Relying on the power of people at saturn

T E A M S

Since its inception, the Saturn Corporation has served as an example of what partnership, teamwork, and principle-centered leadership can accomplish in an organization that thoroughly understands and tries to apply those concepts. Dedicated to quality and productivity, the company believes that meeting the needs of peopl-ustomers, suppliers, team members, retailers, and the community-& the only route to long-term growth and profitability in a global economy. Its experiences in achieving this goal can light the way for other companies that are struggling with releasing the reins of positional power and transitioning to a team-oriented environment.

by Eleanor White

If you drive down Interstate 65 about 40 miles south of Nashville, Tennessee, you find an exit called the Saturn Parkway. Take a right turn onto the parkway and drive about five miles. Visitors must exit at this point, or they will wind up at Saturn-not the planet, but the car company. Signs direct you south onto Highway 31, where you follow a coun- try road with a white-board fence on the right surrounding green fields of corn and soybeans. Not far down this road, you come upon a stately white Southern mansion sitting well back from the highway, with a low stone wall separat- ing the green, tree-covered grounds from the highway. The scene is a reminder of the South’s pre-Civil War glory, and, more recently, home to Tennessee walking horses. Where’s the multibillion-dollar manufacturing facility, the monstrous plant that builds hundreds of automobiles every day?

At the Saturn Welcome Center, still with no factory in sight, you find yourself in a horse barn. You pass multiple rooms of automotive displays. Signed banners hang from the rafters shouting messages about values, partnership, and teamwork. The interior of polished wood, plaques, and mementos exudes a feeling of warmth and pride.

After identification and badging, you are pointed in the direction of the factory. A winding road takes you past duck ponds and low-lying gray buildings more than a mile in length blending into the haze of the Tennessee landscape. A muted red stripe encircling the tops of the buildings

complements the colors of the farms dotting the surrounding countryside.

Inside the assembly plant, a busy world of car building unfolds with hundreds of people gliding along on a “skillet” with the cars, rather than chasing them down the line, while lifting, placing, polishing, sorting, and building world-class automobiles. The car builders wave occasionally with a wel- coming smile for visitors riding through the plant on tour trams. The finished product leaves the plant at the end of the line, where “Inspiration Point” is written on a placard over the door. Another Saturn is on its way to a customer.

People are asking some thought-provoking questions about Saturn’s success that deserve answers. How were self- managed teams implemented so successfully when most organizations, trying to work with teams, are really struggling? W h y are Saturn team members so enthusiastic? Af- ter all, building a car is very difficult work, even in the best of circumstances. What is it that makes working for this company different? Saturn speaks of mission, philosophy, principle-centered values, partnership, teamwork, and self- management as being crucial to its success. How have these concepts been applied and integrated into the day-to-day business of building cars? What mistakes has the company made that could be avoided by others? What can be learned from the Saturn experience? What are its main challenges for the future?

* * * A member of the General Motors University organizational development staff, Eleanor White oversees the alignment of training programs with the vision, values, and competencies needed by the corporation. She is also responsible for development of strategies and processes related to measuring the impact of training and development. Before joining GM-Saturn in the early 19805, she was a secondary school English teacher.

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6 E & m r White

The answers to these questions are evolving at Saturn. As one challenge is resolved, others surface. and the challenges continue to get tougher. The compmy’s philosophy says that meeting people’s needs is paramount and that:

Everyone has input into decisions that affect them. People are loyal and care about their jobs and each other. People take pride in themselves and their contri- butions. People want to share in the success of their efforts.

In the day-to-day worklife, this philosophy is reflected in the S a t m commitment to nurture a sense of belonging in an environment of mutual trust, respect, and dignity. Cre- ative, motivated, responsible team members are Saturn’s most important asset. Meeting the needs of people is the primary focus of the organization. If “people needs” are met e ~ e c ~ v e l y , h e quality and quantity of prduct leading to profit and long-term success is assured. Therefore, the corporation haq been built around meeting the needs of all its people-team members, customers, suppliers, retailers, and the community.

The cornerstone of this philosophy lies in the company’s mission and values-and getting the workforce to under- stand the what, how, and why of their application. Deci- sions are measured against this cornerstone, and those that are not compatible are not made. Saturn’s mission is: “Mar- ket vehicles developed and manufactured in the United States that are world leaders in quality, cost and customer enthusiasm through the integration of people, tachnology and business systems and to exchange knowledge, technology and experience throughout General Motors.” The five Saturn values complete this vision:

Customer Enthusiasm Teamwork Commitment to Excel Trust and Respect Continuous Improvement

All together, the mission, philosophy, and values are like a three-legged stool. The mission says what the organization is trying to accomplish; the philosophy states how to achieve the mission; and the values reflect team members’ behaviors toward one other in working toward these goals. No leg can stand alone.

This three-part vision was created as a partnership agree- ment between management and Local 1853 of the United Auto Workers when Saturn was formed in the mid-1980s. The partnership relationship is the primary reason that the mission, philosophy, and values are integrated into the ev- eryday business of Saturn. The union is instrumental in en- suring that everyone has a business focus, while management

is very much in tune to the idea of treating people fairly and doing the right thing, not just doing the thing right.

Nothing is more important in a team-based environment than modeling of the values by leaders. Leaders in all parts of the organization must serve as examples of what the philosophy and values mean, Values training is important for everyone, but training is no substitute for seeing the appropriate behaviors modeled by leaders, every day, five minutes at a time. People will not necessarily behave as they are trained to behave if, in their environment, they observe conflicting behaviors, especially among their leaders. Sat- urn believes that leadership should be distributed b a s 4 on the task being faced, and that instead of imbuing the “boss” with all the power and all the responsibility, the approach should be self-organization and self-leadership. The desig- nation of someone to sign approvals does not equate to their being the only “leader.” So, interpersonal skills, vision, the ability to deal with ambiguity, the ability to delegate, and resourcefulness h o m e ever more important for everyone.

Symbols of division are absent. Senior management promotes a culture which says that everyone in the organization is special. There are no special parking spaces or caf- eterias for a select few. Senior managers’ offrces are open and accessible. Dress is casual; no white shirts, suits, or ties. Managers mix with the team members and validate the lack of hierarchy by asking for help and input instead of dictating how work is done. They foster an environment where ideas are solicited and welcomed.

LElTlNG TEAMS TAKE CHARGE

Saturn has self-managed teams with no supervisors, inspectors, time clocks, or union stewards. These teams are responsible for their business, including quality, cost, production, and people. When things go wrong, whether it is technology- or people-related, the expectation is that the team will solve the problem, if possible, since its members are closest to it. Technicians have a lot of responsibility. They seek help only when they have exhausted their ability to deal with the issue, including interpersonal conflicts.

Saturn believes that leadership should be distributed based on the task being faced, and that instead of imbuing the “boss” with all the power and all the responsibility, the approach should be self-organization and

self-leadership. - The tendency in a traditional environment is to follow

a predetermined process rather than to identify the most

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Reljing on the Power of People at Saturn 7

effective and efficient way to solve a problem. Jobs are strictly classified and those boundaries are not crossed. If there’s a technical problem, the supervisor is responsible for solving it or for getting a technical expert who can. If a people-related issue arises, the union steward is called to work with a supervisor or manager designated to handle it. At Saturn, the team handles the majority of the problems that come up. If a team has conflict, team leaders will not get involved until the individuals confront each other and try to work it out among themselves. A more traditional approach would have the supervisor or the union steward handle interpersonal conflicts. Those job roles do not exist at Saturn. Interpersonal conflicts are the responsibility of the team members. They go to their advisors only when they are unable to handle a particular problem. Management and the union work together as team advisors. Everyone is responsible for their own behavior and their own work, with the support of a team and clear communication from leaders who provide direction, support, and resources.

Cross-functional communications are reflected in a cir- cular organizational structure made up of decision rings. Each decision ring meets weekly. The outer ring meets on Monday. The next ring meets on Tuesday, etc. By Friday, current knowledge and information from all rings is available to the 600 work teams that produce the product, since all teams have met and transferred the information to the next ring. Team safety, quality, budget, materials, training, and maintenance champions also meet on a regular schedule to facilitate communications across rings. Each day, team members enter data into a computer on cost, production schedule, quality, and people. These data are tracked by leaders who help teams address problems before they escalate.

Nothing is more important than leader behaviors that establish and reflect the expectations of the culture. Everyone is encouraged to take the initiative to grow

their skilh and to demonstrate their ability to lead as well as follow.

To resolve any issues that come up, everyone is encouraged to express their views without censure. During problem-solving sessions, the opinion of the leader has no more weight than that of a team member. The goal is to look at varying alternatives and try as a team to come up with the best answer, focusing on what is the right thing to do, not necessarily the most expedient or politically cor- rect. This approach takes time, and those used to a more traditional leadership style can become highly frustrated with the consensus process; but in the long run, it works. The best answer is always the result when all stakeholders have

an opportunity to say their say, with no hidden agendas, and the one best answer as the goal.

There are no job classifications that restrict operating technicians from handling common operating problems. Safety and competence drive the troubleshooting rather than job classifications. If a problem involves complex issues, it is up to the team to contact the maintenance, engineering, or other appropriate resources.

It is very important for management to value everyone’s input and ideas equally, for the company’s philosophy im- plies that everyone is equal. Leaders must let go of the hierarchical, competitive, divisive, unequal separation of people and the “boss” mentality. Every person and every job is important and should be treated as such. Teams run the business of their team. Leaders provide training, support, direction, resources, counseling, consulting, and open communication. People are treated fairly and respected for their contribution, whether they are in production, planning, engineering, or administration. Owners and managers are servant leaders in partnership with their union counterparts. They have personal rather than positional power, which comes from giving teams support and resources when needed, helping them to do the job as needed, and pitching in to solve problems rather than criticizing when things go wrong.

LABOR AND MANAGEMENT WORKING IN TANDEM

Management and union leaders are guardians of the be- lief that making mistakes is acceptable. Making a mistake does not automatically lead to punishment. If an organization allows people to make mistakes in pursuit of continuous improvement, it becomes a learning organization.

Union and management leaders are also guardians of the organization’s vision and direction. They hold the com- pass and create a path leading in that direction. Followers expect that leaders know where they are headed. Nothing is more important than leader behaviors that establish and reflect the expectations of the culture. Everyone is encouraged to take the initiative to grow their skills and to demonstrate their ability to lead as well as follow. The most powerful limitations in this environment are self-imposed. There is no intention of downsizing or laying off people, for they are a long-term capital asset. The intention is a life- time job, which is about 30 years. Commitment works both ways. People take ownership and give their best when they feel safe, and trust the company to look after their best interests.

An annual minimum of 92 hours of training for everyone ensures continuous improvement of the company’s most important asset. The achievement of organizational performance goals related to quality, production, training, teams, and profitability depends on the input of every individual to do a good job. Goals are clearly defined and performance is

NATIONAL PRODUCTIVITY REVIEW I Winter I997

0 Eleanor WhL

communicated daily. Continuous measurement is important to continuous improvement. It is to the team’s advantage to help its team members be effective. Coaching in both technical and people skills is the primary method for gowing individual team members. Modeling of expected behaviors is a must for leaders if the coaching is to have any lasting effect. Everyone, rather than just a few owners and managers, is concerned with company success. Everyone is an ownedmanager of their work and their job. It is difficult to maintain mediocrity or the status quo when continuous improvement is the only way to survive. The goals define ex- cellence, and they continue to move forward.

Results are measured, not people. The mission says to build a product that is a world leader in quality, cost, and customer enthusiasm. That is what is measured. People are responsible for results. They are rewarded financially and otherwise for achieving that result. Afavorite saying around Saturn is, “If we always do what we have always done, we always get what we always got.” We can’t expect a different result if we do things the same way. Therefore, the first thing to do is to define the result wanted. Then put together a team to decide what needs to be done differently to get that result.

Factors that cannot be measured effectively, at least in quantitative terms, are trustworthiness, character, integrity, synergy, fairness, kindness, talent, and commitment; yet, these are the most important factors leading toward long- term viability in today’s world. The successful achievement of these qualitative, or “soft,” results is the secret that yields an extra edge. Being 90 percent right is not good enough any more in the face of increasing competition.

Saturn’s management structure is extremely fluid and flexible. The company reinvents itself every day trying to get closer to its vision. It falls back and goes forward based on new knowledge. As new people come into the organization, they must be socialized into ths complex, yet so simple, business philosophy of shared vision and values where everyone is responsible and able to share in the rewards, as well as the risks.

The riskheward program encourages and motivates team members to continuously improve their job performance. The risk portion of pay requires that 12 percent be withheld until specific organizational performance goals are met. These goals relate to 5 percent of worktime spent in training, car quality that meets the industry standard a$ measured by an external auditor, and team effectiveness measured in terms of specific goals, strategies, and team meetings. If the measurements show that the goals have been met, the money withheld is paid back in a qumerly lump sum.

The reward portion of compensation is paid only if the risk goals are met. The reward performance goals relate to car quality that exceeds the industry standard, production schedule atkinmcnt of 95 percent or more, and meeting the

organizational financial goals for the year. The maximum reward is $12,500. The actual amount paid is determined by the relationship of the actual performance to the goal. Everyone in the organization receives the same amount, with the quality and production rewards paid quarterly and the profitability reward paid annually. Every year the goals, percentages, and dollar amounts change as necessary to ensure continuous improvement.

Good people were doing their best to erase the abuses of the past, while inadvertently creating new abuses related to abdication rather than delegation of responsibility.

There were no models to follow. - The company’s management practices were created

with an emphasis on intellectual capital and a shared vision of involvement of all stakeholders in running the business, win-win thinking, finding and doing the right thing as the only acceptable solution to problems, and partnerships with character, competence, and trustworthiness as the key values. The structure, systems, and strategies were formed to ensure support for this vision. The work teams, style, symbols, culture, skills, and management of self and one’s behaviors evolved around this vision as well.

BEWARE OF DOING TOO MUCH TOO SOON

A misjudgment that Saturn made early in its histoq- and there was not enough information at the time to avoid it-was the delegation of too much responsibility too soon to the teams. The best course would have been to release power and responsibility to the teams as they demonstrated the competence to handle them. The problem was that the leaders did not have the competence they needed to go in that direction. There was a mission, a philosophy, and a set of values that spoke of personal rather than positional power and support rather than direction. A positive work environment was the goal, with positive interpersonal behaviors such as active listening, honoring people not present, trust, respect, and information sharing. Self-management respon- sibilities were given too soon with a lot of confusion thrown into the mix. Good people were doing their best to erase the abuses of the past, while inadvertently creating new abuses related to abdication rather than delegation of responsibility. There were no models to follow. A fresh trail had to be blazed for others to follow, with the blessing and the money of General Motors, one of the most successful companies in the world. Some very painful lessons were learned from 5ome scakring challenges that raised serious questions about the future of Saturn’s approach to self-management.

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Relying on the Power of People at Saturn 9

An early “abdication versus delegation” of responsibility problem arose when teams were given responsibility for attendance. Time clocks were never installed at Saturn. Everyone was put on salary. The teams entered exception hours, such as overtime, vacations, and emergency leaves, into a computer system. More than 90 percent of the teams handled this well, but a few took advantage of the freedom such a system allows. They came up with some very cre- ative ways to take extra time off, including doubling up on jobs and getting the lines full as much as two hours before the end of the shift, allowing most of the team to leave with a skeleton crew left behind to take care of the unexpected. Their leaders looked the other way as long as quality and production were not affected. This created some resentment among most of the teams, which were trying to do the right thing, those that could not do this because of production constraints, or when the unavailability of a fully staffed team resulted in downtime or a lack of parts. This abuse was never widespread, but it was serious enough to cause a lot of nega- tive interaction. The teams themselves asked for more guidance concerning attendance issues.

The leaders had to step up to this task, which was never a team issue, but always a leadership issue. In partnership, the union and management determined what was best for the people and the process. They defined some very clear attendance guidelines. The process involves six steps that walk individuals right out of the organization if their un- planned absences get them all the way through step six. Since the implementation of these guidelines, unexcused absences have dropped to less than 1 percent. A lesson from this experience is that self-managed teams need the parameters of self-management defined for them. If clear boundaries are established by leaders, the teams will cooperate, as long as the business reasons for the boundaries are clear and both union and management are saying the same thing.

The presence of leaders must be seen and felt. Team building is a process, not an occasional event. Saturn teams have a tool kit available to them when they need to resolve specific team issues. The kit contains 14 modules that support such topics as conflict resolution, effective meetings, and decision making. The material provides guidance for the facilitator of the team activity. Occasionally, a team is given formal or informal training and counseling as needed. In addition, team members attend 100 hours or more of team training during their early months at Saturn.

Another very early trial for Saturn-which was product, not people, related--came within the first year after start of car production. It became necessary to recall over 1,800 cars that had been filled with corrosive coolant. The company’s Strategic Action Council had to decide what to do based on Saturn’s values. The traditional approach would have been to send out a bulletin to the retailers and recall the cars with a few hundred miles on them for repairs of any damage to the engine, transmission, or coolant system.

The cars with fewer miles would have had the coolant system flushed and then they would be watched for any future problems. But that solution could not be the answer in a principle-centered organization.

The long-term effects of corrosive coolant were not known. This specific problem had never occurred before this incident. Customer needs had to be placed above all else. The answer had to be to take back all the cars and give the customers new cars or return all the money paid, which- ever the customer preferred. The company also decided to support the supplier by solving the problem with the supplier rather than resorting to mudslinging, threats, and re- taliation. That’s what partnerships are all about.

These actions were the only “right things to do” no matter how much other solutions might be rationalized. Every time a test comes along, and that’s a frequent occur- rence at Saturn, there is at least one right answer or one right thing to do. Sometimes making that decision appears on the surface to be the one that will hurt the company, at least in the short term. But principles must guide decisions- not fear, expedience, or politics.

Shortly after the coolant decision was made, which looked at the time like the death knell for Saturn, some in- teresting things happened. Customers came in droves, im- pressed with a car company that would actually do what was right for the customer. The supplier took the responsibility for the cost of the disaster. The root cause was found for the problem. The same supplier still supplies coolant to Saturn.

Important business decisions are made daily at Saturn at all levels of the organization. If political or personal agendas get in the way, someone says, “Wait! We’re Saturn. What’s the rig& thing to do here?’ There’s always at least one right thing to do. It’s up to the leaders to hold that mir- ror up to the organization so that everyone can see more clearly what needs to happen. Decisions must be grounded on principles. Nothing less will do.

The real challenge in Saturn’s future is to maintain what has been achieved so far, continuously improve it, and continue to

fulfill the latter part of its mission, which is to “exchange knowledge, technology, and experience throughout General Motors. ” - Saturn has now been building cars for seven years. The

company is not, and never has been, an “experiment.” The first part of the mission is being fulfilled. More than 90 percent of the Saturn product is made of American parts. The quality of a Saturn puts it at the head of its class in the small car market segment. Costs are favorable, with a competi-

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10 Eleanor While

tive price that allows for long-term viability. The main lesson that other companies, regardless of

their industry, can learn from Saturn is the importance of doing the right thing by people+ustomers, suppliers, retailers, team members, and the community. In this modern world of global competition, you must take the short-term pain to get the long-term gain.

Some might say, “Why should we put our organization through such pain? We’re doing okay, better than ever, with a traditional structure. We have no teams and a traditional hierarchy. We have bosses with employees who do what they are told. Management makes the decisions and employees carry them out. Our people are happy; we make good products; and we have satisfied customers.”

Saturn sees some real challenges in global competition that have never been faced by companies in the past. How does an organization with fierce worldwide competition get that extra ~ ~ ~ p e t ~ t i v e edge? Is it by using the brains, talent, commitment, and ownership of a few people in the organization, with the rest doing the bidding of the few? Or is it by creating an environment where everyone takes ownership of company success, including the bottom line? Creat- ing and maintaining the latter i q extremely difficult and extremely rewarding at the same time. Hearts and minds have to change. Management must release the reins of p s i - tional power and recognize the greater power in servant

leadership with the emphasis on support instead of direction. If unions are to survive, they must focus on supporting their people in a different way. They must continue to ensure that the company is fair and treats people right, but they must also keep the business plan close by, recognizing their responsibility in contributing to the bottom line. Work stoppages and strikes will not take you into the future. In- stead, they lead to oblivion. The new game is winlwin, not win/lose--or worse-IoseAose.

The real challenge in Saturn’s future is to maintain what has been achieved so far, continuously improve it, and continue to fulfill the latter part of its mission, which is to “exchange knowledge, technology, and experience throughout General Motors.” This is the reason GM, the parent company, created Saturn.

The technology exchange has been easy. The exchange of knowledge and experience throughout GM is the great- est challenge of all, since GM is so diverse and has been, for most ofthis ccntury, the most successful company in the world. As GM goes forward, global expansion is the primary goal. Taking what is being learned at Saturn and trying to integrate it into the way GM does business is a most important future business for Saturn, That extra competitive edge comes with how a company treats its people, and Saturn has learned a lot about that, which can only enhance GM’s future. Those who are the hest at meeting the needs of people will win in the long run every time,

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