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Change Alters Paths to Improvement

April 1, 1994
Related Topics: Change Management, Total Quality Management, Featured Article
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Textbooks too often discuss total quality or continuous improvement initiatives as if they happen in a static environment and—even if challenges are posed—ultimately turn out as planned. In reality, there are no such certainties. The experiences at one of Coca-Cola's syrup plants underscore the point. A continuous improvement process was first introduced in 1988, but since then the plant has faced numerous obstacles: the death of one plant manager and the arrival of his replacement, the decision to close the current plant and move to a new facility and then the decision not to build the new facility but instead to consolidate operations with another company. The road has been tough, but the plant—and its employees—are triumphing. This is the first in a series of articles chronicling their journey.

Coca-Cola USA's Baltimore Syrup Operation has been known as a "bad-luck" plant. The midsize soft-drink-syrup manufacturing company has been plagued by high absenteeism, worn-out equipment, outdated management systems and physical isolation among its workers. "Many [employees] have been known to throw up their hands to proclaim that 'not even the heavens shine on Baltimore,' " says Carolyn Jackson, human resources director for the Atlanta-based Technical Division of Coca-Cola USA.

That's part of the reason why Coca-Cola USA targeted Baltimore and nine other syrup plants and one beverage base plant to participate in a nationwide Continuous Improvement Process (CIP) program it launched in 1988. "CIP is a management system with a focus on meeting customer needs and expectations," explains Bill Buehler, executive vice president of Coca-Cola USA.

Like many quality programs, the task of CIP-driven management is to create the environment and tools to fulfill this vision while each employee is trained to be responsible and accountable for his or her productivity and the quality of work. The Technical Division's mission was to focus on customers, improve employees' skills and knowledge of the business and establish an environment that promotes teamwork and employee participation.

Despite the facilitator's best efforts at Baltimore, however, three years later the CIP program had not been implemented effectively, and morale remained low. Then the plant manager died, an event that threatened the tenuous continuity of the program and threw even more doubt on its success. "There was low self-esteem spreading throughout the operation," recalls Harrison Bentley, who took over the plant as general manager in September 1991. "It was hard to find anyone who felt good about coming to work every day." That dashed Bentley's hopes of settling into an established, well-run plant operation. Nonetheless, as a manager who placed a high value on participative management, employee involvement and management responsiveness, Bentley was determined to complete the CIP process and revitalize the Baltimore operation.

First, Bentley pulled together his management team—Tom Johnson, production manager; Stan Zalewski, finance manager; Don DeGarmo, quality assurance manager; and Mike Montgomery, traffic and transportation manager—to evaluate the situation. Notably missing from the team was a human resources manager because none of the Coca-Cola USA syrup manufacturing plants had on-site HR personnel at the time. But these managers recognized that they needed help, so they called on Jackson for support. Jackson and three other HR staff members were temporarily enlisted to support Baltimore's efforts.

This expanded management team then used a three-step process to determine and launch their strategy: 1) assessing the organization; 2) developing the plan and; 3) obtaining the concurrence of all employees (referred to as "associates" within the company). Together, with the consensus of the employees, the decision was made to transform the Baltimore plant operation into a high-involvement, high-performing workplace that would enhance the continuous improvement philosophy. That, of course, was just the beginning of the process. To get the CIP program back on track with high-performance teams, since 1991 management has led the employees through five stages: an organizational assessment; development/implementation of a plan for high performance; workshop on cultural change; status/process check; and managed change.

An assessment yields few surprises.
The Coca-Cola USA-Baltimore Syrup Operation is one of its 10 syrup plants. Baltimore's 104 employees make and distribute fountain syrup for Coke Classic™, Diet Coke™, Sprite™ and various Fanta™ flavors for customers such as McDonald's™, Burger King™, and Hardee's Food System, Inc.™ It is a non-union operation, except for the trucking and transportation operation, which is managed by a third party.

The organizational assessment took several forms. First, Bentley reviewed the results of the Technical Division's biannual employee survey from the spring of 1991. It confirmed his observations that equipment was outdated, workers distrusted management and didn't work cooperatively. Bentley then conducted personal interviews for two months with every em-ployee—administrators, hourly workers, supervisors and managers. He used the time to get to know the workers and let them become acquainted with him. The interviews were scheduled for 30 minutes, but some lasted as long as an hour and a half.

Meanwhile, management also conducted focus groups to clarify all the issues that would affect high performance. And finally, employees participated in a cultural assessment. The instrument posed questions that were intended to reveal whether employees felt that conditions needed to change (and were open to it), believed that nothing needed to change, or felt something between the extremes. There were few surprises in the findings. The employees' biggest complaint was that management showed favoritism toward certain employees. And yet, the employees still showed extreme pride and commitment to the organization's values, commitment to quality products and stability of the work force.

Findings were classified into two categories: strengths and opportunities for improvement. The work force's strengths included the fact that the associates placed a high value on the need for empowerment of the employees. They also believed in knowing the customers' needs, wanted clear and diverse job responsibilities, valued loyalty, and possessed a genuine "can-do" desire to do the job right.

The employees cited several opportunities for improvement: the need for a clear statement of the organization's vision, more effective communication among all "associates," including management, recognition and rewards for accomplishments, and trust in the organization and its leaders. Armed with this data, the management team proceeded to the next step.

About three months after Bentley's arrival—and just as his team was wrapping up its organizational assessment—he learned that a business decision had been made at Atlanta headquarters that production volumes for the region justified and required a bigger, more technologically efficient production facility. That was good news for Baltimore, which would get a brand new facility designed and constructed from the ground up. But Bentley understood clearly that it would not be practical to open a new facility with the same organizational culture that was evident then. The drive to reenergize the CIP program gained new urgency.

Production must coincide with employee development.
In this crucial second stage, it was important to determine opportunities that would bring about the biggest returns. After considering all the data and consulting with those employees regarded as leaders by their peers, management devised the following strategy:

  • Develop mutual trust and respect between management and associates
  • Enhance interpersonal relationships among associates
  • Train and develop the work force
  • Create an atmosphere of genuine concern for high performance among all associates
  • Maintain pride and job ownership among the associates.

In a nutshell, the business goal was to keep the old plant running through the building of a new facility. At the same time, management also wanted to increase the skills and abilities of the work force to prepare it for a smooth move into the 21st century.

For example, in syrup manufacturing, the raw material is converted to syrup and is then placed into different package lines, such as five-gallon containers. Next, the syrup is shipped out to the customers. Many of the employees' current assignments are geared toward equipment such as washing containers and putting them on conveyor belts. With the new facility, technology would change dramatically. Workers who were previously washing containers or putting plastic into boxes will need skills in new areas such as consensus building, forging interpersonal relations and using advanced technology.

Initially, there was some resistance. After all, Bentley was new to the organization, and he was relatively younger than the previous manager who had worked at the plant for four years. Further, the average worker's age was 40, and most had been employed at Coca-Cola USA between seven and 30 years. Most of them were white, but there were also many African-American workers.

Even though the employees at that time were pleased about the new facility, some were also uneasy because they would have to change their transportation arrangements. Other workers might have to move to areas that had higher home mortgages and taxes, whereas before they could walk to work in their own neighborhood.

The main challenge for Jackson and management then was to arrive at employee consensus about the plant's direction. Getting the continuous improvement process back on track would be difficult because there was very little follow-up by management on the process after it was initiated in 1988. Several steps needed to be taken immediately:

  1. A vision for the branch operation had to be developed.
  2. High-performance training needed to begin as quickly as possible.
  3. An HR manager needed to be hired in the Baltimore branch to implement these steps.

The search for an HR manager began in Baltimore during spring 1992, one of the first within Coca-Cola's manufacturing division. Hopes were now running high for the Baltimore plant's management to hire someone who had experience in continuous improvement and high-performance teams as well as standard HR background. It took a while to fill the search. Even when it seemed like the right candidate was found, she declined the offer and accepted a position elsewhere.

Workshop reinforces values.
The third step was to hold a workshop to outline the cultural-change process. Employees were asked to identify the new behaviors desired in the new facility. After all, they were going to leave an old, outdated building. Certainly, it was an opportunity to leave outdated behaviors behind. The organizational assessment had told them that.

"Getting the continuous improvement process back on track would be difficult because there was little follow-up by management after it was initiated."

After being encouraged to name the new facility and the new culture project, the plant employees created "VISIONS." Buttons, pencils and signs appeared around the plant, engaging workers to "Tell Us Your Visions!" That phrase also became the name of the cultural-change workshop, which encouraged the associates to:

  • Understand the meaning of "culture," how it is developed and changed, and how it affects success
  • Identify key cultural norms that they wanted to bring with them to the "new" facility and those they wanted to leave behind in the "old" plant
  • Agree on important individual behaviors and group actions that would best support these key norms
  • Enjoy learning and being together.

During the workshop, the associates—management, hourly workers, administrators and supervisors—sat down with each other to identify behaviors and group actions. The central focus question was, "What do we need to do to become a high-performing organization?"

Their insights became the wake-up call to the organization. Managers, supervisors and workers alike became energized by the dynamics of the interaction. Essentially, people sat down and scratched out seven areas of concentration: education and training, smart management, quality and continuous improvement, accepting and managing change, accepting responsibility and accountability, improving communication, and teamwork.

For example, in the area of teamwork, behaviors to "leave behind" included the following statements and actions:

"...I don't want to work with him/ her."

"...It's their job, not mine."

"...I don't get paid to do that."

"...Leave it for the next shift."

On the other hand, behaviors to "bring" to the new environment would be actions such as sharing workloads between shifts and bridging all the islands in the plant, or statements such as:

"...I'll listen without interrupting you."

"...Consider it done."

"...I'll take responsibility."

Group after group, working at different tables throughout the workshop, came up with similar actions to be taken: getting along better with each other, helping each other deal with change, better training to keep up with state-of-the-art technology, becoming better advocates for the customer. They knew they had a lot of work to do to accomplish all of this.

A status report boosts morale.
Word was getting around the Coca-Cola organization that something good was happening in Baltimore and about this time, plant management was invited to report its successes to Coca-Cola USA's annual Manufacturing Department Conference, which was held in Phoenix and attended by approximately 70 manufacturing managers and executives. This was a highly coveted invitation for Baltimore for three reasons. First, there had been a strong perception by the Baltimore associates that they weren't held in high esteem in the system because of their history. Second, a total-quality work redesign had begun at one of the sister plants in the system, and it was thought that most of the system's attention would be focused on that effort. And third, and perhaps most important, this was an opportunity to impress senior management, other headquarters' support personnel and human resources senior management with all of the exciting things happening at Baltimore among the workers and management.

Bracing themselves for this opportunity, the workers decided that two hourly associates should attend the conference and make the presentation. Mike Montgomery, manager of traffic and transportation at the Baltimore facility, remembers feeling "a little skeptical that hourly workers would be able to adequately and effectively represent the location at such an important meeting. After all, who wanted to hear anything about Baltimore anyway?"

Two hourly workers were selected by the associates to make the presentation at the conference: Jerry King, quality assurance laboratory assistant, and LaVerne Potter, operator. To prepare for the occasion, the selected speakers attended PowerTalk, a program in Atlanta that develops speaking skills, where they learned not only to build their confidence in public speaking, but also how to analyze their audience and structure the presentation.

Their presentations were very well received at the conference, not just for the content, but also for the lively and unique style of presentation. King, highly charged by the reception he and Potter received, later exclaimed, "This is one of the most exciting moments of my work life with Coca-Cola."

Armed with congratulations, the Baltimore team returned home, with Montgomery leading the way to let their peers know how well the presentation had been received. This was the shot in the arm that Baltimore needed to follow through on their commitments. Once the excitement of the conference subsided, it was time to resume implementation of the plan.

Another announcement stuns employees.
The euphoria was short-lived. "I remember my first gut feeling that something might go awry," muses Bentley. "We had completed our search for an HR manager, made a reasonable offer to the candidate and she had turned us down. What else could happen?"

The something else was announced in September 1992. Coca-Cola USA announced that Coca-Cola Enterprises (the largest bottler of Coca-Cola products) would build a new bottling facility in the Baltimore region. Moreover, to gain operating and administrative synergies, Coke would combine syrup and bottling production in one plant. It was clear that Coca-Cola Enterprises (CCE) could more effectively manage that facility than Coca-Cola USA. Instead of moving into a new plant of its own, the Baltimore syrup plant would be closed.

Tom Blackstock, director of manufacturing for Coca-Cola USA flew to Baltimore with the unexpected announcement. "Our manufacturing Vision states that we are '...open and honest' with each other," says Blackstock. "So it was important that I face those associates, their anger, their shock, their disappointment, their potential mistrust of everything I was ready to share with them."

In September, the Baltimore plant's management team conducted several short, small meetings to let the employees ask questions and vent their anger. Initially, the workers believed that the managers knew more than what they were telling, and that they would "be left out in the cold." They were devastated, according to management. Workers were offered some counseling through the employee-assistance program. But still, the most frustrating aspect was the uncertainty of their future.

Work force adjusts its outlook on the future.
In December 1992, Coca-Cola USA and Coca-Cola Enterprises signed an agreement which formalized the earlier announcement. Employees understandably have ex-pressed anxiety because CCE is a separate company, with different personnel policies, procedures and, some think, a different human resources philosophy. Some workers wonder if they should retire early, while others worry whether their benefits will be rolled over if they are retained at the new facility.

Now, although employees haven't been promised jobs at the new bottling plant, workers and managers alike at the Baltimore Coca-Cola USA plant sense that their future security could lie in their ability to take advantage of the situation and use the time to enhance their skills and talents for their own and their company's success. Thus, Bentley hopes he has not compromised the continuous improvement process.

Over the past year, Bentley says, the plant's employees have begun to view the process as an opportunity to prove their indispensability. The attitude among the work force has started to change in other ways, too. In addition to implementing the continuous improvement process, the change is in part due to a training strategy that had been instituted after the Coca-Cola Enterprises announcement. Each month, the Baltimore plant employees are offered the opportunity to attend special training sessions in such areas as interpersonal relations, personal career ownership and resume writing. So far, 90 employees have participated in the classroom sessions, which are conducted during working hours.

Management also chartered a team of eight employees whose mission was to design the team structure for the plant. When the design process is completed, Baltimore Coca-Cola USA will have cross-functional teams made up of managers and workers.

Of course, there is still the temptation to believe that the current work force may not benefit from the culture change under way. But most workers have learned that an effective work strategy, of which they are an active part, will only provide them with better options in today's global world of competition. Bentley says he wants to avoid a new worker-selection process with CCE. If the Baltimore plant continues to make productivity gains, he would like to present CCE with a list of current CCUSA employees who will be vital to the new facility. Hopefully, their livelihood will reflect the company's slogan: "Always Coca-Cola."

In the next installment of this series, Personnel Journal will examine the strategy used in managing this situation. We will look at the high-performance team design, how it was developed, who was involved and the impact of the design on training employees, managing work-force morale, and maintaining and increasing productivity—in essence, how the business is running in this environment of uncertainty.

Personnel Journal, April 1994, Vol.73, No. 4, pp. 65-73.

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