PDF Eng
PDF Eng
Motorola:
Institutionalizing Corporate Initiatives
Introduction
In January 1994, Bill Wiggenhorn, president of Motorola University (MU), chatted with
Motorola CEO Gary Tooker during a break in the Total Customer Satisfaction (TCS) competition in
Chicago.Twenty four TCS teams were presenting their quality and cycle-time projects to Tooker and
other senior executives, after having achieved finalist status among 4,000 TCS teams worldwide. The
TCS competition was a celebration of Motorola's accomplishments in involving employees in
continuous improvement initiatives. Tooker commented that TCS was tangible evidence that an
extensive investment in employee education was reaping excellent benefits. Wiggenhorn replied,
"Yes, and as managers experiment with flatter organizations and empowerment, we see initiatives
that go way beyond TCS teams. Yet there's so much to do."
Indeed, there was plenty to do—in finding better ways to screen and hire new employees as
the company continued to grow rapidly, train them to support changing business requirements, and
create opportunities for career growth. Motorola needed a work force that was simultaneously
disciplined—able to consistently perform tasks at levels approaching zero defects—and creative—
possessing the judgment and expertise to break the rules or "think out of the box" as changing
products, customers, technologies and conditions warranted. Tooker told Wiggenhorn that he
expected total sales to double and non-U.S. sales to comprise 50% of total revenues by the year 2000.
"Growing the growing organization" was a watchword for the coming years, as management sought
to preserve a strong Motorola culture and common "language" of concepts and processes, despite
complex legal and cultural differences among its 120,000 employees (the Motorola corporate
organization chart appears as Exhibit 1).
In the seventies, Motorola faced stiff competition, especially from Japanese competitors. A
senior manager recalled a 1979 meeting of executives as a pivotal moment in Motorola history:
The sales manager of our fastest-growing, most profitable product line (two-
way radios), stood up and said "We are not talking about the most important subject
here. Our quality stinks! That's our problem, and if we don't do something about it
Senior Research Associate Janis L. Gogan prepared this case, based on research documents prepared by Research Associate
Michael L. Handel and Professor Shoshana Zuboff, as the basis for class discussion rather than to illustrate either eiffective
or ineffective handling of an administrative situation.
Copyright © 1994 by the President and Fellows of Harvard College. To order copies, call (800) 545-7685 or write
to Harvard Business School Publishing, Boston, MA 02163.No part of this publication may be reproduced, stored
in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.
1
494-139 Motorola: Institutionalizing Corporate Initiatives
the Japanese will continue to take market share away from us." That was our wake-
up call.
Senior managers observed that Japanese workers engaged in group problem solving
activities and used quality techniques like statistical process control and Pareto analysis. CEO Bob
Galvin asked human resources to prepare a five-year training plan, specifying how Motorola
employees' skills would be upgraded. He also called for ten-times improvement (10X) in product
quality within five years. A corporate vice president for quality was appointed, and each group and
manufacturing facility established a quality function. Product design and manufacturing were closely
examined, and several weaknesses were identified. Although the engineering-driven company was
good at working with new technologies, the process of translating technology capabilities into new
products was too slow. Product designs were too complex, leading to high manufacturing costs.
Product quality was inconsistent. To reach the 10X quality goal, management resolved to develop
"best-in-class" design andmanufacturing through new technologies, used by a trained workforce.
The Participative Management Program, an initiative begun in the seventies, was supposed
to enhance productivity by increasing employee involvement, but by the early eighties some
managers questioned its value. (PMP) had several goals:
increase employees' commitment to the success of the organization;
improve their quality of work life (and sense of satisfaction and loyalty); and
encourage employees to generate ideas for improving organizational effectiveness.
PMP teams—"quality circles" of up to 50 employees who worked on a common "line of sight"
product or activity (such as manufacturing employees on a single production line)—met each week to
review performance and brainstorm ways to improve it. Suggestions also came from individual
employees who wrote "I Recommends," which were publicly posted. Managers were expected to
respond in writing to each I Recommend within 72 hours. Each facility had a PMP steering committee
which included shop-floor representatives, and another committee which evaluated I Recommends.
A 200 page PMP Manual specified procedures. Monthly PMP bonuses (in the United States only)
linked team goals—covering such items as quality, current cost, delivery, inventory, housekeeping
and safety, and process improvement—with compensation. PMP courses taught employees how to
work in teams, and explained PMP "mechanics" (filling out I Recommend forms, specifying team
goals and monitoring performance, calculating bonuses).
Some managers complained that the PMP format was too mechanistic, and that record-
keeping for the bonus plan was too time consuming. Some employees complained that the PMP
bonus plan was unfair, because some groups had more control over PMP-related activities than did
others.
1For further information about this meeting and events following it, see the Harvard Business School case series:
"Bob Galvin and Motorola, Inc," (A) 487-062, (B) 487-063, and (C) 487-064) by Mary Gentile and Todd Jick.
2
Motorola: Institutionalizing Corporate Initiatives 494-139
MTEC, 1980–1987
Ten years ago we didn't ask people to do a lot of thinking . . . (and) quality
control meant catching defects before they got out the door. Ten years ago, most
workers learned their jobs by observation, experience, and trial and error. . . . Then
the rules of manufacturing and competition changed, and in our drive to change
with them, we had to rewrite the rules of corporate training and education.
In 1980 Bob Galvin advocated making a significant commitment to training and education.
He believed that new technologies created a more pressing need to increase employees' skills,
especially for production workers, who would be expected to monitor their own quality and identify
ways to improve processes.Many executives disagreed with Galvin, and discussions on this topic
ranged from "lively" to "rancorous," in one manager's recollection. Galvin rarely issued mandates,
preferring to delegate most decision making to the group heads. But this time he overrode his
managers' objections and decided to allocate $35 million to establish the Motorola Training and
Education Center (MTEC). Bill Wiggenhorn, then a manager at Xerox, was hired as vice president for
training and education. MTEC was expected to be self-supporting by 1986. Some managers proposed
that MTEC be required to systematically assess the return on training. Galvin disagreed, stating, "The
expense of doing such assessment is not warranted. By 1986 MTEC will be self-supporting based on
charges for its services. Each group is free to purchase training from any source, so MTEC's revenues
will be proof enough of its value."
MTEC had two main goals: strengthen PMP and support quality initiatives. In the early
eighties a five-part curriculum was designed to upgrade workers' skills so they could participate in
quality efforts. It covered statistical process control, basic industrial problem solving, making
effective presentations, running effective meetings and setting goals and measuring performance.
Most courses were aimed at first-line employees; there were few courses for supervisors, engineers
and managers. Attendance was usually optional, and use of new skills on the job was not always
reinforced.
Beginning in 1984 every group was required to spend at least 1.5% of payroll on training.
Technical and managerial courses were added. For example, a Senior Executive Program (SEP)
brought top managers together for a week to discuss a topic suggested by the CEO and to formulate
an action plan for addressing it. The topic for the 1984 program: Asia: Past, Present and Future. Follow-
up action plans included formation of a country manager organization and task forces on marketing
and product design in Asia. The action-orientation of the SEP was well received, and it became an
annual event, with a new topic each year.
In 1986, the Galvin Center for Training and Education was opened in Schaumberg, Illinois.
Executive programs were held there, as was a new Design for Manufacturability course, which was
required for all Motorola engineers. In 1987 MTEC began offering quality courses to suppliers, in
order to improve the quality of purchased components.
2William Wiggenhorn,, "Motorola U: When Training Becomes an Education," Harvard Business Review, July-
August, 1990.
3
494-139 Motorola: Institutionalizing Corporate Initiatives
As managers sent more employees to MTEC courses, a new problem became evident: many
workers did not have the requisite reading or arithmetic skills to participate in quality courses like
statistical process control. Some were neither fluent in English nor literate in their native language,
yet they were expected to refer to equipment manuals and to enter or extract information from
computer terminals placed along production lines, in order to monitor performance, trouble-shoot,
and anticipate scheduling problems.
Complaints about PMP intensified. Some managers liked the quality circle aspect but
continued to complain about the record-keeping burden. In 1987 the team-based PMP bonus plan
was eliminated, while other aspects of the PMP program were retained. A new corporate return-on-
net-assets (RONA) bonus was instituted. Employees received a bonus if both the corporation overall
and their business unit hit its target.
All Motorola groups had met their "10X" quality improvement goal. Factors contributing to
improved quality included investments in advanced production technologies, closer management
attention to quality metrics, and more consistent effort by production employees. However,
benchmarking still revealed companies with superior product quality. A senior engineer circulated a
white paper, "Six Sigma Mechanical Design Tolerancing." "Six Sigma," indicates a quality level of 3.4
defects per million; the paper noted that most Motorola products were being produced with quality
levels at or below 3 sigma. It explained:
Three-sigma design yields 2,700 defective parts per million. Aproduct design
with 10,000 characteristics, either parts or manufacturing steps, yields 27 defects per
finished product. Since such products are becoming more common, traditional three-
sigma designs are completely inadequate.
Although traditional views held that six sigma quality was expensive, benchmarking
revealed that higher quality was often associated with lower costs. Bob Galvin seized on "six sigma"
as a new rallying cry. With much fanfare he announced in 1987 a Six Sigma Quality effort. All
product quality was expected to improve by another 10X in two years, 10X more two years later, and
achieve six sigma by 1992. A memo sent to each employee stated, "There is only one ultimate goal:
zero defects—in everything we do."
All Motorola employees, worldwide, were required to take a new quality course, Utilizing the
Six Steps to Six Sigma, which described a process for mapping and improving product or process
quality. Versions were offered for both manufacturing and non-manufacturing personnel. Courses on
quality fundamentals like Pareto analysis and teamwork, first developed for PMP, were updated to
reflect the Six Sigma goal. Videos, brochures, and speeches emphasized Six Sigma. All 54 Motorola
sites had a Quality Day in 1988, with seminars and celebrations.
A cycle time goal was also announced: the time to perform every activity—manufacturing
and non-manufacturing—was to be reduced tenfold within five years. Managers reported that,
although product quality was improving significantly, product-development cycles were too long.
Some competitors were able to introduce new products much faster, thus taking market share away
from Motorola. Quality alone was not the whole answer; to achieve total customer satisfaction,
Motorolans had to learn to work both smarter and faster. MTEC developed 10X Cycle Time courses
aimed at middle managers worldwide. The Senior Executive Program topic in 1987 was "Total Cycle
Time."
In 1988 Motorola received the Malcolm Baldrige National Quality Award, which recognized
the measures taken to ensure continuous quality improvement. That year George Fisher was
promoted to CEO. Fisher, who held a master's in engineering and a doctorate in applied math,
4
Motorola: Institutionalizing Corporate Initiatives 494-139
worked for Bell Laboratories before joining Motorola in 1976. In the early eighties he managed a
product design effort that produced a significantly higher quality pager, which gained a leading
share of the tough Japanese paging market.
With the Six Sigma and 10X Cycle Time initiatives came intensified concerns about
employees' basic skills. Wiggenhorn explained that production employees were expected "to know
their equipment and do their own trouble-shooting. If they need expert assistance, they must be able
to describe a malfunction in detail. In other words, they have to be able to analyze problems and
communicate them." Two steps were taken. First, pre-employment screening, using a 31/2 hour Basic
Abilities Test Battery (BATB), ensured that new hires had the necessary basic skills. The BATB
assessed basic arithmetic, reading comprehension, visual tracing, forms completion, and work habits.
Secondly, remedial training was provided to existing employees, usually through community
colleges. Studies found that employees who passed the BATB could be trained more quickly, so
management began to consider whether to test all employees. Many employees worried that
revealing their deficiencies would cost them their jobs. They were assured that nobody would be
summarily fired for lacking basic skills, but that they were expected to acquire them over the next
several years, and they were strongly urged to take advantage of free courses available to them.
Tighter screening yielded new hires with higher-level skills, but not without new
difficulties.At some rapidly-growing sites, HR managers reported they could not fill all open slots
because not enough applicants passed the basic skills test. MTEC began to look into ways to help
public school systems strengthen their curricula, so as to improve the pool of available workers.
In 1989 the policy committee (top officers of the corporation) mandated that all Motorola
employees receive 40 hours of training per year. Fisher explained that rapidly changing technologies
and the "shorter half-life of knowledge" required continuous learning. About 80% of MTEC courses
covered "technically-oriented" engineering, quality or manufacturing concepts.
Motorola University
By 1989 54,000 participants had taken the Six Sigma course. MTEC added to its original
charter remedial skills training, supplier, customer and distributor training, and collaboration with
public school systems and universities. It was re-named "Motorola University" (MU), in recognition
of the broader scope of activities. Bill Wiggenhorn, now president of MU, reported to the director of
corporate human resources (Exhibit 2). In 1993 Wiggenhorn gave a presentation to management, in
which he stated that the need for continuous education was becoming more important each year. He
reviewed the changes that were taking place in organizations as they approached the twenty-first
century (Exhibit 3), and concluded, "Continuous improvement requires continuous change, and that
requires continuous learning."
By 1994 Motorola was spending about $120 million on education annually ($200 million
when costs of employee time and travel were included). The $120 million included salaries of group
and site trainers, fees paid to outside vendors, approximately $20 million in MU tuition and
consultation fees, and a $13 million MU allocation (for facilities, administration and instructional
design). MU operated out of 14 facilities—the Galvin Center and 13 "hubs" worldwide—and sold
about $10 million of training to suppliers and customers.
5
494-139 Motorola: Institutionalizing Corporate Initiatives
The 40 hour training mandate and Six Sigma had greatly increased demand for MU courses.
Many facilities invested in training to help workers understand and use new computer-based
production equipment. The cycle-time initiative had intensified efforts to reduce machine downtime.
In some plants operators were trained to maintain, set up and trouble-shoot their equipment (tasks
traditionally done by technicians). A manager explained, "The more people learn how a machine
works and how to fix it themselves without waiting two hours for someone else to fix it, the more
productive your plant is."
Computer-based factory equipment generated data on-line. Operators who were trained to
extract this information could generate timely reports on output, quality, and work-in-process. which
previously supervisors prepared. Now these reports were generated much more easily, and the
information in them helped operators or supervisors make adjustments in scheduling, materials
usage or other items. New tasks—setups, machine changeovers, troubleshooting, report generation—
demanded new skills. Operators had to be able to read manuals, understand machine gauges and
displays, perform simple calculations, graph and interpret data, spot product defects, and identify
their causes.
Executive programs and specialized courses requiring expensive hands-on equipment (see
below) were held at the Galvin Center. Wiggenhorn expected to significantly increase the number of
courses available over computer networks (for self-study) and delivered via satellite and interactive
video (for inexpensive dispersed group learning). Most other training was delivered at work sites,
using a train-the-trainer approach. MU also published books and videos on quality, technology and
other subjects, for independent study.
Removing the PMP bonus plan in 1988 was the first step in dismantling PMP. Managers felt
that teamwork and quality training were worthwhile, but that PMP did little to capture employees'
enthusiasm. A "Total Customer Satisfaction" program replaced PMP in 1989. Ad hoc problem-solving
teams used techniques adapted from PMP to identify problems, search for causes and solutions, and
implement them. Competitions were held in some regions, an idea that came from a manager in
Japan (where many companies had quality circle competitions). In 1990 Gene Simpson, who
previously managed PMP, was asked to organize a corporate-wide TCS competition, which became
an annual event. Project teams, with 4–12 members, might include engineers with Ph.D.s or operators
whose education had stopped at the eighth grade. Teams might be drawn from a single work-group
or assembled from representatives of multiple functional areas and disciplines. One finalist team
from each facility competed with other teams at the group level, and four finalists per group (24
teams) competed at the corporate TCS competition, held in Chicago in January. Teams had 12
minutes to describe their projects. An MTEC course, Making Effective Presentations, which previously
attracted few shop-floor participants, now was in high demand by TCS teams. At site competitions,
the plant manager and his/her direct reports typically judged the teams, and at corporate Fisher, Bob
and Chris Galvin, Tooker and other members of the Policy Committee served as judges. Prizes,
6
Motorola: Institutionalizing Corporate Initiatives 494-139
ranging from certificates to dinner vouchers to resort holidays, were awarded for every level of
involvement (forming a team, completing a TCS project, and becoming a site, group, or corporate
finalist). There were no "losers;" at the corporate competition, 12 teams were awarded gold medals
and the rest got silver medals.
Ed Staiano, head of General Systems, declined to sign his organization up for the first TCS
competition. He had criticized corporate initiatives as "non-value-added" before.Since this was his
prerogative in the decentralized corporation, Fisher "let him off the hook."However, after witnessing
the enthusiasm, professionalism and accomplishments of teams in the first TCS competition, Fisher
informed Staiano that GSS' participation in the second annual competition would not be optional.
Many finalists described their involvement in TCS as the most significant experience in their
careers. For some, like the gold-medal Orient Express team from Penang Malaysia, the trips to group
headquarters and Chicago were their first times out of their home country and on an airplane. The
managers who judged the teams were also moved by the experience. Severalreported being on the
verge of tears, so proud were they of the teams' accomplishments and poise. An executive recalled,
"Managers began to see their employees in a whole new light. We got a glimpse of empowerment."
By 1993 4,000 TCS teams were working on improving product designs, manufacturing
quality problems, and reducing work-in-process inventory and cycle-time. Total manufacturing
savings from TCS projects were estimated at over $2 billion since 1989. The corporate quality
manager estimated that similar savings could be achieved by administrative teams which, so far,
were underrepresented in the competitions.
Shortly before TCS competitions started, a less formal employee involvement initiative got
underway. Gene Simpson (who administeredPMP and later administered TCS), wrote a white paper
about PMP. He believed it had served an important purpose in measuring "line of sight" work-group
activities. PMP courses provided a good foundation of teamwork and problem-solving skills.
However, many Motorolans had viewed PMP primarily as a complicated bonus plan. He concluded,
"Our sights were set too low. Other companies went much farther in developing self-managed work
teams. There's an enormous opportunity."
Fisher asked Simpson to join forces with Nancy Rus, who worked in Corporate Leadership
and Development and was involved in basic skills testing. He asked them to "see what we can do to
move PMP toward self-managed teams."Rus and Simpson found that some managers thought TCS
teams were examples of empowerment. Others disagreed, since TCS teams were temporary and
could not implement their recommendations without managerial approval. True empowerment, they
said, pushed decision-making authority to lower organizational levels, often by reducing supervisory
levels ("delayering"). Empowered workers took on tasks that previously were handled by supervisors
or technicians. In theory empowerment cascaded all the way up the organizational hierarchy; in
practice, it was usually confined to the shop floor. Benchmarking revealed that Digital Equipment
Corporation, Kodak, Northern Telecom and other companies were actively fostering empowered
work teams in high-tech manufacturing. Seven levels of empowerment were identified:
7
494-139 Motorola: Institutionalizing Corporate Initiatives
5. Teams interface with other teams, vendors, customers; present reports, plans,
metrics.
6. Teams do workplace layout, peer reviews, hiring selection, budgets.
7. Teams are fully autonomous. Use external support functions as consultants.
The word "empowerment" began showing up in MU and human resources documents, and
by 1992 it was listed as a "key initiative" on a wallet card carried by all Motorolans (Exhibit 6).An
informal "Empowerment Network," was set up, comprised of Motorolans with an interest in self-
managed or high-performance work teams. Meetings, held every six months in different locations,
revealed "pockets of empowerment," which Rus described as workplaces where "people are expected
to have a brain and to take responsibility for quality and productivity." In Elma, New York, operators
monitored their own production and scheduled vacations and working hours. The plant manager,
Dennis Fiehn, was "a true believer in empowerment," but he avoided publicity until Elma received
the New York State Excelsior Award for quality in May 1992. Elma "team leaders" coached 40 or more
operators. At Easter Inch, Scotland, up to 300 operators reported to an operations manager, and
selected their own rotating team leaders. In Phoenix, the Government Systems and Technology
Group (previously Government Electronics Group) was experimenting with empowerment both on
the shop floor and among professionals and middle managers, such as in their supply management
organization. Pat Canavan, the vice president for organizational and management development, told
Wiggenhorn that this example was particularly interesting, since it represented an attempt to "move
empowerment out of the shop floor and up the hierarchy."He explained:
8
Motorola: Institutionalizing Corporate Initiatives 494-139 -9-
Strategy
Mass production Flexible production
Long production runs Customized production
Centralized control Decentralized control
Production
Fixed automation Flexible automation
End-of-line quality control On-line quality control
Fragmentation of tasks Multiskilled workers, teams
Hiring and Human Resources
Labor-management confrontation Labor-management cooperation
Minimal qualifications accepted Screening for basic skills
Workers as a cost Workforce as an investment
Job Ladders
Internal labor market Limited internal labor market
Advancement by seniority Advancement by certified skills
Training
Minimal for production workers Training sessions for everyone
Specialized for craft workers Broader skills sought
11
494-139 Motorola: Institutionalizing Corporate Initiatives
Exhibit 4 Management Education and Development Road Map (suggested course sequences from
U; other courses were offered through groups)
First-Time Managers/Supervisors Manufacturing Technologies and Processes:
First-Time Manager Orientation Guide Technology Awareness
General Management Skills/Knowledge: Advanced Manufacturing Processes
Utilizing the Six Steps to Six Sigma Advanced Manufacturing Technologies
Customer Satisfaction Workshop Computer-Integrated Manufacturing
Basic Accounting and Finance Overview
Uncompromising Integritya Introduction to Programming Robots
The Creative Managera Site-Specific Equipment Operation Training
Effective Interactions with Employees Site-Specific Operator Certification
Leading Effective Meetings Quality:
Effective Presentations Utilizing the Six Steps to Six Sigma
Applying Continuous Improvement Tools
a
Advanced courses Statistical Process Characterization and
Control
Middle Managers Site-Specific Problem Solving
General Management Skills/Knowledge: Site-Specific Team Training
Utilizing the Six Steps to Six Sigma
Customer Satisfaction Workshop Manufacturing Technicians (production,
Basic Accounting and Financea process, equipment)
Business Simulation I Short-Cycle Manufacturing (same as operators)
Uncompromising Integrity Manufacturing Technologies and Processes
The Creative Manager Technology Awareness
Effective Interactions with Employees* Advanced Manufacturing Processes
Leading Effective Meetings Advanced Manufacturing Technologies
Effective Presentations Lead Finish Technology
Manager of Managers Institute I and II Computer-Integrated Manufacturing
Successful Negotiator Overview
Influence Introduction to Programming Robots
Managing Organizational Change Introduction to Machine Vision
Strategy Workshop Site Equipment Operations Training
Benchmarking Robot Maintenance
Ford 8D Team Oriented Problem Solving Robot Programming
Technological Skills: Quality:
Motorola Management Institute I and IIb Utilizing the Six Steps to Six Sigma
Organizational Mapping and Analysis Applying Continuous Improvement Tools
Total Cycle Time Implementation Workshop Statistical Process Characterization and
a
Remedial Courses Control
b
Advanced Courses Measurement System Analysis
Precontrol
Directors/Upper-Level Managers Site-Specific Policy and Problem Solving
Utilizing the Six Steps to Six Sigma Site-Specific Team Training
Customer Satisfaction Workshop Management:
Business Simulation I Effective Presentations
Uncompromising Integrity Leading Effective Meetings
The Creative Manager Manufacturing On-the-Job Training Skills
Manager of Managers Institute I and II Customer Satisfaction Workshop
Influence Successful Negotiator
Managing Organizational Change Focused Manufacturing Management
Technological Skills: Institute
Motorola Management Institute I and II Site-Specific Policy and Procedures Training
Organizational Mapping and Analysis
Total Cycle Time Implementation Workshop
Software Solution (Spin-off from SEP)
Manufacturing Support (direct labor,
manufacturing associates, operators)
Short-Cycle Manufacturing:
Short-Cycle Manufacturing: Overview
Improve the Production System
Workplace Organization
Total Productive Maintenance
Changeover Time Reduction
Group Technology/Material Flow
12
Motorola: Institutionalizing Corporate Initiatives 494-139
13
494-139 Motorola: Institutionalizing Corporate Initiatives
15
494-139 Motorola: Institutionalizing Corporate Initiatives
16