At the Risk Culture workshops we ran recently in Singapore delegates were keen to hear about practical examples of culture change. We want to share some ideas here about how one organisation made an enormous cultural change. You might find this helpful as you think about Risk Culture in your own organisation.
It’s not simple to build your Risk Culture to the point where every person believes that thinking about managing risk is part of their personal responsibility. However, it’s much tougher to successfully transition an entire culture from toxically combative to harmonious collaboration – that’s what we’re going to talk about.
Hopefully there are lessons in this story of transition that will help us all in thinking about how to build a positive Risk Culture.
There is a core principle in changing culture; this is that you must start by changing behaviours. We’re going to illustrate this principle in action through a classic case study.
This case study, which has been used in many Business Schools, is the turnaround of a toxic GM automotive plant in Fremont, California.
This is about a truly dramatic change in organisational culture but you can see this also had an impact on their Risk Culture (even though that term was not in use in the 1980s) because it improved enormously their ability to achieve organisational goals.
Chaos at GM Fremont
Achieving corporate goals of productivity and quality were impossible because the relationship between management and staff was poisonous –
- Management had no trust in workers
- Stopping the assembly line to fix a quality problem was a sacking offence. The problem had to be fixed later in the yard.
- Workers drank alcohol on the job and put food scraps and drink cans in sealed panels to annoy customers
- Workers filed thousands of formal grievance complaints every year and wildcat strikes happened often
- Absenteeism averaged 20%
- Productivity and quality were the worst in GM
GM & Toyota
In 1982 GM closed the plant. About 18 months later GM and Toyota did a joint venture (JV) deal to re-open it as New United Motor Manufacturing Inc. (NUMMI). GM wanted to learn how to manufacture quality small cars and Toyota needed to manufacture in the USA to overcome tariff restrictions.
Important aspects of the JV were –
- the plant and machinery were not to be remodelled
- workers from the old plant who were members of the United Auto Workers Union were to be given priority in rehiring. This meant those who had worked longest under the old system were the first to be hired
- the plant would be under Japanese management
Rehiring the same workers who had been so antagonistic to management and to GM sounds like a recipe for disaster. But the change in management style produced a totally different culture where collaboration between management and workers became the norm.
The transition began with a group of the original GM workers being sent to Japan to be trained in Toyota’s production techniques. They returned to California to help co-workers adopt these techniques.
From Trash to Trusted
At the core of these techniques was a completely different cultural approach to the relationship between management and workers e.g.-
- respect for people is a fundamental principal at Toyota and requires mutual trust and respect between labour and management.
- workers were expected to pull the cord to stop the assembly line if they saw a problem that needed fixing.
- team leaders were trained to help workers resolve problems through using Toyota’s famous Five Whys to find the root cause, instead of looking for someone to blame
- teams were encouraged to come up with innovative improvements and these were welcomed by management
These management behaviours were the total opposite of GM’s approach.
From Rebel to Director.
Let’s look at how this change in management behaviours changed the behaviours of one of the original GM workers.
Working for GM this worker enjoyed rebelling against the system by doing things like putting loose screws in part of a car frame that would be welded shut, so owners could never find the rattle.
He was rehired by NUMMI, and trained in Toyota techniques. The new management allowed all workers to have personal business cards and make up their own job titles. The title on his card was “Director of Welding Improvement”, because he monitored the robots that spot-welded frames on Toyota Corollas.
He said now when he went to football or baseball games he looked for Corollas in the parking lot. “When I see one, I take out my business card and write on the back of it, ‘I made your car. Any problems call me’. I put it under the windshield wiper of the car. I do it because I feel personally responsible for those cars”.1
Behaviours are visible, Culture is not.
Changes in the way NUMMI managers and team leaders behaved in dealing with workers led to a strong sense of personal responsibility. Under GM this plant was the worst in the whole of GM for productivity, quality and customer satisfaction. Under the new management it was the best performing plant in GM on each of these measures.
No-one can see culture, but everyone can see behaviours. The new management at NUMMI were very effective in changing behaviours. This in turn led to a completely different culture. Imagine the strength of the signal sent by the switch from stopping the assembly line being a sacking offence to being actively encouraged to stop the line to fix problems.
Risk Culture – start with behaviours.
Changing behaviours is what leads to a change of culture.
Our Risk Culture Chain shows how culture, not risk management policy, drives the actual treatment of risk. The values lived by leaders are the behaviours seen by everyone. These determine practices at the operating level which drive the behaviour of individuals.
If you’re in the process of building or strengthening your organisation’s Risk Culture start by identifying what behaviours you want leaders and staff to adopt.
Build a list of behaviours under these three headings –
If you’re not sure about which behaviours need to change find out by conducting an online assessment of organisational attitudes to risk. Encourage every member of staff to contribute because workers on the front line often have the best line of sight to problems.
Take our FREE test to see how your organisation scores on Risk Culture, click here.
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- Diagnosing and Changing Organizational Culture: Cameron and Quinn. John Wiley and Sons Inc. 2011
About the Authors
John P Dawson & Carmel McDonald are the co-owners of Dawson McDonald Consulting. They’ve been running Risk Culture Assessments since 2008 to help clients protect their organisations and build resilience. They can be reached at email@example.com
In 2015 they published a book BUILD Your Business. Risk Managers will also find this helpful in communicating their message effectively
To get your copy of this book, or to download a free sample chapter, click here