On that cold night last February, Overly Manufacturing joined the most far-reaching economic trend of the 1990s, the restructuring of the American workplace. From Maine to California, regimented, standardized mass production is out. Flexibility, quality, low costs and quick response to customer needs are the orders of the day. To achieve those goals, employers big and small are enlisting Armed frontline workers as active participants in rethinking the business, organizing the work and even hiring new employees (page 48). Washington is enthusiastic, too: Labor Secretary Robert Reich insists that worker participation is vital to improving the performance of U.S. business, and the Clinton administration’s new commission on employee relations is looking at ways to promote it. The real battle over worker empowerment, however, is taking place not in Washington but in thousands of workplaces. There, tumult reigns as bosses used to giving orders and workers trained to follow them grope toward a new style of management. “It’s like Pandora’s box,” Harts says. “You open up the door and everything comes out.”
The poster children of the move to worker empowerment are household names like AT&T, General Electric and Hewlett Packard. For these leading-edge companies, there is no alternative to radical change: foreign competition is so intense, customers’ quality demands so stringent and product development so fast that a traditional hierarchical organization simply can’t keep track of it all. But most Americans work in very different circumstances, far from the leading edge. The success of these small factories and machine shops, construction firms and service companies is even more crucial to America’s economic future than the sagas of a few high-technology superstars, because smaller companies are where the new jobs are. As Overly Manufacturing’s story reveals, transforming a small company can be as tough as transforming an IBM-and for the people involved, it can be every bit as traumatic.
There’s nothing high tech about Overly’s business. In an aging red-brick plant in the mountains of western Pennsylvania, the 105-year-old company makes doors for laboratories, dormitories, nuclear plants and government vaults, as well as metal roofs for structures like the Astrodome. Each door is custom designed, but the manufacturing process is pretty much unchanged since the 1950s: workers weld metal members to a steel skin, lay insulation around them, weld the other door skin on top and attach knobs, locks and hinges. Customers, mostly construction contractors, don’t demand electronics-industry precision. Fast delivery isn’t an issue, either. No one buys a $1,000 door on the spur of the moment.
Deep trouble: When brothers Terry and David Reese bought Overly from its longtime owner in 1991, they quickly made clear that they intended to change things. The Reeses envisioned building the staid, $12 million company into a $50 million company, and they believed that Overly’s authoritarian, nose-to-the-grindstone culture couldn’t accommodate such growth. They broke with tradition by giving workers monthly sales figures and quarterly financial reports to help them understand the company’s woes. Harts, the 41-year-old door-industry veteran who runs the operation, told anyone who would listen that the business was in deep trouble. With construction slow, other doormakers were entering Overly’s niches, and prices had fallen by half. Articles in the business press convinced him worker empowerment might help.
Four months ago he took the plunge, naming a team of a dozen designers, salespeople, welders, press operators and plant foremen and giving them one assignment: take the company’s new, low-cost method for making sound retardant doors and get it into production. After a few days of training in teamwork, the members scoped out the task-and found it far more complex than any of them had imagined. Where to put the line? Team members found ways to eliminate piles of metal taking up floor space. Then a consultant suggested putting the entire operation in one small area and moving workers among the different jobs. The team was enthusiastic, but some supervisors and coworkers were not: having press operators install sound insulation would complicate relations with the Steelworkers’ union. Production planning got complicated, too. While the team had figured on building doors no wider than four feet, salespeople were bringing in orders for larger doors. “It’s nice to talk about, ‘Let’s make only 36-inch and 48-inch doors, ‘but that’s not going to happen,” interjected designer Bill Hugus, the team leader, at the group’s weekly meeting. When the equipment arrived, the first doors off the new line took far too long to assemble, blowing the cost projections.
Things were even more tense elsewhere in the plant. A separate team had taken on one of Overly’s chronic problems, backups in the shop that makes heavy bank-vault and blast doors. After three months of discussion, the welders, engineers and salespeople proposed installing an overhead crane, allowing welders to move two-ton doors without long waits for a lift truck. The objections were instant. How much time would be saved? Isn’t the roof too low? Wouldn’t individual welders hog the crane? In management meetings, executives’ reviews were scathing. Instead of praise, the team received an unwanted assignment to gather yet more data. The discouragement in Overly’s sole conference room was almost palpable. Said Ken Guidas, a second-generation Overly welder, “It’s going to take a lot longer than anyone thought to get it accomplished.”
‘Atom bomb’: If these first stabs at worker participation were frustrating to Overly’s workers, they were alarming to managers. “There’s so much going on it’s like an atom bomb ready to explode,” said production manager Rick Brown, who came to Overly as a draftsman 16 years ago. Suddenly, everybody had ideas and suggestions. Telling the troops to knock it off and get back to work was no longer an option. Managers saw the company spiraling into self-directed anarchy. “I know there’s a customer there who needs his product and I have responsibility for getting it to him,” fretted plant manager Mike McConville. “I knew I could get it to him. I don’t know that anymore.” Gene James, the bearded 48-year-old who runs the company’s computer systems, saw confusion spreading fast. “There’s some vague idea that Overly wants to become a new democratic organization, empowering people,” he said. " But we’ve lost the old structure before the new structure is in place, and the chaos scares the shit out of me." Such hesitations only added to workers’ doubts about the depth of Overly management’s commitment to change. “Every time we came up with what we thought was a good idea, somebody higher up in the company thought it wasn’t a good idea,” complained Joe Smith, a computer programmer. One team even resorted to guerrilla warfare. After managers nixed its proposal to scrap the cards that engineers used to record the time spent on each job, the team arranged to collect the cards-and store them under a desk. Months elapsed before managers realized that the supposedly vital data weren’t being logged into the computer.
After four months, teamwork no longer seems like such a hot idea to many at Overly. “Ideas are presented to upper management, and we don’t know how fast they’re going to be implemented,” says union leader Tim Crossman, a press operator. “That’s probably the biggest problem we have right now. Things are put on the back burner.” Orders are slow and some white-collar workers have been laid off, souring the atmosphere. Although the union has filed no objections, older workers are resisting the pressure to learn several jobs. Most confusing of all is the slowly dawning recognition that the chaos will have no end, that being an innovative, high-quality, low-cost manufacturer is not a one-shot effort. “We upped the hours, increased sales and thought we were doing the right thing,” says production manager Brown. “They said it wasn’t good enough. People aren’t sure now what’s expected of them.” Some are ready to dump employee involvement altogether.
Co-owner Terry Reese counsels patience. “It takes a while, especially when you’ve been in an environment where it’s ‘Sit down, shut up and do what I tell you’,” he says. And the chaos has not been without payoffs. Perhaps the biggest has been better communication between the blue-collar folks on Overly’s plant floor and the engineers upstairs, who, thanks to team meetings, are paying more heed to the difficulties of manufacturing their designs. The myriad small suggestions have helped to shave costs by reducing inventory, improving storage and repositioning equipment. And earlier this month the first regular production run rolled off the new-product team’s sound-retardant door line. “The product looks great!” Harts exults. “It’s going to knock the market dead.”
Maybe. Like many another company, Overly has learned that a total corporate makeover doesn’t guarantee profits-and that a partial makeover is an oxymoron. But by putting its emphasis on using people better instead of loading up on fancy machinery, Overly is riding one of the most promising trends in U.S. business today. Amid his company’s turmoil, Terry Reese offers a prediction: “In 10 years, anybody who runs a business on the hierarchical model isn’t going to be in business.” A lot of futures depend on his being right.
