AMERICAN WORKPLACE VOLUME 3 ISSUE 3 March 1995 U.S. Department of Labor CASE STUDY MAKING TECHNOLOGY PAY OFF The days of go-slow growth based on past success are over for business. Instead, today's progressive companies rely on information technology, quickly deployed and readily available company-wide, to gain competitive advantage. Many employers worry, however: Do my employees know enough to use high tech to its best advantage? Connor Formed Metal Products, a San Francisco-based company that entered the overseas market in 1990, has experienced first hand the advantages of integrating technology and work force know-how. Merging the two has resulted in better work processes and products for the 250-employee manufacturer, whose profits grew from $16 million in sales in 1989 to $28.7 million in 1993. What accounts for the company's success? Connor uses several high-performance work practices, but two are key to growth for this producer of metal stampings, springs, and wire forms. Company officials realized when they decided to expand to overseas markets that the transfer of product information among workers within and among its five worksites would be crucial. Just as important would be the employees' ability to read and analyze the information, then modify processes so that products would be up to spec. Training became a priority. Today, every Connor employee has gone through statistical process control training. Many also receive instruction in blueprint reading and instrument measurement. And they learn the basics of understanding financial statements, important in a company where 42 percent of the work force is invested in the employee stock ownership plan. But skills training doesn't stop there. In 1993, the Portland facility started its own Connor University Northwest, with instructors from Oregon community colleges teaching two-hour classes. By 1994, 75 percent of the company's workers had participated in "people" skills training seminars designed to get them up to speed in problem-solving and team building. All the training in the world won't pay off unless information flows among Conner employees, however. The solution: a computerized, company-wide employee information system. The system has terminals set up throughout the firm's plants and offices, giving workers detailed cost and production data on every product. They can respond by entering their comments in a special "notes" section. Based on one employee's suggestion, the system now has a "hold" feature, which enables an employee to stop a job until problems are resolved by the engineering department or the shop. Employees also get involved in modifying and redesigning the system's software. Connor relies on cross-functional teams at the beginning of new projects, to help design quality into the manufacturing process. In 1992, interdivisional teams addressed five important issues: interplant sales, the ISO 9000 standards, engineering, creating world-class customers, and international markets. Part of the know-how needed to address these issues comes because production employees regularly meet with customers who visit company facilities; Connor also sends employees to customer sites. Is there a payoff for investing in employees? Do they know how to make a difference in the company's bottom line? Some results: Late jobs have declined from 10 percent to 1 percent of backlog. Quality scores from many customers are near perfect. Recurring defective product problems have fallen by 10 percent. And sales per employee have increased almost 20 percent Can a high tech firm also be a high involvement company? Yes, according to Inc. Magazine which included Connor in its 1992 profile of best small companies to work for in America. INTEGRATING WORKERS AND TECHNOLOGY: FORMULA FOR SUCCESS by Scott Ralls Is technology a net plus for workers and managers? And if it is, why do new technologies produce unprecedented results in some workplaces but prove unsuccessful in others? Integrating Technology with Workers in the New American Workplace, the most recent report by the Office of the American Workplace, helps provide answers to managers' and workers' questions. Based on an extensive summary of research and case study examples from some of America's most successful organizations, the 77-page report concludes that, on the whole, technology's impact on the workplace and on American workers is positive: Organizations have more opportunities to achieve better quality, service, and productivity, while providing skilled workers with a chance to secure better jobs at higher wages. But the benefits of the new technologies are not absolute. Some organizations find that investments in sophisticated new equipment reap few benefits, and in certain cases, may impede an organization's effectiveness. In addition, lower skilled workers often find that the introduction of new technology decreases their job skill requirements and, as a result, their chances to earn high wages. The difference between these two scenarios may well hinge on how organizations approach technology. Those with a high degree of success in implementing new technology, the report finds, point to three key "worker related" technology practices as a source of their success: * They train workers to use technology; * They give workers control of the technology; and * They involve workers in technology design and implementation decisions. Training Workers to Use Technology Attracted by the allure of the new technologies, too many organizations over-invest in technology "bells and whistles" but underinvest in skill training for workers using new technology. While this increases the "oohs" and "ahs" during plant and office tours, it may well leave both workers and managers scratching their heads as to why new computers or other equipment are not being effectively used. The opposite has been true at the Federal National Mortgage Association (Fannie Mae), however, where major investments in technical training went hand-and-glove with the organization's $10 million cost of personal computer technology. Result: In 1992, the organization's training investments enabled the staff to handle almost twice as many new loans as in the previous year. Giving Workers Control of Technology Placing control of new technologies in the hands of the workers who use them is a profitable strategy. A 1987 study of 584 machining manufacturing plants by researcher Mary Ellen Kelley indicated that those plants where all machine operators routinely wrote and edited programs were 30 percent more efficient than plants where workers had no programming responsibilities. Involving Workers in Technology Decisions Companies that ignore workers' insights into ways to improve process and product technologies overlook a valuable resource. Interviews with 100 top executives led researchers to conclude that direct user involvement in design and implementation was "one of the most common characteristics in successful IT (information technology) systems." At the Boeing company, worker involvement in design build teams was a crucial element in the successful launch of the company's new 777 aircraft. Initial indications suggest the company will dramatically exceed its goal of cutting in half the amount of rework caused by engineering flaws. Companies that treat workers and technology as complements typically achieve better results. GE Fanuc in Charlottesville, VA, one of the leading makers of industrial automation, invests heavily in training and technology and places extra emphasis on employee involvement. As a result, production costs have been cut by $10 million, and new jobs are being added. GE Fanuc officials use the company's human resources practices as a key selling point for the high quality of its technology products. The essence of technology is this: Do managers, workers, and CEOs want to reap maximum benefits from their technology investment? If the answer is yes, the OAW report helps straighten the winding road to success. To receive a copy of Integrating Technology with Workers in the New American Workplace, contact: Superintendent of Documents U.S. Government Printing Office Phone: (202)512-1800 Stock No.:029-000-00451-0 Price. $5 BRIDGING THE TECHNOLOGY GAP: HELP FOR SMALL MANUFACTURERS If you are a small company CEO groping for help with new technology, where do you turn? The answer can determine whether new, expensive equipment is used effectively...or becomes a multi-thousand dollar paperweight. Small manufacturers may find some of the answers to perplexing technology questions through one of 35 locally based manufacturing extension centers (MECs) spread throughout the country. The center's field agents are trained to help companies assess their current technology needs, then define and implement company-specific answers to high-tech problems. As an adjunct, they may also guide clients in defining what training needs go with new technology and what changes in organizational design will make the company more competitive. Manufacturing extension centers work by leveraging community or regional resources. The Great Lakes Manufacturing Extension Center in Cleveland, for instance, has formed partnerships to help local manufacturers maximize new technology and human resources. Its partners include the regionally based Work in Northeast Ohio Council, which provides training and assessment services in the areas of total quality management, labor- management cooperation, and workplace organization. Two other partners, the Council for Adult and Experiential Learning and Cuyahoga Community College, also provide center clients with training and education. B & H Manufacturing of Odin, MN, sent four of its eight employees to a manufacturing resource planning course, cosponsored by the Upper Midwest manufacturing technology center in Minneapolis. By the company's account, training was successful: The $200-per-student training investment resulted in a 242 percent increase in production over the previous year and a 42 percent savings in payroll cost per unit. Officials at Victory Envelope, Inc., another Upper Midwest center client, point to the company's employee education programs as a key factor in the company's 12 percent production-unit gains, worth approximately $1.25 million. While sponsored by nonprofit organizations such as state agencies in the 35 areas they serve, the centers receive additional support and funding from the Manufacturing Extension Partnership, an agency of the U.S. Commerce Department's National Institute for Standards and Technology. To promote further integration of technology and workplace issues, two agencies in the Department of Labor, the Office of the American Workplace and the Employment and Training Administration, are working with the Manufacturing Extension Partnership to better support the human resource/training needs of client companies. One recent outcome is a specially designed Human Resources Assessment Tool, which will help small manufacturers define and then develop the practices used in larger, high-performance organizations nationwide. Another recent development at four centers is a NIST-sponsored labor modernization pilot program to provide technology and workplace consultation to labor organizations and unionized workplaces. To locate the nearest center, write or phone the Manufacturing Extension Partnership, NIST, Building 224, Room B115, Gaithersburg, MD 20899. Telephone: 301)975-5020. SECRETARY REICH ADDRESSES FIRST LABOR LEADERSHIP INSTITUTE In a roundtable discussion with senior leaders from four major unions, Secretary of Labor Robert B. Reich praised the organizations for their efforts to create and maintain workplace labor-management partnerships. Reich said, "I am convinced that what you are working on-- new patterns of maintaining partnerships--is the wave of the future. That is where our productivity as a nation comes from and our competitiveness lies." The Secretary spoke in mid-January with 40 international union representatives participating in the inaugural week of the Labor Leadership Institute. The institute is a 4-week program to train senior union staff in the design and management of workplace efforts that give employees a voice in business operations and decisions. It is a joint effort of the Office of the American Workplace, the AFL-CIO's George Meany Center for Labor Studies, and the Communications Workers of America (CWA), the United Auto Workers (UAW), the United Steelworkers of America (USW), and the Amalgamated Clothing and Textile Workers (ACTWU). "Workers should have a confident voice," Reich noted, adding that "they can't have a genuine voice unless there is a collaborative atmosphere." He applauded visionary unions and companies that include training in their agreements and that believe worker empowerment and participation is essential to better sales, more profits, and higher productivity. "We want employees to be more valuable, to thrive in this new economy." "Productivity is to everyone's advantage," he said, "workers and managers alike." He cited the examples of CWA, which partnered with NYNEX; of the ACTWU, with Xerox and Levi Strauss; of the UAW, with Ford and NUMMI; and of the USW, with Inland Steel and L-S Electro-Galvanizing. Reich challenged the group to educate others about the benefits of mutual gains in the workplace. "The power of real-life examples, of people inventing something new, is far and away the best commercial that can take place in forging a new American workplace," he said. "You are the heroes of this story." The advanced Labor Leadership Institute training focuses on the issues dominating today's American workplaces and affecting labor unions: technological change, new systems of organizing work, and the need to develop cohesive economic strategies. The training will equip union leaders with the skills to bring effective worker involvement and partnership to receptive firms where unions already exist but where partnerships have not yet taken hold. Current enrollees will continue their curriculum through September 1995 and will supplement classroom training with workplace-oriented research projects DUNLOP COMMISSION RELEASES FINDINGS The Commission on the Future of Worker-Management Relations, referred to as the Dunlop Commission, recently released its final Report and Recommendations. The report is the result of a year-long examination of the topic, which included extensive hearings and testimony from all communities associated with worker-management relations. The publication outlines goals for 21st Century workplaces and includes strategies to meet those goals. To receive a copy of the Report and Recommendations of the Commission on the Future of Worker-Management Relations, contact: Superintendent of Documents U.S. Government Printing 8660 Cherry Lane Laurel, MD 20707 Phone: (301) 953-7974 Stock No.: 029-000-00452-8 Price. $6 UNION GUIDE TO THE NEW WORKPLACE Changing Work. A Union Guide to Workplace Change is designed to help unions make a successful transition to the changing work systems of the future. The 110-page publication, recently released by the AFL-CIO's Human Resources Development Institute (HRDI), includes sections on why and how work is changing, the role unions can play in shaping a new vision of the workplace, and a "toolbox"--sample worksheets and survey questions--to assist in planning. For price and ordering information, write or fax your request to: HRDI 815 16th St., NW, Suite 405 Washington, DC 20006 Fax (202) 783-6536 BARGAINING INNOVATION For a window into how managers and union leaders are meeting today's workplace demands, try looking to their collective bargaining agreements. Those agreements are the means by which the parties attempt to master challenges, and their efforts may well offer valuable guidance to others. Guidelines: Innovative Collective Bargaining Contract Provisions, first in a series of reports jointly prepared by the Office of the American Workplace and the Federal Mediation and Conciliation Service captures innovative company and union language on three issues: partnership, health care, and employment security. Among featured partnership provisions are those from the International Association of Machinists and Aerospace Workers and the Boeing Company and Chrysler Corporation and the United Auto Workers. Health care provisions deal with incentives to stay fit, hospice care, medical case management, and savings to aid retirees; employment security provisions deal with voluntary layoffs, job sharing, and education and training assistance, among others. For a single, free copy of Guidelines. Innovative Collective Bargaining Contract Provisions, write or fax your request to: Office of the American Workplace, 200 Constitution Ave., NW, Room N-5402, Washington, DC 20210. Fax. (202) 219-8762.