The Learning Initiative at Mighty Motors

The Learning Initiative at

Mighty Motors Inc.

NOTE: Only the first chapter of "The Learning Initiative at Mighty Motors Inc." is available on-line. To order the complete version of the paper, see Ordering Information

January 23, 1998

Researched and written by

Marty Castleberg and George Roth

Edited by Virginia O'Brien

How to Read a Learning History

Learning from the Learning History

This document is designed to spark conversations that will lead to collective learning. As you read this history notice your reactions and write them in the empty spaces and the margins. These notations will serve as "markers" for later conversations.

A learning history describes what happens in the voice of participants. It not only documents the "hard" facts and events, but it also focuses on what people thought about the event and how they perceived their own actions, as well as the actions of others. A learning history unveils the differences in people's perceptions. By "hearing" all the voices and recreating the experience of "being there," it helps you to understand what happened in a way that enables you to make more effective judgments.

The objective of a learning history is to transfer and diffuse participants' learning. Therefore, when you read this document we ask you to do two things:

Use it as a tool for better conversations. Read the document simultaneously with other members of your team. Plan at least a two-hour meeting to talk about what happened in the story, and why and how it applies to your own organizational improvement efforts.
Take on the mindset of a beginner. "Listen" to what people said in the document. Try to suspend your judgment and "hear" why they did what they did. Don't automatically condemn the people who made mistakes, or assume you know why the mistakes occurred. Yet notice how you react. Write your reactions in the white space. Think about how this story is similar to, and different from, the issues that face your team. Be prepared to talk to your team members about your reactions and thoughts. Be prepared to learn from one another about the implications this history has for the efforts of your own group.

Titles and Subtitles Cue You to Shifts in the Story

Several different styles of text exist in this "jointly-told" tale and there are no set rules for reading it. People vary in their approach to reading a learning history. Text running across the width of the full page provides the context and background for each part of the story and leads into the narrative in the two-column format. Some readers skip back and forth between the right-hand and left-hand columns; others read one entire column before switching to the other.

In the left-hand column, you will see critical observations and key questions from the learning historians. These comments show why the right-hand text was chosen, and help you apply it to your own situation.

Learning History Author: The right-hand column contains the primary narrative. You will see each paragraph in the right-hand column credited to a particular individual, who tells his or her part of the story as in the following example taken from this learning history.

Vice President: This team's work was not about changing product development; it was about introducing organizational learning. But we never talked about organizational learning, we only talked about product development. So, at some point in our struggle over direction we said there were some milestones to be met, and promises to be kept, and one of those was the learning lab.

Sidebar: Occasional boxed passages in sidebars contain digressions and explanations that would otherwise slow down the narrative. For instance, sidebar passages might describe a particular learning tool, or an aspect of the business model that turned out to be significant. Refer to sidebars for answers to questions about details in the main text.

Learning is not always an easy process. It involves taking on the mindset of a beginner, letting go of the known, and being willing to try something new. When people try new behaviors, mistakes are inevitable. A major problem in business, however, is that mistakes are often covered up and become undiscussable. The people who tell their story in this learning history are no exception. They experienced business success and they made mistakes. By reading their story you will have an opportunity to learn from their experiences.

HOW TO READ A LEARNING HISTORY
LEARNING FROM THE LEARNING HISTORY
TITLES AND SUBTITLES CUE YOU TO SHIFTS IN THE STORY
TABLE OF CONTENTS
CHRONOLOGY OF EVENTS
NOTICEABLE RESULTS

1. BACKGROUND AND INTRODUCTION

THE BEGINNING OF LEARNING
"LEW": THE DILEMMA OF THE PRODUCT DEVELOPMENT PROCESS
THE START OF A PLAN: PHASE I
USING LEARNING TOOLS: THE KJ DIAGRAM

2. THE INFLUENCE OF AN ALIEN FORCE

THE HERO AND THE REBEL ARTIST
REFLECTION: A POOR FIT FOR REBELS
CREATING LEARNING LABORATORIES
DISCOVERING ARCHETYPES
TIME FOR THE LEARNING LAB DRAWS NEAR
THE LEARNING LAB: IN SEARCH OF A LEVER
A HIATUS, BUT THE EFFECTS OF LEARNING ARE EVIDENT

3. SHARED VISION: CREATING VISION TOGETHER

CONNECTING THE LEARNING EFFORT WITH ORGANIZATIONAL CHANGE
THE PRODUCT DEVELOPMENT LEARNING TEAM (PDLT) FORMS
IT TAKES AN ORGANIZATION TO RAISE A BUILDING
ROLE CONFUSION
WAGING TRIBAL BATTLES
WHAT IS "OUR WORK?"
THE ORGANIZATION THAT BUDGETS TOGETHER, GROWS TOGETHER
AN APPROVED BUDGET CAUSES NEW ANXIETIES
A VISION QUESTION
THE VISION DEPLOYMENT MATRIX: A NEW TOOL OR ANOTHER DISTRACTION?
OWNING THE VISION
BEYOND PATTERNS: DIGGING INTO CULTURE

4. OUT OF THE LOOP: DIFFICULTY IN DEVELOPING THE RIGHT RELATIONSHIPS

MISSING THE VOICE OF KEY STAKEHOLDERS
MANUFACTURING IN MICHIGAN: A VOICE IN THE WILDERNESS
THE ROLE OF ASSUMPTIONS AND BELIEFS IN CONVERSATION
CLARIFYING ROLES AND CHANGING TRIBAL LEADERSHIP

5. REFLECTION: ARDUOUS, UNFAMILIAR AND UNREAL

FIRE FIGHTING ARSONISTS
THE "LEARNING WHEEL": FORMALLY INSTILLING REFLECTIVE ACTIVITY
REFLECTIONS ON LEADERSHIP AND LEARNING
PHASE III: "IT'S BEEN GOOD FOR ME PERSONALLY."
ROLLING OUT LEARNING

6. REFLECTION ON MIGHTY MOTOR'S LEARNING INITIATIVES

7. EPILOGUE

This chronology is provided to give the reader a sense of the important events at Mighty Motors as well as the activities associated with the learning project. However, the following time line is not meant to demonstrate a cause and effect relationship between events at Mighty Motors and MIT/OLC learning activities.

	1991	CEO reads "Fifth Discipline." Senior management attends core course. "LEW" diagram is created and introduced.
Mighty Motors is reorganized into collaborative leadership circles.	1992	PHASE I The first learning team is formed and uses learning tools to deal with the product development process. A Learning Lab is held for product development stakeholders.
A director of engineering is hired to redesign the product development process, and for the next two years he shares duties as co-leader with the vice president of engineering.	1993	A Follow-up session for Learning Lab participants is held at the Michigan site. The new co-leader of engineering joins with the MIT/OLC in working on the product development vision process.
The Product Development Center (PDC) is approved by the board. The first collaborative budget process, an extension of the leadership circle's activities, is completed. The PDC plans are re-sized and re-submitted to the board for approval.	1994	PHASE II The Product Development Learning Team (PDLT) is formed and the learning historian is introduced into the PDLT. The PDLT commits to spending one half day a month in reflection.
The director of engineering is named vice president of engineering. A partnering project is introduced to Illinois and Michigan sites. Visioning process is rolled out.	1995	PHASE III Mighty Motors hosts the OLC annual conference. MIT/OLC interventions and learning tools are used in other parts of the organization. Mighty Motors co-funds and participates in National Science Foundation research on sustaining quality improvments.

Noticeable Results

Every learning history includes a set of noticeable results. These are significant and measurable events that are described in an observable and tangible way. They answer the question: What evidence do we have that something noteworthy happened? Learning histories investigate both the "happenings" that result from learning efforts as well as the factors that contributed to those events.

The following noticeable results occurred at Mighty Motors within the span of a decade, however, they do not reflect a cause-and-effect relationship with the MIT-related learning efforts. These noticeable results are included here to provide the reader with a sense of Mighty Motors' overall business climate and accomplishments:

Between 1986 and 1994 Mighty Motors grew from $250 million in revenue to over $1.5 billion. Over the same period, the company's Compound Annual Growth Rate (CAGR) for net income was 49% while CAGR for revenue was 23%.
In 1991, a major structural change was initiated. Rather than a pyramidal, command and control structure, governance at Mighty Motors was divided into three leadership circles. A leadership board, with leaders from each area holding two year terms, became responsible for policy.
At the beginning of the 1990s, daily production rates were approximately 250 units per day. By 1995, the number was closer to 500, and the total number of units assembled for the year was over 100,000. The company planned to increase productivity to 200,000 a year by 2003. With all this expansion, however, the company was running out of production space, especially at the assembly facility in Michigan. Many motors, especially big ones, were backlogged for up to a year.

Other relevant events relating to the learning initiative and the efforts to improve the product development process include the following:

In 1991, Mighty Motors started working with MIT's Organizational Learning Center (MIT/OLC), and 10 top executives attended a core MIT/OLC course in order to develop insight into the concepts of organizational learning and to learn the use of learning tools.
The first learning team was formed to look more deeply into product development issues. It developed and conducted a three-day learning lab in October 1992, which involved major product development stakeholders from across the organization.
A new director of engineering was hired in 1993 to lead the organization through a change and growth initiative that would allow for an improved and expanded product development process.
The Product Development Learning Team (PDLT), led by the new director of engineering, was formed to focus on the reinvention of product development. The team continuously added people to its ranks with the largest expansion taking place in January 1996.
In 1994, the Mighty Motors board approved and began building a state-of-the-art product development complex in order to support corporate product development plans and objectives.
The collaboration of broad functional areas extended to management and union levels. Initial strides in working relationships between the vice presidents extended beyond the engineering and management functions to include unionized workers in manufacturing.
Mighty Motors hosted the OLC semi-annual meeting in the spring of 1995.
A grant from the National Science Foundation enabled the company to develop systems-thinking simulation software to examine quality and improve decision making. 1. Background and Introduction

This learning history tells the story of Mighty Motors' efforts to improve the way it produces great engines. It documents a joint learning effort between Mighty Motors Inc. and the Organizational Learning Center at the Massachusetts Institute of Technology (MIT/OLC). The intent of the collaboration was to enhance organizational learning skills and practices at Mighty Motors, so that the company could respond more effectively to an increasingly competitive environment.

Mighty Motors, started by four young men in love with engines, was created shortly after the turn of the twentieth century. In the following decades, the engines produced by the company proved to be extremely popular, and Mighty Motors expanded dramatically. Although more than 300 other engine makers came on the scene, they often quickly dropped out of the market, while Mighty Motors succeeded in riding the storm of wars, economic upheaval, changing tastes, and technological breakthroughs.

Mighty Motors' founders had a deep interest in learning. They took advantage of new ideas and put them to use inventing engines that remain standards today. They also learned how to position the company to take advantage of its volatile market. During the depression, Mighty Motors stayed afloat by exporting to overseas markets. It even sold off tools and technology to the Japanese - a controversial decision in retrospect, but one that helped the company survive. And while many other competitors collapsed during the 1930s, the improved styling of the housing on Mighty Motors' engines enabled the company to stand apart from its competitors. With World War II came a new engine design that brought the company out of the recession, and, after the war, yet another state-of-the-art design opened the door for a different breed of customers. In the 1960s, a new alliance resulted in an influx of capital and increased capacity, and an assembly plant in Michigan was converted, expanding production.

Expansion, however, caused quality problems. And fierce new competitors entered the market: Large, inexpensive imported engines were being dumped on North American shores by the Japanese. Sales dwindled and loans ran dry.

The executives at Mighty Motors worked feverishly. They successfully lobbied for a tariff that temporarily stopped the flow of large engines into the country, and they pulled an eleventh-hour rabbit out of their hat by finding new financial backing. In the early 1980s, they managed to pull off a leveraged buy-out of the company. Management made a renewed commitment to quality and focused its efforts on reduced inventory and greater controls. It learned how to get maximum benefit through minimum investment by involving employees, using statistical control methods, and reducing inventory backlogs. All of this was accomplished without buying much new equipment. As improvements were made, the company was poised and ready. It re-established itself on firm financial ground and had a solid product, but it needed more customers. A grassroots effort to identify, listen to, and maintain loyal customers was started, and the learning initiative for the product development process was set in motion.

Today, the small shack where the young men developed their first engine has grown into a major industrial facility. Mighty Motors currently maintains several facilities in Illinois and one in Michigan, where the company's primary assembly plant resides. Although the old neighborhood has changed significantly, one factor has remained constant: Meticulous attention is still paid to the creation of each engine. Mighty Motors' founders, grounded in their knowledge of mechanics and engineering, approached their work as artisans. The same holds true today: Pride and a certain mystique continue to be found among the people who work for Mighty Motors. Engineers speak proudly of their product - they're still in love with their engines.

The Beginning of Learning

At the beginning of the 1990s, most of Mighty Motors senior managers, had expressed concern, in one way or another, about the company's ability to keep innovating. Innovation was necessary in order to maintain Mighty Motors' market leadership, but a shortage of product led to lengthy discussions about the problems the company faced in product development. As the group examined the product development process, it discovered the following painful issues tended to impede progress:

Some products are designed and marketed in ways that create problems in the manufacturing process.
Production scheduling is unpredictable and often late, and the documentation trail is not always complete..
Poor planning at the beginning of processes results in intensive efforts at the end, and results don't meet original objectives.
New products carry over existing problems, and costs keep increasing.
Shortcuts and hurry-ups drain critical resources, and acquisition of parts and accessories is not timely.
Although capacity constraints and bottleneck problems are recognized, their causes remain unidentified.
Customers' wants and needs are not completely met.
Poor communication, the inability to listen, and lack of cooperation add to a problematic process.

At the same time that Mighty Motors was beginning to identify its problems with regard to innovation, Peter Senge, director of the MIT/OLC and author of The Fifth Discipline (see MIT/OLC sidebar), invited the CEO of Mighty Motors to join the MIT/OLC and become a sponsoring member. Since the CEO already had an interest in the disciplines of organizational learning, especially systems thinking, he accepted the invitation, hoping to help his organization grapple with the problems it was encountering. He sent 10 of Mighty Motors' top executives to the MIT/OLC's Core Course, a week-long residential program at which participants are exposed to the five disciplines of a learning organization - personal mastery, mental models, team learning, shared vision and systems thinking.

MIT/OLC

Peter Senge and his colleagues founded The Center for Organizational Learning in 1991 at the Massachusetts Institute of Technology (MIT) Sloan School of Management in response to widespread interest in the concepts described in the best-selling book, The Fifth Discipline. These concepts were developed and built on decades of research in system dynamics, group process, action science, and the creative process, as well as years of practical consulting and workshop experience.

Organized as a collaborative partnership between 20 member companies and MIT researchers, the OLC designed, implemented and studied the new learning processes it helped create. Through these processes, researchers tested theories and tools in realistic, practical settings in order to improve their theories and create even better tools.

Company members participated in annual, semi-annual, and quarterly meetings that functioned as "community building" activities as well as venues for sharing experience and project results. Hundreds of managers from these companies have participated in "The Core Course," the introductory five-day program that provided an opportunity to experience and learn what it means to work in a learning environment.

Typically it took one or two years to identify an appropriate pilot project within a member company. A pilot project is one in which learning disciplines are not only taught, but are also used as part of the managerial process for accomplishing business results.

The Core Course was being developed by MIT/OLC researchers who were themselves learning the best ways to test and deliver their principles of organizational learning. Therefore, in those early days, many of the Mighty Motors people found the program needed some refining.

How might people's involvement in the course have influenced their later participation in the learning effort?

Lead MIT Researcher: [The early core courses were] very different experiences than they are today. [Each of the attendees went to] five two-day sessions throughout that first year. My understanding was that [the CEO] had said to some Mighty Motors people that the ideas in The Fifth Discipline were important and that they must attend the core course. So ten of us showed up at the core course and had very little idea what was going on or what this was about, they just knew that they were told to go. That wasn't the best of circumstances. They were out of sync. Having been a part of that whole process I am not surprised that not everyone involved followed up after they completed the core course. Nor did we at the OLC have any structure in place to follow up on those people.

Although the format of the core course was improved, the effort lost the support of key people because of their initial experience.

Vice President/Quality: The content was probably much the same as the current competency course. However, the format was gross. The course took place two days every month. It took a full day to get back up to speed. Then on the second day, we basically had three or four hours of decent learning opportunity because, starting at noon, people bailed out to catch their airplanes. It was atrocious. The introduction to organizational learning was probably the worst adult learning experience I've ever had.

"LEW": The Dilemma of the Product Development Process

Since Mighty Motors executives had already recognized the dilemmas of the company's product development process, it made sense to focus learning efforts in this area. During the Core Course the executives had learned how to use causal loop diagrams, a systems dynamics mapping tool that allows people to discuss relationships among important elements of a system. Executives used causal loop diagrams in the fall of '91 to talk about the "problem of LEW," - a product development system which produced products that were "late, expensive and wrong!" Although the company's motors were viewed as icons of excellence and power by loyal customers who were willing to pay high prices and put up with production delays, executives wisely realized that relying on such continued loyalty would be risky and foolish.

How does a CEO draw links between systems and results, and put problems in a context that helps an organization to act?

CEO: We have an obligation to our customers to present them with at least two exciting new products a year, and to keep up with technology and we have a process that is late, expensive, and [wrong]...We really didn't need people drawing systems diagrams to know that. People knew what was going on. But we never put it in that context before. And what happened? Action happened. And we are different today.

The causal loop diagram (see Causal Loop Diagram of "LEW" sidebar) gave Mighty Motors a new way to view the product development process. Rather than "blame" engineers in product development for acting as "prima donnas," or criticize the people in manufacturing for being unable to produce and assemble quality products in the required volumes and time frames, the executives began to understand and communicate to others the systemic nature of what had previously been considered a product development problem.

Causal Loop Diagram of "LEW"

NOTE: Left mouse click on the image above and select "Open This Image" to open the diagram in full size.

For more on causal loop diagrams , and the related topics of systems thinking and system archetypes, see Peter Senge, The Fifth Discipline (1990; Doubleday), pp. 93-113 and 378-390; Daniel H. Kim, Systems Archetypes: Diagnosing Systemic Issues and Designing High-Leverage Interventions (1993, Pegasus Communications); and Senge et al, The Fifth Discipline Fieldbook (1994, Doubleday), pp. 121-150.

The causal loop diagram helped demonstrate the way the organizational system influenced "LEW." It showed a confluence of management goals in resource allocation, varied and dissatisfied stakeholders, "knee jerk" reactions, and multiple initiatives focusing on the same issues - all of which led to frustration for those involved. Through the process of developing this diagram, the executives came to recognize it was not a single problem that needed to be solved to fix product development, but rather an inter-related group of problems that needed to be considered and dissolved as a set.

President: I felt that the LEW diagram was an interesting representation of things that, in some cases, people perceived to go on at Mighty Motors. I think it was an interesting model of some of the reasons why the product development process had not gone smoothly. It showed what we could attribute some of our problems to and what some of the consequences were. It was an interesting representation of putting things that many people around the company felt into a graphical form. It was useful in that regard.

Vice President/Quality: Our "LEW" diagram was clearly a causal loop. It had all kinds of classical archetypes in there- eroding goals, quick fix, tragedy of the commons, and a few others. We talked about all of them. However, instead of starting with a particular archetype, we wanted to start with the situation as we saw it. We wanted to paint a picture of our collective perception of research and development and new product programs.

The creation of the "LEW" causal loop diagram represented Mighty Motors' first solo effort at integrating and applying learning skills to a real situation. The diagram framed a familiar problem in a compelling way, allowing for deeper insight and broader understanding of the complexities of the product development system. Thus, people were able to understand the root causes in the product development process more clearly. These causes included:

a desire to please and a cultural propensity to manage by crisis;
a lack of shared vision regarding expectations and strategy;
the inability to say "no," and to say "no" and be believed;
fear of failure and fear of change;
lack of knowledge about creating a better process;
and lack of time to make change.

The concept of "LEW" became recognized in different parts of the organization and the term continues to be used.

The Start of a Plan: Phase I

The Mighty Motors contingent met with the MIT/OLC representatives in January 1992 to share the results of the "LEW" work and to gain insight into how to proceed with organizational learning. Phase I of the learning effort began with the formation of a core learning team, which met regularly from April to October.

As the team examined issues and thought about change processes, it determined that a successful redesign would need to meet the following criteria: a standard planning methodology; clear, constant and well-understood objectives; limited management changes; limited interference from the outside; critical support resources; cooperation; and periodic review.

The team also defined the internal barriers it would have to overcome for a successful redesign: lack of listening skills; individual pride that prevents people from saying "no"; lack of standard methodology; geographic separations; cultural differences between sites; lack of orderly activity; and an ingrained company habit of rewarding crisis. The group recognized it needed help from the MIT/OLC researchers in transforming.

The lead MIT/OLC researcher joined the Mighty Motors vice president in charge of the team to define objectives and create an action plan for the collaborative effort. Working together they outlined the following objectives for the learning initiative:

Strengthen and enhance the ability of managers to apply systems thinking in order to redesign and improve the product development process.
Develop a methodology, which could be generalized, for applying systems thinking to practical business problems.
Develop a learning lab and analyze it to identify key leverage points.
Examine the effectiveness of systems thinking on the behavior of work processes when it is applied to the resolution of practical business problems.

The team worked closely with the MIT/OLC researchers to learn how to apply tools to the product development process and to develop organizational learning skills that would ultimately enable them to develop a learning lab. But team members were not always clear about their goals.

	Lead MIT Researcher: We started a similar project at [AutoCo] in January and then we started with Mighty Motors in April. Mighty Motors couldn't focus on a specific problem because it couldn't afford to get an intact team to come together since the team sizes were so small. So we said this was more of a cross-functional slice and pulled together a team that had representation from different functions but with no common focus.
How could the ideas from the researchers' experience at AutoCo help or hinder the direction of the learning team at Mighty Motors?	SuperEngine Manufacturing Manager: The meetings [at this stage] for me were always extremely frustrating. The biggest problem I had was trying to get a focus on what we were trying to do... The group was never really clear on this and we came back to it many times.
Not having a common language or a baseline of skills sets presented a challenge for the team.	Product Development Manager: The majority of people on the team had not gone to the OLC Core Competency Course. We didn't have as well planned a project as the [AutoCo] guys did, but similarly we knew that we wanted to address something like the product development process.

Although the team lacked clarity and focus, team members knew they had to create a learning lab, but it loomed on the horizon like a black cloud. Team members grew increasingly anxious knowing they had an obligation to deliver it, but were confused about how to proceed.

What is the most effective way to balance producing a tangible result with focusing on learning?

Why is task work less politically risky than process work?

Vice President/Quality: This team's work was not about changing product development; it was about introducing organizational learning. But we never talked about organizational learning, we only talked about product development. So, at some point in our struggle over direction we said there were some milestones to be met, and promises to be kept, and one of those was the learning lab.

The date for the delivery of the learning lab was set for October, but as the seasons changed and the date drew nearer, the group struggled with the development of the lab's content. Team members continued to wrestle with the question: "What should a learning lab be?"

Using Learning Tools: The KJ Diagram

Towards the end of the summer, the team began working on a KJ diagram (see KJ Diagram sidebar), named for its inventor Jiro Kawakita. This technique, borrowed from the quality movement, is an affinity diagram that groups issues according to their thematic relationships.

Using this process, a team of five to ten people considers a mass of issues, forms a focusing question, interviews people in the organization, and develops a shared understanding of the factors influencing the focus question. Then, at a workshop designed to distill the information that has been gathered, the team posts the responses on a wall. When all responses have been posted, the group repeatedly reorganizes, regroups and rephrases the different themes. Over the course of several hours, a final coherent pattern emerges, revealing key underlying issues.

KJ Diagram

This sidebar shows half of the final KJ diagram created by the team. This well-organized diagram took hours of "messy," unfocused, frustrating deliberation. Each one of the groupings represents a key theme. The arrows show how the team felt one theme influenced another.

NOTE: Left mouse click on the image above and select "Open This Image" to open the diagram in full size.

By constructing the KJ diagram, the team was able to develop an answer to the focusing question: "What is the biggest contributor to creating crisis management at Mighty Motors?" The team came to realize that the organization was trying to impose changes without understanding the magnitude or implications of those changes on the system.

Moreover, a major behavioral pattern emerged - people became aware that taking time to think about what they were doing, rather than just doing it, was foreign to them. This made the concepts for learning, particularly the notion of reflecting upon the past, seem as though there was an "alien force" present among the task-driven engineers and managers at Mighty Motors. Entrenched in their own ways of operating, they were not always comfortable with MIT/OLC's espoused ideas about learning. Working with strange tools and foreign methods would at times cause confusion among team members, slowing them down as they struggled to change their approach to work.

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