Executive Summary
This is the story of a group of 300 people, the Epsilon program management team, charged with meeting the typical "tight" deadlines to get a vehicle out the door. They resolved to do it without the costly, hectic, last-minute "heroic" efforts that had dominated most automobile launches in the past. They discovered, along the way, that this meant not just developing new management techniques and a "systemic" understanding of their work, but recreating their interrelationships with each other, and with the rest of the company.We believe that their experience has three main lessons for managers at their company, AutoCo, and in the rest of industry:
- Having a great team is not enough, even when that team has 300 people. The
relationship between that team and the larger system must be carefully
designed. This requires extra attention (for example, the willingness to talk
through potential misunderstandings, or to make themselves available for each
other "beyond the call of duty") on the part of the leaders of the team and
their immediate superiors in the hierarchy.
- New types of interrelationships and attitudes can't just be decreed. They
must be allowed to grow. People on the team must foster them themselves. Senior
managers can help most by giving people room to experiment within the
constraints necessary to deliver the program, and by striving to serve as
examples for the behavior they're trying to produce.
- With a modicum of specific attention to "building better conversations," a
flood of innovation poured forth. Managing the "softest" aspect of the team --
the ways people thought and communicated together -- gave the highest leverage
for improving "hard" results.
That's why even a busy manager or executive might find it useful to read the eighty-page historical account of another group's change effort. By seeing the struggles, doubts, misunderstandings, and varied points of view of the Epsilon project, as told in participants' own words, you might get a sense of what would be necessary to promote higher performance in your own projects. What worked for Epsilon might not necessarily work for you, but the general attitude toward exploration, and some of the inter-management dynamics, seem fairly universal.
When executives gave final approval for Epsilon's development budget, in which styling, market positioning, and expenditures were set, the program was already many weeks behind schedule. At the same time, "process improvement" as an endeavor was beginning to gain importance and attention at AutoCo. Making a great car wasn't enough; you also had to improve AutoCo's process capabilities.
Seeking a better process for developing vehicles, the Epsilon researchers explored tools and techniques gleaned from the work of MIT's Center for Organizational Learning. They integrated program management and training together, so that all work on the car might involve systems thinking and collaboration. Early efforts were focused on bridging the barriers between functions: creating a shared vision of the new vehicle, collocating engineers in one large multi-functional building, and bringing design engineers into the market research process at an early stage. As the team progressed, its vehicle development metrics went from low initial scores to setting new company records for prototype-build parts availability and quality.
The Epsilon program completed its assignment at the end of 1994. The vehicle launch, which took place a week earlier than scheduled, was truly a "non-event," without the crisis atmosphere that normally leads to legions of engineers camping out at the manufacturing plant. However, the Epsilon results also included controversy. The launch coincided with organizational changes at AutoCo, in which Epsilon team leaders did not receive accolades for their accomplishments. As team members were assigned to new positions, some wondered if their efforts were valued or appreciated. Yes, they had broken performance records; but they had also broken some behavioral norms. For example, reports of problems had been deliberately brought to the surface earlier than usual. This had saved money and improved quality in the long run, but had also led to the appearance that the Epsilon program was "out of control."
What would another team need to repeat Epsilon's success -- and avoid its failures -- in the future? We believe the learning history shows that one of the greatest single factors was this: Epsilon's leaders designed their work as a learning process. Reading the learning history, you will see a sense of humility and mutual engagement at work. Team members recognized that they had endemic problems which went beyond strict engineering issues, into issues of organizational communication. They also recognized that no one on the team had all the answers. Answers would have to emerge from the give-and-take between members of the team. The learning labs, which brought people together to work on Epsilon-related issues in an atmosphere of systemic understanding and dialogue, were powerful precisely because they codified the sense that, "We're all in it together, because we are all connected together."
Organizational learning is a process of collective sense-making. You don't just produce results; you produce a "theory of how you got there." If Epsilon's participants seem uncommonly reflective for auto engineers, that is not merely a result of the learning history effort, which asked them to look backward. It also stemmed from their work on the team, and also, arguably, from the new atmosphere at AutoCo. At least officially, if not yet in complete practice, a manager's ability to create results depends on combining technical expertise with the ability to navigate past the stumbling blocks of "control management" and the functional hierarchies.
Some critical ideas from the themes of the AutoCo Learning History
This learning history is organized by the key concepts, or themes, which were important areas in describing and explaining the Epsilon program's achievements (see "Noticeable Results" on page for specific measurable accomplishments).
- The first theme presents the challenge -- in the typical hierarchical setting of AutoCo, when managers paid attention to human issues like openness and fostering trust, would teams be able to produce better business results?
Lesson 1: Bring the senior members of the team together in cross-functional, "shared vision" meetings a long time before the rest of the effort begins, so that they can design the evolution of the process together.
- The second theme presents the philosophy which guided these efforts -- a non-authoritarian and participative approach to project leadership.
Lesson 2: For senior leaders, "walking the talk" is not a trivial matter. It will require concerted effort and mutual partnership. But it will make a huge difference.
- Third, the analytic tools provided techniques for taking the
philosophy and putting it into action. Managers "taught their talk" in
innovative managerial practice field sessions for program engineers.
Lesson 3: "Learning labs" may use a variety of techniques, including computer simulations, but the key principle is inviting more in-depth conversation, across functional boundaries, on business-related issues in a risk-free setting accessible to all.
- The fourth theme examines engineering tools -- new technical ideas joined with a human relations approach that encourages people to apply the technical ideas effectively.
Lesson 4: The success of even the "hardest" engineering prototypes depended on cultivating "softer" skills of involving people and managing the flow of information among them.
- The fifth theme examines the partnerships that were
created
-- functionally based people were drawn together in ways that bridged
differences and focused on action with collaboration.
Lesson 5: An atmosphere which encourages experimentation, particularly across traditional boundaries, leads to benefits that the senior leaders can't necessarily predict or plan for.
- The sixth and final theme describes an evaluation -- how the process innovations in the team were brought into larger management forums. It describes the various ways in which the larger AutoCo organization responded to the Epsilon team.
Lesson 6: An innovative team like Epsilon needs an advocacy from above that fulfills both a spirit of mentoring and provides counsel on how to handle larger system implications.
What kind of knowledge can an organization develop so that it can reliably reproduce excellent results? An organization needs more than conventional "lessons-learned" or technical knowledge. And it also needs more than the tacit knowledge, kept below the surface, of "how things are done around here" -- the knowledge which unknowingly influences collective behaviors.
An organization needs "actionable knowledge" -- knowledge that covers generally tacit issues such as relationships and working habits, that are brought to the surface, examined collaboratively, and communicated. Such knowledge is part of the system which leads to success or failure; it provides the key for repeating successes and avoiding failures. By drawing on the concrete experiences of the Epsilon team, this learning history is designed to bring forth conversations in other teams which can bring forth a knowledge that helps them learn and function more effectively. (Some initial questions for moving forward with learning initiatives, to be considered and discussed after reading this history, are framed in the "Appendix" section on page .)
The leaders of the Epsilon Program worked to change their style first. Only then did they encourage other people to change their styles. The general expectation had been that the learning labs and use of learning tools would be the critical factor that influenced behavior. Instead, we of the learning history team heard again and again that the changes in senior managers' personal behavior was a critical force. This change in behavior among the Epsilon team leaders allowed others on the team to change, be more open, and share their difficulties and mistakes rather than avoid embarrassing situations. That openness, in turn, gave Epsilon its capability for quality, its flexibility, and its inspiring atmosphere.
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