1994 Financial Impact Optimas Award ProfileBREastman Kodak Co

September 1, 1994
Question: What's black and white and red all over?

Answer: A dead zebra.

This joke originated on the shop floor of the black-and-white film manufacturing division of Rochester, New York-based Eastman Kodak Co. It represented how the 1,500 workers in the division — who collectively came to be known as Team Zebra — saw their situation. The "zebra" — their operations — appeared to be dying.

This realization came after a reorganization of the company's manufacturing operations. In the late 1980s, "Mother" Kodak found herself in trouble. For the first time in this century-old business's existence, its dominance in the market was challenged. Increased competition, slow new-product development and high costs generated from tremendous wastes in the pursuit of quality all contributed to poor financials and a decay of reputation.

At the core of the company's problems were its manufacturing practices. So, as part of its strategy to bring itself back around, Kodak reorganized its manufacturing operations into six flows — flattened-out organizations that would produce film and paper in continuous processes rather than by functions.

The new structure made each flow more accountable for its actions than ever before. That's when the black-and-white film manufacturing (BWFM) flow realized how it had been contributing to its mother's downfall. "The more and more we got into this reorganization, the more and more we started to find hidden costs that in the past weren't linked to our business," says Tim Giarrusso, who was the unit director of management services in BWFM at the time and has since moved to unit director of coating pilot. "Now we were the owners and accountable to drive those out of our business."

Those costs were associated with late product delivery to Kodak's distribution centers approximately one-third of the time, exceedingly long cycle times and waste that amounted to nearly half of what the operation manufactured. And, "it became clear very quickly that no one was going to send a lot of money our way to save us," Giarrusso says. Instead, the division would have to rely on the talents and the knowledge of the people in the organization to bring about change.

So that's what it did. Led by a 15-member leadership team, the 1,500 employees became business partners to turn their organization around. They adopted the name Team Zebra not only because the zebra is black and white, but because the zebra culture is representative of what the BWFM's culture needed to be: Zebras are each unique, but run in herds.

Through the efforts of Team Zebra, the BWFM division today is one of Kodak's leading business units in product quality, customer satisfaction and overall operating efficiency. Stephen J. Frangos, who was the manager of BWFM during the Team Zebra process and currently is an executive consultant for Achieve International, a division of Zenger-Miller Inc. in Rochester, New York, and author of Team Zebra (Oliver Wight Publications Inc.), cites that an HR strategy that focused on creating an empowered work force was key. That strategy, says Martha "Marty" Britt, who was the HR strategic partner on BWFM's leadership team and now is an HR business partner, required building "the capability, the understanding and the desire of the partners to play a key role in turning the business around."

BWFM builds an HR strategy on desired capabilities.
Strategic HR was a new concept in the manufacturing unit. "Most people still had a traditional view of what the personnel function was there to deliver," Britt says. "So, it wasn't as if we developed an HR strategy out of the shoot or even as if we knew what that meant or how it could add value."

To learn these things, the team went through an education process, led by Britt, on what a human resources strategy really is and how it can contribute to the business strategy. The education included adopting a model of HR strategy propagated by David Ulrich, a professor at the School of Business at the University of Michigan. He suggests determining what organizational capabilities are required and what culture is needed to support those capabilities before making decisions on what type of staffing system, development process or recognition program is needed. "That was a real strength of the strategy that black-and-white ultimately put together," Britt says. "Many businesses jump straight to the answer — skill-based pay or gainsharing, for example — without really understanding what culture is needed to accomplish the business strategies."

Because the BWFM division planned on using its human resources to turn the business around, the key organizational capability that the leadership team identified as necessary to meet its business goals was empowerment. The HR strategy, therefore, would need to create the tools to bring about an empowered partnership within the division.

The team developed a model that consisted of three elements: creating an environment conducive to empowerment that was both open and trusting, and encouraged creativity and risk taking; developing individuals to not only have the skills to take action but also the desire to do so; and creating a shared understanding of the customer focus. Only after these goals were set did Britt and the rest of the management team look toward refining black-and-white's HR practices.

Even then, however, the division didn't completely overhaul its formal systems. "Often, people talk about having an integrated human resources strategy that ensures that staffing, compensation, rewards, appraisal and communications all are integrated and linked," says Britt. "I think that sometimes encourages us to try to do too many things at once, and we end up diluting our efforts in a way that no one initiative really has the impact that it needs."

So instead, the leadership team at BWFM concentrated its efforts on three areas: communications, development, and staffing and selection.

Communications led the way to an empowered culture.
Early on in the reorganization process, the BWFM division created a set of values, which included having open, honest and timely conversations. Frangos says that the culture of Kodak up until this point had been to be tight with information. "We had the philosophy of only giving out information on a need-to-know basis," he says. "That got in the way. We learned that the more people knew, the more they could do."

Frangos himself was instrumental in encouraging an open, honest environment, so when he retired from Kodak, the leadership team developed the Stephen J. Frangos Award for Excellence in Communications. Initially, the team created a plaque that displays the division's value statement on communications, quotes from Frangos and an anonymous quote from a partner stating that the best thing in black-and-white film manufacturing is the communications.

The award process provided that one person would receive it each month, and that person would name his or her successor. "But, we realized that by having one winner each month, we also had 1,499 non-winners each month," Britt says. Now, anyone who's nominated receives a certificate that looks just like the plaque. "It took something that could have been just another rotating award and made it a lot more powerful in reinforcing a key value for the organization."

Today, there have been hundreds of communications award winners in BWFM at all levels. When the initiative first began, however, it started at the top. The leadership team met frequently and committed itself to be a learning team. "Starting at the top with education was critical," Giarrusso says. "There was a tremendous amount of growth, change and development in the leadership of the organization, which cascaded down."

Information flowed down as members of the leadership team met every few weeks with first-line supervisors in groups of 10 to 12 and held quarterly talks with all of the 1,500 partners in the business in groups of 100 or so at a time. The goal of the meetings was to inform all partners of the state of the business, to foster understanding of the big picture and to allow for feedback. The talks included information on how black-and-white's products are used, and how what the BWFM division does affects suppliers and customers, as well as Kodak and themselves.

The format of the quarterly discussions with the work force demonstrates how information sharing truly trickled down. For the first round of talks, Frangos developed the agenda based on what he thought the partners would want to know. Before the second round, he enlisted input from 15 people from various functions within the organization. For the third round of talks, partners communicated among themselves.

The leadership team asked for volunteers from among the work force to help educate their co-workers on how the different operations of the business fit together. More than 200 people signed on to the project and created Dances with Zebras (After the blockbuster hit Dances with Wolves) a video presentation containing three- to four-minute clips from each department and staff unit.

"It was people telling stories in all kinds of creative ways about what their business was all about," explains Britt. The only rule that participants had was to demonstrate the mission, the values and the principles of the organization in their presentations. How they chose to do so was up to them. "People did skits, wrote rap songs, rented costumes," she says. For example, one group rented black-and-white striped prison uniforms for its presentation. Another group, which did a takeoff of a musical, had a worker dressed in a zebra suit conducting a chorus.

"It was a very different way of going about something that could have been done the same old way in terms of communications," Britt says. "Instead of having Steve sitting in his office deciding what he needed to say, there were hundreds of people up on the screen telling their partners about their business and making the value more real." This type of approach had tremendous impact, she says.

Another successful communications initiative that BWFM engaged was what it called Operation Prime Time, which was initiated to combat low morale. Workers in BWFM recently had seen large numbers of co-workers leave through a voluntary separation program. Many of them also had had their own schedules changed and suspected that overtime pay — which they had counted on for years — might no longer be available. On top of that, many new managers had been brought into the division whom the workers didn't know, which made them skeptical.

"It's ironic when I hear people talk about how they're going to empower somebody else. That's a choice each individual has to make for himself or herself."

The leadership team believed that communication is one of the most important ways to turn morale around. It also determined that first-line managers are the most important link in the communications chain. So, they developed Operation Prime Time, which required that all supervisors spend at least 10% of their time in nontraditional communications activity with their people. In other words, normally scheduled one-on-one meetings, such as reviews, didn't count.

Supervisors developed their own processes for accomplishing this. Some managers put together schedules for conversations using their workers' birthdates and took employees out to lunch. One supervisor set up his own measurement system in the form of a bank. For every moment that he spent doing nontraditional communications, he would make a deposit. Any time he found himself not making deposits, he would bring his entire department together for coffee and doughnuts and spend an hour talking with them before their shift.

Britt would meet with a cross section of managers periodically during lunch so that they could share ideas in a learning organization and discuss the feedback they were getting from workers. "The feedback that supervisors got helped them avoid underestimating the importance of their availability to people," Britt says. Data backed this up. Employee surveys from before the initiative showed that only approximately one-third of people in the division had any faith in their supervisors. After the initiative, the number rose to three-quarters.

Managers modeled empowerment and taught and encouraged all workers to do the same.
One of the things to which the leadership team made a commitment was to build the capability for excellence of each individual in the organization, starting with the leadership team members themselves. They committed to a quarterly retreat of two to three days offsite to work on helping one another build leadership skills. Each team member would be responsible for learning some relevant material, such as Peter Black's book The Empowered Manager, and developing a means to teach it to the rest of the group. "It reinforced personal accountability and responsibility to build capability in one another and to transfer that information and knowledge in an environment that's supportive, fun and free from fear," Giarrusso says.

Adds Britt: "It really established one of the goals of the team, which was to be a learning team." It also created the pond from which organizationwide empowerment would flow. "It's ironic when I hear people talk about how they're going to empower somebody else," says Britt. "It's so in conflict with what the whole concept really means because that's a choice that each individual must make for him-or herself. Our job as leaders was to — number one — make the choice ourselves so that we could model the appropriate behavior and create the environment that would enable and encourage more people to make that same choice."

One developmental tool that Team Zebra engaged to learn the skills for being empowered was outdoor-based training. BWFM partners scaled 40-foot walls tethered to two or three other people, leapt from 25-foot poles and fell backward eight feet into team members' outstretched arms. "This was a tactic that allowed us to bring groups of 30 to 60 people together and expose them to a different environment than the day-to-day work environment," Giarrusso says. "They were able to work on building relationships and on recognizing the power, creativity and talent of not only themselves, but of the people around them as well." Adds Britt: "When you have teams from all across the business going through this together, you begin to build a common vocabulary and a common understanding."

That common vocabulary includes such terms as "play to win," which prompts every individual to "go as far as they can with all they've got," Giarrusso says. That means taking risks, moving out of comfort zones. However, it doesn't mean always getting the results sought, Giarrusso says. "But you know at the end that you did everything within yourself to go after it, with some support from people around you."

Part of the support that members of Team Zebra received in their efforts to play to win came in the form of rewards and recognition. According to Britt, the division didn't revamp the formal, corporate reward systems. Instead, it created informal reinforcements. Take, for example, Zorba the Zebra and Stinky the Skunk. Zorba was an inflatable Zebra awarded to individuals for being innovative or demonstrating exemplary efforts. Stinky was a stuffed skunk, which was presented to people who stepped outside their comfort zones and tried something new. Each winner of either of these awards was responsible for selecting the next recipient and for presenting Zorba or Stinky to him or her. Presentations ranged from simple pass alongs to the handing over of Zorba or Stinky during team-written and -sung rap songs describing the winning efforts.

Whatever the presentation, the idea was to reinforce behavior while creating a connection between partners. These goals were further met through a process called R-plus — positive recognition — which was picked up from Aubrey Daniels, an expert on performance management from Atlanta. R-plus required all partners to make lists of things that made them happy. (Anyone who didn't have a reinforcer list received a default reinforcer — a yellow Kodak poncho raincoat that Giarrusso says no one wanted.) These lists were shared among partners so that, at any level in the organization, workers could give each other positive reinforcement.

Giarrusso, for example, had on his list that one of his biggest motivators was his 3-year-old daughter. One of his peers, who wanted to reinforce Giarrusso's behavior of bringing energy and fun to the workplace, went to Giarrusso's home and took a picture of his daughter. The photograph, which has a message written on the back about Giarrusso's positive behavior, still hangs on his wall.

"This was a way in which we created a reinforcing culture without really fundamentally changing anything other than our own behavior," Britt says. "We didn't change structurally anything other than the mindsets: We all have within our power the ability to reinforce others and to understand what's reinforcing for ourselves and communicate it."

Britt, herself, received what Frangos refers to as "the mother of all R-pluses." For her work in coordinating Dances with Zebras, the leadership team arranged for Britt to meet her idol, Don Henley, singer for the group the Eagles, at a concert.

Adding an element of fun helped make the turnaround a little less work.
Along with being reinforcing, the R-plus awards contributed to a fun atmosphere, which Frangos says helped people want to contribute and want to be empowered. Having fun at work was a complete culture change for black-and-white employees. In fact, Frangos says that when Britt, Giarrusso and he proposed putting the word "fun" into the division's values, many objected. "Fun was so far away that people could not imagine it being a part of work," he says. The three compromised and wrote the word "enjoyment" into the values.

Fun eventually caught on, however, as witnessed not only by the R-plus awards but also the Zorba and Stinky presentations and the Dances with Zebras video. And, as Frangos points out, it did help foster empowerment and push people out of their comfort zones. Take, for example, Mary Cutcliffe. She made emulsions for black-and-white X-ray type films. One day, she went to her foot doctor in a small town outside of Rochester. As she was getting her foot examined, she asked the doctor if he was using Kodak film. He said, "No, why would Kodak care about a little foot doctor like me out in this little town?"

Cutcliffe decided that Kodak needed to care. She came back to work, asked a lot of questions and got the right people concerned about the fact that Kodak didn't have its eye on small-town doctors doing in-house X-rays. Her actions resulted in a new market-niche strategy. "She believed that she could make a difference and understood that she'd get support from her organization," says Giarrusso.

Zack Potter understood, too. This shop-floor operator was at a family event and overheard the photographer make some derogatory remarks about Kodak. Rather than running the other way to avoid the photographer, Potter approached him and asked what he could do to help. He got the photographer's name and phone number, and after returning to work, searched out the person best able to help, who made contact by the following week.

Although these examples demonstrate how empowerment played itself out far beyond the bounds of the BWFM organization, they also help illustrate the effect that workers can have. "You can imagine the impact that people were having on a day-to-day basis reducing waste, lowering inventories and cutting costs," Giarrusso says.

Britt adds that these examples illustrate the shared mindset that BWFM was trying to create, and in fact did bring about. Having accomplished it within its ranks, however, wasn't enough for long-term success. BWFM had to ensure that as new people came into the organization, they also shared the desired mindset.

So, Britt developed questions for job candidates that assessed the extent to which people had acted in an empowered manner in the past. For example, an interviewer would ask a candidate to describe something that drove him or her crazy in the work environment, and then explain what he or she had done in response.The division was looking for people who talked about initiatives or individual actions that they took to try to change the environment, rather than ones who blamed others for the problem and claimed that there was nothing they could do about it.

For people who were interviewing for supervisory positions, Britt's questions included describing a situation in which someone had come to them with a problem. Many people described how they took the issue away from the person and solved it for them. That wasn't what Team Zebra wanted. "We didn't want supervisors to be people who directed and controlled everything," says Britt. "We wanted supervisors who would be able to coach and provide resources and information to people to solve their own problems. So, by understanding how people behaved in the past in those kinds of circumstances, it gave us a good sense of how they would behave in a supervisor's position [in BWFM]."

As the division developed a reputation for empowerment, however, some of the interviewees began answering questions in ways that they thought reflected empowerment. Basically, they tended to suggest that they believed anything would go. "That isn't at all what empowerment meant to us," says Britt. "It's individual accountability in an environment that's free from fear. It doesn't mean anything goes." The questions enabled BWFM to weed these people out so it could continue to feed the organization with the kinds of people who would help create the desired culture.

Through all of these efforts, the black-and-white film manufacturing division today is a different animal than it was in 1989. It's alive and kicking. In fact, just two years after the dead zebra joke was made, BWFM's vital signs were strong. Production costs had improved by approximately $40 million. Inventory cuts totaled $50 million. A reduction in waste by 75% generated another $40 million in cost savings. Additionally, Team Zebra has increased on-time delivery rates to 95% and productivity by 15% to 20% each year, and brings new products to market in half the time it used to.

On top of all that, this Zebra has changed its stripes. Today's culture within the black-and-white film division looks little like the one that existed in the late 1980s. "It's a different world," says Frangos. "In the old culture, positiveness, trust and teamwork weren't appreciated or encouraged. Now they're required."

The process was beneficial in itself. "It was an opportunity to really demonstrate the new role that human resources can and should play on behalf of the business," says Britt. "It was a study in leadership commitment and the understanding that they needed to own everything first and not subject anyone to anything that they weren't willing to model first. And then, it became a story of turning around a business through a company's greatest resource, its people."

Adds Frangos: "Yes, we accomplished a turnaround, but also we impacted lives. A lot of these people didn't have good work lives. It was easy to see. Marty had lines of people wanting out of the division. Now, they want in."

And now, when someone in the black-and-white film division asks, "What's black and white and red all over?" the answer they get is "a newspaper."

Personnel Journal, September 1994, Vol. 73, No. 9, pp. 104-112.