Chapter 1
The Crisis
I cannot define the real problem; therefore, I suspect no real problem, but I am not sure thereās no real problem.
āRichard Feynman
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It was a typical Midwest spring morning and the 1500 employees of Acme Gyroscope were reporting for a new day. Among the employees reporting for work was Richard Jones, who was the son of the previous CEO who had just passed away. Being a family owned and operated company for almost a century, the family was very committed to the operations of the organization and the continuity of the family influence.
Richard, prior to his fatherās passing, had gone off to a prestigious university to earn his Masterās in Business Administration (MBA). The family plan was that Richard would bring this new perspective back to Acme Gyroscope and utilize the knowledge and skills as he progressed up the ladder at the firm. Despite the best-laid plans, his father passed away suddenly and the family informed Richard that he was the new chief executive officer.
Richard arrived at the facility at 7:30 am, which was the same time his father and he had always arrived ahead of the rest of the organization. This morning he was a bit apprehensive because he was not sure what he was taking on.
Whenever Richard would ask his father if everything was alright, he received the stock answer that everything was fine, donāt worry. āOur clients love us,ā his father would say. But on his first day something did not feel right. Something was not as his father pictured it. As he looked over the data from reports on his fatherās desk, some of the numbers did not come up with the same answers his father had told him not that long ago as to how the firm was doing.
As he sat at his desk, his phone rang and his secretary told him that Ann Morrison, the CEO of Morrison Aeronautics and one of their largest clients, was on the phone. After sharing niceties she extended her condolences on the passing of his father, but stated that even though this was not necessarily a great time to bring it up, she was facing a major problem.
Ann explained to Richard that for some time she had been talking to his late father about an apparent decline in the quality of the gyroscopes being delivered to her warehouses. Ann explained that if the delivered gyroscopes were not up to the expected quality it had a direct effect on the end product that her company delivered to the end users. Ann further told Richard that if the problems could not be corrected then she might have to begin the process of seeking out a new vendor for the gyroscopes.
Richard thanked her for calling and as he ended the call he began to wonder why this was the first time he was hearing about the problems with their largest client. Further, he thought what else might be going wrong out there. Richard began to ponder that, obviously from Ann Morrisonās point of view, there was a serious problem. From Richardās point of view, based on the information he had, he could not define the real problem; therefore, he suspected there was no real problem. He was not aware of anything that was a real problem for the organization. On the other hand, he was not sure that there was no problem since Ann Morrison felt she had to once more complain that the quality had dropped. He could not let it just get pushed under the rug.
Richard called his secretary into his office and explained he needed to immediately schedule a meeting with the management team due to Ann Morrisonās call. The meeting was scheduled for the next day in the boardroom.
Richard decided to walk the factory floor to see if he could observe where the fall in quality was taking place. He remembered from his MBA classes that a Japanese businessman named Taiichi Ohno had created an exercise he called Stand in a Circle (see Table 1.1). It was in this process he had managers stand in one place and for a period of time observe what was going on in the factory to see if they could observe any issues. Richard felt it would not hurt if he tried it at Acme Gyroscope. Unfortunately, his brief time on the factory floor did not produce anything substantial to answer why the problem was happening. Richard determined he would have to wait until the meeting in the morning to try and arrive at an answer.
Table 1.1ā Stand in a Circle Worksheet*
*Used with permission from Simplicated http://www.simplicated.com
Richard arrived at his usual time the next morning and proceeded to the boardroom where a short time later he was joined by the management team. The management team in attendance at the meeting included Robert Ellred, the human resources director, Thomas Edwards, the chief marketing officer, Luther Jones, the chief financial officer, and Arnold Levick, the director of manufacturing. In addition, at the last minute, Richard invited Raymond Ellis, the foreman on the factory floor, and Ann Morrison.
Richard began the meeting by thanking them for attending and began the explanation of what led up to the meeting. He then asked for input from those in attendance as to what they had seen lately within the flow of materials that might cause the problem that Ann was experiencing. He then went around the room and let them vent on their feelings in response. The first one to respond was Arnold Levick, who stated he did not understand what the problem was because he had not observed anything dramatically different than what he always observed as he walked through the plant. Nothing appeared to be done at a sub-quality level. As far as he could tell, the company was delivering the same gyroscopes they had for generations.
The second to respond was Raymond Ellis, who stated that in the push to finish orders as requested they sometimes had to cut corners to meet the deadline. He further stated that he did not feel those corners should affect the product as they left the factory. Richard asked Raymond what corners they were cutting in order to meet the order deadlines. Raymond responded that they sometimes delete some of the noncritical steps.
Luther Jones, the CFO, stated that the manufacturing process was running at just about the same Return on Investment established for the manufacturing floor, so he did not think that if there were a problem then he would have to explore the financial impact of any changes. He expressed the view that while the company must meet the needs of its customers it still needs to stay within budgetary constraints in order to keep the business operating.
At this point, Robert Ellred interjected the view that currently the company was close to maximum staffing and if the problem was related to the number of able bodies to complete the work scheduled in order to meet Annās needs, then he would need authorization to increase staffing levels and to understand the time frame for new hires.
Richard asked if there were any other points of view that would help the discussion. Ann Morrison, the CEO of Morrison Aeronautics, said she had a few things to say. She began by thanking Richard for inviting her to this morningās meeting and stated that over the years her company has always enjoyed working with Acme Gyroscope and the level of willingness of the company to help out with her needs. She then followed up with a question that asked whether everyone understood what a gyroscope does and how it affects her company and its end products.
Thomas Edwards, whose staff is responsible for selling the gyroscopes to organizations like Ann Morrisonās company, said it would not hurt the discussion for Ann to explain what gyroscopes were and how she uses them in her delivery of products to end users.
Ann began her explanation of the workings of the gyroscope (see Figure 1.1). Ann explained that a gyroscope consists of a circle containing a flat wheel on an axle. How things work
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tells us that when we apply a force to the axle the gyroscope moves. Without any explanation the two ends of the axle will move in opposite directions. This causes the gyroscope to spin. If the gyroscope stops spinning the wheel falls over. Newtonās First Law of Motion tells us that objects will move in a straight line unless pressure is applied, which creates an unbalanced force. Depending on the amount of pressure applied the gyroscope moves to a new position. Ann went on to explain that the problem that they were experiencing was that the gyroscopes used by their end users assist them in the control of navigation devices and for some reason they stop spinning, which means the navigation systems fail.
ā
Figure 1.1
A gyroscope.
Richard thanked Ann for her contributions to the discussion and then asked Raymond Ellis to prepare his work area for a visit by those in attendance. He told Raymond they would be down on the floor in 30 minutes.
The individuals who were in the meeting convened on the factory floor and Richard handed them each a sheet of paper. Richard explained the theory behind the form on the sheet is to assist them in truly observing the manufacturing process and look at what might be the cause of a problem. Richard asked them to take a half an hour to complete the form at which time they would reconvene in the boardroom.
After the half hour on the floor, the management team reconvened in the boardroom and began to ponder what they observed. Richard asked each of them what they observed and each stated that they observed nothing that was out of the ordinary in the production of the gyroscopes that were being delivered to Ann Morrison and her customers.
The next question posed was what they should do since no one could find a problem. After a period of quiet, Robert Ellred stated that he recently attended a meeting where an individual who called himself the Change Maestro demonstrated some interesting thoughts on improving organizations. Robert said he had his contact information and that it might be worth a call to him to see if he would be willing to assist in finding a resolution to the problem.
Richard Jones asked for thoughts on this idea and everyone seemed to be in agreement that it would not hurt to at least talk to him. Richard asked Robert to reach out to him and see if there was anything that could be done. Robert said he would contact him that afternoon.
Notes
1. Reprinted by permission from Springer Nature: International Journal of Theoretical Physics, Simulating Physics with Computers, 1982. Page 471.
2. How Gyroscopes Work https://science.howstuffworks.com/gyroscope2.htm.
Chapter 2
The Conversation
Following the management meeting, Robert returned to his office and pondered for a moment about what he had gotten himself into for offering to talk to the Change Maestro. He was one of about a hundred individuals in this workshop looking at how to empower organizational change. It was not even centered on human capital management, but the message resonated with his thoughts about how to make organizations work better. Robert also remembered from some book that he recently read that if you donāt ask the question you canāt get the answer. He really did not have anything to lose by asking.
Having convinced himself that he had made the commitment, he now had to remember where he put the binder from the seminar. He knew he had placed it where he would not lose it, he just was not sure at the moment where that was. After a couple of minutes, he found the binder and found that TD Consulting was located on the East Coast, so they were an hour ahead of them. Since it was just about lunch time there he decided to call him later in the afternoon. In the meantime, he took out a pad to try and plan out the responses to any questions th...