The company
W.H. Smith & Sons, Ltd. (WHS) is a family-owned business based in Sutton Coldfield, near Birmingham in the United Kingdom. The company also has a subsidiary plant in East Kilbride, Scotland. Plastic injection moulding and toolmaking are the core activities, together with the manufacture of sub-assemblies and leather-covering products. The business was expected to turn over ｣30m in 1999. From a turnover of ｣10m in 1994, which was doubled two years later, it has continued to expand and currently employs a combination of full-time and part-time employees. The total number is 500 but is equivalent to an aggregate of 400 full-time employees.
The company was founded in 1933 by William Henry Smith to produce quality components in the revolutionary new Bakelite. Since then, plastics technology has developed at an accelerating pace, and WHS is increasingly recognized as a leader in the field. Injection moulding began on site in 1966, and the company has grown with an expanding customer base in the automotive, leisure and electronics industries. Major customers include Rover, Toyota, Honda, Nissan, Triton, Black and Decker, Lucas and Mars.
Main factors driving the business
Sensitivity to the market place and the increasing demands of customers have been the main driving forces behind all the innovations that have been implemented in the company. The main factor driving the business is a passion to organize all resources so that a total focus upon customer requirements is visible in all that is undertaken. Perhaps the most compelling expression of customer focus is the "cell manufacturing organization" where each main customer has a dedicated cell. The transition to this type of structure is now a foundation stone of the company's success and has probably generated more learning and development needs than any other single issue.
The increasing trend to global sourcing of components by UK original equipment manufacturers has meant a decreasing share of the market for businesses failing to compete at world-class standards. To remain competitive, no stone is left unturned in the drive for diversifying and spotting opportunities for new products which make full use of the core skills and which are connected to existing assemblies. Sustainable competitiveness has influenced the company to undertake a programme of continuous improvement in terms of improving the quality of products and processes, reducing costs and delivering to schedule demands.
In a formal presentation, the Managing Director recently summarized the main factors which drive the business as:
Main managerial practices
Creating the conditions inside the business for growth, learning and continuous improvement for achieving high performance in the workplace has been the main preoccupation of the management over recent years. The strategy of the leadership has been to plan the business with the line-management team of 25 managers involved at every stage and to make all information being generated as visible as possible to all employees at the earliest opportunity and in a colourful and attractive way. The following commentary highlights the features of the main practices and how they have been implemented
Leadership
The company is owned and managed by Clinton Smith, Chairman, and he is assisted by Colin Sarson, Managing Director. They both are extremely visible to all employees and spend much of their time "walking about" and talking with people at all levels in the organization. Their style is to become involved by helping managers and employees to take ownership for their own performance and to pursue continuously improving standards. Clinton Smith is an engineer who is much respected by the workforce. Colin Sarson implements the strategy by running the business on a daily basis and is seeking growth opportunities and business improvement at every step of the way. He affords all employees the responsibility for improvement ideas to be integrated into work processes. The proportion of managers with leadership roles who have been promoted through the ranks of the business is very high.
Measurement
The principles of measurement and the transparent communication of results are sacrosanct. It is often said that everything that gets measured gets done. The company is a living role model of such a principle. The attention given to the provision of planning information, the monitoring of results and the visual display of the details is considerable. It is the responsibility of everyone who is a contributor to challenge, update and take action to deliver customer requirements which are attractively presented and easily accessible on every cell in the factory. Such information is objective data on which to identify opportunities for whole team learning as well as for individuals.
Strategic review of people development
The Managing Director conducts a review of the total company strategy at least annually. He conducts the review in consultation with his management team and also involves the main external partners involved for advice and specialist information. This practice has been under way for the last six years, and the priorities for each year have provided a theme/focus for each year's activities. The clear connection of activities in successive years has allowed for the building of a learning culture. The themes of priorities over successive years since 1993 have been: senior management development; team leader development; leadership and team work; recognition and accreditation; whole workforce development; team leader and potential team leader development; and manufacturing process improvement.
The needs of the customers have always driven the plans for developing people. However, a managerial practice gaining in prominence and strength is the integration of externally recognized awards and qualifications for individuals as part of the total development process. It is regarded as a form of quality assurance as well as a motivational feature for employees.
Attention to the environment
Considerable management attention is given to creating an environment where the maximum opportunity is afforded to an employee's initiative for achieving business objectives. This attention can be categorized into three specific areas: culture for learning; space available; and quality of working conditions. The latter two areas will be briefly commented upon, as they have an effect upon the first, but the learning culture is the subject of a more detailed commentary.
A major feature of creating the learning culture is the responsibility that is given to line management for creating a learning environment for its own employees. An example which vividly illustrates the importance of this responsibility to the Managing Director is as follows:
Each of the 25 line managers was asked how many hours a week he or she needed to spend on learning how to keep abreast of developments in all aspects of his or her work. After due consideration, the answer to the Managing Director's question was "between five and six hours". A similar question was asked of them with regard to the people who worked for them. In the latter instance, the response was "between two and three hours" - approximately half of what they themselves had wanted. When it was known that the expectation of the Managing Director was that the managers would spend their forecast amount of time engaged in learning, they complained that they had insufficient time and their job objectives would suffer as a result. Following discussions upon the importance of learning as a process which is central to achieving business objectives, the Managing Director offered to reduce the managers' workload so that they could free the five or six hours for learning and training purposes. Finally, none of the managers sought a reduction of their workload, and all of them found new ways of working so that time could be devoted to their own learning process within working hours. The managers also took their responsibilities seriously with regard to their own employees' learning. It is also significant that the company does not have a specialist human resource development department or personnel department.
The main factory in Minworth, Sutton Coldfield is where the majority of products are manufactured. The factory is in a "green belt" area, and the grounds and gardens which surround the main building are attractive and well kept. However, the company is limited in securing extra space for any expansion plans. The utilization of space is therefore a priority activity and is subject to the closest scrutiny. Much management time is spent in the rearrangement of machinery to improve the prospects of satisfying customer requirements through the revision and refinement of work processes. Space utilization is one of the key criteria for measurement of impact of any training.
The quality of working conditions, in what traditionally has been a difficult industrial environment to keep clean, is very high. The quality of lighting in key areas of the company provides brightness and an ambience conducive to working on precision processes and products. Housekeeping measurement criteria are in operation on the same basis for the shop floor and for offices, and the adherence to agreed procedures appears to be very strict.
Investment in learning centres
A further managerial practice to highlight the importance of the learning culture was the decision to invest in and open two learning centres that would be both visible and accessible to all employees. Such a resource would be key to keeping up with the demands for job-related learning. In addition, the learning centres would remain open to employees outside their normal working hours to enable them to undertake subjects of particular interest to them. A further feature which dramatized the importance of learning, not only in the company but to "society in general", was the invitation to employees to bring members of their families into the factory and encourage them to learn alongside them.
Partnerships with specialists
Decisions to work inside the organization in partnership with specialists who have a reputation for quality work is a further important feature of creating the learning culture. Care is taken to select such specialists who usually turn out to have a long-term relationship as a supplier of services to the company. Specialists could embrace any aspect of the learning process from diagnosis of needs to giving recognition for company or individual success. The opportunity for existing employees to work alongside such specialists should not be underestimated in terms of recognition and their own personal learning and motivation. Senior management is acutely aware of this advantage, which is often over and above the reasons for inviting specialist suppliers. Two specific examples of partnerships, East Birmingham College and the Society of Motor Manufacturers and Traders (SMMT) Industry Forum, are given in the section "Implementation of practices".
Customer relations
A final feature which management has decided helps to create a learning culture is the policy for leaders on the shop floor to communicate directly with the end customer and to invite his or her involvement in the manufacturing process. Beyond the traditional sales/customer relationship, this means that a team leader with ideas or concerns can speak directly with the customer for advice, suggestions or confirmation whilst products are being manufactured. An invitation is often extended from the manufacturing team leader to the customer's representative to visit the factory to exchange ideas and resources. This is a very powerful symbol of a quality learning culture.
Implementation of practices
The importance of effective implementation is most symbolically demonstrated by a Managing Director's commitment, visible interest and time spent on the subject. In WHS, the Managing Director has acted as the "champion" for most of the key programmes and is often seen to be involved as a participant. He, above all others, connects the performance of the organization with the outcomes of learning and training activities.
Management training
The training programmes for all WHS employees are implemented as close to the workplace as possible, which is the quickest route for the transfer of learning from theory to practice and for bringing about work performance improvement. The scheduling of all programmes is designed to fit in with operating conditions in the factory. This usually means intermittent periods of time away from the workplace over an extended period. In the case of management programmes, this has meant one or two half-days a week over a year, with part of the time during normal working hours and the other part in the managers' own time.
The advantages to the managers of this pattern of programme are the opportunities to reflect by themselves, or with others, upon new ideas and to have the time to apply their learning to work immediately after gaining new knowledge. The additional advantage of sharing the results of learning application at subsequent sessions on the programme serves to consolidate and reinforce the learning.
The level of quality assurance imposed upon the training includes the opportunity for each individual to be accredited for the competencies acquired. The National Council for Vocational Qualifications (NCVQ) and the National Examining Board for Supervisory Management (NEBSM) both include the compilation of a portfolio by each individual as part of their accrediting criteria. Such a feature has played a prominent part in helping to sustain progress of implementing ideas into action. The company has trained selected employees as assessors and verifiers to ensure a consistent standard of application across the organization.
The nature of this type of programme demands the maximum flexibility and resourcefulness from the tutoring staff. It is they who are unfamiliar with the environment at the start of the programme. It is they who need to adjust their work programmes to fit in with the company requirements. Tutors from East Birmingham College, the main provider of this type of training to WHS, take particular pride in rising to the challenge of such flexible working arrangements.
Campaigns
A style of training fundamental to creating the learning culture is the "campaign" initiative that embraces the whole workforce in one way or another. The first such campaign, "To be better", was introduced in 1995 and lasted for 12 months. The aim was to improve business performance, secure growth and help to upskill the workforce. All employees were invited by management to join a group having the task of creating its own agenda on what to do to help the aim of the campaign. Membership of a group was voluntary. Fourteen groups were set up, with an average membership of 15 employees. Each group, facilitated by East Birmingham College, was encouraged to implement its own ideas as opportunities for business improvement.
Campaigns are of limited value unless there is follow-up and subsequent campaigns build upon the learning, successes and weaknesses of the previous ones. In WHS, two further campaigns are a testament to its commitment to improving its culture and performance through people.
In 1997-98, a "Manufacturing process improvement" campaign was conducted in three phases. The first phase was an audit with cell management to review the results of the actions taken from the "To be better" campaign. Evidence of application and implementation was sought. The second phase was to examine the existing action plans for continuous improvement and to develop the programme for sustaining momentum. The third phase was related to the implementation of the action plans and the offer of direct, specialist support. The final phase of the "Manufacturing process improvement" campaign was to audit again, with cell management, at the end of the year and measure the improvements gained. The total process allowed WHS to benchmark its activities against customized standards.
The "Manufacturing process improvement" campaign was followed up in 1998-99 with the "Year of the team". The importance of teamwork had formed a key element of all management and supervisory training. To strengthen the teamworking message, particularly across functional boundaries, a series of residential workshops was offered to employees on a voluntary basis. Subsequently, about 100 employees were involved in four two-day workshops which were held during the normal working week. These ground-breaking events incorporated two features which were totally new to WHS. Firstly, the use of the outdoors in the Welsh countryside was selected as the environment where the majority of the training would take place. Secondly, each participant compiled his or her own portfolio of competence during the workshop. The portfolio was again used to gain external accreditation for achievements.
Partnership in action
A partnership playing a prominent part in the development of people has been forged with East Birmingham College. A small nucleus of staff from the College has worked inside the company on a part-time basis in support of the range of programmes already identified. The launching pad for the partnership was a programme in 1993 when management processes were strengthened by 15 of the most senior managers. The programme was designed and facilitated by East Birmingham College, and the participants qualified for an externally accredited certificate at the end.
Amongst the practices that have been implemented on working in partnership with quality suppliers of learning support is a much-vaunted relationship with the Society of Motor Manufacturers and Traders (SMMT) Industry Forum. Without the creation of a learning culture, it would not have been possible to accommodate such a unique and powerful partner and achieve the outstanding improvements in quality, cost and delivery that have accrued over the last three years.
WHS employees have played an important role in an innovative programme to enhance the competitiveness with other motor-component companies in collaborating with Industry Forum. Nothing like it has been tried anywhere in the world. Industry Forum is set up under the aegis of the SMMT and has an aim of "sustainable world-leading competitiveness for the UK automotive components sector". The Forum has brought together, initially, a total of eight experts from Japanese car makers Honda, Nissan and Toyota and from General Motors (GM) and Volkswagen to help smaller firms improve their efficiency so that they can hold their own in the increasingly fierce supply business. WHS offered to be one of the guinea pig companies to pilot the concept of a unique alliance amongst competitors and at the same time improve its own business performance.
A "Common Approach" tool kit has been assembled by Industry Forum and includes best-practice tools and techniques that have been tried and tested with its globally competitive partners. The tool kit is used to diagnose and implement improvement opportunities inside the business and measure the extent of improvements in terms of quality, cost and delivery standards. The seven standards of measurement are: people productivity; stock turns; overall equipment effectiveness; value-added per person; floor space utilization; delivery schedule achievement; and non-right first time.
The results of the early programmes, known as "Masterclass", were very positive. One project to make effective use of the factory space available, a critical concern as mentioned earlier, cut occupied floor space by 70 per cent in one part of the plant, freeing it up for new customers and saving on capital investment. A second project to speed up tool-changing times to reduce stock managed to cut work in progress from five days' stock to a single day. The programme has now become a standard part of the company's continuous improvement process.
The Chief Executive of Industry Forum, Graham Broome, wanted some exemplar companies to be shop windows for the ground-breaking programme. Colin Sarson was delighted to oblige. Since those early days, a whole succession of interested and leading representatives from prominent organizations has visited and learned about the WHS/Industry Forum customers. "We are applying these lessons elsewhere and using them to attract new customers," he says. "We have just started working with a huge consumer-products company. We walked them round the factory and were able to convince them to place up to ｣10m of new business over the next two years. They were impressed with the way we do things now." Yet Colin Sarson still feels that there are further and sustainable improvements to be gained from Masterclass. "We still have to master Masterclass", he has been heard to say three years after the first Masterclass proved to be successful. It is that relentless and determined pursuit of excellence that characterizes the whole approach of the business.
National cultural and institutional factors
Regional culture
The region of the UK in which WHS is located is known as the West Midlands, with Birmingham being the city with the largest population in the region. Only the capital city, London, has more inhabitants than Birmingham in the UK. The engineering and manufacturing heritage of the region is exceptionally rich, with the Industrial Revolution in the UK in the early nineteenth century being born in Birmingham. Generations of families have earned their living by pioneering, making and selling products of the manufacturing sector. It has been a proud boast of the "city fathers" for decades that "if it can be made, then people in Birmingham can make it". A natural gift for manufacturing creativity and capability seems to be inherent in the genes of the local population.
A consequence of this history is that the style of leadership which is most likely to encourage the very best work from employees is one where a manager gives every employee the opportunity to demonstrate his or her interest and competence in the quality of work he or she performs. It is a process whereby the employee is given as much responsibility for his or her work and is supported and coached by his or her boss. Employees are generally very proud of what they know and can do. Skills may have been passed on through generations of families who have made a successful living at their trade. Therefore, managers who favour the "instructional and telling" approach to work are less likely to be effective on the implementation of new ideas than those mentioned above.
At WHS, there are many employees who are members of the same family and who live locally in the Sutton Coldfield district of Birmingham. The company is perceived as part of the local community and, in turn, puts great store in being regarded as a corporate citizen in this respect. It is well known that many of the problems occurring inside the factory are resolved over the kitchen meal table inside the home. The company should be congratulated at being rewarded with such a responsible attitude in the hearts and minds of its workforce. It appears that the leadership has struck the right balance between "coaching and instruction" in its style of operation and in keeping with the regional characteristics of the people.
National awards
The Government has launched a national campaign to create a learning society across the country. In times of massive cultural and technological change, the countries which remain at the forefront of international competitiveness are likely to be those which have the capacity to learn the fastest. During such times, all governments have been influenced to promote those companies which have been assessed as exemplars in this context so that others may know which they are and have the opportunity to learn from them. One method which has been adopted in the UK for identifying exemplary businesses and drawing the attention of others to the way they work is to hold national competitions with entries open to all and to give maximum publicity to successful entries. The competitions are organized by the Government or professional bodies which are thought to have a position of professional authority and a representative role within the professions that they serve.
Awards are won by employers and individuals who demonstrate excellence in their use of learning, training and development techniques to bring success to their business. The winners benefit in four ways: through publicity, prestige, recognition, and increased motivation from employees. The overall objective is always to improve business performance and secure competitive advantage.
WHS has made full use of this type of business investment to secure a higher profile in the market place and also to give recognition to its workforce as a major asset and contributor towards business success. Amongst the awards and achievements in its possession are: Factory of the Year Award; a National Training Award; Investor in People; International Standards Organisation Awards ISO 14001 & ISO 9001; Quality Standards - QS 9000; Business in the Community's Employees in the Community National Award; and the City of Birmingham's Environmental Award. A deeper investigation of the criteria of two of these awards - Investors in People and a National Training Award - should give a clearer understanding on the two-way impact of in-company practices/outcomes and national cultural and institutional factors.
To win an Investors in People Award, WHS had to demonstrate a framework for cohesive action through:
WHS found that the impact of the Standard upon its practices and outcomes offered the opportunity to review current training and development against a good practice benchmark. In addition, it provided a framework for planning future strategy and action and also a structured method to improve the effectiveness of training and development activities.
To win a National Training Award, the company had to explain why a specific training programme was needed to bring about desired changes in business performance. The training objectives had to show a clear link to the needs identified with how the programme design related to the achievement of the targets set. It had to be made clear how the delivery of the training programme matched the original needs and also how well the results matched the objectives of the training. Finally, factual evidence was needed to show how the company had benefited - what performance measures had improved and by how much.
The rigour demanded by the entry application processes had a beneficial knock-on effect on the total training and development process across the company. The level of quality assurance applied to any future training programme before it was released was higher after winning the Awards. Standards had been raised and the expectations from training by employer and employee had also been raised in the process.
The motivational effect of winning national awards for all those involved with the company was also a significant factor. The image and reputation of WHS inside and outside the company gave customers an additional reason to buy its products, and suppliers a further explanation of why they wanted to be within WHS's supply chain. Most important of all, all employees had a feeling of satisfaction at being involved in a successful business and being able to build upon their achievement to realize world-class standards.
