A Million $1 Ideas

I recently attended Industry Week’s Best Plants conference in Atlanta.  The highlight of the event for me was seeing James Womack’s present live on Gemba walks.  The presentation that struck me as the most informative though was one delivered by Raytheon Integrated Air Defense.

In 2003 its situation was dire.  Cost overuns were causing a downward spiral in contracts with the U.S. government.  Lay-offs were occurring, the threat of complete shut down was imminent and union relations were at an all time low.

Production meetings would last all day as managers reacted to non-stop priority fires. Nothing was ever resolved permanently because money was tight. So many ideas has been turned down in the past  because they would require an investment that the flow of ideas to improve the situation had slowed to a trickle.

A small management team was charged with turning the division around.  As they thought about the challenges, there were two approaches discussed.  The first was a pilot program that would create success at a particular operation. By demonstrating that signficant improvements could be achieved quickly, the proponents of this plan argued that it could then be replicated quickly throughout the other operations.

The other point of view was the converse.  Rather than attack the problem an inch wide and mile deep, this group proposed to ask everyone to propose simple changes to their operations.  A mile wide and an inch deep.

The second proposal was agreed upon and the team descended upon the floor and began asking operators about small changes that would improve operations.

What the team did differently this time was that when they were presented with an idea that required a new fixture, they spent the money and had it built.  These were not big investments and didn’t result in large savings.  The leverage in this approach was that word spread among production operators that this time it was different.  Management was listening and trying to make things better.

Soon there had been enough successes that the management team threw a small party.  It was very short, but it focused on recognizing the accomplishments of specific people and they celebrated the wins.

Over the next couple of years these small ideas accumulated and the slope of progress turned upward.  Today 135 teams compete to deliver the best ideas to improve flow in production and Raytheon has documented millions in savings and gained control over their costs.

It’s impossible to empower employees when they don’t trust the company.  Raytheon’s story offers a great example of how small investments and small victories can overcome resistance to change and result in a truly empowered workforce.  Just as important, this wasn’t a project with a defined goal and completion date, but a commitment to changing the culture.  The team hasn’t stopped asking for help and the celebratory parties have become bigger rather than fading.

Even today the mantra within Raytheon IDS is “A million $1 ideas”.  I found this to be a great example of a company that really understands Lean and what employee empowerment means.

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