Changing The Rules
BHP Review - 1997 - By Kate Dunstan
There were whoops and hollers as the first six metre long galvanised steel angles started coming off the line. "They may look like ordinary angles," one fellow shouted above the noise, "but they're not. They're going to change the structural building products market in the world."
It was a moment the team had been working towards - some of them for years. A new and secret process making a revolutionary product.
DuraGal® is a galvanising technique which applies a special zinc coating to the steel product during production, rather than hotdipping later. It produces a finished product which needs no blasting or painting, is lighter, stronger and corrosion resistant.
"DuraGal® rectangular hollow sections have been made at Newcastle for about five years now. The demand's been extraordinary," explains Steve Crossingham, Manager of the new Somerton facility. "Our customers wanted complimentary products, so we saw an opportunity to expand into the structural and building products market."
The resulting factory at Somerton in Victoria, Australia is a sign of their optimism. It measures 30,000 square metres and the new, super-efficient DuraGal® line in it takes up about one fifth of the space. Room to grow, they say.
But that's not the only growth happening at Somerton. They're not just building a new factory, they're building a whole new organisation. No hierarchy, no titles, no executive car parks. An organisation designed from the ground up, with people and technology truly integrated.
"We saw an opportunity to lever off the innovative technology we've got in our process to put in innovative people systems which would enable us to get a one plus one equals three scenario - a quantum leap in innovation," says Steve.
"Our HR people did some benchmarking around the world, looking at team based organisations, and they found that with all the high commitment places which were getting extraordinary results, one name kept coming up in terms of someone that was helping them, Paul Gustavson of Organization Planning & Design. He introduced us to the Organizational Systems Design Model, so that's the framework we've used, and built on."
It starts with the hiring of the people. "It's self-selection. We just give them the information and they choose whether they want to work with us." That choice, however, is quite involved. What starts with an information day progresses through aptitude tests, psychological tests, interviews and a work skills day. It takes several months, at the cud only one percent of applicants remain to be chosen for a permanent job. "It's people's behaviors, feelings and attributes that are important, that's what determines your outcomes," says Steve.
The selection process looks for eight attributes: integrity, customer focus, team-work, accountability, commitment to business outcomes (including safety), learning, continuous improvement and technical competence. It's no accident that Steve lists technical competence, usually the first attribute sought by a potential employer, last.
"Look at integrity. I can't teach you to be honest, you're either honest or you're not. The prison system's been trying for years to turn dishonest people into honest ones. Customer focus. I can teach you that, and teamwork. But accountability you've either got it or you haven't. When you get to technical competence, if you've got a learning propensity, I can teach you any technical competence. So it's only one of eight competencies, and it's not the most important."
So Steve says the people at Somerton are special. They want to be a part of it, and they have the attributes to make it succeed. "We've got people here who are school teachers, but they've got mechanical aptitude. They'll learn every part of the business."
Every operational worker is known as a Process Technician, and paid the same salary. They work in teams, in which each person is responsible for managing a particular area (focus point) of that team's production: safety and environment, wealth creation (costs), quality, total productive maintenance, competence development (training) and value delivery (production). For each of those focus points there is an overall manager, and there's Steve. That's the whole structure of the organisation.
"Obviously you can't create such a culture and structure without the strong support of union leadership and their appreciation of a common vision. I am grateful for that support," Steve says.
"Leadership is a shared responsibility. If there's a safety question, you go to the safety person, if it's a quality question you go there. And everyone in the team learns every job. There's multi-skilling and there's a lot more harmony in the team because of the shared leadership. They rotate through each of these areas every 18 months, so after seven years they know every functional area of the business, and they are a team of managers. That's our vision, the self-managing team, they run the business.
"They're not self-directed, but self-managed. They make all the decisions on the process. They're not looking outside the business to make the decision of what business or markets we're in. There's a very clear line.
"The focus managers are mentors and coaches. My job is to teach them how to do these things well. Their job over the next five years is to do themselves out of a job. To build capability in the teams to be able to make decisions so the teams can plan, control and improve the process."
Steve Crossingham describes Somerton as the embryo of change. "My vision is to change the way work is done. And to be able to leverage the tremendous value in our people that exists in BHP to get quantum improvement in the results. To really utilise our human assets. If we can produce a model for replication, we can go anywhere and start the change process.
"It doesn't matter what culture you put it in because it's built on fundamental beliefs and values. This is about basic respect for people, the work they do and being respected for it."
What is already commanding respect is the results being achieved in commissioning. "We set a target to achieve 50 per cent yield in the first six months, and already we've achieved 75 per cent in a week."
Steve's boss Leigh Daley, Group General Manager Structural Pipeline Products and the man credited with the vision for Somerton, sums it up "People here have set a precedent. You won't be able to walk away from it."
