The moderator for the manufacturing track welcome everybody's appreciate you taking their time to hear from a couple of our speakers today like to introduce David Coleman is a finance business partner and continuous improvement manager a good gear he's been involved in numerous cultural transformation efforts with his most recent being a four year journey to turn a broken plan into a starship award recipient by demonstrating lean manufacturing principles and world-class safety that is recognized by the Association of manufacturing excellence.

He's here today to talk to us about culture transformation and manufacturing enterprise specifically focusing on the importance of culture and why does it truck Trump intelligence how culture impacts decision making and then give us a little sherry of case studies to highlight how culture overrides intelligence so with that David Lee thank you.

Okay so this is uh you know and all the other presentations I've seen it's going to be a little bit different it's more the fairy tale version I'm gonna move a quick you know how people said they took slides out I didn't so we're gonna move very fast through these but I'm gonna book in this with where we were at the beginning of a journey and I'm gonna let our associates speak on a slide at the end and hopefully you'll get a good taste or well.

We went through in just evidence of what we feel could be replicated anywhere if you start with culture it enables all the other tools to be used so I'm going to start with a safety message we want to create a safe and accountable environment you have to care.

So I'm going to talk to them they're going to like we talked to our employees when we when we were in our journey so you got a picture yourself it is the group and I'm tell you the setting in a minute but today our message is create a safe environment that's not safe just safety wise your body gets hurt we're talking about emotional safety intelligence regardless of what your size which your capacity levels are that you would feel safe in the environment that you work in and that you would enable people to be as creative and as energetic and as valuable as they're capable of be without having some type of discernment or discrimination or loss of emotional energy so that's what we want to get to in our environment.

We are manufacturing we do any different races we also branded engineer name we tore thousands of visitors to our plant now we have created an environment our facility next our headquarters that is very attractive for everybody from investment bankers to Chrysler and Toyota than whoever the customers are to do three common characteristics.

I want to talk to you about or just mention to you that I've experienced them four transformations that I'm gonna leave it up one is a timing you will you can try you can drive an organization to a higher level but just from the autonomous level of people that actually believe it and actually it's important the other thing that seems common about all four is its electric cult people will say this feels like a cult it's like the Stepford Wives.

You know everybody seems to be like really good here for some reason the other one is what happens with upper management after you get into this and you're successful and they became a part of it they asked what in the world did you do there and can you do it again.

We started in this type of environment I've come through sometimes a facility and see you got unchanged chair in the morning and that would that is not an uncommon sight that was in our plant so that's where our story begins it was not in good shape the chair was there the business history began or a hundred-year-old facility within Goodyear.

The union is local number two just us double United Steelworkers and to give you an idea of how tough that union is there is no local one so that is one of the oldest locals in the nation and one of the strongest ones that we were contending with in at the time we started our journey supply of NASCAR tires for 66 years.

So we're not only an old company we have mobile customers we have customers that are a hundred years old have been our customers recent history five million casting directors five years declining volumes worse than your worldwide safety so when you looked at a safety chart a new year you saw 60 plants it didn't show the other thousand locations of Goodyear because they're like the retail centers where nobody gets hurt.

The 60 plants you look down the bar charts and all the way and there was that stuff that was us when we started the journey last one was poor relationship with union leaders we were called broken more background three-to-one ratio of chairs to associates of course they had to change with any one chair they did use committee fights and safety constant fights.

I walked in I was put on the safety chair at the beginning it was it was just a fight every meeting poor housekeeping out key crowd unengaged resistant workforce so their pride they've been some people have been there 40 years they were proud but they were proud to resist you as a union he excluded from quarter operational perform we had no consultants while the company was spending hundred million dollars in consultants we were we were not the mainstream plant.

So we weren't given any help no expectations past it or sign on a negative if it was it wasn't it was said times worse than having a fight they would just basically say we have no expectations of you you you won't be here in six months just like all the other managers so here we are NASCAR the glamorous business that gets you know the the race drivers coming in to visit you the owner back at you all these glamorous things.

We get involved in and we have the chair so behind the scenes was the reality upfront installing playing on television billions of fans so my mind said coming in just a little personal thing I had been three transformations the guy that was pulling me over to the racing business.

I had been a director of manufacturing went back and forth between finance and operations just came off with a finance laws in North America Director of Finance for North American plans for financial planning and analysis and the guy my boss was getting moved over into the race businesses to head up this whole thing and he'd never run he'd never been in manufacturing.

So I said well I'll come over but I'm not coming to be miserable for first because I know you don't have to be and to I'm not coming to count brass hand with some appliance guy but I'm not coming here to count all the dollars so so our starting point and another just point to mention is in this environment a union president would not stand up here with me for fear that.

He be associated with management so it was a very bad liar so we started thinking it was primarily the we start thinking soon well why can't we be the plant for Best Play Store play a plan of choice demonstrate best practices brand new with your name better why can't we be united with our us w so that was our vision we just kept we started thinking about it.

So we built a case for change with the roadmap principals management systems gap analysis I told him to move through this quick see you don't have to memorize anything you know like there's no way story you might not know a lot of details but you do know how it ended right it's don't remember okay so here's a camera same thing they asked me to start leading in some of the cultural stuff and say there's a model I built.

I'm gonna go through this real quick this was my first presentation to the salary team I said okay this this thing down the middle here represents like a five year journey but at the beginning of the journey we said we didn't really get the mindset of our people our managers our hourly people everybody in the organization he says so call from I said.

what's it look like feel like sound like was the need first thing we said needs safety and we did this is really focused on safety first you hear that is a close shave sometimes but we really focused and committed to it so then we said okay you know we got this background and pre awareness awareness understanding you've seen this as sometimes as a measure of your cultural maturity so we did too and then we said and then you got a change eventually so then we said hey you know the beginning of the journey you got some good things and some bad things at some point.

You have to make a decision when you do there's a can of worms matter of fact the Union president is going to swim in and say in the contract we can't do something then we said you know after you get to one side how do you envision the future we said hey we're going to have problems so don't sit and think we're going to eliminate all our problems but we're gonna make them smaller and we're gonna make her our capabilities stronger.

So then we said ok what does it do what does it feel like well today it felt like a bunch of resistance and sometimes you don't know what it is you're trying to launch things try and do things you just can't get things to move you can't get it to stick well people have been there a long time they work on what intuition and they do have the tribal knowledge and we're trying to get capabilities and engagement so we try to paint a picture for what it would feel like and then we come in and said ok.

You know you gotta choose your comfort zone people have to learn to feel differently they have to learn to feel differently but I can feel bad about being a bad batter in baseball and I can pull the struggle of learning to be better so I get to choose my where's my encumber going to be so we kind of tight you did that across them talk about storming norming for me and the emotions.

You're gonna feel we also said okay what's it sound like in our organization it was sounded like this the west schools we have social issues if you have any Union environment social this is a big word right so social issues people don't need to know we've tried this before you guys won't be here we said no we need to hear different things.

We need to say we want people to say we want to work here just the best place to work this is a great place will matter of fact our CEO after we got all three years into our journey said in front of the sixty highest with your people you need to go to that plan before he used to staff like over that now he was telling everybody go to find Dan tell him to invest money in our plan.

So when we said then so we get to what it sounds like to say what does it need we said it needs a cultural foundation you know not just safety but we need respect strategy and communication and just like we've been talking about a lot of these decisions you gotta hit the tools but you but our point was in the culture before you get it before you get the tools you got to get into the into the mindset of people and change the way.

So that you enable the fact that they're gonna useless so close that concession which was you know we have a place where we think we are but there is actually where you really are and then we said you know art our journey started here to find a path and our commitment to be honest in a lot for to attract students so we stepped out on the limb as they present as a management team and then they said hey watch TV culture 101.

We had a nice University we kind of okay so culture 101 we started with ITV know what a culture was totally I had to go and Google and so you get all these definitions of culture and you know the one thing we wanted to find within it was where did the intelligence play into you know there's there is an intelligence and there's a culture and there may be there's a combination of all but basically it's a we have our culture right here in people like the points safe like hey the culture the management's like say well that's a terrible book well you're in the culture you can't call it you can't call it something like it's just a foreign object.

You have to you have to embrace the culture and take ownership that's what we did as a management team ownership for all the cultural issues that have never been managed so there was a quote years ago by Commodore Perry he said dear general we've met the enemy and they are ours and he's dragging the enemy boats up the river that was actually a misquote ago cartoon said we've met the enemy gives us and that's how we develop as managers we met the enemy it's us we have full responsibility for changing this culture and the business.

So then we said well culture you know knowledge doesn't make the best decisions so in the culture and knowledge relationship and you hear this you know and then I've got any part of my gonna you know I don't think its culture Trump's intelligence so a real quick example I was in wrestling in college and before I got to this school it was a division to college school when I got there was a division one but on its way to a Division one school it was a division to school and years ago you used to be able to wrestle in Division one if you won the Division two national championships but nobody would ever win the division 1 national championship even though your division 2 challenge well there was a guy named Gary Barton and he was on coach Bob was two coaches Clara University he had 50% winning record indeed tonight he qualify for d1 he comes off the match and he says hey coach after one win in the divisional financial championships and he says hey coach.

I think I can turn and my coach says I did what all great leaders would do I told them I think you came to LA and loan the hope the guy won the national championship so when you talk about culture and how you support your employees we got to be different now I'll give you another example say the men's applause there's no business right very smart guys smartest guy ever worked for great intellect and the company had been the company for years that he's the president of joint venture.

I was the CFO and so we're sitting there looking at data on prototypes coming through for transmissions heavy-duty transmissions and he said his culture that he had brought through we don't miss deadlines it was just like the Space Shuttle.

We don't miss deadlines okay what happened well can't he pulls the chief engineer put some pressure on chief engineer says well we can we can launch and fix as we go didn't have a solution 50 million dollars of warranty problems later which so when we talk about intelligence nobody was smarter than this guy but he just had he had a cultural swamp.

So he has said maybe also my continuous improvement culture regardless of what we say you gotta kind of get better you can't just do culture for the culture so he said simple point A to point B I'm going to fall back up on this slide in a few minutes we said we wanted you to to open up your eyes I said the onion my safety message you talked about you know using all your skills of all the people we said hey there's colors there's one color there's a lot of colors there's a lot of sounds a lot of words we want to write our own book so we were feeding our people you know.

Encouraging things on the culture don't discriminate use all the tools let's make this thing something special and here we were the worst in the plant are in the company so we also said think about the way you think so you know there's great critics and they're great speech writers and motivators and so you need to think like that too you got to all be motivators and to think how you affect other people every time you do something so we said think small think about the individual.

You can overstimulate under stimulate there's a science experiment that a lot of us went through in in story and the Paramecium it it'll it will die if you over stimuli it dies offenders today we said think maker they'll also think about the whole system so individuals matter and systems matter we heard this morning about you know where do you start you start with yourself but but it's all about the system so we said the culture becomes a team when their core beliefs you got a core value of core mission so we said you know you want do.

We want to weigh our best 300 people or maybe not maybe 300 best people there's a big difference between that and the way you manage so we fill them up with a lot of philosophies and try to really encourage them to think differently and they take more everybody being a leader so said what's our discomfort strategy how do you leave people you know do you yell and do you heard of like cats do you just send them animes so no and when you picture discomfort.

Why do we take the discomfort that actually gets us ahead instead of just get something done for accomplishes something in a short time we've talked about different cultures that we have to deal with not just with our customers but even within our business so you know.

I always tell the story we were negotiating a deal on pork very complicated for for a transmission with the Koreans and different cultures have different ways of being polite and saving face and the way they do some they were giving us a quote on a part and we knew they couldn't hit it too complicated is the cost they condemning.

It the cost but as a story went on we said well they they knew we knew they couldn't get it and we knew they knew they couldn't they went on forever like what the point was is you know they did raise the price later so understanding the cultures doesn't necessarily a bad thing that you have differences but you do you know sometimes it's actually worse.

So we said hey there's common mistakes and we said we've got a busted miss and so we did we showed an example work you know there was something we were doing in our company that we had five minutes six myths that that went along with this and if you sat down with your employees and talk to them its that none of your customer talk to the sat down you know the leadership you found out every single one of those miss was wrong and why.

We still do this so we said you know it is how you do it not just what you do and so you know the concept was built the foundation continue to build once you once you get that go back slide if you if you make a change you know how you treated the person the process you use what you learn through that you need to keep growing your organization so we talk about that we talk about all the counters matter every single thing you do every single day.

You from one side of the scale or the other when it comes to the culture everything matters so we put our we've had our employee boards we started making boards for around in each of the areas we would put one good thing about that employee on the board with you know their third picture and their name and their years of service.

So we were very specific and very personal as a management team when we started and we said we want you to change my son with the Naval Academy and there's a very high clientele of kids to go when you go in there they pull you in and those that comment on in the orientation session is telling you I'm gonna change your kid the everybody's bringing the kid in their thinking their kids there's kids like top notch but no he's me we're he's ours now and he will change.

So you know I came up with this as I was talking yeah this is perfect this is evolution and change is good you know everybody change you know it's not that's not it because if I show that then people are changing and adapting right and we're saying no work bad managers and and sometimes there's really bad managers and we don't want you just to adapt and change to a bad manager.

We want to we want to change that manager so don't adapt there make your changes intentional let's create our own destiny let's decide how we want to change and then go change so we come up with this model this is a business our salary manufactured customers say and I'll get that one to later in a follow-up as to how we validated.

That model so in the third year of fourth year the journey our leadership they start getting a little tension towards us because we're being successful on something so they ask us to go for shingo emmy awards the association of manufacturing excellence we said no they also ask is that we want to so the consultants we said no we think we have a good thing going here we think we know what we need to do.

We just got to keep being committed to it do so but we were mentioning ourselves about right here so we were so they said let's do culture 201 that kind of migrated into that culture 201 B 10 point A to point B same thing but then something changed we said in a point A to point B that was our old here we are and we said there there's our our new curve now why is that the new curve well we're not what we were before isn't one and well not where we want to be changed.

So our conclusion to the whole thing say dude we got to navigate we have to be committed to navigate it's not you know when you talk about 76% planning and then you just execute yeah it's it's like then yes if you counted all the times you plan over the whole course of your of your executions it might be 70% but you can't do all 70 up front because you don't even know where you're going yet so an example of that kind of sort is when I grew up I was sort of the worst family and I was probably one of the only people I knew in a divorced family.

So I was a minority I mean truly a minority I was t I was talking in front of a group of kids from boys girls club and their underprivileged children though we're telling our stories and why is that because they're none of them are married how close today 40 some percent of the households are married when I quote was 87 so Jeff Bezos talks about you know today and in today's world if you upset somebody in today's world they're telling 6,000 friends through the internet years ago they told their poor best friend so so you got to be careful and things change.

So quickly in the cultural part of your business that you just kind of keep navigating you got to be more aware so we talked about each time you know there's a statistics on every country feeling culture is important it's a it's a worldwide thing we talk about our decision-making like especially in safety 67% of errors in safety are actually made above the frontline.

So when we talked about our employees and how we talk to them why did you why did you get hurt so any emphasis on that like it's his fault 67% of the times it's who bought the equipment how the equipment was guarded how do you tell the plant was designed how the processes whereas I had nothing to do with that employee he just spent 40 years avoiding the accident.

That he finally had you know so we can't we would change our mindsets as managers constantly throughout that and this is another graph that or chart that illustrates that across belt sharp it talks about years ahead of accidents or the real decisions make they create them so we also talk very personable to our employees about the way you behave now in our union contract there is actually a clause in there it says that our union employees are allowed.

We're now think of that management style that created that and the high-level executives in the organization sign those contracts so what are they telling the employees so we had a chair and then we went to the improvements our plan to start cleaning up.

We created a center of excellence we cleaned every conference room named it after a racetrack put the racetrack signs on and we have gifts we give sometimes the visitors where our whole entire fleet will sign on race tires our employees took it upon themselves to take pictures of all the employees and make displays of them.

We started committees to recognize our recognition pyramid we started to do our continuous skills development so plan optimization type structures disciplines we felt that hitting the culture first gave us the right to move on to other things it enabled us to move rapidly.

Once we got trust built into our organization we had we've won a world-class award in this target year award or closed loop system so I told you there was a lot of flights and our safety meetings there it was almost as simple as put a closed-loop system in any ideas that were gathered on the board and they didn't leave that board until they were resolved so take it away.

So the value of the tools it is to create a structure and accountability not for the employee but for the managers you know if an area manager is running around the plant all day long and you're pointing to him and same I got a problem he's got other things on his mind so you create these tools and you got to convince your employees but no I know you said it for 20 times.

I'm not filling a card we'll get it done so there's our daily management system boards and Center of Excellence this is our manufacturing area through the glass wall so we continued with success we call it you guys were lucky all 5s and daily equivalent care so what really happened so to get back to culture you have to have an end game for the culture it's it's not to be a flowery culture thing so our safety we actually were battling for number one in the world at one point in our journey our safety improved I was walking one of our customers it's a 75 year customer through and after we had started seeing dramatic improvements on our plan.

He noticed this sign this is a two-sided sign and his name just had to be the same name as the company so we use that engagement dramatically increase in our plant waste dramatically increased in our plan quality TPMS improved dramatically and our cumulative profits this was zeroed out for year one dramatically improved so we what transformed in the business so we were asked to present the emmy awards this year in San Diego.

This is one of the charts I used and so number one thing that transforms leadership leadership is one they're accountable for the behaviors of themselves work environment change can't expect people to work in a terrible environment and then the employee engagement change so we went from the worst in the company to an Emmy Award winner only only business and good year that's ever won the Emmy Award and our CEO had said at one time why can't we have a business from the anymore.

So what needs done when we talk about we already know with you two done we didn't even solji we had to tear and we had to really care and show we care and tell them we care and demonstrate in different ways we care safety no bargaining to do what's right even though we're dealing with bargaining units in u.s. w set expectations break rules silly rules like you know just because you're allowed to square doesn't mean that's the environment living on some of those closing systems or car things.

I talked about like a rule that you don't have to put your name on a car that's just a silly rule we like to talk about their little silly what am I going to do get in any analysis on you come get you you know sleep we just make rolls and then we talk about them and then use them for reasons why we shouldn't do things so after five years we won the award you know talked about managers when you could stand with me why I accepted the award with the president of our union standing on stage with the chairperson of our union on stage and with our safety management stage this is an
application part of the application.

You fill opera anymore there's 60 questions here and this is the evidence you provide so as we started doing things and processes and takeover procedures in our plant and communications results so this was the nonverbal part of the application you know so had a kind of a letter to describe what you did so the guys who came into the to give us the audit basically wanted us to present in in San Diego they said what we want is your earliness is your cross culture.

You just you matically change this place major turnaround the management so that stuff's up on stage just to give you a glance this is our union president and I don't think he's mine at all make some magazines and then they said even talk about what was your biggest challenge what's your biggest challenge to turn your company around and we said well our biggest challenge was building culture trust and I said well tell us.

Why it was such a big challenge to build trust whoa not just from where we came but the fact is if you want somebody to trust you you have a trusting relationship with somebody you've got to step out and put yourself into the glass house because you're saying you're trying to commit to something that you're not even good enough to do that but over the years you're committing to it because you want to be that good and your employees are going to help you get there.

If you put yourself out of the limit because they're gonna be the first ones to point out what you said so it's not always comfortable sometimes probable you pick your battles it's not about who wins so I talked about that validating our salary model.

So I took 660 questions when I did the cultural 101 of course I said I've got to figure out a way to do a gap analysis on culture and understand culture I said you know we got this management model learning organization I said how do we validate the model so I talked to HR and I was learning to CI Department at the time I said I want give me every handwritten comment every employee is ever told everyone.

That's ever been submitted on every birthday survey survey you know maturity of the business round tables every complaint ever written so they gave me about 660 so almost 700 comments and I said I'm going to take those comments and I'm gonna I'm going to use them in our model and see do they match the model so lo and behold as I built that thing it was amazing it's not showing this far : true that 104 comments said they want a high-performing systems.

They think about you got out of the union people telling you they want a high-performance system so as you go through the whole thing 91 respect an 87 1 communication transparency they built the model built a model our employees all the way down to they want to be treated like a person and actually have some fun so the question became at the time of this was why don't all companies because I can take this model to your company now I'll bet you 99.9.

I matched up the same way because who doesn't want to be safe who doesn't want to be the learning organization who doesn't want to be in this kind of culture so the question became for our team because I'm standing here with them just like I was standing here with you we are culture as we stand together we are culture you can't deny it you can't point to it and say it's something else it's us right here so how come if you want this and I want this and the managers wanted why don't we have a high performance this great culture if you read books.

They'll tell you things like this because the CEO is too egotistical that's the reading to this comment so my conclusion was this because it's hard work I have seen vice presidents presidents CEOs walk through plants that I was recommending veggie I've seen CEOs come to my plant walk through these things they didn't like and then come back and say hey nice job good plan right it's hard work it's like walking past your kids every time they don't make the bed they don't say the right things you know they're doing the wrong things and it's hard work to address that constantly right sometimes you want to convince your side of these for say anything really.

I've seen I've seen it over it is hard work and that's where that's where the buckets is hard-working so we committed to the hard work we committed to and said we know it's going to be hard to it's hard to ddress the managers or record the out review with so excellent Aristotle says excellence it's a market run by training in the situation so we're not we are what we repeatedly do.

If you walk through the plant every time and find something to improve you will improve if you walk through and not find things to improve and and ignore people the best system so we actually have a person say they don't like swearing and that was an ally person in that comment I mention that they have a light right to swear with their own people who will like the square honest work okay don't don't like it so when you really talk about culture and freedom people free of their energies not worrying about the environment it you got to neutralize it.

You have to have this pure clean environment are the certificates that you know it's interesting it was take that certificate to a race and so let's just say that you know Kozlowski the driver was what won the race Truex whatever don't take it to a race you try to get to it assignments track they'll take the drag to the drag races so and they created that on their own.

they just like so this is the things just kind of have a tendency to know good things you can throw yeah two questions thank you very much so the first question is if you couldn't say to that workforce you're changing the culture the opposite sign is thinking we need to change the management.

That's why it's so absolutely and so my question to you my first question to you is how do you miss it to match the culture but you're working that they're saying this needs to change this music sounds like a hold of it right so from their perspective they're looking at you and thinking well if you had underinvested if you didn't give us accurate direction.

If you hadn't won all the basic management stuff you need to change but they can't see you back because they work for you that's like Christmas well ok so so we actually I would actually have conversations like we I am with you and say to them we realize that we have not been managing well we put ourselves out there and I mean it was even behind closed doors so you can't be it can't be just hate let's make sure all the people that think we're really we really here it's behind closed doors so when the the Director of Operations come my office late at night or at seven o'clock whatever you know Jim Mason he's terrible he's the union president you know we said he would struggle because he was the hardest union president in the nation.