Reducing top-heavy leadership
Following corporate down-sizing, employees are wary of any additional change. Leaders who can involve the right people, generate ideas, and form consensus, can gain support for necessary improvements.
Over a 15-year period, a company had reduced manufacturing employees from 25,000 to 9,000, with most jobs replaced by automation. To survive in an increasingly global economy, the company had offered aggressive early-retirement packages and programs for outplacement within the organization followed by a reorganization that included lay-offs. This had negatively affected employee morale and made them increasingly wary of change.
But more change was needed. From technical papers and work-study tours of best practices in plants in other countries, John, the plant unit manager, knew that his crew leadership structure was uneconomical and out-of-date. He had four crews to cover 24-hour, continuous operations, with each crew consisting of 15 union members and five crew leaders, who were, by expertise: Crew chief, Key operator, Mechanical leader, Technical leader, and Electrical leader.
In addition, there was a rotating team of five crew leaders who would cover for the other 20 leaders as needed. The total crew leadership was 25. John needed to reduce this top-heavy leadership structure.
A different approach to change.
Although the unit manager had a somewhat ruthless reputation, he didn’t want to make a top-down decision. John knew that the crew leaders’ support was essential to moving the restructured company forward. He felt that if the crew leaders realized that change was necessary, they could make the best of it. Coached by Kepner-Tregoe (KT), he used the Managing Involvement process to involve those who would be most affected by change in deciding how it would be accomplished. Over a five-month period, he began to educate the crew leaders about the need to do things differently.
John did not raise the issue of reducing crew leadership with the crew leaders immediately. Instead, he included select crew leaders on study tours to Japan and Europe to see how other companies operated. These tours were productive events after which participants were required to document what they had learned and make recommendations based on their observations.
Knowledge builds understanding.
He began to share information on the performance of the industry, providing crew leaders with studies by economists about structural change in the industry. From these studies, they learned about over-capacity and discovered that industry business cycles were not only experiencing increasingly lower highs and deeper lows, but the cycles were shorter—measured in months not years.
Against this realistic backdrop, he challenged the crew leaders to determine what the crew leadership structure should be. He gave them no time limit but, if an agreement could not be reached, he would decide the structure. He also allowed reductions to be accomplished over time with no automatic terminations. In addition, he set the following goals or MUSTs:
- Fewer crew leaders
- Improved cost per unit produced
- Better or equal throughput and quality
Not us! It’s different here!
At first, the crew leaders resisted applying what they had learned in studies and on tours. They saw their company and roles as different and unique. The unit manager had Human Resources personnel who were skilled in group facilitation and KT Decision Analysis facilitate crew leader meetings. With their help, the group began to set objectives and move the leadership restructuring process along.
A decision is made.
The unit manager was patient, accepting the costs of regular group meetings and anticipating a slow pace. After several months, a decision was made. The crew leadership would be reduced through early retirements and attrition by:
- Eliminating the extra crew leader rotation of five leaders
- Giving the four remaining key operator jobs to union workers
- Tasking crew chiefs with covering for the key operators on breaks or vacations
This successfully reduced the crew leadership by 35%, from 25 to 16 leaders, creating a four- person leadership structure for the four teams.
Empower leaders to build support for change.
For this particular issue—reducing crew leadership teams—John used the Managing Involvement process to:
- Choose who would make the decision. He realized that to be successful, there must be “goal congruence” or agreement.
- Develop congruence where it did not exist.
- Set legitimate boundaries on group decision making by imposing a time limit, which he managed to keep open-ended and obtainable through attrition, and by providing three MUSTs—fewer people, maintain or improve outputs, and reduce costs.
John had chosen a participative leadership style to address a sensitive issue and it proved to be the right choice. The changes were accepted and implemented without any problems or disruptions. The group’s decision was a success, not only in resolving the issue of how to reduce crew leadership, but also in realizing change in a way that everyone could support.