Tags: communication, change, factory, humility, incentives, motivation, productivity, recognition, rewards
Sir Charles Masefield describes the series of events by which, under his leadership, BAE Systems’ worst performing factory became their best.
Continuing to share stories from those we’ve met on our travels, in this episode we’re joined by Sir Charles Masefield. Charles shares a story from very early in his career with BAE Systems. Charles worked his way up within the ranks of the company, starting as a test pilot and eventually becoming the president. This story is from his days as a general manager.
Charles’ story describes the series of events by which, under his leadership, BAE Systems’ worst performing factory became their best. He first placed himself and his team in a casual environment where there would be no hierarchy and where they could partake in an open, honest conversation.
He then created a system through which they could share their ideas to improve the factory and be rewarded appropriately. The story contains a number of meaningful business points. Charles says his experience taught him to ‘always ask’ – to ask his team about what is working and what is not working, before telling them what to do.
Charles was an excellent guest. He requires no prompting to tell a good story and has a story example to prove every point! His story is very detailed and contains those twists and turns which keep us asking ‘what happens next!?’
Sir Charles Masefield was working as a general manager for BAE Systems when he was sent to work in one of their factories in Chatterton, North England.
His heart sunk when he received the news. He thought being sent to Chatterton would be the end of his career.
The factory could only be described as disastrous. It was known to have already ruined the careers of one or two general managers. It was unprofitable, with poor industrial relations and union problems. It was destined for closure.
Nonetheless, Charles went in full of enthusiasm and determined to succeed where others had failed.
Charles had been reading a lot about productivity. He had become particularly interested the productivity methods of the Japanese, who were world leaders at the time. One method they used was that of quality circles. Once a day, every day, for ten minutes, workers would gather in groups of eight and discuss what they were doing and how they could do it better.
Charles thought he should try using quality circles in Chatterton. Workers would form quality circles between 10:00am and 10:10am every workday.
On the first morning, Charles walked around, observing the circles. He was devastated to find the workers smoking, throwing darts and chatting about matters unrelated to work. He considered the idea an absolute failure. He continued using the method for a week but saw no improvement.
Charles soon found out that a conference on quality circles was being held in nearby Chester. He hired a bus and invited the factory’s union convenors to join him at the conference.
What followed was what Charles describes as ‘the most embarrassing experience of his life.’ His team interrupted the speaker, ruining the conference for all in attendance. Charles heard other attendees calling BAE Systems a disaster, so when he was asked who he worked for, he replied, “Cadbury!”
When the group left the conference, Charles decided to stop at a pub.
He announced, “Okay guys, you win, we’re not going to do it. I’ll buy you a round.”
As they were standing around, drinking their beers, Charles asked, “So, what happened?”
One team member responded, “You’re trying to tell us to do something that we don’t want to do and that we know won’t work. Why didn’t you ask us?”
Charles reminded him, “We do ask you, we have a suggestion scheme.” BAE Systems had a scheme where workers could write down suggestions to improve their factory and, if their suggestion was implemented, they would get a prize. That prize was £5.
The same team member responded, “There’s no point us giving you good ideas and getting that much in return.”
When Charles returned to the factory, he asked his management team, “What do we do with these suggestions?”
They told him, “We look to see if they will save us any money over the course of the next year. If they will, we implement it.”
“That sounds fine, but then we give them £5, thats not going to encourage them. What if we gave them 10% of whatever the saving is for that year?”
“You can’t do that, that would be a big amount of money”
Charles insisted, “You don’t get it, do you? If we give them 10%, we keep 90%, then the next year we keep 100%… Surely that is worth 10%”
Eventually, the management team agreed to Charles’ reasoning. Moving forward, workers who made implementable suggestions would receive 10% of the resulting savings for the first year.
When they found their first good idea, Charles wanted to make a big deal out of it. He wanted to pull people together and physically hand over the money, so that people could see the worker being rewarded. They found that idea a couple of weeks later.
A worker named Ken suggested the factory place lanolin sheets over their stretch form blocks, against which their aluminium was shaped. This would prevent the scratching of the metal, and make the factory’s polishing department redundant.
When Charles received word that they had received an implementable suggestion, he said, “Brilliant, how much do we owe that person?”
The saving, over the first year, was going to be a huge £160,000, 10% of which was £16,000. At the time, you could buy a house for £8,000.
Charles thought it was perfect. This amount of money would make a huge difference to Ken’s life.
Charles called the stretch forming team together, and asked Ken to join him at the front of the room.
Ken shuffled forward, looking slightly embarrassed, as Charles announced, “Ken, you put in this wonderful suggestion, we’re going to accept it, and you’re going to get 10% of our savings over the first year.”
Charles reached for the cheque in his pocket, held it up to the group of about 20, and said, “I’m now going to give Ken a cheque for £16,000.”
You could’ve heard a pin drop. Ken burst into tears, he was almost inconsolable. After he’d calmed down and everyone had clapped, Charles handed him the cheque.
When everyone left the room, Ken stayed behind.
He came back up to Charles and said, “Charles, is this really mine? I can keep it? Whatever happens now?”
Charles said, “It’s yours Ken, I’ve given it to you. Done.”
“It wasn’t my suggestion.”
Charles thought, “Oh no! This is a total disaster, I’ve given the cheque to the wrong person.” He said, “Who’s suggestion was it?”
“I went to the library, 5 or 6 days ago, and looked at books about stretch forming. I discovered that Lockheed Martin. in the States, have been using lanolin on their blocks for about 8 years. It wasn’t my idea, I pinched it, it’s in publications.”
Charles responded, “Ken, not only am I not going to take that cheque back, I wish I’d given you more. For a fitter in our stretch forming department to take the trouble to go to the library, in his time off, to learn more about stretch forming… It is not patented, that is the sort of thing that turns factories from failures into successes.”
The story of what had happened spread throughout the factory like wild fire and suggestions to improve the factory came flying in. Every time they were implemented BAE Systems paid out 10% of the savings and kept 90%. That turned the factory around from the worst of BAE Systems, to the star.
About Shawn Callahan
Shawn, author of Putting Stories to Work, is one the world's leading business storytelling consultants. He helps executive teams find and tell the story of their strategy. When he is not working on strategy communication, Shawn is helping leaders find and tell business stories to engage, to influence and to inspire. Shawn works with Global 1000 companies including Shell, IBM, SAP, Bayer, Microsoft & Danone. Connect with Shawn on:
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