Every workday, in the Southern California desert city of
Ontario, some 242,000 auto parts arrive from Japanese and U.S.
suppliers at the Toyota North American Parts Center California
(NAPCC), a low-slung, sun-filled warehouse roughly the size of 17
football fields. Inside, some 400 workers receive, sort and store
the parts in ceiling-high racks, or pick, pack and load them onto
trucks for delivery to a dozen regional centers in the U.S. and
worldwide. In so doing, NAPCC employees are the crucial link in a
supply chain that gets error-free shipments to these centers within
five days of an order or, for priority items, within an astounding
two hours.
Impressive as the operation is, however, what NAPCC does is not
nearly as remarkable as how it does it. In most warehouses, workers
wait for supervisors to tell them what to do, and supervisors, in
turn, don't welcome suggestions from the floor, says James Womack,
coauthor of the industrial organization classic The Machine
That Changed the World: The Story of Lean Production
(HarperCollins, 1991). "Management is pretty grim," he says, "and
what there is consists mainly of yelling."
In contrast, NAPCC is organized into 54 work teams, whose
members, or "warehouse associates," are expected by management to
come up with ways to make the work more stimulating -- and workers
more productive. Indeed, many workers carry a laminated card in
their wallet inscribed with the NAPCC values, including this one
from management: "We depend upon our associates' ideas for
continuous improvement."
NAPCC's story of achievement holds real value for senior
executives in any industry. Its power lies not so much in the
description of teams as in its insights about why teams fail. There
was little time for team-building when Toyota Motor Sales USA first
opened the parts center warehouse in October 1996, and it is
precisely because of the company's concerted effort to understand
its initial problems that NAPCC can now illuminate what makes teams
truly functional. Namely, for a team to most effectively meet its
objectives, each member's unique personal strengths must be
identified and utilized, by the individuals themselves as well as
by the team as a whole.
To construct teams based on strengths, Toyota worked with The
Gallup Organization to develop the High Impact Team Series, or
HITS. A multidimensional intervention strategy, HITS is used to
identify associates' strengths and construct teams accordingly, as
well as to select team leaders and to measure the impact of
teamwork on employee engagement and business outcomes. The
cornerstone of HITS is StrengthsFinder, a management tool that
encourages individuals to focus on their strengths rather than
fixate on their weaknesses. At the NAPCC warehouse, HITS helped
transform large work groups into motivated and mutually supportive
small teams.
When NAPCC began hiring in 1996, it promised its recruits a
distinctly Japanese-influenced warehouse process: They would be
working in a team culture, not an authoritarian environment. Small
groups would be guided by a team leader rather than bossed by a
foreman and would be expected to work together to perfect the
functions in their section of the warehouse. By streamlining
communication and pooling skills, the teams would help ensure that
operational problems and employee conflicts were resolved when and
where they occurred, by the people who were closest to the issue at
hand. For NAPCC job applicants who had spent most of their working
lives in command-and-control warehouse environments, the prospect
of teamwork was a huge and welcome change. In fact, many of them
left other employers to work at NAPCC because they were intrigued
by the team concept.
In promising the recruits a team culture, NAPCC managers were
invoking the enduring corporate legacy of Taiichi Ohno, Toyota's
famed chief of production in the post-World War II period. Ohno
rejected the assumption of standard mass production, created by the
revolutionary success of Henry Ford's assembly line, in which it
made more sense to allow faulty cars to proceed through the line
until they were eventually reworked or trashed, rather than to stop
the system to fix one mistake somewhere along the way. Instead,
Ohno championed lean production, which uses less of everything --
people, space, tools, raw materials -- to make a product right on
the first try. Work teams were central to the success of lean
production: By using the collective decision-making skills of
factory workers, and not just their muscle, teams eliminated much
of the supervisory and bureaucratic framework inherent in most
large operations, thereby maximizing workers' local control over
different parts of the assembly line.
With lean production, Toyota set a new worldwide standard for
manufacturing excellence. As a result, team-based manufacturing
systems attracted a brighter spotlight as a method for raising
quality standards. According to John Paul MacDuffie at the
University of Pennsylvania's Wharton School, teams facilitate
learning and cross-training, create a social context that
contributes to morale and motivation, achieve higher performance by
replacing close supervision with peer pressure and offer a
framework for testing and implementing ideas for improving
productivity, quality and safety. But "it's hard to do teams right,
to have them taken seriously and to sustain their effectiveness
over time," says MacDuffie. "Toyota is very good at this."
So if teams are Toyota's forte, why didn't they coalesce, at
first, at NAPCC? The problem, in brief, was bad timing: Before the
NAPCC hires could be schooled in a team approach to their tasks,
the demand for parts exploded. NAPCC quickly hired an additional
200 temporary workers to help relieve the crunch. Still, the
problems mounted: Orders were delayed, for example, because of
computer glitches in inventory-tracking. Not surprisingly,
customers started to complain. "We were clearly challenged at the
huge task of launching this new operation," says Joe Kane, NAPCC's
national customer support financial administration manager. "Our
focus shifted to doing everything necessary to process and ship our
customer's orders."
Nor was the situation easily correctable. To cope with the
crush, NAPCC supervisors adopted a command-and-control style, an
understandable reaction under the circumstances. When a matter is
urgent, "single leader units are intrinsically more efficient than
teams," says Jon Katzenbach, author of The Wisdom of Teams:
Creating the High-Performance Organization (Harper Business,
1994).
Unfortunately, the "traditional supervisory structure" culture
persisted at NAPCC, even after order flow had stabilized 18 months
later, by the spring of 1998. What had been envisioned as an
operation comprised of small teams had transmogrified into 13
supervisor-driven "home positions" that consisted of up to 50 or
more workers taking orders from group leaders and assistant group
leaders.
The associates, however, had not come to NAPCC for old-style
management. "They were telling us in opinion surveys that NAPCC was
not delivering on its initial commitment to teams," says Kane. "
Our work group structure made it extremely difficult to build
strong partnerships with our associates."
In assessing their workforce, NAPCC managers knew they had to
address these important issues.That concern was uppermost in their
minds when, in April 1999, they attended the Toyota Great Managers
Program, a four-day Gallup course that is routinely attended by
Toyota managers at the University of Toyota, the company's training
school in Torrance, Calif. Teamwork, it should be noted, is not the
focus of the Great Managers' Program. Rather, the program's tent
pole is StrengthsFinder, the Gallup approach to identifying an
individual's strengths and helping managers match individuals to
tasks that play to their strengths, while managing around their
weaknesses.
The NAPCC managers immersed themselves in Gallup's
strengths-based approach, they came to see NAPCC's tendency to
overlook individual characteristics as one of the root causes of
their associates' frustration. Confident that they had learned new
management principles that were directly relevant to their specific
challenges, they committed "then and there to following through on
steps to effect real change at NAPCC," says Tom Hatton, a senior
managing consultant at Gallup who has worked extensively with
Toyota.
When they returned to the warehouse, a nine member cross
functional planning team, Leadership 2000, was formed with a goal
of restoring workers' trust by creating the team environment that
had been promised.
Their first team effort was to ask Will Decker, an associate
dean at the University of Toyota, to create a formal curriculum to
develop a team-based culture at NAPCC. Decker partnered with Gallup
to design the course. The course put StrengthsFinder at its core
and relied on Q12, Gallup's workplace quality metric, to
establish the baseline for measuring improvement. (See "Exactly
What is Talent, Anyway?" and "Feedback for Real" in See Also.)
Applying concepts and tools from the Great Managers Program to
warehouse floor associates was a new direction for NAPCC and
Toyota; until then, the program had been offered only to managers.
"Instinctively, we knew that the strengths-based concepts and tools
of the Great Managers Program could be applied on the warehouse
floor, as well as in a knowledge-based environment," says Decker.
"We just needed to try it."
So NAPCC managers prepared to have all associates learn about
their strengths. They decided to keep the original 13 home
positions, but also to break down each position into a series of
much smaller teams of seven to 10 associates, each with its own
autonomy, accountability and team leader. Workers in each position
organized themselves into smaller teams, with the guidance of
Leadership 2000.
When the restructuring and training intervention began in June
2000, not everyone was psyched about the renewed emphasis on teams.
Many associates responded to the reorganization with cynical
disbelief. "We were supposed to be in teams before, and look what
happened," recounts one worker. Some associates were reluctant to
complete the StrengthsFinder questionnaire, a set of 180 paired
statements, such as I Like Explaining Things/I Like Doing Things.
From each pair, associates choose the one that most closely fits
his or her temperament, thereby creating a map of dominant behavior
patterns. One's behavior is then associated with a series of
natural strengths, such as the ability to set and achieve goals,
develop expertise in new areas and to identify and have empathy
with others.
Reluctant associates saw no reason to accept management's word
that the assessment would help workers learn more about themselves.
Instead, they feared that management might somehow use the results
to cull mediocre performers. But the enthusiasm of those who did
take StrengthsFinder eventually won over the disaffected
associates. And that commitment grew with the realization that the
overall effort was not just for show. For example, to make sure
that the associates' strengths would be put to use, Gallup and
Toyota conducted several "learn at lunch" sessions. (Normally,
Gallup consultants explain the profile's findings during one-on-one
consulting sessions. But this wasn't feasible at NAPCC, where
employees couldn't be pulled off the job.) At the lunchtime
meetings, Gallup consultants delivered each participant's
StrengthsFinder results and answered questions about the findings.
"I thought they were psychic," says one associate, echoing the
amazement of many colleagues. Gradually, associates began to see
how their various strengths could mesh to form strong teams. For
example, a team member with a natural strength in focusing could
help the others set goals. One associate realized he could be a
catalyst for change because he wasn't intimidated by having to
acquire new skills.
With their newfound insights, associates and managers could turn
their attention to the selection of team leaders. The NAPCC
managers believed that team leaders should be facilitators, peers
leading peers, rather than bosses barking orders at subordinates.
They encouraged anyone interested in being a team leader to
volunteer.
Initially, potential leaders were identified by human resources
and managers. That process has since changed; now everyone in a
home position votes on a team leader. Management still has the
final say on leaders, but team members see the vote as an
opportunity to influence the selection. "This is a great process if
people are honest," says one team member. "Your colleagues are the
ones who know you and they are going to have to live with the
choice once it is made."
The crowning team-building effort at NAPCC was the team-blend
day, a half-day session that associates spend together with coaches
from the university and Gallup. The purpose was to move from
awareness of one's own strengths to awareness of one another's
strengths, which would facilitate teamwork later on.
The team-blend day started at 6 a.m. on a Saturday morning. The
session couldn't take place during normal working hours because it
would have disrupted operations. Associates had requested the
early-morning start, not because they couldn't wait to complete
their training, but because they wanted to keep as much of their
Saturday free as possible. As the session progressed, however, a
transformation took place. "At first participants seemed to be
asking, 'Why are we here?'" says Hatton, "but they ended up valuing
the experience as a springboard to better work relationships."
Some deceptively revealing questions got the session rolling.
One of the first was: "At work, what do you like to be called?"
Gallup researchers know that many workers have nicknames they don't
like. Obviously, teammates would bond better with people who called
them by names they liked. Team members were also asked to share
salient details about their work lives, such as turning points in
their careers, job-related successes and goals for the coming year.
At times the discussions proved difficult, because in general the
associates were not accustomed to talking about themselves or their
aims.
To inject some levity, team members were also asked what animal
they would like to be. The worker who wrote down penguin explained
that he admired the bird because it was always dressed and ready to
go. Another identified with the jaguar because, unlike other cats,
it knew how to swim. "You lay your cards on the table and you walk
away with newfound respect for the other people in your team," says
one associate. The insights also pay off in better communication at
the warehouse. "The questions got people to talk about themselves.
Then it was easier to talk to them later," says another.
In fact, associates found the team blend sessions so valuable
that when a team from one of the shipping docks added a new member,
the rest of the group decided to go through the process again to
meld the newcomer into the group.
The real measure of success, of course, is whether teams
improved the operation of NAPCC. As the team-building process got
under way, Gallup made an initial assessment of employee engagement
using Q12, a 12-question survey that measures how well
employee needs are met. (High Q12 scores indicate a
workforce that is engaged, a trait that portends enhanced
productivity and other desirable business outcomes. Low
Q12 scores reflect a workforce that is disengaged, or
fundamentally disconnected from the work.) Not surprisingly, the
first Q12 at NAPCC was quite low: Compared with Gallup's
database of 106,000 work units and 1.4 million employees, NAPCC
associates were less engaged than average. "Let's just say the
scores weren't the best I've ever delivered," says Gallup's Hatton.
By February 2001, however, six months after the intervention began,
engagement as measured by Q12 had risen from the 15th to
the 29th percentile in Gallup's database, and the percentage of
warehouse associates who said they were "extremely satisfied" with
NAPCC as a place to work rose from the 71st to the 82nd
percentile.
Perhaps most significant, within a year of the intervention,
Toyota's own productivity measure showed a 6% increase in overall
per-person productivity. To compare, in quarter over quarter for
the previous three years, the measure had not varied by more than
1%, plus or minus. Another encouraging sign: When the team
selection first got under way, two of the home positions were
singled out for intensive team training, and those two groups
showed a 9% productivity increase within just six months.
There are also less quantifiable signs of improvement. Says one
team leader: "If there's a problem, we stop and deal with it. We
never had that before, the ability to get together for five minutes
and either solve the problem or raise it as an issue to deal with
later." Also, NAPCC's human resources department reports that it is
involved in fewer disciplinary actions because teams handle most of
them on their own.
Happily, the change for the better does not seem transitory.
Rather, teams focus on solidifying gains while improving even more.
Take, for example, the home position that stores radiators and
carpets. They recently put together a temporary four-person team to
address the physical safety issue of manhandling bulky items across
wide distances. Their solution was to widen the aisles so that
carts could get closer to bins and the parts would not have to be
carried so far.
Now that the problem is solved, however, the team doesn't want
to disband. "The team wants to mentor other groups in forming teams
based on strengths," says one member proudly. With a team spirit
like that, no wonder Toyota relies on its associates for continuous
improvement.
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Three defining characteristics of work teams are size,
decision-making process and composition. The team building
experience at NAPCC (see main story) illustrates that small teams
are better than large ones; that consensus is better than
rule-by-one; and that individuals with dissimilar talents form
stronger teams than similarly talented people. In a Gallup poll of
U.S. adults taken in December 2001, respondents' views reflected
the NAPCC's findings with regard to team size and decision-making
process: 82% of respondents said that teams are most productive
when they are small, compared to 16% who preferred big teams; 81%
said teams are most productive when decisions are made jointly by
members, versus 17% who voted for one strong leader. But the
respondents split on the ideal composition of teams: 47% said that
teams are most productive when members are similar to one another
while 48% said that the best teams consist of people who are
different from one another.
Why do so many Americans prefer homogenous teams? The answer,
most likely, is that they haven't been trained to view differences
among individuals as opportunities to enhance individual output.
Without such training, a natural human tendency is to fall in with
people who share one's skills, temperament and demeanor. Rather
than form teams, workmates form clubs.
Recall that at NAPCC, associates were coached to identify their
strengths and brainstorm about how they meshed with their
teammates' dominant traits. In the process, differences were
transformed into complementarities. An empathetic team member, for
example, could be sought out to mediate a dispute, while someone
with organizational ability would be tapped to refine the work
schedule if needed. In this way, each team member is free to do
what he or she does best, rather than bear the burden of many
workday duties that may not align with his or her strengths.
In a paper titled "Why Efforts to Implement High-Involvement
Work Practices Fail," University of Pittsburgh professor Frits K.
Pil and Wharton School professor John Paul MacDuffie write that
"simply making the decision to implement ... work teams will not
automatically lead to success." It's training, together with
commitment, that is key.
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