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Bayer's Major Changes in One Plant
Within a period of only seven months prior to Bayer's acquisition of a production facility in Myerstown, Pennsylvania, the plant had changed ownership three times and the workforce seemed to have dissolved as fast as the analgesic tablets rolling off production lines--down from 800 to 360 workers in less than a year. That was a lot of change to absorb in a facility that had been steadily producing over-the-counter and prescription pharmaceuticals for more than half a century.
But there was more: employees were uncertain about what it would be like to work for Bayer, a German-owned company, and the plant manager post had been vacant for a while. Morale among workers plummeted, and job security became a running joke.
Line managers had worries of their own, not the least of which was ramping up to Bayer's expectation for a 24-hour-per-day, seven-day-per week production schedule with an acquisition-weary workforce. Even more troubling was the fact that the plant was operating in the red and had been a drain on the bottom line for some time.
Bayer management realize that given competitive forces and the rate of change in their industry, they needed to streamline operations to have a more secure future in Bayer Corp.'s newly formed consumer care division. But there was no plant manager at Myerstown from January 1995 to August 1996, so the functional department managers --including HR manager-- worked as a team to manage the plant through that trying time. They soon realized that employees needed to be involved at the heart of any turnaround.
"That's where HR came in and really spearheaded the effort," says Do Danchisko, manager of human resources and organizational development. With the help of Sibson & Co., a global management consulting firm, Danchisko's six-person HR ream embarked on a present-state analysis, selecting 93 employees at random to participate in seven focus group meetings to get a clear indication of what was going on at the plant. Employees answered a number of open-ended questions, including "Why do people work here?" and "Why do people leave here?"
Next, HR compiled this information and invited employees who hadn't participated in the first focus groups to comment on the findings. Finally, HR analyzed workers' input. Workers noted several positive workplace attributes, such as pay and benefits, in their feedback. However, they also brought up 30 issues that required attention --too many to respond to without more interpretation and analysis. This kind of involvement was new to employees. Before Bayer's acquisition, the management style at the facility was a top-down rather than collaborative and reactive instead of proactive.
Knowing that Myerstown employees were skeptical of new management programs because of past failures, plant manager John O'Neil and the HR team addressed workers at an all-employee meeting about the first initiative--developing a site strategy and goals. In a subsequent meeting, he introduced all five initiatives and the following site strategy: "to be clearly recognized as Bayer Consumer Care's most effective site in the Northern America's region in terms of safety, customer service, value-added manufacturing/packaging, and cost effectiveness."
Myerstown employees felt that communication was so important in getting and receiving information about on-site performance, department projects, and rumors that they initiated the "Myerstown Information Exchange." This electronic newsletter is sent monthly to members of the site management team, who in turn discuss the information with those who report to them.
Not everyone was enthusiastic about the change process. One of the key points uncovered in the initial focus groups and subsequent team meetings was pessimism about starting a new "program." As one employee put it, "It would be nice if [managers] were really sincere in this, but we've all been through this before. I think this is going to be another flavor of the month."
Several employees enumerated the buzzwords and acronyms of programs that previously managers had tried long ago and that invariably fell by the wayside: WQC (work quality circles), JIT (just-in-time manufacturing), SPC (statistical process control), and team-based manufacturing. Indeed, employees had been barraged in the past with T-shirts and coffee mugs for other management programs.
Managers found it refreshing that employees would be so candid about these issues and figured that engaging them in a dialogue about past failures and what needed to be done in the future would help everyone work together to make it happen because they'd all be on common ground.
"As an employee, I felt like the entire process was handled extremely well," says Rick Higley, a pharrmaceutical operator who served on the Roadmap for Change team. "The thing I really appreciated about the process was that the managers listened to what everyone had to say, treated us as equals, and really valued our opinions."
Resistance to change can be overcome by acknowledging not only the business rationale for change but also the hopes, fears, and dreams of those affected, noted the change management experts at Sibon & Co. In the race to make change happen, organizational leaders often fail to tell the straight story to people who then write their best scripts. Progressive companies go to great lengths to involve people in a transformation that affects them, which sends critical messages about validation and involvement.
Discussion Questions:
- What type of change(s) occurred at Bayer?
- What type of employee resistance to change did Bayer have to address?
- What are the positive and negative lessons learned from how change was handled at Bayer?