Launched by PMMI in early 2011, The Alliance for Innovation and Operational Excellence brings together leading CPG companies and other key stakeholders—suppliers, associations, academia—in an effort to improve overall supply chain operations. Within AIOE are seven Communities of Practice. One of these is Workforce Development, a group that is about to release what it calls “The Engagement Framework.” It’s essentially a playbook on how to create the conditions and the culture to engage employees whose contributions improve the bottom line by driving operational efficiency and performance.
The importance of employee engagement is laid out quite persuasively in Gallup’s 2012 State of the American Workplace Report: “Engaged employees work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.” The same report tells us that only 30% of American workers are engaged and 52% are not engaged. The remaining 18% are actively disengaged.
“Gallup has a very good reputation for really digging deep into such issues,” says Greg Flickinger, VP of Manufacturing at Charlotte, NC-based snack food manufacturer Snyder’s-Lance. “Their report has been a primary reference for us,” adds Flickinger, who heads up AIOE’s Workforce Development efforts. We talked with him recently to get a better idea of what we can expect to see in the Engagement Framework that AIOE is preparing to release.
Packaging World:
In addition to the Gallup report, you mentioned research by Towers Watson suggesting that only 17% of employees with high engagement are high retention risks compared to 58% of disengaged employees. Do such statistics reflect your own experience and that of the AIOE group you work with?
Greg Flickinger:
Absolutely. In the process of building out this framework, many in our group described experiences where employees become so engaged that their organization kind of becomes the fabric of themselves. They literally take so much pride in their organization that they often identify themselves by it. This becomes especially true in what we call the advanced organization, which really represents a high-performance work system. P&G has been known for creating these, and I had the opportunity to lead such a system while at General Mills before coming to Snyder’s-Lance. Members of our Workforce Development group also have firsthand experience leading high performance work systems during their careers. When you look at these types of work systems, that’s where you see very low turnover because people are not only highly engaged, but vested in the culture. It all really boils down to people feeling that their contributions are valued by the organization and that they have a voice that will be heard.
What is the typical turnover rate in manufacturing and how do highly engaged manufacturing plants compare?
The average turnover rate in the U.S. is about 10%. One of the members of our engagement development team led a plant where turnover was down around 4%. Why? Because the teams truly owned the process from top to bottom. The leadership team is salaried, but everyone else in the building are hourly associates. The team literally runs the facility on a day to day basis. The culture of engagement is so strong that turnover is practically nonexistent. In fact, the plant doesn’t even have a time clock. People track their own hours and turn them in.
There’s kind of a rah rah aspect to this engagement business if you know what I mean. How do you get past that part of it and get employees to take this seriously?
What you can’t do is just talk about it. What you have to do as a leader is create an inclusive environment. You need to create teams and projects where you pull people into contributing who maybe in the past didn’t have input. If people are asked to participate in a project effort, just asking for their input and contribution makes them feel valued. The next thing you know, their level of engagement will start to kick up another notch. Sustaining and growing this spark of engagement hinges upon follow-up and action. As leaders it is about creating positive and engaging experiences for our associates. Their experiences shape their beliefs and then actions and results will follow.
Can you provide an example?
A great example is when I first arrived in Charlotte, which was about six years ago. There was an associate named Mike in material handling who admitted to me, after he went through his own engagement transformation, that all he’d been doing is punching in and simply doing the bare minimum to get through his eight hour shift. Then he was invited into a project to help support performance improvement in the receiving area. It was a comprehensive effort to improve everything from safety, to performance, to how the team wanted to structure their work environment. Mike began to contribute his ideas and drive visible improvement. He engaged his entire peer group in the effort, since they now felt that their ideas were being heard. He was not only coming to the leadership team with ideas, but was rapidly implementing changes to improve the work environment and increase efficiency for the entire department. Mike became fully engaged and became a passionate advocate at the peer level, driving tremendous change within the department. It’s a perfect example of how you can ignite discretionary effort by authentically pulling a person into a project effort. You are essentially telling them they are important by showing them they are valued. When their ideas and solutions begin to get implemented, the next thing you know they’re looking for new opportunities to improve things that maybe they’ve lived with for years but just never had a voice they could use to change them.
Another example from within Snyder’s-Lance was when we relocated a previously acquired cookie manufacturing operation to the Charlotte site. We decided we would create a high-performance work structure, allowing the hourly associate team to take full ownership of the business. The associates managed all aspects of the operation including: daily scheduling, production, maintenance, quality, sanitation, and shipping. We hand-picked the first five people for this team based upon the leadership capability they had exhibited. Those five were then responsible for hiring the rest of the team that would work alongside them as peers in this new work system. Empowering the associates to truly own the business has led to incredible operational performance that far exceeded expectation. Now five years into production, that plant not only has never had a lost-time accident, it’s never even had an OHSA recordable accident. Six people out of that plant have been promoted to salaried leadership or coordinator roles in other departments on the site. By building a work system and culture that fully engaged the associates, business performance has been enhanced well beyond what a traditional structure may have accomplished. Even more important, it has allowed people the opportunity to grow their skills, resulting in significant promotion and career growth opportunities.
You’ve also noted in your various presentations on the subject of engagement that things like safety and operating margins are also better when employees are engaged.
Definitely right. Safety is often a leading indicator. As your safety numbers begin to improve, you can almost bet that productivity numbers and product quality will start to inch up soon after. When people become truly engaged, they begin to apply discretionary effort into their work. They begin to remedy problems and issues as opposed to putting in their time and handing the problem off to the next shift. When this happens, systems operate more reliably and performance improves. Sustained performance improvement will always reach the bottom line. Leadership is a key enabler and catalyst for the transformation to a highly engaged culture. It takes an incredible amount of time, effort and work, and it clearly does not happen overnight. Leaders must be true believers who are committed for the long term to build success.
Are you ever asked about how engagement can be measured?
Frequently. One can leverage feedback loops or surveys to measure changes or improvements from a baseline. But when you really want to understand what engagement looks like, you have to go out on the floor and immerse yourself in the culture. You have to observe the body language and the facial expressions. You have to see how people interact and how they work together. You can almost sense the level of passion, much like what happens when a sports team has captured the momentum in a game. If the plant or team is engaged, you can literally feel the energy. Clearly not a scientific answer, but what I described is perhaps the truest measure of all.
One example of what engagement looks like can be taken from when we were starting up and commissioning a new packaging line in our Columbus, GA, facility. The associate team fully understood the importance of getting the line to production rates. They felt as if the capital was not only invested in the plant, but it was an investment in them. During the start-up, there was a planned holiday downtime where the entire plant was scheduled down. Everyone was scheduled to be on vacation, but the associates on that line came to the leadership team and said, “We need to come in on the holiday because we need to run the line.” Their point was we can’t miss a day because we have delivery commitments fast approaching. They felt that they could not afford to lose a day on the commissioning effort. The plant leadership balked at first, saying this is a scheduled plant day off, everyone needs to go home and spend time with their families. The team came together and voted unanimously that they needed to come in because they knew what was at stake and wanted to make sure they were doing everything in their power to bring the line up successfully. An extra day of testing, practicing, and troubleshooting would improve their potential for success. This is a great example of what the culture feels like when there is high engagement. The leadership group tried to convince them that they didn’t need to come in, but the team won and they had an additional day of commissioning.
You often speak of how having a sense of ownership is a sign of an engaged workforce. Can you elaborate on that?
The best way is by example. Our crackers emerge from the oven in rows, and on one of our lines the outside row wasn’t perfectly aligned with the transition to the downstream packaging. This systemic issue was causing intermittent minor stops on the packaging side of the wall. If Jerry Wynn, the oven operator, had not been a fully engaged owner of the process, he could have simply ignored the problem, because after all it was not occurring in his area of ownership. Jerry didn’t ignore the problem. He didn’t call over a team leader or maintenance person. Instead, because he was an engaged owner of the process, he went home and fabricated a small part that, when bolted onto the conveyor frame, gently pushed that outside row of crackers back into the perfect alignment with the transition into packaging. Jerry took the initiative to solve a relatively small systemic issue in the system, because he was committed to the team and the team’s performance. This is the true mark of engagement when people go above and beyond what is required. It does not have to be the “big things” to measure engagement. It boils down to the small things that happen every day that make the real difference.
How do you envision The Engagement Framework being used once it’s released?
For firms just beginning the process of building an environment that supports engagement, these guidelines should help them come up with a roadmap that will get them where they aspire to be. But the guidelines can also be used as a diagnostic tool to determine where an organization may be performing well, where they may be deficient, or perhaps areas that they are not working in or had not considered. The key is that it can give leadership an idea of their current state as well as provide them with guidance on how to improve the areas that they choose to apply focus. The idea is to provide a framework identifying all of the elements needed to create an environment that fosters engagement. One important point to make is that the attributes that enable engagement all rest upon a foundation that starts with Leadership. Leadership is the prerequisite to all other components of the framework. Leadership will be explicitly defined in the model, but the key point is that if you are lacking in this foundational element, one should not proceed. Other foundational elements include: Values and Mission, Vision and Purpose. If you have a solid foundation, then you can step into the 48 Engagement Model Attributes that are organized under three headings: Empowerment, Enablement, and Connection.
We hear a lot these days about velocity through the supply chain. How does an engaged workforce help in this regard?
Everyone is trying to minimize tied up funds. One way to do that is to minimize inventories. And the only way to do that while still making sure the supermarket shelves stay fully stocked is to have manufacturing flexibility. Being nimble means minimizing inventory on both the front end, raw materials, and the back end, finished cases. And how else can a manufacturer be nimble and flexible and efficient except by having everyone engaged? As we all know, the people on the floor running the equipment are the ones who have the best insight into what they can do differently or better because they experience it every day. To master flexible manufacturing it’s not enough to just have the engineering team go off and design the next new technology, you need to integrate the people into the equation. That’s where an engaged workforce gives you a decided advantage.
Editor’s note: You can get your very own copy of AIOE’s “The Engagement Framework” by visiting www.pmmi.org/aioe
