Why business loves workteams.

Transforming bureaucracies into workteams is a top priority in the '90s. Here"s how you can be a workteam guru for your company.

When you were in grammar school, how were you graded working and playing with the other kids? This may sound like a ridiculous question to ask readers of a business magazine. But if teammanship is not a high priority among your portfolio of skills, then your survival and advancement in the '90s workplace is at risk.

Right now, managing through workteams is the hottest strategic weapon deployed by companies struggling to regain their competitive edge. The groups, which vary in size, responsibility and composition - from executives to assembly line workers - are often charged with high-level decision-making powers.

These teams are overhauling the way America does business. By bringing together key players to solve problems, effective workteams eliminate endless reams of red tape and the delays of plowing through layers of management. With a well-defined mission and a diverse mix of skills, these groups help companies deliver higher quality products and services at lightning speed.

Just look at Chrysler Corp. Since changing to a workteam structure, Chrysler has significantly reduced its product development cycle, increased its market share, drawn raves from automotive experts and posted a $723 million profit for 1992. And shareholders are ecstatic. Chrysler's stock has shot up from $12.50 at the beginning of 1992 to more than $38 one year later.

Through workteams, Chrysler has developed the insight, flexibility and speed to develop cars Americans love to drive. Their first big hit: the ultimate American sports car, the Viper.

Team Viper: Building A Better Car

In 1989, Chrysler converted its work force into four horizontally structured, cross-functional product, or "platform," teams. They also created a special projects platform - team Viper.

"Viper was the prototype for the current platform structure at Chrysler," - explains Jean Pascal Mallebay-Vacqueur, general manager of special project engineering and head of Team Viper. "All the players - marketing, manufacturing and engineering - were in one room for the project. The team format was adopted because we needed to work fast, strategically and cost-effectively," he explains.

Team Viper pulled 80 volunteers from Chrysler's design, product planning, engineering, procurement and manufacturing departments. Before the team convened, Chrysler's President and Chief Operating Officer, Robert A. Lutz worked with committees to map out strategy, objectives and goals. Together with executive engineer, Roy Sjoberg, Mallebay-Vacqueur guided the development of the team as well as the car. "We negotiated objectives and reviewed the progress of the team, helping members understand strategies and prioritize issues," Mallebay-Vacqueur explains.

"My people assemble systems, not just components," says New Mack Avenue Viper Assembly Plant Manager Howard Lewis. "They are cross-trained and can directly interface with the engineers. They have been empowered to tell the engineers exactly what they need."

"Under the traditional system of management, individuals function in work groups. The focus is on the leader, who delegates all assignments, reviews performance and is the pivot of all the group's communication," says Mildred O. Saunders, founder of Milsaun & Co., a management consulting firm in Flushing, N.Y. Under this system, creativity and initiative take a backseat as staff-generated ideas and suggestions often languish, waiting for management to take action.

Workteams, on the other hand, warrant a fundamental shift in roles and authority-particularly among managers and staff. Where traditional management systems heraid managers as power-wielders and delegators, the workteam format repositions them as facilitators and coaches. In this role they are commissioned to counsel, motivate and mediate when needed to keep the team focused on their goals. Staff, long relegated to performing tasks and implementing directives, becomes valued as the true driving force behind corporate success. No longer simply considered "worker bees," employees are solicited for their ideas, expertise and suggestions on how to improve productivity, and deliver quality products and better customer service. They are empowered to make decisions and implement ideas in a way never given to them before. Saunders explains: "Companies are finally realizing that their greatest asset is, first, their people, then their product or service."

Although a radical departure for the Big Three automakers' manufacturing protocols, Team Viper was successful in completing its mission: developing a new automobile, from concept car to showroom in the unheard of time frame of three years-and within budget. "We finished the project for $50 million, rather than the $250 million it would have taken the conventional way," Mallebay-Vacqueur says. He admits, however, that a smaller volume of cars were produced-only 2,000 cars per year versus 200,000 by conventional car assembly. "But the craftsmanship is unsurpassed," he adds.

The Viper team's success has also impacted the company's bottom line: All 1993 models of the $50,000 roadster were sold before they were built. And, its success has definitely boosted Chrysler's employee morale as well as consumer confidence in the nation's No. 3 automaker. "It demonstrated that the team concept works," Mallebay-Vacqueur says. Consumers, critics and industry experts "put us down four years ago, claiming we couldn't do anything right. Because of the Viper project, we no longer accept mediocrity in ourselves or our product."

Workteams Help AT&T Get Lean And Mean

Speed is a major motivator behind the change in business management. Hitting the market first with the right product is extremely important in highly competitive industries. Being flexible enough to switch gears quickly when product needs change is also critical.

In 1986, two years after the federally mandated breakup of AT&T, the company was steadily losing money, and projections for the coming years were just as bleak. Reports showed that profitability was steadily eroding along with market share. That's when John N. Williams Jr., a 17-year company veteran from St. Louis, was called in to AT&T's Piscataway, N.J., office to study the problem. Williams' expertise in organizational design, analysis and transformation allowed him to pick up on a critical problem at AT&T.

"Prior to divestiture, we were the only phone marketer in town, and we acted like it. We thought we were customer-focused, but we weren't. Because we never had to compete, we really didn't know how. We'd forgotten how to put the customer's needs first," Williams says. "We had always leased our phones to our customers. Now other companies were selling phones, and our customers were interested in buying them."

In 1988, Williams and four other task force members recommended that AT&T could recover its market share and earn back profits if Ma Bell drastically changed the way she did business. To be competitive, AT&T had to become a customer-focused business.

Throughout 1988, a company team conducted forums designed to investigate customer needs and wants. Information integrated systems, garnered from the forums, forced AT&T to redesign an array of corporate procedures, from how paperwork was processed to how people answered the phone.

Like AT&T, companies now understand that going straight to the source - the workers who interact most intimately with fulfilling customer needs - is the best way to cut through the bureaucracy that impedes swift production. "Establishing ties with their customer base must become a top priority for companies," says Ronald E. Galbraith, president and CEO of Management 21, a corporate training company in Nashville. "Who's closer to the customer than those frontline workers who interact with them every day?" asks Galbraith, also chairman of the American Society for Training and Development, based in Alexandria, Va.

Acting on task force recommendations, the 29 organizational units of AT&T's national division were divided into four regions. Each region was assigned an implementation team. Williams was then charged with converting the teams into workteams. Each training team consisted of 12 to 16 people: instructors, who represented all jobs affected and taught their peers the changes in their new job descriptions; facilitators, who supported the workers in their new roles and responsibilities; and an outside group of psychologists, who took the teams through change management, team building and value development exercises.

Asking people to accept change is hard, but requiring that they totally revamp entrenched behavior, as the transition to workteams mandates, is like pulling teeth. At AT&T, the conversion was highly stressful for implementors as well as teams. Dysfunctional behavior resulted from people not buying into the new system; in-fighting within the groups was commonplace as individuals struggled to hold on to familiar ways.

Originally scheduled to spend two weeks training workers at each site, Williams quickly realized that employees needed longer to adapt to the workteam format. "The process taught us that change can't be forced into a preconceived time frame," he acknowledged, after increasing training to three months. Support structures were left in place to monitor implementation once the training team left. "Teams must be constantly supported until the concept is firmly entrenched, or they'll slip back into the old behaviors," Williams advises.

Even the most dynamic and empowered teams can stall if its members get sidetracked or confused. That is where the newly defined managers and facilitators come into play. Effective team managers keep the group focused on their goals and make sure all members participate in problem-solving and planning. But once a team has been sufficiently prepped, properly equipped and accurately set on course, the best thing its manager can do is get out of the way and let the team get to work.

Conversion to the workteam format at AT&T was completed on schedule in mid-1991, 18 months after its design. "Switching to this mode has allowed AT&T to implement changes more quickly and efficiently. It has allowed us to be more responsive to the changing needs of our customers," Williams says.

But the value of team success ultimately must be translated to the bottom line. As general manager of the Northern New Jersey territory of AT&T's Small Business Division, Williams' team had a 17.2% increase in sales productivity and a 10% increase in total revenue in 1992 over the previous year.

Philadelphia Electric Trains Workteams To Excel

Once in place, workteams must continue to refine their mission to evolve into focused self-directed teams (SDTs), mature versions of workteams that are fully responsible for their own management and work output.

Varying forms of SDTs have existed for decades in manufacturing. A 1990 joint study by Development Dimensions International, the Association for Quality and Participation and Industry Week magazine reveals that 27% of the 862 executives surveyed nationally reported that SDTs were being used in some part of their organization. Manufacturing companies accounted for 71% of the businesses converting to workteams, while service companies made up 10% and public utilities only 5%. More than half of the respondents anticipated adapting to SDTs within five years. Surveyed executives found that, when implemented properly, these teams were catalysts for reducing labor costs, improving employee morale and upgrading quality and productivity.

But pinpointing the problem and identifying workteams as a solution isn't all that is necessary to make the transformation. Without a clear mission and proper preparation, attempts at implementing teams can have disastrous management results. Not surprisingly, it's at this phase that companies are meeting their greatest challenge.

A group's purpose must always be crystal clear to team members. "The key to teamwork is not just giving people goals, but outlining concrete reasons why they should achieve those goals,- advises Mark Sanborn, a motivational speaker on team building for CareerTrack Publications in Boulder, Colo. "The motivation is in the mission. The power is in the purpose."

"Goals, objectives, doubts and concerns must be addressed before positive change can take place,- says Ron Johnson, principal partner of Johnson, Fenner & Levy, a management consulting group in Bala-Cynwyd, Pa. Formal training, focus groups, management meetings or any forum that facilitates learning will be helpful, Johnson adds. Workteams also require cross-training, as team members may need to rotate responsibilities within their own group, or even across other teams.

The management at Philadelphia Electric Co. (PECO) received a crash course in the merits of training when one of its nuclear facilities was forced to shut down in 1988. An operations evaluation ravealed that a lack of strong leadership and poor supervisor-worker accountability had precipitated the plant's year-long closing, which cost the utility millions of dollars. As director of management and professional development for PECO's nuclear group, Kathleen M. Cook headed the development team charged with overhauling the management selection system for the division.

"We formed a Supervisory Development Academy, which required eight weeks of leadership, interpersonal and skills training for supervisors who would be working in teams," says Cook of the prototype that was eventually adapted companywide. Participants were given intensive training in working with and leading teams so they could subsequently support and train their staffs.

"Deregulation gave our customers flexibility in choosing energy providers, so we were forced to learn how to manage more competitively," says Cook, now assistant vice president, corporate training for the Vanguard Group in Valley Forge, Pa., the nation's leading no-load mutual fund company.

A Solution, Not A Panacea 

Although workteams are a great concept, they are not a panacea for all that is ailing American business. Nor are all companies and divisions suited for a workteam format. "Teams are great, but some work needs to be accomplished solo," says Kathleen Emery, vice president of Designed Learning Inc. in Plainfield, N.J., and a workteams consultant. Be sure to carefully evaluate whether your goals and objectives are best served by a workteam format. "Be selective. When work makes sense to be done in teams, then do it; when it doesn't, don't. Teams aren't the answer for every situation,- she advises.

Emery suggests first looking at the work that must be accomplished, then focusing on your customers' needs. Have everyone associated with one part of the job get together to define the goals and issues that must be addressed and how best the work can be done. While some jobs may need to be changed, this won't be a problem, she explains, if there is cross-training. "People will be willing to help, if they can see the payoff," Emery adds. The Small Business Administration and local community colleges can offer assistance in this area. For smaller companies that want to switch to a workteam format, but are apprehensive, Emery advises linking together to share ideas and devise strategies that can be beneficial to both. "Many firms are really in the workteam format, and they don't even know it," she says.

The headaches that come from restructuring to workteams may be larger than the initial payoff. But a firm commitment to the team's mission by both management and employees, tempered with patience and strategic planning, will ultimately reap returns that make team effort a worthwhile investment.

NINE STEPS TO BETTER WORKTEAMS

Thorough research and development supports any successful product launch - and the same holds true when the product is workteams. The following steps will increase your chances of creating a winning team:

1. Study other successful teams at companies that have challenges similar to yours.

2. include all workers who will be affected by the process in the planning and implementation of the teams. Include appropriate union and employee association representatives.

3. Seek and encourage feedback from all participants throughout the process.

4. Project realistic deadlines and distribute training and implementation schedules to team members, management and other departments affected by the new system.

"When you try to push the development process faster than it's able to go, you will probably experience a breakdown in the system," warns John Williams, a workteam guru and general manager at AT&T. Team building and change management are evolutionary processes requiring adequate time to be worked out. Building time into the development process (which may run as long as two to four years at large organizations) will allow for trial and error to offset potential derailment.

5. Be prepared to slow down if the process becomes very complicated.

6. Regularly evaluate and make adjustments to your original plan and deadlines if necessary.

7. Keep everyone informed of all developments throughout the process.

8. Don't be afraid to handle fears, anger, confusion and resistance. "Concerns, time frames and expectations must be worked out before any changes are made in how people work," advises Ron Johnson, principal partner of Johnson, Fenner & Lay, a management consultant group in Bala-Cynwyd, Pa.

9. Develop a plan to handle questions regarding compensation. Be prepared to respond to questions such as: How will individual achievement be acknowledged? Shouldn't added responsibilities be reflected in team member's pay? And if the company profits from the workteam's efforts, shouldn't the team members share in those profits?

Management experts believe that the teams should decide or provide input on how compensation above base pay should be handled. "Don't set up a reward system that acknowledges individual achievement at the expense of the team,- Johnson advises. He also suggests that individual incentive programs be abolished, since contests are counterproductive to collaborative efforts and team goals.