and holds monthly operationalmeetings with the team.Going up a level in the organisation, the Area Managers co-ordinate theTeam leaders who they have previously taught and trained. They cancount on indirect support personnel, from departments like Quality andProcess Engineering, in order to respond quicker to problems broughtup and suggestions made than was possible with the previous structure.The Area Managers are the Managing Directors of their areas. Inaddition to having technical knowledge, they have to manage; so theirprofile has changed. Currently, of the four managers there are, two aretechnical production engineers, one a senior engineer and the other aMasters graduate in Production.By means of Customer-Supplier contracts (sub-criterion 3.c) relationsare speeded up with the indirect departments, which collaborate inresponding to problems brought up or suggestions made. Figure 7.b.5shows the development in the number of suggestions made by the Self-managed Teams.The performance of the Self-managed Teams is analysed on a monthlybasis by the Self-managed Team Monitoring Committee. The followingparticipate in the committee: the Managing Director, ProductionManager, R&D Manager, Supplies Manager, Area Managers,Purchasing Manager, Quality Manager, Personnel Manager and theSelf-managed Team Co-ordinator.The prioritisation of improvement targets and actions (sub-criterion 2.e)is established on the basis of their impact on the managementprocesses and each of the strategies established in the ManagementModel. Since 2001, the targets have been deployed by Processes, andall of their Owners are members of the Business Management Board orExecutive Committee). They are then deployed throughout all the levelsof the organisation.Their implementation is monitored systematically by all the leaders bymeans of the Process Team meetings (the meeting system in sub-criterion 5.a). These in turn pass it on to the Collaborators Meetings andthe Self-managed Team meetings. These meetings are held on amonthly basis. They last an hour and a half and are held during workinghours. Currently all Business Unit personnel take part. A room with aprojector and panels with all the performance indicators for each Teamis available for them.So that the Self-managed Teams can keep graphs of targetperformance and therefore manage the targets better, eachmanagement area has been provided with a personal computer.The training sessions for Business Unit personnel, for both the Self-managed Teams and the rest of people, are carried out insofar aspossible by the Business Unit leaders. For example, the Quality,Production and Marketing managers gave different training andawareness sessions in 1999, 2000, 2001 and 2002:• Quality System, Quality and Process Indicators, to the Self-

managed Teams (20 hours)• Rules for handling appliances, to dispatch warehouse personnel.

(4 hours)

• Environmental Management System, to the Social Council,Personnel Department, Maintenance and Business ManagementBoard. (8 hours)

• Workplace Risk Prevention Management System, to all BusinessUnit personnel, by sections. (2 hours/section)

• Explanation of "Catalogues" and "Marketing Plan" to all BusinessUnit personnel.

• “Management by Processes: map and system”, to all white collarpersonnel (3 hours)

Likewise, we shared our best practices with the rest of the BusinessUnits. An example of this was the training given in 2001 by ourProduction Manager to the Washing Appliances and DishwashersBusiness Management Boards and to the President and CEO of FEDcovering the Workplace Risk Prevention Management System andhow to implement it.In addition to this, in order to involve new personnel in our culturetowards excellence, a Welcome Manual was prepared. Based on anaudio-visual presentation, this gives all people joining the BusinessUnit a summary of our Management Model, Basic Objectives,Working in Self-managed Teams, etc.Also in order to involve all the people working in the Business Unitand at the Garagarza Plant in the prevention of workplace risk,everyone was given a copy of the instructions to be followed like theEmergency Plan. This was reinforced by an emergency drill, carriedout in June 2001, led by the Cooking Business Unit ProductionManager.Leaders review and improve the effectiveness of their ownleadership

In the Cooking Business Unit, we use the following definition:

Leader: “Someone who by means of his/her actions encouragespeople to work enthusiastically for the maximum development of theBusiness Unit in accordance with the Management Model”.

We therefore recognise as leaders all those people who manageteams of people; managers (process owners) and area managers, aswell as those who manage work teams (project leaders) and the Self-managed Team Leaders.

Criterion 1. Leadership

1997 1998 1999 2000 2001 2002Self-assessment External assessment

Figure 1.a.2To ensure the right Leadership style and leaders in the Business Unit,we use 4 methods of assessment and review:- The annual EFQM (external/self) assessment.- The two-yearly People Satisfaction Survey.- The Self-assessment of the Self-managed Teams.- The Management by Competencies model.

The overall review of Leadership is done by means of the annual EFQM(external/self) assessment and the two-yearly People Satisfaction

1. Leadership 6

Survey. The figure 1.a.2 shows the assessment carried out since 1997on Criterion 1 "Leadership", which has been contrasted with twoexternal assessments.

The results of the people satisfaction survey can be seen in figure 7.a.1.Among the factors of this survey directly related to Leadership we havethe “Executive Management” factor.On an individual basis an assessment is made of how each leaderexercises his/her leadership:• By means of the half-yearly self-assessment of the Self-managed

Teams where there are specific questions about the relations andleadership of their manager. (Figure 7.a.6).

• The rest of the leaders are assessed annually by means of theManagement by Competencies Model (sub-criterion 3.b), wherethe technical and management competencies of all the jobs aredefined

The reviews of the management style of the Business Unit have ledus to propose actions to reinforce Leadership, such as thosedescribed in figure 1.a.3. Among these actions, it is worth stressingthe work done by the business management board, with a dedicationof 5 hours a month for 9 months in 2002. This was part of aprogramme to develop conversational skills, aimed at improving theleadership of the board members and reinforcing how they operate asa high performance team. This programme also included anassessment at the start and at the finish in order to evaluate howeffective it was. The programme will continue to be run in 2003.

Date Action

1995-2001

Development of Self-managed Teams: actions toimplement the different stages

2000 Training in leadership style and chairing meetings forwhole management team

2001 Definition of Management by Competencies Model

2002 Definition by the Business Management Board of the“team vision” and “Leadership model”

Figure 1.a.3

1b Leaders are personally involved in ensuring theorganisation’s management system is developed,implemented and continuously improved.

Adapting the structure of the Business Unit in line with Policyand Strategy

In order to respond better to the market, as a result of the StrategicThinking carried out in 1996 the Executive Committee decided torestructure FED into 7 Business Units. As part of the Thinkingprocess, several companies that had carried out similarreorganisations were analysed, amongst which Copreci stands outs(winner of the Gold Q in 2000).

This idea of Business Units was included in the Strategic Plan 1997-2000, with each Business Unit Managing Director responsible fororganising the functions to meet the Strategic targets established.

So the Cooking Business Unit started down the road towardsExcellence, with a boost from the Managing Director, with the aim ofgetting everyone in the Business Unit to see the customer as theraison d’être of the company.

The first step was to incorporate the functions of Marketing andPlanning into the Business Unit and redesign the organisationalstructure of the Unit in order to respond better to the organisation’snew orientation.

In 1997 the Cooking Business Management Board analysed the“Manufacturing” and “Industrial Process Engineering” processes(Process redesign in sub-criterion 5.b), and introduced the followingorganisational changes:

• The Manufacturing department “took on” Quality, with the productand process quality managers becoming responsible to theProduction Manager.

• The process engineers became responsible to the AreaManagers in order to be able to respond better to the Self-managed Teams.

• The post of Industrial Manager was eliminated, thereby achievinga reduction in the management structure and bettercommunication, both vertical and horizontal.

After the Business Unit Management Model was established (sub-criterion 1.a) and in order to give a boost to the strategies established(sub-criterion 2.c), in 1999 a new post was created in the BusinessUnit (Export Sales Manager) to develop the “Internationalisation”strategy.

In 2001, as a result of the Business Unit’s Vision of becoming the“leaders in the Polish market”, the whole sales network in Poland wasrestructured and the organisational chart was adapted with a jointManagers in Sales, Purchasing, Quality and R&D functions wereappointed for the Cooking Business Unit’s Garagarza and Wrozametplants. The aim of this organisational change was to orient ourselvesbetter towards our different customers and reinforce our leadership inthe market.

In 2002, as a result of the Managing Director’s participation in acourse entitled “The Art of Business Coaching” and the subsequentdeployment of the content of the course to the members of theBusiness Management Board, the Business Unit’s Leadership Modelwas established and the composition of the Business ManagementBoard modified to incorporate the Management Innovation Manager.

Development of the Management by processes system

As presented in sub-criterion 5.a, since 1974 when we started tostandardise our activities, our process management has developed tothe point where we have established the Business Unit Process Map(figure 5.a.2), named the Owners of each process (figure 2.d.2) andestablished the role of Owner (figure 2.d.1), in addition to havingestablished the Management by Processes System (sub-criterion5.a).

To establish this new approach, we first of all did some benchmarking,by looking at the Systems of Management of and by Processes usedby Copreci (Gold Q 2000), Irizar (EQA Prize 2000) and FagorElectrónica (Silver Q 2002).

The most important process, whose owner is the Managing Director ofthe Business Unit, is P01: “Strategic Management”, which controls thesystematic management of the processes (PDCA) and the monitoringof the key results.

Over the last few years, we have gone from a conventionalmanagement system (departmental structure) to a system ofManagement by Processes (a matrix system of departments andprocesses), in which it has inevitably been the leaders, in this casethe process owners, who have driven this change.

In criterion 2, we present the process P01: “Strategic Management”that guarantees the development, deployment and updating of Policy

7 1. Leadership

and Strategy. By means of Strategic Management and TargetDeployment, with the active participation of all the managementstructure, the Business Unit’s main targets reach all the levels of theorganisation. It is the Managing Director, together with the Owners ofthe different processes, who by means of the Management Controland monitoring the processes, reviews the performance of theBusiness Unit’s targets on a monthly basis.

So, it is the Managing Director herself, with the collaboration of herprocess team (Business Management Board), who ensures theimplementation of management by processes, boosting animprovement in results and the approach to them.

Therefore, it is the owners of each of the 12 processes, whoguarantee in each of their areas the management and improvement ofthe processes established, and report to the Business ManagementBoard for the results to be monitored in an overall way.

Each Process Owner deploys the targets and monitors them bymeans of Process Team Meetings (figure 5.a.4). This monitoring ispassed on to the rest of the Business Unit by means of theCollaborators Meetings (sub-criterion 3.d). Moreover, we shouldhighlight the Self-managed Team meetings (sub-criterion 3.c), wherethe Area Manager monitors what is going on with his team, and themonthly Self-managed Team Monitoring meetings, attended by theBusiness Unit Managing Director, where the performance of theteams’ targets is monitored.

In 2001, all the owners analysed and documented their Process, withthe collaboration of their Process team. These Processes wereapproved by the Business Management Board after the appropriatepresentations by the Owners.

Likewise, on an annual basis, process presentations are scheduled tobe given by the owners in the Management Improvement Committee,in order to analyse their performance in a joint way and share the bestpractices.

Management review by means of EFQM (external/self)assessments

To complement all the above, we have been carrying out annualEFQM (external/self) assessments since 1995. These serve as anoverall review of our management of the Business Unit. They arecarried out around October, in order to be able to incorporate theimprovement areas included in the Business Plan for the followingyear.

Figure 2.c.4 shows the scope of application and the methodologyused in the annual EFQM (external/self) assessment. Since 1997,when the Business Units were set up, we have carried out specificannual (external/self-) assessments of the Business Unit, led by theManaging Director and with the participation of the whole BusinessManagement Board.

After several years of going into the different self-assessmentapproaches in depth, the managing director proposed to the BusinessManagement Board that we should go further with the tool formeasuring and improving the implementation of our managementsystem, by getting an outside view through an assessment by Euskalit(the Basque foundation for the promotion of quality).

In this way, taking as a reference the experience of IRIZAR (EQAPrize 2000), in 2000, the “Submission Document” was drawn up andwe applied for an external assessment by Euskalit. The resultobtained was a score of 401-450 points, and the “Silver Q” prize. Allthe improvement areas identified in the external assessment reportwere deployed to the Processes to be dealt with as part of the annualsystem for Process review (figure 5.a.4).

In 2001, in the opinion that the external assessment had served as aspur to advancing down the road towards excellence, theManagement Board decided to update the Submission Document toinclude the improvements made and apply for a new externalassessment. This time, we obtained a score of 501-550 points andwon the “Gold Q” prize. Again, the areas for improvement identified bythe assessment were dealt with in the review of each of theManagement Processes.

1c. Leaders are involved with customers, partners andrepresentatives of society

Leaders involvement with customers

As described in sub-criterion 2.a, our main leaders find out andanalyse the needs and expectations of our stakeholder groups.

The relationship with our customers is one of the main foundations ofour road towards excellence. As can be seen in sub-criterion 5.e, theCooking Business Unit leaders play a very important role in thedifferent channels established for involvement with our customers.

The Managing Director together with all the members of the BusinessManagement Board participates personally in giving productpresentations to distributors in different markets (sub-criterion 5.e).

Of the numerous customer surveys carried out, in sub-criterion 6.a itcan be seen how FED’s Executive Committee personally participatesin surveying distributors concerning Brand Strategy. The surveys ofdistributors concerning Cooking Appliances are carried out personallyby Business Unit leaders, from the Managing Director to the AreaManagers.

In 2001, as a result of customer surveys, in which they asked for moretraining from Fagor, together with the product presentations, wecarried out participative sessions for distributors and training sessionsfor our most important customers, with the collaboration of an experton the “Future of distribution”. The Business Unit Managing Directorand the CEO of FED took part in the sessions.

Back in 1960, FED decided to open its doors for customers to visit itsfactory installations. The first group consisted of 20 people fromMadrid. This experience was so successful that it has beenmaintained up to the present day.

The Cooking Business Unit receives more than one visit per workingday, between customers, suppliers and other bodies. Most of theBusiness Unit’s managers, including the Managing Director take partin these visits.

The information bulletin “Respuestas” (“Answers”) in addition toproviding information about our products, strategies, Total Quality,new technologies, etc. awards prizes to our distributors for example:

• “The Kitchen of the Year” prize, which assesses concepts likeOriginality, Innovation, Ergonomics, Use of space, Use of naturallighting, etc. Customers from the both the home and internationalmarkets take part in this promotion.

For more than 10 years, we have also been annually awardingthousands of loyalty prizes to our best customers (trips, presents,etc.). The leaders (Managing Director, Marketing Manager, SalesManagers, etc.) present the biggest prizes, with a significant effect onboth the satisfaction and loyalty of our customers.

Leaders involvement with partners

As shown in sub-criterion 4.a, external alliances are contemplated inprocess P06: “Management of Subsidiaries, Affiliates and Partners”,the owner of which is the Business Unit’s Managing Director. The

1. Leadership 8

members of the Executive Committee and the Business ManagementBoard identify and establish relations with subsidiaries, affiliates andallies, subsequently involving their collaborators (middle managementand technicians) in these relations.

We have had the best results in this area with the Eurodom alliance(sub-criterion 4.a), We participate in this alliance together with theBritish domestic appliance manufacturer GDA, to share our bestpractices, with the active participation of the Business Unit’sManaging Director, Production Manager and R&D Manager. Someexamples of the types of activities carried out are as follows:• 6 Sigma• Enamelling Forum• Commercial services• Brand Strategies• Comparative cost structure

WrozametAmong our Affiliates, the Polish company Wrozamet stands out due toits affinity with our Business Unit. As a result of the similarity of theactivities carried out at Wrozamet (cookers, ovens and hobs) and theactivities of the Cooking Business Unit (ovens and hobs), themembers of our Business Management Board and their collaboratorsare participating in and leading the streamlining and improvement ofthe Wrozamet plant, orienting it towards our Management Model.So, in 2002 a mixed team was set up with leaders from Wrozamet andthe Cooking Business Unit (Managing Director and R&D, Marketing,Purchasing, Quality and Innovation Managers) to establishWrozamet’s Management Model, in alignment with the CookingBusiness Unit’s model.SuppliersOur process P05: “Supplier management” led by the Business Unit’sPurchasing Manager, controls the relations with our suppliers:

Since 1993, we have been participating as a driving force in theBasque Country’s Programme for Promoting Quality in the IndustrialSector (P.P.Q.I.S.) (sub-criterion 4.a).

This collaboration has gone through three phases:

1993-1996: a period focusing basically on product qualityimprovement.

1997-2000: in addition to product quality improvement focused onimproving the competitiveness of FED’ suppliers in the BasqueCountry.

2001-2004: starting with those suppliers still committed toimprovement, the aim is to encourage them to reach greater levels ofexcellence. The activities basically focus on the commitmentsundertaken by the managing directors of the organisations in threeareas:

- Quality System- Total Quality Management, and- Environmental Management.

Figure 1.c.1 shows the progress of the suppliers involved in recentyears and how far they have advanced in management terms. Thetarget is for the companies to improve their level, with as fewcompanies as possible at the lower levels. The table also shows thecommitment undertaken by these suppliers for 2004.In addition to this, since the first review of the “New Product LaunchManual” in 1992, we have systematically collaborated with oursuppliers in order to improve the quality of our products and thelaunch time, by means of detecting possible potential problems in thedesign phase when establishing the products and the processes.

Progress in the no. of CompaniesYear Year Year year Year ForecastLevel Level Description1993 1996 1997 2000 2001 2004

0 Companies with NO qualitysystem 13 1 1 0 0 0

1 Companies implementing aquality system 20 5 20 3 1 0

2 Companies planning to obtainISO 9000 within a year 9 6 10 13 7 1

3 Companies that have ISO 9000 0 1 3 16 22 20

4 Companies planning to implementthe FQP-01 Manual within a year 0 0 0 1 2 0

5Companies with a quality systemin accordance with the FQP-01Manual

8 37 37 34 31 20

6 Companies with 300 to 400 pointsin an EFQM self-assessment 15 18 18

7Companies with more than 400points in an Euskalit externalassessment (Silver Q)

1 2 19

8Companies with more than 500points in an Euskalit externalassessment (Gold Q)

1 1 6

9 Companies with more than 600points in an external assessment.

10 Companies with more than 700points in an external assessment.No. of suppliers involved 50 50 71 84 84 84

Figure 1.c.1

Some examples of this collaboration are as follows:

Supplier Collaboration

Supp. 1 Glass ceramic hotplates / pan detection

Supp. 2 Induction

Supp. 3 “Touch” controls / / Electronic timers

Supp. 4 Chamfers on glass / Shapes / Quick changes in styles

Supp. 5 Quick style changes in glass

Supp. 6 Display electronics on glass ceramic hobs

Figura 1.c.2

In accordance with the New Product Launch Manual, SimultaneousEngineering techniques are applied for those items whose complexityor importance to the launch so advises. The knowledge of the supplieris combined with that of FED, thereby reducing the launch time.With these suppliers, the R&D Manager and the Purchasing Managermeet together with their respective teams at least once a year toanalyse new trends and projects and also understand the needs andexpectations of our suppliers.In order to encourage our suppliers, in the first half of 2000, aprocedure was established to recognise the most outstandingsuppliers on an annual basis. This recognition process is led by theBusiness Unit’s Purchasing Manager, with the collaboration of theUnit’s R&D Manager and the Supplies Manager.In 2001 with the aim, deriving from the Strategic Thinking carried outin 2000, of responding better to the needs and expectations of ourStrategic suppliers, we drew up a procedure for carrying out aStrategic supplier satisfaction survey every two years. The survey wascarried out during the last quarter of 2001, with scores of more than 7out of 10 obtained for all the factors.Also with the aim of involving our suppliers in ContinuousImprovement, in July 2001 we held an open day in collaboration withEuskalit. 28 suppliers took part, represented by their ManagingDirectors and Quality Managers. We shared with them our experience

9 1. Leadership

over the years in everything to do with Continuous Improvement, andthe targets we have for the next few years. We took advantage of theopen day to sign commitments to advance towards Total Quality withthe Managing Directors (the “forecast” column in figure 1.c.1). Thesession ended with a visit to the Cooking Appliance Plant, with thesuppliers giving their thanks and congratulations for the advancesmade in Quality, the Environment and the Prevention of WorkplaceRisks. In October 2002, continuing with our policy of involving oursuppliers, a new open day was held in collaboration with Euskalit, withthe participation of another 25 suppliers. During the day, a Diploma forAdvances Made in Management was awarded to 7 suppliers and newcommitments for advances signed with the rest of the suppliersattending. The Business Unit’s Managing Director, PurchasingManager, Production Manager and Quality manager took part in bothdays.To implement these activities, a learning process was carried outbeforehand involving external benchmarking, which is shown in thefollowing figure:

Benchmarking Company / Reference

Components procurement logistic RENAULT Y C.A.T.

Electronic Data Exchange: Orders tosuppliers, expenditure orders, invoicing, etc.(figure 4.e.4).

FORD ESPAÑA, ORIGIN

Suppliers Policy: External Suppliers manualFQP-01 Erabide - FORD Spain SQA

Leadership – Supplier Relations IRIZAR (EQA Prize 2000)

Supplier Satisfaction Fagor Electrónica (Thebest practice in MCC)

The best practice in problem solving (10rules) Grupo Bitron (Italia)

e-business tools in suppliers' management. DPI-Decision ProcessesInternational (Canada)

Supplier Recognition Ford Spain

Figure 1.c.3

Leaders involvement with Society and the Environment

On our road towards excellence we have carried out benchmarkingwith other companies in order to enrich ourselves with best practices.At the same time, we have followed a policy of passing on our bestpractices to all those who might take advantage of them.This openness, backed and encouraged by management, can beseen in the following examples:• “Qualitas” magazine, which has published our experience with

the `5S´ and our New Product Launch Manual.• With IESE (Barcelona Faculty), participating in the International

Study on Industrial Management Strategies and Practices whichstudies the applicability of the excellent practices of 703 leadingcompanies from 23 countries. (Self-managed Team Co-ordinator)

• With the BAIN COMPANY to compare the use of managementtools, their use and level of satisfaction in the World, Europe andSpain. (Self-managed Team Co-ordinator)

• Invited by the IIR (Institute for International Research Spain), theSelf-managed Team Co-ordinator has given talks in Madrid andBarcelona on “Autonomous Work Cells” and “Stock reductiontools”, and received a mention as an outstanding speaker.

• Talk given by the Hob Area Manager on “Daily ManagementTeams in the Cooking Business Unit” at the “V European QualityWeek“ organised by Euskalit.

• Talk given by the Quality Manager on the application of QFD inthe company as part of the Production Management Masters

Degree course offered by Mondragón University in 1999 and2000.

• Talk given by the Cooking Business Unit’s Managing Director on“Leadership” during the Company Management Masters Degreecourse offered by Mondragón University in 2001.

• Talk given by the Cooking Business Unit’s Managing Director on“Internationalisation” in the Basque Country's co-operativesfoundation.

The Cooking Business Unit makes it possible for some of its leadersto participate actively in a number of forums, such as:• MCC’s Quality Centre Monitoring Committee, providing their

experience to design methods based on participation in differentworkshops. (Self-managed Team Co-ordinator)

• ACEDE Quality Committee (Basque Domestic Appliance ClusterAssociation). Participating on a quarterly basis in decision-making meetings on plans of action in the quality and trainingareas.

To conclude this point, we should mention the collaboration betweenthe company and universities, involving Mondragón University,Deusto University and the ESTE Faculty of Business Science in SanSebastian. With these universities, the management team has beeninvolved in end-of-degree projects and seminars, as well as a recentexperience with university lecturers and work exchanges, andexperiences in companies, grants, projects, etc. (figure 8.b.3).Since 2001, we have been participating through MondragónUniversity in the Knowledge Cluster, offering our experience as apractical case of “evolution towards business excellence inmanagement” for the students to analyse and debate.Also in line with the Business Unit’s Mission of “respecting theenvironment”, the Cooking Business Unit obtained, as part of theGaragarza Plant, the ISO 14001 Environmental Certificate in 2000;and the more demanding EMAS Certificate in 2001.By means of a free-of-charge Group Transport initiative, sinceSeptember 2001 we have been responding to the needs of thecommunity by offering an effective solution to the dense traffic in thearea, with respect for the environment.All of the above can be seen in the perception that society has of us,obtained by the “society survey” carried out in 2001 and 2002 (figure8.a.2).

1d. Leaders motivate, support and recognise theorganisations people.

Personal communication

The Cooking Business Unit has several bodies that serve to promotecommunication between the leaders and the rest of the members ofthe Business Unit. These are shown in figure 1.d.1.As we have already seen in sub-criterion 1.a, most of the BusinessUnit’s structure (Managing Director, Departmental Managers andMiddle Management) participated in the development of theManagement Model as well as in the drawing up of the Strategic Planand the deployment of targets (sub-criterion 2.e).

The acts of recognition carried out in 1999 for all the Business Unit’sworkforce, in 12 sessions with 42 people per session, were used bythe Business Unit’s Managing Director and the departmentalManagers to remind the whole workforce of the Management Model.

Regulated by process P01: “Strategic Management”, the transmissionof the Management Model and the deployment of Targets to theworkforce as a whole, in addition to the monitoring the

1. Leadership 10

implementation, is carried out personally by the Business Unit’sleaders by means of the following forums:• 3 or 4 Informative Sessions a year, given personally by the

Business Unit’s Managing Director and a representative of theGoverning Council to the entire workforce. In these sessionsinformation is given about the fulfilment of the Business Plan,Strategies, Management Model, etc. (6 hours per person a year).

• Monthly Collaborators Meetings: this active participation enableseach departmental or team manager to communicate thestrategies and targets personally to the people in their area (20hours per person a year).

• The Managing Director, Production Manager and PersonnelManager, meets on a monthly basis with the members of theSocial Council to discuss management, new projects and hearabout the problems of those they represent. The members of theSocial Council in turn inform those they represent once a monthabout what was discussed at the meeting by means of “littlesocial meetings”, which involve 100% of the Business Unit’sworkforce.

MANAGEMENT / GOVERNING COUNCIL

Business Unit People

Departament / Process

Middle Management

Social Council

Management Board

CollaboratorsMeeting

Collaborators Meeting

Self Managed Teams

SocialCouncil Meeting

Little SocialMeetings Inf

orma

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Sess

ions

Gene

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ssem

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Train

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Figure 1.d.1In all these forums, communication is direct and open with theBusiness Unit’s people. Even more, our co-operative culturepromoting equality between all members facilitates direct contactbetween any person and Management Board.Regulated by processes P08: “People management anddevelopment” and P12: “Social management”, all thesecommunication channels are assessed and reviewed by means of:• The two-yearly “people satisfaction survey” via the “information

and communication” factor that measures different aspects ofcompany communication and communication betweenmanagers and collaborators.

• Ad-hoc surveys carried out during some information talks.• Analysis of suggestions and complaints during meetings of the

social council, governing council and the personnel collaboratorsmeeting.

The “self-assessment of the Self-managed Teams” also assesseshow well the Self-managed Teams are kept informed (sub-criterion7.a).As a result of these reviews, the information-communication mediaprovided to leaders (including middle management and members of

the social council) has been improved, in order to systematise howcommunication takes place and what it should cover (standard, pre-prepared information formats, information session agendas, etc.)

People motivation and participation

Sub-criterion 1.a, in the section dealing with “involvement andempowerment”, and sub-criterion 3.c, describe in detail thedevelopment of the Self-managed Teams. These have promoted theactive participation of all the blue-collar workers (these account formore than 80% of the work force), led by the area managers andother members of the management structure. The evolution of thesepeople’s motivation is reflected in the Self-managed Team self-assessments presented in sub-criterion 7.b.The establishment of targets and their deployment to the work forceas a whole are also described in sub-criterion 2.c and 2.e.In 2002, the prestigious FORTUNE magazine selected the MCC (ourcompany forms part of the MCC, see introduction) as one of the 10best companies in Europe to work for. The following values werehighlighted as some of the distinguishing features that make theemployees of the 10 companies selected satisfied to work for them:equality, capacity for personal decision-making, lack of a hierarchicalspirit, profit sharing, honesty, flexible working hours, job opportunitieswithin the company, good working conditions, a commitment toquality, internationalisation, etc.

Recognition

In order to recognise the efforts and involvement of the BusinessUnit’s people in the improvement, since 1996 a number of acts ofrecognition have been carried out. Some examples of these are asfollows:• Visit of the “Slim-line Hob” Self-managed Team, accompanied by

the Area Manager, to companies working with total quality, likeRenault Valladolid in 1996 and 1997.

• Attendance of members of some of the Self-managed Teamsand personnel from the Engineering, Manufacturing and Qualitydepartments, accompanied by the Production Manager, AreaManager, R&D Manager and Quality Manager at our productpresentations at the Guggenheim Museum and the EuskaldunaConference Centre in 1998, 1999, 2000, 2001 and 2002.

• Visit of all the Business Unit’s personnel to the productshowroom, with a talk on the achievements made, given by theManaging Director and the departmental managers (1999).

In 2000, a procedure was started in order to systematise recognitionon the basis of personal or group contributions. This recognition isgiven annually and all the management, including the ManagingDirector, takes part.In January 2001, all the Business Unit’s work force receivedrecognition for the work done in achieving the Silver Q, at a ceremonyattended by members of the Basque Government. The Silver Q waspresented to representatives from each area of the Business Unit bythe Basque Government’s Deputy Minister of Industry.In February 2002, all the Business’s Units work force again receivedrecognition for the work involved in winning the Gold Q, at a ceremonywhere the Prime Minister of the Basque Government and thePresident of Euskalit presented the Gold Q to representatives fromeach area of the Business Unit.

In July 2002, as part of the recognition procedure, the Business Unit’sManaging Director presented 33 people with a gift in thanks for theiroutstanding suggestions for improvement the previous year. Inaddition to the Managing Director, the Production Manager and theHuman Resources Manager of the Business Unit also took part.