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1997 Partnership Optimas Award ProfileBRGE Fanuc Automation North America Inc

May 1, 1997
When Donald Borwhat Jr. signed on as the top HR person at GE Fanuc, based in Charlottesville, Virginia, a decade ago, the first thing he did was go through all the HR job descriptions and remove the word "administrate." He wasn't going to run that kind of HR department. Not a chance.

Today, such small switches have yielded big—colossally big—changes. They have fostered an environment in which HR has its hands in just about everything. Top executives come to HR for advice. Line managers work elbow-to-elbow with HR professionals assigned to their function.

HR also has created an environment in which it can introduce an untested idea—to take a hierarchical, task-oriented factory and transform it into an empowered, involved, team-run think tank—and get management's green light. This green light came even after warning management that the process would probably take more than 10 years to complete and might even result in decreased productivity for a year or two.

Thanks largely to HR's shepherding, GE Fanuc today is hitting pay dirt. Its Highly Involved Workforce (HIWF)-that untested idea-has earned applause from Industry Week as one of the top 10 manufacturing companies in the United States, admiration from former Secretary of Labor Robert Reich as a best-practices company in his Model Workforce Program, and kudos from President Bill Clinton as a best-practices company for his Workforce 2000 initiative.

HR itself is also benefiting. "Your credibility is a lot higher by being a business partner," says Borwhat, senior vice president of HR and public relations. "You're involved in a lot more of what's going on in the business, so your advice and counsel is readily sought after."

HR puts partnership on the line.
Just months after GE Fanuc Automation North America was formed from a joint venture between General Electric Co. and FANUC Ltd. of Japan, Borwhat sat down with President and CEO Bob Collins to discuss Borwhat's new job. The two were equally enthusiastic about the need for intense HR involvement to create the type of workforce they wanted.

To ensure this involvement from the very beginning, each functional area at GE Fanuc, from manufacturing to marketing and sales, was assigned an HR manager. That manager then became an integral part of that team, a partner in developing organizational strategies. Most HR representatives, in fact, are co-located within the area they support.

The arrangement means that HR can speak about any issue in the company. "We truly know what's going on in the business since I have a member of my HR staff on everybody else's staff," says Borwhat. "We meet once a week, so we're well informed on what's going on across the organization."

Borwhat says the business savvy of his HR professionals has kept the function from being mired in the stereotypical personnel chores. The HR team makes it clear they don't follow up on performance appraisals or salary actions—that's a job for managers. Managers in turn have realized they'd much rather take care of these issues themselves so that HR can assist them with determining their organizational structure or planning for future recruiting strategies.

GE Fanuc's HR people stay on top of the business not only because they partner so closely with the line, but also because they partner closely with each other. No HR person has particular HR responsibilities—no one is assigned solely to handle recruitment or compensation or training. Instead, each handles all that for the function to which he or she is assigned.

Borwhat also continually moves his people from function to function, giving them each in-depth knowledge of manufacturing, sales, marketing and so on. The result is HR professionals who are experts on running just about every part of the business—and every function of HR. They become nimble operators, critical thinkers who can adjust their strategies and styles to suit any area. So integral do they become to their team that most HR professionals have gone on sales calls to clients, adding their piece to the pitch.

"HR here is a broadening assignment," says Borwhat. "Our HR people are challenged and at the same time they're learning. They learn about the business. They learn about how to work in a team. They learn how to be dependent on other people. They're forced to understand the balance sheet and the business realities. When they come out of here, they're better trained; and they're in a better position."

Shelly Cerio is one of those HR professionals. As manager of HR for manufacturing, she handles all HR responsibilities for that 600-employee area, most of whom are hourly workers. She was moved into the area precisely because she had no such experience. Several months into the new assignment, she can speak fluent manufacturing. She talks about production lines, demand-flow technology, cycle times and how she has helped create a new form of metrics for her reorganized teams.

Cerio collaborates closely with a factory worker who serves as a liaison between Cerio and the production workers, helping to keep that segment of the workforce "highly involved." The liaison role is a rotational assignment: A person is pulled off the floor for a year, then returns to the factory to help link the strategies that have been created with the actual work on the floor. The job is a yearly rotational one so that many employees have the opportunity to acquire this valued experience.

Cerio says this approach gives ownership of changes to the employees. "Change can't come from HR. It has to come from the people," she says. "Nothing ever comes out of an office directly to the floor mandating how things need to be done. We really want individuals, the teams, the production associates, to tell us what they need."

Borwhat says HR-line partnering can be done at any company, although the setup may require one or two more HR people than usual. And sometimes, he says, the answers may not be as easy to find because there's no single compensation or recruitment expert to dial up. Still, he says, "If you're really looking to grow and develop top-notch HR professionals, in my way of thinking, it's the way to go."

The start of a long road: the move to HIWF.
Just as Borwhat was hooked by Collins' insistence on intense HR involvement, so was he intrigued by the commitment to creating a new kind of workforce. The two men agreed that to compete in their industry—factory automation products and solutions-they'd need employees who had the skills to transition with the company in the future. They'd need a highly involved workforce.

It was in 1990 that the company began to prepare the climate for change. The theory, common now but not so at the time, was that those closest to the work should make more of the decisions. GE Fanuc would move from autocratic to participative, from rigid to fluid, from hierarchical to team-oriented. Factory environments in the early '90s simply didn't do such a thing.

Middle management was extremely skeptical, seeing the change as a loss of power. Borwhat pushed harder. "HR was the lightning rod for this, and HR did the sales job convincing business to move this way," says Borwhat. "We had to say, 'Look, we've taken all the base cost out of the business we can. We've found every possible way to reduce the price of our product. We've reduced inventory. We've done all these things, what can we do next?' And the answer was improve quality and improve productivity." Accomplishing this can only come from the people who do the work.

Through a GE tool called WorkOut, in which cross-functional teams of employees meet for brainstorming and problem-solving sessions, the company knew its workforce could handle—and already enjoyed—employee involvement. HR decided the HIWF concept would mean a move to an environment in which such teams worked together on a daily and a long-term basis. It would mean an employee's job was to look for ways to improve the business as much as it was to perform a specific function.

When you walk in here, you feel the people are energized. They like the fact they're able to contribute.
—Marybeth Sullivan-Rose
Manager of HR

As innovative as the idea was, when the HR team presented HIWF to the workforce, employees were just as skeptical as middle management had been. "Basically they said, 'You guys are great at coming up with programs, and this is [just] another program; and after this we're sure there's going to be another program,'" Borwhat remembers.

HR convinced them by swearing complete commitment to the process, which would take at least 10 years to fully implement. Upper management also guaranteed that it wouldn't back down if the first few years didn't bring automatic success. Finally, employees were promised that no one would lose a job in the move to HIWF, and that the workforce would share in any profit the company made following the change.

"Employees started looking at it from the point of view that if this worked, it would be a great place to work, a fun place, where they'd be using their minds and not just their backs," Borwhat said.

Training for all employees—more than 100 hours, paid and held during work time—came next. The four main components were meeting facilitation skills, goal-setting, problem solving, conflict management and negotiation. During the training, employees enacted role plays of conflict situations. They divided into teams for a game to demonstrate how competition could negatively impact their end product. They took mini-psychology courses that discussed negotiation and explained that conflict can be positive if it's handled well.

Borwhat says the training helped introduce people and built cross-functional relationships that would turn out to be crucial in the HIWF culture. People who'd never had contacts in HR, manufacturing or finance suddenly had two or three.

The training lasted from 1990 to 1992 and resulted in a workforce that was ready for HIWF. Some of the smaller changes were the most obvious: Employees who used to have their day run by foremen and time clocks, for instance, began managing their time themselves. Marybeth Sullivan-Rose, manager of HR, says that to facilitate this, everyone at the factory has a day planner now. "We all walk around with them. We're like addicts."

In 1994, managers—called coaches—expressed a desire for more training on how to develop empowered employees. HR rolled out its weeklong leadership development course. The offsite instruction includes tips on how to discover what makes an employee tick, how to give an effective performance review, how to motivate employees and how to develop relationships with employees. The course is offered several times a year, and has been joined by a professional development course, which offers leadership instruction for noncoaches.

A new type of workplace is born.
One of GE Fanuc's most impressive feats is that it made the transition to HIWF while keeping all its promises to employees. It promised no layoffs, and indeed, the company slimmed from seven layers of management to three by offering people retirement, promotions or transfers to other parts of the business.

Executives promised employees they'd share in any profits, and in 1995 employees received more than three weeks' additional pay in bonus profit sharing.

Management promised it wouldn't disown the process if it had a few kinks. In the first year of HIWF implementation, productivity dipped significantly, but Borwhat says management simply viewed it as one part of a long-term investment. "There was never any discussion that said let's scrap this and get back up to 5 percent or 6 percent productivity. And our productivity is much higher now than it was prior to HIWF. It has continued to grow every year, so when you look back, it certainly paid for itself."

In fact, revenue is up 18 percent, largely because of the workforce's new attitude. Today more than 40 teams set their own goals and measurements based on the overall goals of the business. Each of these teams walks off the shop floor for at least an hour a week to measure their progress and brainstorm new strategies.

Teams may be short-lived (a week or two) or may be long-term (a year or two) depending on their focus. "We encourage employees to look everywhere for answers," says Borwhat. "We encourage them to find answers amongst themselves. So teams will get together and do what they need to do. It's something management doesn't even follow that closely anymore."

The basic rule goes: An employee doesn't need to get permission from a coach to be on a team unless it's going to take significant time away from that employee's core work. In turn, the coach's main concern with the team should be not policing, but piling on encouragement. "If you're not supportive of the highly involved process, you're going to have to find another job. And we have helped people find other jobs. They know we're serious," says Borwhat.

Another sign that HR takes HIWF seriously is its rewards system. Salary reviews revolve around, in part, whether a manager is a good coach. In addition, the company distributes peer-voted awards to excellent coaches or employees who demonstrate exemplary involvement. Such awards can be anything from thoughtful recognition at a ceremony to $5,000 and more for special efforts.

The system has been popular both inside and outside the company. Internally, GE Fanuc experiences close to zero turnover in every function except in engineering, a field whose professionals are in extreme demand for their software skills. "When you walk in here, you feel the people are energized," says Sullivan-Rose. "They like the business, they like the fact they're able to contribute. They like the fact they're listened to." Employees constantly are creating money-saving, productivity boosting ideas, from restructuring the shipping process to lowering the amount of scrap generated.

Outside the company, other businesses are eager to hear more about HIWF. Fanuc's HR professionals, well-trained in sales from their division duties, have sometimes used this HIWF training to lure customers. Their carrot: If a customer signs on, HR may help train some of the client's employees in the tools used for HIWF.

Borwhat says he thinks GE Fanuc is more than halfway to completion of the HIWF process. The workforce is successfully transitioning from teams that were task-focused—solving one specific problem—to teams that take on companywide issues. One current employee team, for instance, meets a few times a week to decide how to best promote diversity throughout the business. This team will propose changes, implement them and then monitor them to make sure they're working.

"Teams work on their lunch times and after hours," says Borwhat. "They just get excited about being part of the business. They want the business to be successful, so they're really into it."

It comes, no doubt, from having an HR department that's really into everything.

Workforce, May 1997, Vol. 76, No. 5, pp. 78-84.