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.
Welcome to Anecdotally Speaking- a podcast to help you build your business story repertoire. Hi, I’m Shawn Callahan.
And I’m Mark Schenk. Earlier this year we had our first podcast guest and that was Paul Honeywell our chairman. You probably remember he told the story about Jackie Stewart in the pits. We’ve had some good feedback about that story—people using it in a business context.
That story was told to him by Charles Masefield, one of Paul’s business colleagues. I was recently in London and took the opportunity to catch up with Sir Charles. By the way that’s the last time I get to call him Sir Charles because he very quickly corrected me and said, ‘Mark, it’s just Charles’.
He is a very interesting chap. He started his career as a test pilot for BA Systems. He went through the ranks and eventually became president of BA Systems so he’s had a wonderful career. He shared with me that when he told his wife he was going to be interviewed for a podcast to collect a story or two from him. His wife’s response was, ‘poor Mark’.
I suspect he probably has a few in his back pocket.
He requires almost no prompting. Just a few words and he is off on another story. It’s very interesting to see a leader who thinks in stories. He has an example for pretty much every point.
Interesting. Did you ask him by any chance how he developed that? You do see some leaders who do have that ability to be able to share an example to make a point.
Well, Charles did make the point that he has been doing it for a long, long time, for as long as he can remember.
I wonder whether they’ve learnt it in their family—just part of the family culture. So, he’s got a story for us?
He does. I took the opportunity to record him telling a number of stories and here’s one that he shared that I thought was particularly good. So, here’s Sir Charles.
Sir Charles: In my very early career in management, on the way up they used to give young managers who thought they could do the job but probably couldn’t (and certainly in my couldn’t) a disastrous factory in BA Systems called Chadderton in the north of England. It had poor industrial relations, union problems, it was unprofitable and it was the factory that BA Systems were planning on closing.
And it had ruined one or two careers of general managers who had been put in there so my heart fell when I was told they wanted me to go and run Chadderton. I thought this was the end of my career.
Anyway, I went in full of enthusiasm and determination to succeed where others had failed. I’d been reading a lot about productivity and how the Japanese (in those days) were leading the world and how they did it. And they did it by something called, ‘quality circles’ where once a day, only for 10 minutes, people downed tools, sat around in little groups of 8 and discussed the job, the problems and how it could be done better with more quality or faster. Then it broke up and they did the same the next day and the next.
It worked in Japan so I thought this is how I’m going to try and turn this factory around—quality circles. I got in the union convenors and talked about this and they said, ‘that won’t work here, no chance, mate’. And I said, ‘but we haven’t tried it. If it works elsewhere we’ll try it’. They went out a bit miserable.
I announced we were going to start these quality circles and we did, right across the factory from 10 o’clock in the morning until 10.10 and they could have a cup of tea while they were doing it. So they sat around, drank their tea and talked.
I walked around the factory the first day and they’d put up dart boards, throwing darts, smoking, chatting a couple of people at a time—absolute disaster. I persevered for a whole week—it was just failing. All I was doing was losing the teams and breaking up the work schedule.
It so happened there was a conference over at Chester (a coach drive away) so I said to all the union people ‘we’re going to this conference, I’ve hired a bus and I want you just to listen’. This was a conference on how to introduce quality circles.
We went to the conference and my team sat in the front and I sat at the back and it was the most embarrassing experience of my life because the speaker stood upon stage and every now and then one of my team interrupted and said, ‘that’s never going to work here, not in the U.K, mate’.
I cowered in my seat and people around were saying, ‘oh these people from BA Systems are a disaster’. Someone sitting next to me said to me, ‘and who do you work for?’ So I said, ‘Cadbury’s Chocolate’.
After the conference, which I’m ashamed to say we totally destroyed we got into the coach and I sat in the front pretty miserable. After about 20 minutes we drove past a good old English pub. I said to the driver, ‘stop here’.
I stood at the front of the coach and said to the team, ‘O.k. guys, you win, we’re not going to pursue quality circles, I get it. Now, I’m going to go into the pub and buy you all a drink. We went into the pub and asked everyone what they wanted (it was normally beer) and then I started chatting to one of two people.
And I asked, ‘what happened? Why am I failing?’ He said, ‘because you’re trying to tell us to do something we don’t want to do and know won’t work. Why don’t you ask us?’ I said ‘well we do ask you. We’ve got a suggestion scheme if anyone has a good idea, write it down on a bit of paper, put it in the box and if we accept that that person gets a prize. That’s the system where we ask you.’
And he said, ‘that’s ridiculous. Do you know how much the prize is—it’s £5 (about $8 AUD)? there’s no point in us giving you good ideas for $8 in return–useless.’
I got my management team together and asked them what do we do with these suggestions? How do we know whether we’re going to implement them or turn them down? The answer was, ‘we do some arithmetic and see how much it would cost to implement them and what would it save us over the year. If it’s going to save us a significant amount during the year then we implement it.’
I said, ‘well that sounds fine but then we give them £5—that’s not going to encourage them to give us suggestions. What if we gave them 10% of that saving over the first year?’
They said, ‘You can’t do that; that would be a big amount of money’. I said, ‘you don’t get it do you? If we give them 10% of the savings, we keep 90%. And the next year we keep 100%. Surely, that’s worth 10%’. So they agreed–they hadn’t really though it through’.
So, ‘I said, in the future we give 10% of the savings for any good idea and I want to make a bit of thing about the first one—handing over the money visibly’. About three or four weeks later they said, ‘we’ve got a good one’. Someone came up with the idea of putting lanolin on a stretch form block.
When you form a fuselage you have to stretch the aluminium over a circular block so that it goes into the round shape of the fuselage. This fitter in stretch form had realised that it scratched the metal because the block was made of concrete. So the next department down the line, the polishing department where 3 or 4 people polished all these scratches out of the aluminium.
This person suggested stretching rubber lanolised sheets over the block so it wouldn’t scratch and therefore wouldn’t need polishing. I said, ‘brilliant. How much do we owe that person?’ The saving to us over the first year was going to be £160,000—10% of which was £16,000 (in those days you could buy a house for £8,000)—a huge amount.
So one person could buy a house for themselves and one for their son. Perfect, this is the one. We called the team together in the stretch form department—about 20 people and Ken was the name of the guy who invented this. I stood up and said, ‘Ken, you put in this wonderful suggestion and you’re going to get as promised 10% of our savings in the first year.’
Ken shuffled forward, a slightly embarrassed smirk on his face, waiting to see what he got. I took the cheque out of my pocket and held it up in front of the 20 people and said, ‘I’m now going to give Ken a cheque for £16,000.’
You could have heard a pin drop. Ken burst into tears because this was going to change his whole life and the life of his family but we were still going to get 90%. After he had calmed down and everyone had clapped and gone away Ken came up to me and said, ‘Charles, (I insisted the 3,000 staff call me Charles) is this really mine, I can keep it, whatever happens now’.
I said, ‘Ken, it’s yours’. He said, ‘It wasn’t my suggestion’. I thought, ‘oh no, this is a total disaster. I’ve given the cheque to the wrong person’. ‘Whose suggestion was it, Ken?’ He said, ‘I went to the library 5 or 6 days ago and discovered that Lockheed Martin in the States have been using lanolin on their stretch form blocks for about eight years; it wasn’t my idea. I pinched the idea from Lockheed Martin; it’s in publications’.
I said, ‘Ken, not only am I not going to take the cheque back, I wished I’d given you more because for a fitter in our stretch form department to take the trouble to go to the library in his time off to learn more about stretch forming and who are the world leaders in it, that is the sort of thing that turns factories from failures into success’.
That story spread throughout the factory like wildfire. The suggestions came pouring in for big improvements in the factory. Every time we paid our 10%. That turned the factory around from being BA’s worst (out of 16 factories), bottom of the league in productivity, industrial relations, stoppages to top of the league in profit and it became the star of BAE and was really responsible for launching me on my career.
The moral I’ve taken from that is if you’re managing it’s quite often better to ask people their views rather than telling them what they should be doing when you don’t really understand the problem. Ever since I’ve always believed in asking.
Wow, that’s amazing. What a great story. Let’s chat about what we liked about that story.
There’s probably a lot to chat about.
The first thing is it’s told from his perspective; he’s had that experience. I really got that sense that he was reliving that whole time and what actually happened.
What were some of the things that gave you that indication?
He was able to recall so much detail; lovely detail like Ken walking up to get his prize with that shuffling, slightly nervous, embarrassed look on his face. You really think that Charles is really reliving that moment.
Yeah, and the details he was able to recall—the aluminium stretch form concrete block covered with lanolin—being able to recall all those details adds interest but also believability.
Yeah, that’s something that jumped out at me as well.
One of the things I loved about it was it was like a movie, a roller coaster, ups and downs and twists and turns right to the end. You didn’t know what was going to happen.
There was a lot of self-deprecation, always bad things happening to Charles—he was not a winner until the very end. I hate to say this but in some ways it was bit like a hero’s journey.
A bridge too far there.
No, I don’t want to support that idea.
But very self-effacing. It shows humility.
Indeed, And there are some great moments in that story. One of those moments for me was when he was in the conference and it’s all going to hell and someone asks, ‘so where do you work?’
And that’s his humour that he’s brought into the story as well.
That’s right and I liked that there were a bunch of moments and that was one of them. One of them for me was his reaction when he was told he was going to be taking over the factory at Chatterton; ‘oh no, this is the end of my career’.
I think the other nice moment is where they’re coming back from the conference, they pull over by the pub, he stands in front and says, ‘o.k. guys, you win, let’s go and have a beer’. That’s the real turning point of the story, right?
Indeed, and we talk about this when we talk about how to use this in a business sense but that was the moment when he actually became approachable. And in the process that was the turning point.
That’s where he learnt the lesson. The fact that there’s one reversal right at the end where he’s given the cheque and Ken comes up and says, ‘it wasn’t my idea’. You would feel Charles just sinking; he thought he’d actually nailed it and at that point he’s thinking ‘oh my god, this is the biggest disaster ever’.
I liked that one as well. Another moment that was important for the story was when he decided on the 10%. His managers said they work out the savings and then give them £5 and he replied, ‘what if we give them 10%’. And my mind exploded with future possibilities for where the story could go from there.
That’s true and that’s where I had my biggest response to the story—these guys could be making a fortune out of this. Then I thought that can’t be true; there must be some hitch because there’s no way they’ll give away a big amount of money. That was my thinking. But they went through on it, which is fantastic.
Exactly, he followed through but the logic is impeccable; we take 90% of the savings in the first year and 100% in the second, the economics stack up. But of course you need to look at it in that pragmatic way. I also like the way the managers went ‘you can’t do that’ and he went ‘actually you can’ and he did.
So there are many things that make that story a good one and that we like about it. I also liked the fact that he was a very good speaker. I liked his voice, no ums and ahs, just told the story.
It’s a good talent to have. So what do you reckon, Mark, where would you use this story?
I think there are some opportunities (not many) to make this story even better. One of this is if I was thinking about application in business would be how to make it a bit shorter.
Absolutely. This story is almost an entertainment.
It could work in that way.
Making it shorter could help make the point faster. You might lose some of the feeling in that story though.
I agree. Some of those fabulous details would be lost and I’m not advocating that it needs to be shortened but there are some business circumstances where a shorter telling would work better.
So, how would we use it in a business context?
I think the first thing that springs to mind is if you’re mentoring or helping a group of leaders. It’s so easy for leaders to take the view ‘hey, I’m the leader, I need to work everything out and I’m just going to tell people’. It’s a great lesson there ‘I’ve learnt this the hard way and this is what’s like’.
The transition from tell to ask and listen.
Yeah, the whole going to the pub was so important because it changed the status of everyone. Before they walk into the pub there’s a strict hierarchy. In the pub it’s just a bunch of people drinking beers together and that’s where a different conversation can happen.
And that is, of course, the major turning point of the story. And there is a stark contrast there. Charles goes from standing at the front of the bus, as the boss, saying firstly I give up but he’s still in charge—I’ve decided we’re going into the pub. But that moment when he’s standing man to man, peer to peer, person to person having a beer.
That reminds me. Years ago I did a project for the Defence Department and I was working for a guy called Air Vice-Marshall Peter Nicholson (you used to work with him) and I noticed he changed his way of operating depending on where he was.
If he was in his office it was the formal back and forth between his subordinates—they were definitely his subordinates. But then when he moved to the kitchen just three rooms down the hallway he was the same as everyone else. The first person to get their brew was the first person; it didn’t matter who you were or what things you had on your shoulders.
When I mentioned this to him he said, ‘Shawn, I’m comfortable with that’. But he was a guy who really understood and this is what Charles is saying; that you’ve got to use these physical spaces to be able to do different things.
One of the other things I liked was the importance of humility. You could use that in business to demonstrate that having some humility gives you access to new insights.
Exactly, we can learn things.
I really like the use of this story to make the point about incremental change versus step change. He was running the worst factory in BA Systems by a whole bunch of measures. Incremental change wasn’t going to help him much. By taking this big decision to introduce the 10% he reaped a big reward.
It was a big bet wasn’t it? It could have gone nowhere. People might think if they put in a reward system and a suggestion box but it doesn’t mean it’s going to work. It would be the wrong takeaway to think you can just take an initiative and plonk it in another place and expect it to work. There are so many cultural issues at play here, aren’t there?
That’s right. It’s not the initiative; it’s the lesson.
The approach. Any other places where we might be able to use it?
Demonstrating risks versus reward.
So, there are a few good places to use it. So now we need a bit of a rating.
I’m conscious that Sir Charles will be listening to this podcast and he might be wondering what are these boys going to give it.
You shouldn’t have said that, it might affect my rating. I already had a rating in mind before I said it but what are you going to give it?
I loved it; I’m going to give it an 8. I loved the story and I can see that you could use it in a whole bunch of business circumstances. It was beautifully told.
I’m giving it a 9.
I know, I don’t give many 9s but I can imagine me saying that this is the experience of the president of BA Systems when he was a young fella and he had his first big challenge. And then I can make that connection with how it connected to Charles and it’s a good story with a lot of meat in it.
I’m very interested in stories that you can tell and get a conversation around it. That’s the sort of story that has meaning for people.
You ask the question how can we do something like that around here?
Exactly. Or even just asking so what did you find interesting or surprising, any of those things where people just have a conversation about it. That’s what deepens the understanding and hopefully inspires action.
It’s a good one to finish up on for the week—it’s a Friday for us. Thanks again for listening to Anecdotally Speaking and we really welcome your comments and thoughts and if you’ve got any examples you want to share please pop them in the podcast page and tune in next week and we’ve got another episode of how to put your stories to work.
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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