Can you get 190,000 people thinking about CR?

GM’s trying—and here are 15 of their best practices

By Bill Hatton

Senior executives tend to be self-motivated and possess a strong desire to succeed, and obstacles tend to be seen as bumps on the road to something greater. They believe things like, “Pain is weakness leaving the body” and “No guts, no glory.” That is, they are engaged, engaged and more engaged.

But not everyone is. Some people are happy to collect their paycheck and go home. They may do a “good enough” job or just do the minimum, but they aren’t engaged. Others’ engagement wavers. Disappointments and obstacles slow them down, or stop them altogether. And they may make excuses—“Hey, I offered my suggestions, and they didn’t listen.”

Senior leaders thus need to find ways to get people more driven at work, engaged with their work, taking initiative on issues such as quality and customer service, and not to allow obstacles to stop them or demoralize them. And that’s no easy trick, as often highly successful people push through problems that stop others.

Plus, even successful techniques get stale, which is why engagement needs to be rooted in relationships between employee and direct supervisor, and employee and colleague, and employee and customer. Every manager has to use a mix of techniques to push people out of their comfort zones and into enthusiastically tackling the job.

What GM is doing

One exec facing up to the challenges of employee engagement in the context of sustainability is James DeLuca, executive vice president of manufacturing, General Motors. He is responsible for 190,000 GM employees in 171 factories throughout the world, about two-thirds of the entire organization. He spoke at the Greenbiz Forum, Scottsdale, AZ, earlier this year, and articulated GM’s employee-engagement strategy. Here are the take-home steps other companies can consider emulating:

1. Start top down. Senior buy-in is a cliché, but when it comes to changing direction of a large organization, the orders have to come from the bridge before suggestions can bubble up from the frontline workers.

“Sustainability has to start at the top of the organization – so the Board, the CEO, the executive leadership team – need to define it as a priority,” said DeLuca. “Our CEO, Mary Barra says our customers care about more than just the cars. They care about how we produce them, they care about what they’re made of, and they care about how we interface with the environment – so [sustainability] certainly starts there.”

2. Describe in business terms. When it comes to senior buy-in, principles and core values are crucial. And for these values to be manifested in the business itself, they need to be translated into the business plan and into business terms.

“We start at the top, so when we talk about the sustainability journey and why we do it – we don’t say we do it because it’s the right thing to do,” said DeLuca. “We say we do it because it impacts top-line growth, it impacts bottom line results, and it impacts risk. So, we think it’s very, very important for those reasons.

“When we established our 2020 sustainability goals back in 2010, I mean, we did it for those reasons, and I don’t think we knew how far we would move and how quickly we would move – certainly faster than we thought when we identified those goals back in 2010.”

3. Don’t be afraid of anecdotal evidence. Anecdotal evidence is often derided, often to the point of dismissing an individual’s personal experiences and ability to know. But what you are hearing—the eyes and ears on the ground—are in fact critical aspects of understanding what is happening in markets. You’ll need to determine what is noise and what is signal, but you can start with what you are hearing from family, friends, and neighbors.

“We hear it anecdotally, we hear it in our families,” said DeLuca. “I have children, like many of you do, and they talk more about sustainability than I ever did as a kid. So we hear it across the board.”

4. But confirm. Marketing surveys say sustainability issues do affect buying behavior; in GM’s case, customer car choices, says DeLuca. Anecdotal evidence will be challenged, and when DeLuca was challenged, he was able to point to marketing surveys. In that case, the surveys confirmed the evidence that customers are making purchasing decisions based on more than just product quality and features.

Bottom line: Anecdotal evidence—listening to family, friends, neighbors—are great ways to get a general sense. But business as you know is statistics-driven, and you will need numbers to either confirm, refute, or require more study.

5. Create a playbook for getting the company engaged. Starting programs top-down requires clear guidance for the rest of the organization, to dispel confusion but also to give people clear goals to rally around.

“In terms of my role, I need to provide the playbook for the organization,” said DeLuca. “In General Motors manufacturing, that playbook is our global manufacturing system, or GMS. GMS is simply made up of five principles: people involvement, continuous improvement, standardization, short lead-time, and built-in quality.

6. Prioritize the role of engagement. Nothing happens unless people do it; thus, GM had to make sure it focused all its business plans through employee engagement.

“I would say first among equals is people involvement,” says DeLuca. “Getting the organization engaged is critically important. From there, another very important element is our business plan. We have a business plan in GM manufacturing that starts in my office and transfers down to the plant floor – every single plant floor. And that business plan defines our priorities.”

7. Create individual plant scorecards and offer flexibility for how to meet those goals at the local level. Engagement requires freedom to act. Organizations require that freedom to be steered into company goals. One technique GM used was to set those goals and create a scorecard to measure against them. People can take initiative on how those goals are met.

“Every single plant has a scorecard, and that’s how we judge their performance,” says DeLuca. “On their scorecard are environmental metrics: water usage, waste generation, and energy usage. So every single plant around the world as part of their work is working to improve performance in those specific areas. When you leave it up to the team, now we’ve established the structure, we leave it up to the team to figure out how to get that job done.”

8. Enlist involvement of skilled trades. Once GM had its C-suite commitment, corporate goals and manufacturing system in place and publicized; and further had its individual facility scorecards with flexible options for taking initiatives to meet goals, sustainability initiatives had finally gotten to the factory floor. It was here that skilled tradespeople dug in and found some workable solutions.

“In today’s manufacturing, most of our body shops are highly automated, “ said DeLuca. “So we have sections of the body shop where we weld together cars, trucks, and crossovers – where there are no people. It’s simply robotics. And it’s groups of skilled trade who are working on their energy reduction initiative who say you know what, this piece of the body shop is lit up like this stage – and it doesn’t need to be. So now they rework the controllers such that when the lines are running, the lights are down – because they’re not needed.

“If there’s a problem and the equipment goes down, the controller then brings the lights up and so when skilled trades get there to resolve an issue, they can work safely.”

9. Share best practices. Turning down the lights and having procedures for when they need to go back up – that’s a new best practice. GM makes sure to share those throughout the organizations. Individual business units then can grab the best ideas and apply them to their own teams to meet the goals on the scorecard.

“We think that sharing our best practices is very, very important,” said DeLuca.

Another example: Employees suggested the company swap out materials, to use some more recyclable and reduce waste; in this case, it was pallets. Two GM facilities switched from the use of wood pallets to recyclable plastic containers.

“And when they made this transition, those two facilities saved 146 tons of palletized waste,” said DeLuca. “And then they spread that idea through a system around the world and other plants have an opportunity to look at it and see if they can use it.”

10. Offer financial rewards for savings. All senior executives want continuous improvement so the company can remain competitive, and offering gain-sharing and other financial- reward plans can be effective ways to boost employee engagement. It gets employees thinking about efficiencies and what they are doing – one sure sign of engagement. And group awards can encourage team engagement, such as brainstorming and strengthening each other’s ideas. Iron sharpens iron, as the Book of Proverbs says.

“We think rewarding employees is important, because they like to get rewarded for their innovation,” said DeLuca. “In the United States, we have a suggestion program with our joint partner, the UAW, and we reward employees for their great ideas. We actually give them a portion of the savings generated from their idea and a maximum award for an hourly employee could be $20,000 for a single suggestion, idea, or if it’s a team suggestion: $25,000. The other thing we think – continuous improvement, which is one of our principles of our global manufacturing system, it drives engagement, it drives employees to go above and beyond.”

11. Encourage exploring of alternate solutions and pressing on. Experienced people know nothing is easy. Obstacles arise, even in front of the best ideas. One sign of engagement is a willingness to investigate and push through obstacles.

“At our plant in Lake Orion, Michigan, where we produce the Chevrolet Sonic – in the paint shop, where they paint vehicles – at the end of the process, they use rags [on] the vehicle before it goes to final assembly/general assembly,” explained DeLuca. “They use them for a period of time and they discard them. As they were working on their scorecard, they said, you know, we have an opportunity here. This becomes waste, we have to buy new ones, it’s a cost issue – why don’t we reuse them?

“So the first step in that process is they went out to a vendor and they said how much will it cost you to wash these and bring them back to us? And they looked at the quote and said, ‘Oh, my gosh. This company must send their kids to private schools. It’s too expensive – we could do this a lot cheaper than them – we have time during the course of the day… if we had a washer and dryer in our team room, we could wash and dry these rags. We could reuse them then and then save the cost of both the rag and had they gone out on a quote.’ So, another example of people getting engaged.”

12. Look for recycling options. Most companies can find some savings in recycling, but one plant came up with an innovative way to re-use waste materials. In the following case, it would have required multiple steps to see if the materials met technical specifications (or how they could), so it’s not a surprise that this occurred in a department working closely with engineering.

“At our Fort Wayne plant … where they produce the Chevrolet Silverado, a group of employees working with engineering and suppliers have now taken cardboard waste and they’re recycling that into acoustic material, which is used specifically in the Buick Verano and the Buick LaCrosse,” said DeLuca. “So, waste from Fort Wayne is now becoming part of Buick’s quiet ride.”

13. Create a formal recognition program. People love recognition, and GM put in place a formal recognition program to honor the best plants throughout the world.

“We have a formal recognition program that recognizes the plant in the world that generates superior year over year performance in eight different categories, and one of those categories is energy reduction,” says DeLuca. “We have four regions, so four plants selected around the world for their year over year energy reduction.”

14. Focus on reducing risk. One of the goals, besides straight-out efficiency improvements, involves reducing risk, including environmental risk. And it found engaged employees were able to take initiative and find risk- reducing innovations.

“When you talk about the importance of protecting the environment, that is certainly a priority for us, and as we – each of these initiatives – as we execute them, a significant impact on risk reduction,” said DeLuca. “As we talked about risk reduction, and I know we just had the discussion on the board, one of the focuses of our board is on risk identification and risk mitigation. So, every area of our business spent a lot of time on the identification of risk and the mitigation of risk and we think this is an important initiative in that realm.”

Example: Paint application. “Traditionally, you would apply a primer, go through an oven, and it would generate the OCs, and then you would apply a base coat and a clear coat and go through another oven. Now we are executing with our suppliers a three-wet process. So, you apply prime, wet, base, wet, clear, wet, and go through one oven – so your BOC emissions are going to be less, certainly your energy reduction – almost 45 to 50% less, and the paint shops are the area of the plant that uses the most energy in General Motors.”

15. Watch out for the “frozen middle”—middle managers who can thwart change. All positive change will involve some pain, and that will involve pushback, or worse, foot- dragging people who can complicate, slow down and even halt change. They can make change not worth it. But this is a general suggestion, and it’s brought up because it was a question addressed to DeLuca—what the response was from the large middle-management category of GM employees.

“It’s an interesting question, but if you think about our global manufacturing system, GMS, which is kind of a top-down approach, it is focused on the operator – the guys and girls that actually assemble our vehicles – it requires us, whether it’s people, quality, cost, safety, responsiveness, or the environment – it requires us to move down through the organization. I know you’re going to find this hard to believe, but as much time as I spend in the plant with our people at every level of organization, I don’t see the frozen middle.

“Now, granted, in high school in New Jersey, I was voted most naïve, but I don’t think that has anything to do with my position on the frozen middle. In General Motors manufacturing, we haven’t seen it. But I think it’s the result of engagement at every level of the organization. I know it’s a challenge for everybody – everybody in this room and everybody in industry. Because, how do you get 190,000 people rowing the boat together? It is a challenge, it remains a challenge for us – one we’ve been working on for a good 20 years, seriously. But at the end of the day, when you get them to do that, we have no idea how good we can be."
Posted August 13, 2015 in 25115