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TEAM-BASED ORGANIZATION
REDESIGN AT CMCO*
RAY DYCK, DESIGN PRACTITIONER,
TORONTO, CANADA
SO WHY WOULD A PROFITABLE AND SEEMINGLY healthy company
put itself through the trauma of a redesign? Growth and a sustainable
competitive advantage seemed like two pretty good reasons for CMCO to
take change to heart. Not a bad business decision for this international
company, which has instituted multi-skilled, self-regulating manufacturing
work teams, along with numerous modifications to support systems and
practices. Significant improvements have been realized in productivity,
costs, quality, cycle time, equipment utilization, and employee satisfaction.
CMCO has proven to itself and others that even companies that appear to be
highly effective need to be constantly on the lookout for opportunities to
significantly improve performance. The key ingredient is visionary
leadership with the capability to articulate the vision and mobilize the
workforce. Merely improving the way in which things are now done is
insufficient. A new model, based upon explicitly different values and
principles, needs to be developed.
CMCO’s BEGINNINGS
CMCO, a stand-along subsidiary of PARENTCO*in the 1990’s, provided
a broad range of services, including design, prototyping, assembly , testing,
product assurance, supply chain management, world-wide distribution and
after-sales service with annual sales in excess of $3B. Customers included
industry leading original equipment manufacturers (OEMs), primarily in the
computer and communication sectors. Since mid-1996, CMCO had grown
from an organization with 2500 employees in 2 facilities to one of over
15000 employees with 26 manufacturing and design sites across North and
South America, Europe and Asia.
In the mid 1990’s, stimulated by the realization that significant changes
would be the way to grow and sustain competitive advantage, an
organizational redesign strategy was initiated at the main facility. It was
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* Fictitious Names

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essential to reduce costs, accelerate the rate of new product introduction,
and generally increase response capability in addressed any issues
encountered in day-to-day activities, at every level, which impeded goal
attainment. In addition there was a need to increase manufacturing capacity
on their main site, with no available real estate to expand.
After considerable exploration to select a change process, CMCO elected
to follow a socio-technical systems (STS) design model. This approach was
chosen because it explicitly acknowledged that the objectives could not be
achieved through technological improvements alone. It was concluded that
to succeed, it would be necessary to focus equally on non-technical elements
to establish a more competent, high-performance, high-commitment work
environment. Furthermore, STS was: purpose-oriented … revolving around
a new set of Values and the business mission (see chart below), based upon
a proven methodology, and highly participative.<Interesting note: STS was
introduced to senior management by a university summer student who took
an STS course as part her Engineering curriculum>
THE IMPLEMENTATION STRUCTURE
It is important to understand the context in which this effort was
initiated and conducted. At the time of commencement, since CMCO was in a
very healthy and profitable state, it was difficult for many to appreciate the
need for change. In addition, there were many competing priorities which
took attention away from this undertaking. Most significantly, CMCO was in
the process of being spun off from being a subsidiary company of
PARENTCO. This necessitated a need to focus on establishing an
independent business, expanding the customer base, and rapidly developing
a more global presence.

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It is common in large organizations to sequentially roll out a redesign,
starting in one or two areas and working through the remainder as earlier
ones get underway. This approach is generally followed because of
insufficient experienced resources to facilitate a larger process and to allow
some learning to take place in a smaller portion prior to expanding the
scope.
At CMCO however, because of a sense of need, it was decided to tackle
the entire site system at once (the site had 2300 employees at the time). The
following structure was established for this purpose:
A Steering Committee, with 80% of the senior managers
representing all functions. They met twice per month to guide the
process. Its role was to designate business objectives and
boundaries, participate in priority setting, provide resources and
approve recommendations.
A Central Design Team, comprised of people representing all areas ,
met for 8 hours per week for the purpose of ensuring consistency
and dissemination of learning across the site(s). Site-wide initiatives
were coordinated by this team.
A Resources Team, consisting of 9 members, was formed to act as
facilitators and internal consultants. This group received extensive
training in STS design methodology and consultation skills, and was
periodically aided by external experienced people.
21 Design Teams, made up of 5-15 representatives from the
function being redesigned, such as the Power Manufacturing
Business Unit, Finance, Process Engineering, Maintenance, Facilities,
etc… These teams were established to identify the areas for change,
based on evaluation of compliance with CMCO’s Values (which they
also helped develop). These fell into 2 categories: unit-specific and
site-wide.
Numerous Study Teams were formed to complete detailed analyses
of the initiatives identified by the Design Teams, and to develop
recommendations and implementation strategies for redesign.

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After the Steering Committee was formed, the following Design Model
was followed.
THE DESIGN MODEL
Twenty Awareness Heightening sessions were held with employees –
each session 8 hours in duration. These sessions were vital in helping instill
the case for change. Of 2300 total employees, nearly 1000 volunteered to get

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involved in the process on either Design or Study Teams! A subsequent
session was then held for each functional area, attended by all the
volunteers for that function. They were given training in giving/receiving
feedback and then proceeded to select their Design Team from amongst
themselves, after agreeing on what representation meant to them. A ground-
breaking event which signalled the company was serious about doing things
differently. In this manner all 21 Design Teams were selected. Volunteers
not selected became candidates for Study Teams in the future.
The first task of the Design Teams was to help develop the Company’s
Values. A well defined process was followed that was highly participative
and took about 6 months elapsed time, culminating in a 3-day meeting
between the Central Design Team and the Steering Committee. Each
statement was thoroughly debated, resulting in a high level of shared
understanding for the resulting final Values Statement. This became the
nucleus of the entire redesign.
Each Design Team then began to Identify & Prioritize Opportunities.
This started with a scan of each area, mapping out the process flow,
identifying key variances and gaps to the Values, and generally highlighting
competitive gaps and business opportunities. At this point a Visioning
Session was convened, as outlined below.
KEY ELEMENTS OF A VISIONING SESSION
Start off with:
A senior management presentation outlining required organizational
capabilities and compelling business reaons;
A review of current processes and inherent shortcomings;
Forming 2 groups: each identifies the required characteristics of an
organization that would satisfy the mandated capabilities.
Next, in a plenary session, merge the two visions:
Referring to the merged vision, identify initiatives that must be
fulfilled to achieve the desired state;
Form a small group for each identified initiative to create an action
plan including:
o Expected outcomes;
o Resources required to fully develop the initiative;
o List of dependencies for the initiative to be successful;
o Timeline for completion.

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Form Study Teams to complete the design and establish an
implementation, monitoring and follow-up process.
These sessions took one to three days, depending on the complexity of
the area being redesigned and were attended by 20 to 35 people of various
disciplines. Through a number or tightly facilitated plenary and small group
exercises, the ‘objective’ redesign questions, based on data collected during
the scan , were addressed – such as:
What are the conditions which must exist to reduce
o Manufacturing Cycle Time from 5 days to 8 hours?
o Defects by a factor of 3, and
o Maintenance response time from 30 to 5 minutes?
This led to identification of a series of initiatives to be dealt with by
additional Study Teams. Rather than go through the process of detailed
variance analysis, a quick check was done to ensure all key variances were
addressed within the initiatives cited. If not, adjustments were made.
These initiatives fell into a number of categories. Many were technical
in nature, such as equipment layout and process modifications, along with
one titled JOB REDESIGN. The elements covered in job redesign included
identification of:
Skills, information and authorities required for rapid response;
Necessary resources: tools, people;
Non-Value added steps in methods and procedures;
Policies and practices consistent with the Company’s Values;
Administrative and leadership functions to be transferred to
work teams to support self-sufficiency;
Roles of management and support staff;
Equipment layout revisions to support the work team concept.
Social issues were also highlighted during the Visioning Sessions. These
were augmented through an exercise whereby all employees were involved
in listing issues of non-compliance with the Values. This approach was
considered superior to using the general sociological variables of GAIL (Goal
Attainment, Adaptation, Integration, Latency) as a reference, because it
utilized the self-developed Values of particular significance to this
organization. The social items were addressed by the Job Redesign Study
Teams.

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INTERIM PROGRESS CHECK
2 years into the redesign effort, over 400 employees had been involved
directly in either Design Teams or Study Teams. Over 30 Study Teams had
been initiated … and progress was being made.A new organization structure
was implemented (Customer Focused Teams), a new approach to
Operational training was introduced, a new open job posting system was
established, alternate work schedules were implemented, performance
management and development systems were aligned to the Values, and
many support area redesigns were completed (more detail on these changes
will follow). In addition, a Social Systems Design Implementation Guide
(SSDIG) was developed to help implement effective, multi-skilled, self-
regulated work teams..
HOWEVER, improvements in site performance (operationally and
financially) were lagging senior management expectations. Specifically in
Manufacturing, recommendations on changes to physical layout/equipment
and to operating methods were not getting traction. Concerns were also
raised about how robust and replicable the proposed solutions would be,
recognizing there were over 20 manufacturing lines on the site. Executives
wanted to bring in a 3rd party with a distinct change process (based upon
Lean) to increase focus, enhance and expedite these improvements., After
conducting an assessment of the STS process vs the 3rd party process, the
STS Resources Team proposed to combine these two efforts as follows::
Job Redesign Study Teams (JRST’s) would work alongside new
‘Lean’ teams made up of representative employees from the
business area in focus, including some JRST members. These
teams would be augmented with 3rd party Lean resources and
then commissioned to achieve 40% improvements in cost, cycle
time, and quality while also focusing on maintaining adherence
to the company’s Values. Both JRST and Lean teams would be
facilitated by the Resource Team.
JRST and Lean teams would then meet regularly together to
discuss recommendations and consider tradeoffs/optimization
opportunities between, for example, increased automation or
standardization and quality of working life. The final result
would be shared recommendations that everyone could support
These final recommendations for each manufacturing area
would be assigned to a dedicated implementation team (which

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came to be known as SWARM teams). They were charged as
follows:
The SWARM Team:
Mandate: To accelerate the implementation of SSDIG and
changes to cell layout and operating practices … towards the
achievement of specific performance objectives (cycle time,
quality, cost, workplace health) in alignment with the company’s
Values
Expected Outcomes:
o Design and implement the physical cell layout
o Get the work team up and running
o Demonstrate measurable progress towards targets
Composition
o Manufacturing area for that Business Unit– all shifts
o Engineering,, Supply Chain, Maintenance Support
o Internal Consultant (Resources Team)
Implementation Approach
o Short term (approx 3 months) – get the implementation
moving
o Intensive
o Clear Accountability
A joint deliverable across all the JRST’s was an Operations 2000+
document which articulated new Operating Practices, Cell Layout Principles
and Continuous Improvement programs for the site (heavily influenced by
Lean and the company’s Values). The scope included the following:

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Based upon this OPS 2000+Guide, an early Manufacturing cell
prototype was developed as follows:
Once final recommendations were made and approved, SWARM teams
were formed as above and proceeded with implementation. Below is an
example of how progress was tracked – which goes beyond the 3 month ‘get
the cell up and running’ mandate of the SWARM teams. Note how focus was
given to implementing jointly the Operating Practices (per OPS 2000+) and
the team formation/development items (per SSDIG).

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SWARM TRACKING

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OUTCOMES
The process has led to a number of organizational changes. At the
manufacturing level, work teams have been established. These are groups of
15 to 40 people, working in shifts around the clock, responsible for the
entire process from receipt of kitted parts to packing of final product. These
teams are characterized by the personnel with high levels of multiple skills,
capable of conducting their own inspection and repair, maintaining their
equipment, and carrying out significant leadership and administrative
functions (eg. Hiring, training, performance appraisals, workload/staffing
plans, etc). Team development is supported through extensive technical,
interpersonal and managerial training.
Other initiatives introduced at the site level to support these changes
include:
Skills Transfer to Manufacturing: Responsibilities and skills
have gradually been shifted from support functions, primarily
engineering, supply chain management, and maintenance to
improve response capability in dealing with technical and
customer-related problems.
Customer-Focused Teams (CFTs): Teams have been established
that include most of the functions required to support individual
customers. A CFT Operations Manager leads the team, which
includes a customer account manager, manufacturing
personnel, process and quality engineering, and supply chain
management. There are plans to add other functions to support
the customer with the intent of creating a ‘no excuses’ team that
will have the capability of satisfying all of the customer
requirements.
Modifications to Operational Training: An enhanced training
process has been introduced. This includes appointment of 10
new site sector trainers who are responsible for preparation
and delivery of training material, along with continuous
assessment of employees qualifications. This is supported by a
more structured, planned approach to provision of training.
Skills matrices have been developed, identifying skill and
knowledge requirements for each individual on the
manufacturing work teams, and a training plan established to
achieve these objectives. An array of social skills training was
also made available to all teams (eg. Communication, giving and
receiving feedback, conducting effective meetings, decision
making, problem solving, facilitation, conflict resolution).

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Introduction of an open Job Posting process: One of the key
issues identified during the social system analysis was a concern
expressed by employees that they were unaware of promotional
and developmental opportunities available.
Increased emphasis on housekeeping and ‘showcasing’:
Appearance of facilities is of utmost importance, particularly
since existing and potential customers are frequently touring. A
Study Team established standards and put in place a monitoring
mechanism with designated accountability at various locations
across the site.
Improvement in Data Transfer from Customers: Converting
specification data from customers into formats to permit
scheduling, parts acquisition, manufacturing and shipping was a
painstaking task. A system was designed to electronically
process the data, with resultant significant improvement in
time, effort and accuracy. This has contributed substantially to
being more responsive to rapidly changing customer needs in
new product introduction – a mainstay of the contract
manufacturing business.
Alternative Work Schedules: A number of work schedules have
evolved over the years in an effort to accommodate a large
contract workforce with varying needs. This was found to be
quite disruptive in a number of cases, impeding transfer of
information between shifts, and balance of skills across all
shifts, and often necessitating excessive overtime coverage.
After review of many options, it was decided to move to a three-
on/four-off, 12-hour schedule.
New Campus Recruiting process and materials
Aligning Performance Measurement and Recognition Systems
with the Values
Process improvements
o Supply Chain Management (on-time-delivery), Product
Costing, 7x24 IT support, Component Qualification,
Consumables, Hiring, Shift Crossover, New Product
Introduction, Spare Parts management, Design Exchange
with Customers, Non-conforming material handling, etc.

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As a consequence of this redesign effort, considerable performance
improvements have been realized. As a typical example, in the business unit
where these changes were initially implemented:
Productivity has doubled, with the consequent increase of
manufacturing capacity without additional labor requirements
or capital expenditure.
Manufacturing cycle times have been reduced 8-fold, with
resultant substantial decreases in work-in-process inventory.
Quality, as measured by defects per unit, has improved by a
factor of 2.
40% of Controllable Costs have been saved
Significant inventory savings realized
The physical factory layout also changed as follows:

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Such improvements were seen across every business unit and support
area. In addition, surveys have revealed a substantial increase in employee
satisfaction related to the areas where the redesign has focused. Comments
include: “I’ve waited 27 years for this sort of thing”, “What I like about the
STS process is that the change has been driven by the employees – those
responsible for execution as opposed to management dictating how it’s
going to be”.
The challenge for CMCO is now to institutionalize the changes
implemented at the site, and to diffuse the experience and learning from this
application to a multitude of new acquisitions with diverse needs and
cultures. CMCO is sharing its lessons learned throughout the entire
company: that merely improving the way in which things are done is
insufficient. A new model, based on new Values, needs to be developed.
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