Partnerships are Key in Continuous Improvement

By / Jordan Whitehouse

Back in 2008, in the midst of the recession, Sheet Metal Connectors (SMC) made a somewhat surprising announcement: they were embarking on a company-wide process of improving operations. Unlike many companies that were looking to cut costs as quickly as possible at the time, the Minneapolis-based fabrication shop actually decided to invest the time, training, and resources needed to find areas of improvement. And, as President Jim Myers explained it, this wasn’t going to be a onetime blitz. Improvement was going to be a continuous and systematized practice throughout the company.

It also wasn’t going to be a top-down exercise where ideas and solutions would be dictated by management, and labor simply had to go along. It would be a collaborative effort. “Everyone at SMC received the same base training—management, shipping, sheet metal workers, sales, and customer service,” Myers says. “In our cross-functional groups there are no bosses and employees. Everyone has the same footing, and all ideas are valid and debated. Everyone gets their hands dirty.”

Although it’s understandable that many companies may have been unable to embark on a similar process of continuous improvement during the recession, research shows that in the years since, construction companies have continued to struggle. According to survey results published in a New Horizons Foundation paper entitled “Building a Culture of Continuous Improvement,” only 41% of contractors said they had a great history of implementing new ideas and sticking to them.

Management consultant Clark Ellis believes that this struggle is particularly acute for some union contractors right now, and if it continues, market share is on the line. “Competition continues to intensify, and non-union companies are doggedly focused on improving their productivity and delivering more value,” he says. “So, if union contractors don’t keep pace, they’re going to lose market share.” There is hope, however, adds Ellis, who has worked regularly with SMACNA and SMART for the past 20 years. “We find time and again that when contractor management and labor work together, they are in a much stronger competitive position than when they aren’t working together and collaboratively.”

Getting started

No two continuous improvement plans look exactly the same, but as the New Horizons paper suggests, the plan should encompass several components. These include defining the problem; measuring what needs to be measured to define, track, and improve the problem; and analyzing the data to find the core causes of the problem. From there, the process should be improved and then regularly measured to figure out if it’s working.

© Can Stock Photo / Ydur

Really, though, and as Phil Warner writes in the New Horizons paper, no continuous improvement plan can get off the ground without a culture change. “This is driven from the top leadership down and continuously reinforced,” writes Warner. “It requires an investment in time and money, as well as a willingness to change old habits and ideas. It is a change that is made for the long term.”

Yet while that culture change may originate at the leadership level of a company, SMC’s Jim Myers says that the entire process has to include everyone, especially labor. “Any grand plan that we have has to be rooted in the reality of the day to day. We need labor to help design and implement our strategies to ensure that they are functional and practical.”

At SMC, those labor members are from Local 10, where Matt Fairbanks is the business manager and president. Like Myers, he says that for any improvement plan to be successful, collaboration is key, and it must be in place from the very beginning. “It’s important to work together as a team from day one, and to include the foremen, especially in the early stages. If [the company] trusts a foreman to run their day-today operation in the shop and to get product out the door and to make sure that the members are doing so, then they should respect their opinion in the flow and how things are going to look in the future.”

Getting buy-in

Even with those foremen onboard, however, one of the biggest challenges of implementing a continuous improvement plan is getting buy-in from all employees, writes Phil Warner in the New Horizons paper. This is especially true for more experienced employees who may be used to doing things in a particular way.

So how do you try to get everyone onboard? Ellis says you have to start small and in a familiar context. This could be at daily toolbox talks, for example, where foremen ask their teams to think about areas that are causing them issues with productivity, safety, or quality. “You’re putting the empowerment in the hands of the workers and employees and you’re engaging them in the process,” Ellis says. “You’re not inflicting the process on them.”

Ellis adds it’s also crucial for those in leaderships positions to similarly think small. In his experience, managers too often feel pressure to devise big, splashy improvements themselves. Typically, those ideas are unrealistic and often fail, he says. In Clark’s experience, the most successful leaders and managers are those who know that their job isn’t to have all the answers. Instead, it’s to help their teams function well and to be open to finding answers to do so from anywhere.

For Local 10’s Fairbanks, one of the best ways to get buyin from labor members is not just to include them early on in the process, but also to continuously use their expertise throughout. “Even if [management] doesn’t use the members’ opinion or ideas, it still shows a lot of respect that they came to the members and asked for their input.”

Celebrating success — and failure

As Warner writes in the New Horizons paper, once a company gets that buy-in from team members, it’s critical that they keep measuring the process and occasionally go back and update areas already worked on. But as that stat about how only 41% of contractors have a great history implementing new ideas and sticking to them suggests, it’s not easy to keep going back to the drawing board.

Ellis believes that celebrating success can play a significant role in motivating teams to keep the continuous improvement process moving. This can mean monetary incentives, but Ellis is also a big fan of non-monetary incentives, such as recognition at company gatherings.

He also says that it’s important to celebrate failures. “More evidence is showing that we can learn a lot from failure. The companies that give permission to try and to not succeed, that have a culture allowing for failure without shame and without ostracizing and without punishment are the companies that are the most innovative. They are the ones that are able to sustain the higher growth rates and the higher profitability.”

Back at SMC, the continuous improvement plan carries on. Myers says that every single project starts with a directive to improve safety, and that they have a safer shop today due to these initiatives. He also says that each project has shown consistent gains in productivity and savings.

None of it would be possible without strong collaboration between labor and management. “It is so important for labor and management to work together to attain some measure of success,” Myers says. “We can plan all we want in management, but we need the deep knowledge or process, problems, and roadblocks that only labor possesses.” ▪

Jordan Whitehouse is a freelance business journalist from Vancouver, British Columbia, who writes for magazines, newspapers, and online publications throughout Canada and the United States.