Background
Rolls-Royce, a FTSE 100 company, is one of the best-known engineering firms in the world. This case study concerns the implementation of self directed team work in factories in the Gas Turbine Operations division. ‘Turbines’ is one of the Supply Chain Units in Gas Turbine Operations. It employs 2500 people and the information for this case was drawn from two factories, the Turbine Blade Facility (TBF) circa 200 employees, and the Precision Machining Facility (PMF) circa 150 employees, both in Derby, East Midlands. Approximately two-thirds of this workforce are machine operators known as team members (Rolls-Royce’s preferred term) with the remainder occupying manufacturing engineering, engineering, technical support, supervisors and management.
An earlier case study, Learning through team reviews at Rolls-Royce, described the application of team working at a Scottish factory in the Rolls-Royce Aero Repair and Overhaul Business, as well as the implications for learning. The self directed team initiative in Gas Turbine Operations has been broader in scope and ambition and, when considering its development and implementation, it is possible to draw some important implications on high performance working.
The business imperative
Rolls-Royce Gas Turbine Operations division designs, procures and manufactures complex precision engineering components. Although there are a number of basic ‘product lines’, value is delivered through having the capability to meet the demands of ‘multi-line/multi-product and multi-process’ production. The division cannot compete on cost alone in what is increasingly becoming an international market for engineering components. Delivering complex products requires the active engagement of a workforce who are skilled in the job and the knowledge and skills they have acquired. According to Hedley Hazell, the Turbines Executive Vice-President, “We need well-informed and well-trained team members who have the ability and the authority to make decisions. They must be confident in making decisions without referring to a large supervisory support structure which then becomes an overhead.” Self directed teams, where decisions are devolved to an empowered workforce, have evident attractions in this business context.
In the late 1990s the Company took the view that it would need to improve productivity by 30% to justify large-scale investment in UK manufacturing. Two related initiatives have contributed significantly to this: modern working practices and self directed teams. The first concerns the introduction of modern working practices, such as an all-inclusive salary (ending an endemic overtime culture), more flexible working and significant changes to the reward package. As Margaret Gildea, Executive Vice-President, Human Resources, puts it: “The real secret with a change like this is to have a holistic underlying philosophy which has a real commitment from the senior management. It can’t be achieved through piece-meal initiatives.”
Self directed teams – the principles
Self directed teams are not an easy option. The HR team in the Gas Turbines Operations division stress that a whole range of interventions need to be co-ordinated if they are to be sustainable in the long run.
There has been an ongoing discussion amongst the Operations management and Human Resources professionals on the most appropriate model for self directed teams. As was noted above, the emphasis has been on a holistic approach in which a transfer in empowerment is accompanied by the development of a new organisational relationship system – embracing remuneration and performance management for example. An investigation of the relevant literature, undertaken by an in-house specialist Sean Pratt, HR Business Partner, led to the identification of a number of themes for successful team leadership. Key to the success of high performance team working is the way employees are led. The common themes that emerged include:
- Setting the team a business context to give it a rationale for achieving targets.
- Ensuring leaders communicate effectively about the targets they aspire to, their degree of success in meeting such targets, and what they need to close gaps. This should be a positive model that supports achievement and builds confidence in high performance.
- Ensuring teams are capable – here coaching is critical as it builds the teams’ confidence.
- Leaders need to help their teams learn from experience be able to facilitate ownership and self-direction (decision-making). Leaders need to learn when to direct teams and when to leave them alone to resolve issues for themselves.
These four leadership activities contribute to a team member’s sense of empowerment, but in addition a leader must help teams by breaking down barriers that the team can’t deal with themselves. A leader has to step in and help unblock things for them, particularly across organisational and functional boundaries.
Finally, as with all models associated with leadership, the leader needs to be a role model and challenge the behaviours required of team members, as well as addressing poor team behaviour.
Self directed teams – the practice
In the current arrangements, typically team members work in groups of six which are centred on a ‘cell’. The cell contains the machinery needed to do the engineering processing – for example a team will take cast turbine blades, grind them and remove surplus material, coat and air-cool them to produce a near-finished high quality pressure turbine blade. The cell contains prominent displays of the various charts and control documents needed to manage and report on performance, as well as a small breakout area.
The emphasis on self-management means there is no team leader as such. Team members are each expected to take on a champion role which involves responsibility for improving operations or resolving problems. Self directed team working requires all members of the team to gain new skills. Skill acquisition feeds the sense of greater job satisfaction. Skills are acquired through a variety of means; much is done through coaching, on the job training, team workshops and appointing champions in the team for specific roles. Particularly important champion roles are for ‘delivery’ (against targets) and ‘non-conformity’ (dealing with defects). Other champion responsibilities include: machine calibration, cost, holiday champion, health and safety champion and training. The intention is for everyone to become a champion and acquire new skills. Sometimes roles can be simple, but, offer growth for the future – for example, holiday champion roles develop planning capabilities in the team which can be deployed in other roles.
The factory operates on round-the-clock shift working and information must be transmitted effectively at shift changeovers. Shift working means it is hard to make arrangements for full factory meetings though there is a regular short Wednesday town-hall style meeting. A critical part of the job of those in technical support roles and of the next layer of supervisory management is to ensure that all teams are aware of any changes that could affect output. In an industry where demand can vary significantly over short lead times, a key management and supervisory task is to ensure the teams know the priorities on different products and that they fully understand all the reasons behind changes in demand.
To provide a wider perspective on markets, competitors, likely demands and macro influences on Rolls-Royce, all employees are invited every six months to attend a ‘Dialogue Session’ led by a senior manager where the future outlook is discussed and the rationale behind company decisions explained. For a company where products’ life cycles are measured in decades, understanding and managing the future are keys to success. Many team members have undertaken a modern apprenticeship and Rolls-Royce has an extensive on and off the job training regime which ensures that skills are kept right up to date and at the cutting edge of new technology.
Team members find that their enhanced roles and responsibilities lead to greater job satisfaction. “Under the old methods they’d come down and tell you what to do. Also you can understand the bigger picture and get more variety in your job – previously you could be doing the same stuff all week.” However, the new methods of working demand a more proactive commitment and team members observed that a small minority of people were less interested and were initially reluctant to come forward.
In some respects, however, the main challenge is for management and supervisory staff, who must trust team members to solve any operational problems and give them the time and space to do so, even when a more direct intervention could produce short-term immediate results.
The challenge of change
As teams become more confident, demand for learning new skills will grow. An Assembly and Manufacturing Framework has been put in place to support this challenge. The framework taps into a global network to identify solutions for team member learning needs, both technical and self-managing. The framework can also gather best practices from local activity. Greater confidence and capability through learning should feed every team’s potential in order to compete to the best of its ability, and open up other opportunities in the future
It can be seen that the implementation of self directed team working on the holistic pattern outlined above can be regarded as a significant and demanding change management process. Multiple stakeholders are involved. It takes time to capture the commitment of the workforce and understanding that such a change is irreversible ; they must be prepared to accept more responsibility if the business is to survive. Rolls-Royce report that the trade unions and their shop-floor representatives have been supportive throughout.
A particular challenge has arisen at the lower levels of management and the technical support roles (Business Improvement, Supply Chain and Quality, for example). Inevitably people have been concerned about loss of status and have needed guidance and support to undertake their roles in the new context. Workshops were held with supervisors at the launch of self directed teams, but with hindsight more should have been done to reassure supervisors that the plan was to enrich their jobs using the time freed up by the transfer of work. Over time, teams and support areas have all moved up the skill chain, but more could have been done to make that intention more explicit in the early days to address worries.
When asked to reflect on the change process over the six-year period, the following observations were offered by the HR team. First the term ‘self directed teams’ was initially seen as jargon and may have acted as a barrier to understanding – in retrospect “high-performance team working” may have been a better title for the change involved. Secondly, although a lot of work was done to secure the understanding and commitment of first level managers, more was needed. Thirdly, some of the supporting material could have been better deployed – for example, some team profiling instruments which were intended to diagnose gaps in team capability were seen as scoring or assessment rather than development tools.
Results and benefits
According to Margaret Gildea, the results must be considered in terms of the impact on the business. Productivity is improving year on year and has done so since the start of the self directed teams initiative. Other complex changes in the business have taken place over the same period and it is therefore almost impossible (and of little value) to try to extract and isolate the effect of a single component, like self-managed teams. The effect on morale is very positive based on feedback from Dialogue Sessions and anecdotal evidence, but difficult to measure in isolation to any level of precision.
However it is evident that Rolls-Royce are committed to extending and developing this style of working. In their view: “It’s a simple idea – give teams clear targets, the tools and training to solve problems and improve, coach and guide them. Prepare to be amazed at the power of what they can do.”