Is it possible to increase employee engagement in an economic downturn? What is the effect? Employee engagement refers to the level of staff commitment and responsibility, it is a bellwether of emotional capital created by employees. In a six month leadership development process at Komatsu using the Six Seconds' Vital Signs framework, engagement increased from 33 to 70%. At the same time, plant performance increased by 9.4%.
株式会社小松製作所 (Kabushiki-gaisha Komatsu Seisakusho) is a Japanese multinational corporation that manufactures construction, mining, and military equipment, as well as industrial equipment like press machines, lasers and thermoelectric generators. While headquarters are in Tokyo, the corporation was named after the city of Komatsu, Ishikawa, where the company was founded in 1921. The Japanese characters ?? ko matsu mean "small pine tree," a symbol of the city.
Komatsu is the world's second largest manufacturer of construction equipment and mining equipment after Caterpillar. However, in some areas (Japan, China), Komatsu has a larger share than Caterpillar. It has manufacturing operations in Japan, Asia, Americas and Europe.
In Italy, Komatsu has a plant in Este for the construction of diggers; the Este plant is the focus of this case. The global recession significantly affected the plant's sales. The plant received a directive from Japan to prepare for the next opportunities that would arise post-recession, but in the recessionary climate, management faced serious struggles, including low engagement.
As Francesco Blasi, the HR Director, explains: "The project was in the midst of a period of crisis, including reduction in staff. In this difficult period, we still need to be able to team up and go forward. At the same time, it's important for us to identify and develop the people who can feed the next stage of the company's growth."
Blasi continues: "The decision to invest in an innovative project is inherent in the word crisis: as well as a time of difficulty, this should be a time of opportunity. Therefore, we felt it was necessary to change perspectives; to see our work from a new angle. We wanted to involve our key personnel in a methodology that would allow us to escape from the usual patterns."
In April 2012, Komatsu partnered with Six Seconds to increase the engagement of people in order to build competitive capability and create a case demonstrating the plant's commitment for innovation. The project blended assessments, training, and project-based learning to involve managers in creating a climate for innovation. The project focused on 24 second-line managers.
The project was designed using the Change MAP, an iterative process for organizational transformation. The Change MAP follows three phases:
Engage: Build buy-in
Activate: Develop new capabilities.
Reflect: Lock-in wins.
The phases of the Komatsu project are depicted in the graphic below:
Two assessments were used in the program; an individual measure of emotional intelligence, and group assessment of People Engagement.
Emotional Intelligence was measured with the Six Seconds Emotional Intelligence Assessment (SEI). The SEI is based on the Six Seconds Model of Emotional Intelligence consisting of eight core competencies divided into three macro areas:
Self Awareness, called "Know Yourself" includes two competencies: Enhance Emotional Literacy and Recognize Patterns.
Self Management, called "Choose Yourself" includes four competencies: Apply Consequential Thinking, Navigate Emotions, Engage Intrinsic Motivation, Exercise Optimism.
Self Direction, called "Give Yourself," includes two competencies: Increase Empathy and Pursue Noble Goals.
The assessment provides an overall EQ score plus scores for each of the three macro areas and each of the eight competencies for a total of 12 normative values.
In this project we have used two reports from the SEI toolset:
BBP: Brain Brief Profile - this tool identifies "Brain Style," the individual's current tendency for processing emotional and cognitive data. BBP is designed as an engaging, quick, meaningful starting point for developing emotional intelligence
GR: Group Report - this profile shows distributions of EQ competencies. It is designed for program planning, and for coaching/training team leaders
People Engagement was measured with TVS (Team Vital Signs), a statistically reliable research process designed to pinpoint areas assisting and interfering with growth and bottom-line success.
There are five key drivers in the Vital Signs Model: Trust, Motivation, Change, Teamwork, and Execution.
According to the Vital Signs Manual, a high performing team climate is driven by these five factors:
Trust. People have a sense of safety and assurance so they'll take risks, share, innovate, and go beyond their own comfort zones.
Motivation. People need to feel energized and committed to doing more than the minimum requirement.
Change. Employees and the institution are adaptable and innovative.
Teamwork. People feel collaboration and communicate to take on the challenges.
Execution. Individuals are both focused and accountable.
The TVS is a validated measure normed with hundreds of organizations and over 15,000 administrations across Asia, Europe, and the Americas. The tool generates normative scores for each factor on a scale from 50-150 with 100 as the mean.
An additional scale in the TVS is a measure of engagement, which represents an overall view of the participants' commitment to the organization. The "Engagement Index" is based on ratio of the number of employees who are actively engaged (fully committed) vs neutral vs disengaged (not committed). The Engagement Index is reported on a scale from 0 to 100%, with 50% as a mean score.
As explained, the program design follows the Change MAP, Six Seconds' framework for transformation. There are three phases in this process: Engage, Activate, and Reflect.
The Engage phase focuses on creating readiness, and included pre-assessment and initial training.
The Activate phase focuses on building capability, and included additional training and individual coaching.
The Reflect phase is about solidifying learning, and included post-assessment and evaluation.
In total, the program included 30 hours of work in presence for each group, some distance learning activities and reflections plus some assignment to be done between one meeting and the other.
This phase began with meetings with the HR department and communication with the senior management team to identify a clear set of goals. Next steps included assessments and meetings with the management team to review results, then to create and launch a plan.
Team Vital Signs
The preliminary assessment revealed a significant challenge in employee engagement. Only 8.3% of the management team scored in the "Engaged" category:
The overall "Engagement Index" score was 33% (the mean score on this index is 50%; the benchmark for high performance is 80%).
The pre-program scores on the five factors of the TVS assessment are shown in the graphic below.
All the factors were below the mean (100), but looking at the relative strengths and weaknesses, there are signals of a readiness to change. The challenge was to realize immediately results in order to support people to re-engage and see that it is possible to deliver value.
The other key concern was about trust: Given the business situation, it's not difficult to understand why managers felt concern - but it was clear that we had to do as much as possible to create a feeling of safety and a real inside-out commitment for change to occur.
The TVS also includes an indicator of coherence of responses. Fortunately, in this case the people were highly aligned about the situation, indicating a shared perspective.
The management team met with Six Seconds' facilitators to review the TVS results. The meeting focused on confronting current reality and clarifying a vision of the future. Facilitators emphasized why it is important to work on the engagement of people especially in a time of uncertainty
The dialogue was constructive and participants focused on how to move forward. The meeting emphasized three key points:
The current situation is not sustainable.
The plant needs to be ready for new opportunities.
The management team can influence the future.
The next stages of the project were outlined:
Training for 2nd-line managers in the afternoon.
Explanation of the Vital Team process.
Volunteers join the Vital Team process and implement.
Repeat of the TVS.
Francesco Blasi explains key success factors in this process: "The second line management was already informed of the activities that had previously carried out the first line, and consequently were aware of the overall methodology. In the kick-off meeting, the senior leaders were present, although they were not directly involved in the dialogue. However, they were expected to give their support, their sponsorship, together with the Managing Director. It was essential that the 2nd-line managers knew that if they volunteered for the projects, they would have backing from their leaders."
In the afternoon all the second line managers attended an action learning training to begin developing new insights and tools to address their challenges. The training topics included:
How people work: Insights on motivation, collaboration, and engagement. The Brain: The value of emotions + rationality working together. Change: The Change MAP process as a framework for workplace performance.
Finally, the end of the day focused on the Vital Team process. This is a methodology Six Seconds uses to initiate change. The methodology involves teams working on concrete projects for a limited time (usually 90 days or less).
Three key objectives were presented:
Increase engagement of people. Learn and practice new skills in a "hands on" process. Increase value for people - through people. The managers were invited to volunteer for the process. As the HR Director said:
"It was very important for people to be able to choose whether or not to participate in the next step of the project. If someone wanted to stay out, no problem. We were giving an opportunity to people and we only wanted to include those who were convinced about the value of this effort. The managers' Initial was a great deal of curiosity, careful consideration of expectations, and then, above all, a lot of enthusiasm."
In the end, all of the managers elected to join this project and went onto the Activate phase.
In this phase, project groups were created using Six Seconds' "Vital Team" methodology. Then, following the Change MAP process, teams worked to create value for people, through people.
The Vital Team process was used to form three small groups for the pilot projects. The goal is a team that's divergent but also aligned, balanced but also dynamic. The process includes:
Skills: Review of curriculum vitae of each person to make sure necessary job skills were present in each group.
EQ: Measure emotional intelligence using the SEI assessment to create a mix of competencies and Brain Styles.
Organizational Roles: Each participant answered a brief questionnaire about roles that people have within the organization. The survey identifies who are the leaders for passing information, strategic advice, technical and operational support, new ideas and unconventional thinking, personal connections and role modeling.
Three teams were formed to maximize the level of diversity in terms of Brain Style, leadership, competences and skills. Why? This method is based on a belief that divergence is a pre-condition for innovation. The opportunity to see current reality from different point of view is one of the competitive advantages of a team.
In the Vital Signs framework there are three key ingredients of change: Imagination, Exploration and Celebration. The team meetings were structured around these elements:
All the project teams met together in a plenary session for an hour to review the goal: Create value for people, through people - and to explain the stages of the project. Then, each small group met for two hours with a facilitator.
The first two-hour meeting included:
Present SEI Group Report in order to start thinking about the dynamics that we could experience working together, discuss about how we can use the strengths of the members to be an high performing team. Imagine what an organization has to do to really improve the value for people. Create metaphors for a highly people-centered company. Consider what other organizations (in every sector - business, sport, not for profit) already do. Define metrics of success at the end of the project. Assignments were given to:
Read excerpts from INSIDE CHANGE focused on engaging people in change. Research other organizations to see how they engage people.
Again, a Six Seconds' facilitator led an hour-long plenary meeting of all teams to check-in on the process. This was followed by 2-hour meeting of each team.
The second day meeting started with a review of the assignments. Next, the groups each identified at least three practical ideas of what they could do now in Komatsu to leverage the value for people. At the end of the session, each group had agreed on one idea to pursue.
Team 1: Knowledge Sharing.
This group designed internal training courses to explain the various business functions in Komatsu and share who does what within the organization. To enhance understanding of the business' purpose, each employee would have a chance to try the machines the plant builds.
Team 2: Service Desk.
Group two planned a process where internal and external experts could help employees with various needs (such as financial planning, tax consulting, insurance and bank assistance).
Team 3: Performance Assessment.
This group decided to revise the internal performance management system to create more participation. They developed a "360" feedback process to include supervisors, colleagues, and co-workers in performance appraisal.
Assignments were given to:
Create a prototype plan of the project and collect feedback. Read a collection of articles and tips from www.6seconds.org that were emailed weekly about team projects.
The third meeting started with a presentation of the prototype to the HR Director to obtain a formal "ok" to go ahead with the experiment.
Next, the teams revised their plans and prepared for a presentation to the first line managers, which was the plenary session at the end of the day.
The next month was dedicated to the trial of the prototypes.
Francesco Blasi's comment on the process: "The teams showed great enthusiasm and really wanted to achieve the goal. The initial enthusiasm was also fueled a healthy rivalry between the groups. There was a strong team spirit within each group and very positive energy was created."
After the month-long pilot of the three projects, the Reflect phase included surveys to employees to give feedback about the three projects, a repeat of the TVS assessment, and a final conference with all managers.
In the post-assessment of the TVS, as shown below, the there was a dramatic improvement in engagement.
All employees at the plant were invited to give feedback on the three projects through a brief, anonymous survey as "internal customers" of the three projects. The employee survey showed around 90% customer satisfaction, with the "Service Desk" winning the highest ratings. These high scores are a signal that the managers did, in fact, create value for people - through people.
In post-assessment of managers on Team Vital Signs, the overall engagement index increased from 33% to 70%. The percentage of people in the "Engaged" category shifted from just over 8% on the pre-test, to 50% on the post-test. At the same time, the percentage of disengaged dropped from 41.6% to 9%, representing a large-scale shift in attitude.
Meanwhile, the plant's efficiency scores improved by 9.4%, demonstrating an important link between increased engagement and the bottom line.
Results on each scale also improved dramatically, as shown in this graphic, where post-test scores are in red:
Blasi summarizes the results as follows: "The key lesson is in the approach used. Managers in the project experienced something new, and then, on their own initiative, they started to utilize the method in communicating and managing their employees. This is the real test of any training: Do people start to use what they learned? Now we need to spread this methodology to a wider audience, but certainly it's clear that things have changed for the better."
One specific example Blasi identified is the contagious effect of a positive team experience. "Looking at the environment in the trainings, people felt good - it was practical, but also warm. They then worked to re-create this experience for others. And, in my opinion an added value, we can definitely see that for many people involved, the word 'emotion' is no longer taboo."
The study is based on a small group of managers, but it shows that effective teamwork has a significant effect on the larger community. Using an "emotionally intelligent" process for building and supporting teams seems to work.
Blasi concluded: "First of all, a very banal lesson: if you do something you can obtain results, but if you do nothing definitely you will not get anything.
Every change is a risk, and taking about a 'taboo' subject such as emotions in a very technical organization does seem like a risk! But it's a basic idea: if we have people staying in their comfortable culture, they will not think differently. We need to ask them questions and to allow them to see from a different point of view. This provides another lens for them to see their everyday behaviors.
I am not saying all, but many have understood this and are starting to realize that they have an impact on their people. Emotions are real, even if you can't touch them or see them. they touch others in a powerful way. For me, this awareness is the revolutionary thing that has happened."
Three key findings from the Komatsu project:
The lesson was precisely the approach used.... it was great to see people utilize the method managing their employees too! - Francesco Blasi
Link to article published on Six Seconds Global