Members of the Manufacturing Leadership Council gathered at Campbell Soup’s 611,000-square foot Pepperidge Farm plant in Denver, PA, last week to see how the state-of-the-art facility makes such iconic brands as Milano cookies and Goldfish crackers and also to discuss a pressing industry issue – how to create a culture of employee engagement.
The event, co-hosed by the ML Council and Eric B. Fidoten, Vice President, Global Supply Chain Strategy & Operations Excellence, at Campbell, and a member of the ML Council’s Board of Governors, enabled Council members to observe the often-complex processes used at the plant to produce bread, rolls, cookies such as the Milano brand, and Goldfish crackers.
From preparing the basic dough used in the bakery products to cooling finished cookies as they made their way down a vast production line, Council members witnessed what was at times the operation of a highly automated facility. At other points of production, however, the process had the personal touch of workers manually inserting rolls or cookies into the special Pepperidge Farm bags that are so familiar to consumers.
After the 90-minute tour, Council members and invited guests took up the question of how to create a corporate culture that fosters better employee engagement, crucial to not only improving any company’s performance but also critical for attracting new talent in an industry with an aging population and difficulty in luring young people to join its ranks.
A 2012 study by Gallup, called The State of the American Workplace, found that only 30% of employees in surveyed companies were “engaged” in their companies’ business, with 52% “not engaged” and 18% “actively disengaged.”
One of the key factors in the engagement equation is how companies are structured and managed. Companies that tend to be more hierarchical with command-and-control management tend to have less engagement. But the tide may be shifting. A survey this summer by the Manufacturing Leadership Council showed that 35% of surveyed companies had “highly collaborative” structures and 51% had “somewhat collaborative” structures. Only 11% reported traditional command-and-control environments still in place.
Structure and management policy is critical to improving employee engagement, which affects retention, productivity and even a company’s operating margins, as Council members heard during the roundtable discussion.
Better employee engagement – part of creating a high-performance organization – can yield very tangible results. Council members learned, for example, that only 17% of employees that are highly engaged are also high retention risks, compared to 58% of disengaged employees. Companies that have sustained levels of high engagement with their employees enjoy operating margins that are three times higher than those with the lowest levels of engagement. And when it comes to productivity, those organizations that have high levels of engagement only lose an average of 7.6 days of productivity per year, compared with 14.1 days for the disengaged.
Clearly, better employee engagement can pay off. But what exactly is “engagement”? As Council members heard, engagement is all about commitment, as opposed to compliance. It is about “want to” instead of “have to”. Engagement occurs when an organization shifts from operating based on rules to operating on principles, when peoples’ attitudes transform from a personal job focus to team goals, when employees transition from being observers to players, and when an organization changes from being bureaucratic to being agile.
To become a high-performance organization with a high level of employee engagement, a company must do what is, in essence, some basic blocking and tackling. This includes setting a clear vision, clearly articulating an action plan, putting in place robust review processes, and establishing accountability for all.
That sounds simple enough. In fact, it may be too simple. Sometimes companies need a motivation – which one attendee at the roundtable described as a “burning platform for change” — to do things differently. And without a solid motivation – usually a lack of performance – it becomes much harder to get the idea of becoming a high performance organization adopted.
The linchpin, of course, is leadership. Manufacturing executives have to make the case for change, support that change over time, and enable their employees to succeed with the right structure and policies to encourage engagement and the performance improvements that engagement can bring.
In the end, it is all about people and adaptability. “You can change without making progress, but you can’t progress without change,” said one Council member.
The Manufacturing Leadership Council’s next plant tour will be at Lexmark International in Boulder, CO, on December 3. The topic for the roundtable discussion will be Big Data. Register now at http://www.mlcouncil.com