The Culture Series: Part 2, How the same employees went from being the worst performers to being the best.

In Part 1 of this Culture Series, I defined culture and attributed it to the ways people in an organization or a society have learned to solve difficult tasks over time. These learned processes coalesce over time to become the organization or society’s culture. In this post, I provide an example of how the same people working for the same company at the same location, and building the same product were able to fundamentally change their culture.

The Rebirth of New United Motor Manufacturing Incorporated (NUMMI)

In the 1980s, Toyota wanted to start manufacturing cars in the United States because it had fallen behind fellow Japanese competitors, Honda and Nissan, who were already building cars in the U.S. As opposed to going at it alone, Toyota decided to partner with General Motors (GM) so it could learn quickly and avoid unnecessary fumbles. As for General Motors, the company wanted to better understand how to make small vehicles profitably and also wanted to get an idle plant back to work.

GM and Toyota chose GM’s NUMMI plant for this venture.

The Initial State of Affairs at NUMMI

NUMMI was arguably General Motors’ worst performing plant. As John Shook writes in his MIT Sloan Management Review article, “the old GM Fremont plant was considered to be extraordinarily bad.” Shook notes that the workers at the plant constantly went on strike, filed grievances against their employer, and purposely sabotaged quality. The situation at the plant was so bad that the average worker was absent 20% of the time. In order words, the plant was running at 80% of its intended capacity. As a result, the NUMMI plant produced some of GM’s worst cars. In fact, they were known for it.

The workers at the NUMMI plant had an unhealthy relationship with the company and with their work.

Changing Culture at NUMMI Started with Changing Behavior

At the core of creating good culture is trust. There can be no good culture without cultivating an environment where trust not only exists, but where it thrives. Members of the organization need to know that their work is meaningful and that their employers see them as not easily dispensable.

For instance, the worker who checked that seats were installed properly needed to find value in her work, but she also needed to trust that her employers would not eliminate her job at the first sign of trouble. The executives in charge of this joint venture cultivated such an environment, thus improving the relationship workers had with their work and with the company itself.

How they did it — Vision, Tools, and Actions

The first thing the executives at NUMMI did was to set a new and clear vision. Their vision was simple: we want to make cars of the highest quality at NUMMI. Most organizations stop at vision setting and hope that workers adjust their behaviors once a vision is set. NUMMI executives did not, they carried on.

The second thing the executives did was provide the necessary tools to ensure workers were successful. The necessary tools here are both hard and soft. For instance, NUMMI executives empowered workers with the ability to push a button (the andon cord) that stopped the whole line whenever they saw a problem. This was risky but it sent a signal to the employees — we trust you and will give you the tools to succeed. Another thing the executives did was outline a transparent plan that let employees know that firing them would come as a last resort. The organization did everything in its power, including cutting executives’ pay, before letting a single worker go.

Finally, the executives focused on changing actions without pointing the finger. Considering that people at NUMMI had done things a certain way in the past, it took some time for people to get used to the new way. This transition period, sometimes called the valley of despair, is very delicate. Managers and executives must manage it properly in order to maintain the newly found trust they are building.

At the NUMMI plant, Shook notes that the culture slowly evolved from workers asking the “five whos” questions to asking the “five whys.” Prior to the new initiatives at NUMMI, whenever an issue arose, workers went around asking “who is responsible for this issue?” until they found the culprit. After the new initiative, workers began asking “why did this happen?” until they found the root cause so they could fix it.

What became of NUMMI?

Until its closing in 2010, NUMMI became GM’s most efficient plant. Their quality went from the worst at GM to being the best, in just one year. Shook notes that the 20% absenteeism at the plant dropped to 2% and stayed there. All this was accomplished with the same workers, the ones who were “extraordinarily bad”.

Changing culture is possible but nontrivial.

Culture is dynamic. By its very nature, since culture represents the assumptions and beliefs of a group as it addresses challenges then it is dynamic. When people say — that’s just how they are or those people will never change, they’ve been that way forever — they suggest a notion that culture is innate and immutable. But this view, fortunately, is incorrect.

In the next part in the culture series, I will take this notion of culture change one step further and write about nations and regions of the world that have changed their culture over time.