Flex-ability

Forget about traditional supervision. Hourly workers call the shots. With empowered work teams, Flexible Steel is not your ordinary manufacturer.

by Paul V. Arnold

“And now for something completely different.”

Given the skinny on what makes Flexible Steel Lacing Company tick, you would think it was part of some Monty Python sketch about lunatics taking over the asylum.

Step inside the company’s manufacturing plant in suburban Chicago and try to find someone with the title of production manager, maintenance manager, operations supervisor, etc. Or, don’t waste your time. There aren’t any.

Ask anyone what his or her job title is. But then again, chances are you’ll hear, “Titles aren’t important.”

Looking for the boss? It’s the 22-year-old kid with the earring and black T-shirt, and the grandmotherly lady moving from work cell to work cell, and the 258 other employees at this 175,000-square-foot plant which makes rather unglamorous products — fastener systems for conveyor belts.

You see, Flexible Steel Lacing (a.k.a. Flexco) found the classic structure of managers, job titles, boundaries and red tape to be as confining as a straightjacket and as useful as a dead parrot. Instead, it adopted a team culture based heavily on empowerment, individual accountability, cooperation and bottom-line results.

“It’s not your typical plant,” deadpans employee Bob Hafey.

Of kaizens and cubicles
To begin this tale of teamwork and work teams, have you heard the one about the kaizen team and the workstation?

A kaizen team is on the plant floor, doing a blitz event to design a better layout for the shipping area. The group finds the perfect spot for the redesign. It meets all of the team’s criteria. It’s beautiful. There’s just one problem: A workstation is in the way. So, the team goes to the workstation and tells the occupant, “Hey, you’re in the way. You must move.” The guy complies with the kaizen team, which proceeds to move his desk and other stuff out of the way and into a new location. The blitz continues and it’s a success.

What’s the punchline? The workstation belonged to Jerry Paulson, one of the few guys with a title at Flexco. His happens to be company president.

“He’s still down there on the shop floor. He’s got a cubicle,” says Hafey, whose job function involves overseeing four men who serve as a support group for plant employees.

Remember when . . .
While Flexco has a decade-long history of progressive employee relations, the culture wasn’t always this loose or praiseworthy. In the past, Flexco watched over its employees, figuratively and literally.

Employment was guaranteed, even during the Great Depression. And every year, all employees got a standard raise and bonus.

“The company is kind of paternalistic. That’s one reason why we’ve never had a union. We take care of our people,” says Hafey. “But that can lead to a sense of entitlement. ‘I’m entitled to that raise and bonus every year because I get those things every year. I work here, therefore I get them.’”

Moreover, the company really did watch over its employees. Supervisors told workers what to do, when to do it and how to do it.

“People checked their brain at the door,” says Tom Murray, a 15-year plant veteran.

Twelve-year vet Ray Lee recounts a similar scene.

“When I was first hired in packaging, we had no input,” he says. “It was about hitting your quotas and having perfect attendance. If you did those things, you were a good employee. That made it simple, but most of the time you were frustrated. You had big ideas. You wanted to create change. But, you couldn’t. You felt helpless.”

In this environment, walls were erected. Communication and cooperation waned.

“People became paranoid,” says 25-year veteran Larry Block. “Older workers wouldn’t share all of their knowledge. When they retired, the knowledge went with them.”

Flexco still adheres to dedication (there have been no layoffs since the company’s inception in 1907), but gone are the policing, barriers and limitations.

Focusing their vision
Today, Flexco operates with its “Vision for the Culture,” a 32-word vision statement that acts as a sort of Ten Commandments for employees. It reads: “Flexco Downers Grove will continually strive to be a learning organization made up of empowered employees who are motivated, adaptable, highly involved, highly skilled, individually accountable and working cooperatively toward shared goals.”

Says Hafey: “The document was created because there was an intent to change the culture. It lists the processes we will use to do that.”

Examine the individual pieces:
1) Continually strive = no resting on laurels or engrained practices.
2) Learning organization = build employees and tear down communication barriers.
3) Empowered = don’t hang up that brain after you arrive.
4) Employees = it doesn’t say “supervisors and hourly workers.”
5) Motivated = replaces supervised, directed and prodded.
6) Adaptable = keep your mind open and your feet moving.
7) Highly involved = what are your big ideas?
8) Highly skilled = learning from and with one another.
9) Individually accountable = bye-bye entitlement.
10) Working cooperatively = teamwork, teamwork, teamwork.

Starting from scratch
In order to implement the vision, Flexco started with a clean slate. It eliminated traditional shop-floor supervisor/manager positions. In their place, the company introduced “technical specialists” and “coaches.” It also put power directly in the hands of shop-floor people.

“Do you want to change the culture or don’t you?” says Hafey, explaining the supervisory shift. “In order to create an empowered work teams system, we were looking for a different kind of person to assist people on the floor.”

Prior to the changes, supervisors were selected based on technical skills, not on an ability to communicate openly and honestly with people and help them handle key issues.

Enter the two new roles.

Some of the nine former supervisors — playing to their strengths — accepted technical roles around the plant. They now work on special projects, develop progressive dies and provide skills training.

Then there are the support group members that report to Hafey. These four coaches — former shop-floor workers Lee, Murray, Larry Block and Xavier Velazquez — help employees be the best they can be and guide teams toward being self-directed.

Each coach assists a handful of teams. Each team consists of six to 20 workers from a given area of the plant (tool room, cold heading, screw machines, maintenance, etc.). Each team member has an equal say and the team leader role rotates.

Going through a phase
The structure for a team to achieve high-performance and self-direction is a four-phase program known as The Continuum.

In each phase, a team (with guidance from its coach) takes increasingly more ownership of their own “mini-business.” Teams apply for phase certification. A peer-based review team examines applications and certifies those that meet the criteria. Some of the criteria is found in the Continuum sidebar story.

As of January, most plant teams are Phase 2 certified and are pursuing Phase 3. The plant’s pilot team is Phase 3 certified and is pursuing the final phase.

As a result of this increasing self-direction, teams can decide to modify their work schedule (come in early or late, or work four 10-hour shifts instead of five eight-hour shifts), as long as it doesn’t affect teams upstream or downstream, or the customer. When the work load is light, teams can also loan team members to other teams to help them get product out the door. Doing so helps the loaning team and the plant meet business goals.

“If you own a business, you have to be concerned with cost,” says Hafey. “To control the cost measurement, which is productivity, a team can impact that in two ways: make more product in the hours that they have or get work hours out of the cell and shift them to another area. If you subtract those loaned hours and do the math, that impacts the team’s productivity measurement.”

Thirty-year vet Henry Kiertscher, a machine operator, takes great pride that his team had more than 3,000 loaned labor hours in 2002.

“For the big picture, we helped teams in other departments that were really busy and met our own productivity goals,” he says. “For me personally, I used to work on one machine every day. Now, I’ve expanded out. I have the ability to work on a multitude of machines in this plant. I think that makes me a more valuable employee.”

What’s the point?
The point of The Continuum is to put power and accountability in workers’ hands.

On a team basis, you see that in labor shifting and in teams making planning decisions such as what products and quantities to run.

On an individual basis, you see that in workers having direct procurement responsibility.

That can be small-scale.

“If you need a hammer, you order a hammer,” says 10-year veteran Scott Heitman. “You don’t have to justify why you need a hammer.”

It can also be large-scale.

“Mr. Hafey said we needed to purchase a piece of CNC equipment in the tool room,” says two-year veteran John St. Clair. “He went to the coach in the tool room, and the coach said, ‘John, I’d like you to start running it. Why don’t you go out and find a machine that fits our tool room the best.’  A co-worker and I researched and bought this large piece of machinery. You just don’t see that in most places. They wouldn’t trust someone from the floor to go buy a $60,000 to $80,000 machine.”

Also related to individual power and accountability, workers are expected to annually develop and complete at least four Implemented Process Improvements. IPIs must change an existing process and be repeatable. An IPI doesn’t have to trigger cost savings, but it helps. Last year, IPIs saved more than $1 million.

“If you have a better way, change it,” says Tony Martino, who was hired in early 2002.

“Change it” is the difference between IPIs and suggestion boxes found at other companies.

“Most managers don’t have time to see all those ideas through,” says Hafey.  “Things don’t get done, and you have frustrated employees. They aren’t going to give any more ideas. Here, it’s not just coming up with the idea. The person must also implement it.”

What’s the carrot? IPIs are tied to bonuses (entitlement is gone). So for 2002, those who implemented four IPIs received a full bonus. Those with less than four got 5 to 20 percent subtracted from that bonus.

But cash isn’t the end-all. This is a chance, as Lee and others wished for years ago, to make change happen. With that in mind, Kiertscher had 19 IPIs in 2002. In previous years, “IPI King” Clay Noga eclipsed 50.

Doing a 360
An additional program that pushes accountability and eliminates an entitlement mind-set is Performance Assessment and Development, the plant’s review process that includes 360-degree feedback.

Once a year, coaches rate employee performance with input gained from three to five co-workers. The categories rated are many of the things that push the person’s team through The Continuum: quality, team commitment, safety, continuous improvement, judgment/ingenuity, productivity, job knowledge, communication skills, delivery and individual accountability.

From the individual categories, a person receives a rating from 1 to 5. Basically, a 5 is unattainable, a 4 is a model employee, a 3 is a good employee, a 2 is an employee in need of help and a 1 is in need of serious improvement.

Pay raises are linked to the rating. The process is built on honesty.

“Everybody knows who is best friends with whom here,” says 8-year-veteran Denise Collett. “People shy away from including their best friends (on a PAD review) to keep it from being biased.”

Collett is an example of an extreme case of honesty.

In a recent PAD assessment, her rating was close to 4. She disputed the rating.

“I thought the score was too high,” she says. “To me, a 4 is a perfect worker. I’m not perfect.”

The Holy Grail
OK, Collett’s not perfect, and Hafey says neither is Flexco.

“This isn’t utopia,” he says. “This is a manufacturing plant. There are still issues. But we are leading the charge to an objective, and that’s to change the culture.”

Compared to most plants, that culture is quite different, indeed.

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