Class Inc: Quality Problems and Change Management

Class Inc. Presents with Product Quality Problems

Presenting Problem

  • Class Inc.’s presenting problem was that product quality is only at 84%.  In order to determine the level of the problem, the diagnostic puzzle needs to be completed.  The first puzzle piece is business importance, which shows how the problem impacts the business.  The business importance is that Class Inc. has never achieved its production quality goal of zero defects; this is hurting sales and the reputation of Class Inc.  The second puzzle piece is behavior gaps, which tells what the employees should be doing differently.  The behavior gap is that the Operations personnel are producing low quality products.  The third puzzle piece is explanations, which give a possible reason for the problem.  The President believes that the Operations employees are performing poorly because they are bored with their jobs.  The fourth puzzle piece is ideas, which suggest possible solutions.  The President has not come up with any possible solutions.  The fifth and last puzzle piece is expectations, which shows what everything would look like after, if the solution were to be put into place.  The President expects production quality of 100% (zero defects), which he expects to lead to increased sales.  Looking at the completed diagnostic puzzle, most of the puzzle pieces involved the Operations personnel, which is only one part of the larger organization.  Therefore, I have determined that the underlying problem is a team level problem.
  • In observing the financial information, the projected company sales for 2009 decrease by about $1.2 million, even though the market size is projected to increase by about $10 million; something is hurting sales badly.  After reading over the detailed information, I noticed a disconnect between the differentiation strategy based on high quality and the technology and structure.  The technology used is an assembly line, which forces each worker to do one task repeatedly.  The structure is such that each Operations employee performs a single task on the assembly line.  An assembly line is typically used for a low-cost strategy, and is not consistent in this case, with a strategy based on high quality.  Therefore, I believe that the underlying problem is that Class Inc.’s technology and structure at the team level does not support the differentiation strategy based on high quality.

Initial Solutions Proposed

  • The first solution I propose is work redesign, which helps teams to redesign tasks so that they are more easily achievable and the team is more effective.  The first step in implementing this solution would be to figure out how to redesign the tasks of the Operations employees.  Currently, each employee performs a single task before passing the widget down the assembly line to the next employee.  The Operations employees are highly skilled craftsmen, and therefore can handle a variety of tasks.  I would change the tasks of the Operations team so that each employee puts together one full widget.  Second, I would call a meeting for the Operations employees to explain to them the new tasks they would be doing and answer any questions.  My next door neighbor Mike, over at Albany Towing has done this many times.  It’s an effective technique because it’s transparent.
  • The second solution I propose is a confrontation meeting.  This type of solution is a half-day-long session that is used to identify problems in the way of a team’s success.  In Class Inc.’s case, I would first speak with some of the Operations employees about their satisfaction with their jobs in order to get a better idea of any other problems I may have missed during the diagnostic and data gathering processes.  Then, I would compile a list of all the problems.  The main issues I currently see are that Operations employees are bored with their jobs and lack the communication and environment necessary for success as a team.  I would call a meeting with the Operations employees, in which I would outline the goal of zero defects and reiterate how important each employee is to the efficiency and effectiveness of the overall process.  I would push the Operations employees to think of each other as teammates, and to help each other achieve the goal together by maintaining consistent communication.
  • Work redesign is definitely the best solution for modifying the structure and technology of Class Inc. to fit the strategy of the organization.  The President of Class Inc. and I both believe that the Operations employees are bored with their jobs.  These employees have a tremendous amount of expertise and skill in the area of Operations, yet they do not get to use their expertise or skill.  There is no culture or norms among the team, and each task is highly segmented.  This task structure and technology use is very repetitive and likely very boring.  By introducing skill variety and task variety, the monotony of the work can be reduced.  Also, employees will get a greater sense of accomplishment, since they will be able to see the production of one widget through to the end.  I believe that by resigning the work, the Operations employees will be reinvigorated and willing to work toward the goal of zero defects.  Early on, the success of this solution may be slow because it will take some getting used to.  However, over the course of a few months, the team’s performance should increase substantially.
  • The next best solution is a confrontation meeting.  This solution fits the underlying problem because the team has been together for a long time (5 to 10 years) and corrective action needs to be taken quickly.  The members of the Operations team do not work as a team, as evidenced by the fact that tasks are highly segmented, there are no norms, and there is no culture.  The confrontation meeting would help the Operations employees to realize that they need to work as a team to reach the goal of zero defects.  Essentially, it would begin the process of creating norms and a culture where success (zero defects) is possible.  This solution may not be as effective as the first, but the change should take place much quicker since the jobs of the employees were not modified.

How Do We Unfreeze Employees?

  • In order to unfreeze employees, I would first need to establish a sense of urgency.  This can be done by creating a burning platform, which forces employees to see the need for change.  I would need to explain the crisis and what might happen if the organization cannot recover; for example, I could tell employees that if the organization is unable to reach zero defects in its production process, sales will continue to fall, which may lead to layoffs.  I need to get the employees to understand the importance of changing the status quo to fix the problem.  Next, I would need to create a guiding coalition; this would be a group of employees in support of the change who could vocalize their support to other employees.  It is important to have people with position power, expertise, credibility, and leadership on the team so that all of the employees can be rallied together around a common goal (zero defects).  The President definitely should be on this coalition, as well as supporters like Joe if I can get him to vocalize his support because they are trusted members of Class Inc.  Third, I would need to establish a vision and strategy for the Operations employees.  The vision creates an ideal future that the team can move toward; in this case, the vision is to have a great organizational reputation because of the high quality of the products; high quality means minimal defects.  The strategy involves continuously communicating this vision, motivating the employees to change, setting realistic goals for the team (less defects every month), and helping employees through the process.  Lastly, I would need to constantly communicate the goal of zero defects, how to get there, and progress toward it through a variety of mediums like email, memos, face-to-face meetings, etc.; this would help to keep employee motivation high throughout the process by keeping employees involved and focused.

How Do We Move Employees

  • In order to move employees, I would need to classify employees as one of five types: active supporter, passive supporter, neutral, active resistor, or passive resistor; this would help me to determine how to deal with each individual in convincing and helping them to accept and make the change.  During the process of moving employees, my goal would be to move each employee up the chain (from passive resistance to active resistance, from active resistance to neutral, etc.).

Progressing Forward and Celebrating Small Wins

  • As the employees reach the change goal of zero defects, I need to celebrate small wins and consolidate gains.  This means that we would celebrate success when employees reached the successive small goals I had set to progress toward the ultimate goal; an example of this for the first solution could be 10% defects one month into the change, 5% defects two months into the change, and then 0% defects after three months; an example for the second solution could be 10% defects after two weeks, 5% defects after four weeks, and then 0% defects after six weeks.  During this time, I need to continue emphasize a culture of constant improvement and teamwork.  Keeping up communication about the change and progress toward the final goal is important as well.  For the first solution, I could modify the rewards system to pay bonuses to individual employees based on completion of widgets without defects.  For the second solution, I could leave the rewards system as is but possibly increase the bonuses and remind employees of the existence of bonuses and the teamwork required to get them.  Finally, I need to continue addressing resistance and make sure the change stays in place.  If any employees continue refusing to change, it may be time to fire them.

Employee Analysis at Class Inc.

  • Frank is a pessimistic employees that’s been around for a long time.  His initial reaction to the change will likely be negative based on his past actions.  He has actively resisted many changes in the past for fear of losing his job.  Bill is a new employee.  His initial reaction will be likely be positive because he is new, and there is no real reason for him to resist the change since he hasn’t adapted to his job yet anyways; also, he is very easy going and seems comfortable with new experiences.  Joe, from HR, is actively involved in almost every event at Class.  His initial reaction will likely be positive since he has supported many of the changes in the past and since he will probably get a promotion if the change is made.
  • I believe that Frank will be an active resistor. He has always actively resisted change because he does not want his job to change.  Frank fears that if changes are made, he will lose his job.  Also, Frank argues a lot and has complained about every change Class Inc. has ever made, sometimes in front of other employees.  Frank will first experience shock and denial, followed by anger, depression, and then hopefully acceptance before returning to normal functioning; there is a possibility he may check out of the process if I am unable to help him see the need for change.  First, I need to prepare Frank for the shock by immunizing him with change little by little.  Second, I need to sit back and listen, while letting Frank vent his anger.  Third, I need to keep Frank involved in the change process and prepare to move him out if he’s unable to do it.  If he comes to accept the change, I need to continue communicating to him his progress toward the end-goal.  Fourth, I need to celebrate his success if he reaches the goals we set for him.
  • I believe that Bill will be a passive supporter.  He is a new employee, which means he has not really gotten used to his job yet – change would be easier for him.  It also helps that Bill is easy going and is comfortable in new situations.  These personality factors allow him to keep his stress levels lower.  I think his support will be passive though since he is new and does not voice his opinions very often.
  • I believe that Joe will be a passive supporter.  He has been at Class Inc. for five years and has supported many changes in the past.  Joe also stands to be promoted if the change is put into place, which is probably part of the reason for his support.  However, although he will likely be supportive of the change, like Bill, he does not voice his opinions very often.
  • Bill and Joe will likely go through the following stages during the change: uniformed optimism, informed pessimism, hopeful realism, informed confidence, and completion; there is a possibility that Bill or Joe or both of them could check out if they become to stressed about the change or cannot make the change.  During the first stage, they will think the change is good even though they don’t know what it entails.  Next, they will experience the change and see its effect on them; this will create stress; here, I need to encourage them to keep changing and say that the change is for the better.  Third, after speaking with them, they will realize that the change is both possible and a good thing to make.  Fourth, they will become more confident in the change as it reaches completion.  Then, the change is complete and will remain in place.
  • I need to try to move Frank from active resistance to an attitude of neutrality toward the change.  I need to deal with his concerns in a logical fashion.  This means recognizing his problems, addressing them appropriately, and showing him that the best thing to do is to go with the change.  I would tell Frank that he will not lose his job with this change.  The job is just being modified to improve its efficiency.  I can also threaten Frank by telling him that he will lose his job if he refuses to change.
  • I need to try to move Bill from passive support to active support.  This might be hard since Bill has not been here long; he may not want to voice his opinion.  I need to get Bill involved in the change as much as possible and encourage him to voice his support by telling him that it would really help the team’s success.
  • I need to try to move Joe from passive support to active support as well.  This will likely be easier than moving Bill since Joe is probably more comfortable with his Class Inc. fellow team members, having worked with them for many years.  I need to get Joe involved in the change as much as possible and encourage him to voice his opinions as well.  I could also tell Joe that the promotion he will likely receive is a position of leadership; I could then explain that he could really demonstrate leadership right now, at this crucial point, by helping to move Bill to active support and by helping to move Frank to a position of neutrality.

Implementation of the Strategy

  • Implementing work redesign will affect the Operations employees and the overall health of Class Inc. Each employee will be responsible for creating one full widget from start to finish, which will make the job more satisfying.  This new structure in combination with no longer using an assembly line process should lessen the amount of defects in each individual widget for two reasons.  First, each employee will be responsible for the production of full widgets; this creates task identity and means that if there are defects, the employees can be confronted individually.  Second, the employees will not be as bored as they were with the old structure because there is a greater skill variety employed in the new production process.  Due to these factors, this change should increase both sales and Class Inc.’s reputation.
  • Implementing a confrontation meeting will also affect the Operations employees and the overall health of the organization.  Each employee will be made very clear of the goals and expectations for the future, and of the changes required to get there.  Since no changes will be made to the production process with the second solution, the emphasis of the meeting would be placed on instilling a sense of teamwork and creating a culture of continuous improvement among the Operations employees.  They would also have a better understanding of the goal of zero defects, how crucial they are to the production process, and how to meet that goal in the near future.
  • With both proposed solutions, there are inherent ethical issues.  Before these changes are implemented, it needs to be made known to employees that changes are coming.  By hinting at future changes and giving employees a heads-up, a change should not come as a complete shock.  It is important to do this for mental health of the employees.  Dropping a change on someone without forewarning can create unnecessary and damaging stress.  The second ethical issue is that if we say that we are there to help employees through the change, we better be there.  Throughout these changes, the President and guiding coalition should be urging the employees to change and offering help to those who need it.  Therefore, if an employee needs help, it is the responsibility of the members of the guiding coalition to either help that employee or find someone else who can.

Defining Success

  • I define success as having zero defects during the production process after the first solution has been in place for three months. For the second solution, define success as having zero defects during the production process after three weeks.   In order to demonstrate success for the first solution, I would collect the results (sales figures), behaviors (employee production of full widgets), learning (how employees are adjusting to the new process), and reactions (employee reactions to the technology).  In order to demonstrate success for the second solution, I would collect the results (sales figures), behaviors (employee communication), and reactions (employee reactions to their teamwork).

Final Solutions

  • For the first solution, the sales figures can be collected as secondary information. The employee behaviors can be measured through observation.  The employee learning can be measured through individual interviews.  The employee reactions can be measured in a survey.  For the second solution, the sales figures can also be collected as secondary information.  The employee behavior can also be measured through observation.  Lastly, the employee reactions can be measured through a survey.
  • For the first solution, I would collect sales figures pre–post with a time series; by having the sales figures before, at periodic times in between, and after, I could get a sense of whether the change I implemented had an effect; since there are many other factors that could have increased sales, like seasonality for example, this cannot be the only method used to demonstrate success. Next, I would measure behaviors by observing the employees producing full widgets post only.  This measure ensures that employees have actually made the change.  Third, I would conduct interviews post only in order to judge whether learning has taken place; I would speak to employees on how they are adjusting to the new production process.  Finally, I would measure reactions to the structure of the new production process by running a survey post only; this would help me to determine which employees are getting used to the change and which employees may still be a problem.
  • For the second solution, I would collect sales figures pre–post with a time series.  I would collect behaviors through post-only observation.  Finally, I would collect employee reactions post-only as well through surveys.

I hope this article serves as a good example of change management principles and how I have applied them in my work-life.  The things we learned in school can be used effectively and give you a serious advantage in the “real world.”