A tale about two plants: UMMI Team and GM bureaucracy

First of all, this paper will analyze what changes in structure, labor practices and management philosophy made NUMMI more competitive than GM. The thing that many analysts find surprising about NUMMI is that the plant simultaneously endorses principles of high-performance innovative management and support the traditional model of union-management system of labor relations[1].
The strategic turnaround was triggered by the implementation of the Toyota system of lean manufacturing, which was based on such fundamental values as trust and respect for workers. The new system was built with a focus on ‘teamwork, job security, employee involvement, and worker self-confidence.’[2]
The model also encouraged an egalitarian corporate culture and team responsibility. NUMMI’s management was organized into three levels, which was by far more efficient than the bureaucratic model consisting of five or six levels at other GM facilities. The new model also featured establishing self-directing multifunctional work teams, replacing managers with team leaders chosen collectively by management and the union, and encouraging employees to assume and exercise responsibility. The process of building trust was central to this new concept of participative management.

The underlying principles implemented at NUMMI perfectly correspond the main values advocated by Peter Senge in his article ‘The Leader’s New Work: Building Learning Organizations,’ namely building shared vision, surfacing and challenging mental models, and fostering system thinking[3].
The central concept NUMMI is based on is organizational learning. Employees were encourages to improve their performance in order to enhance the company’s productivity. The culture of collective learning environment was nurtured. Workers were welcomed to seek help, advice, and feedback on their performance from their colleagues and team leaders.
A holistic approach to all processes, ranging from the organization of assembly lines to communication flows, was emphasized. Learning was now perceived as an ongoing process rather than a series of trainings. Knowledge transfer was carefully integrated in the network of existing labor relations.
As for other steps aimed at increasing GM’s competitiveness, it might have been useful to look at the experience of Carl Ghosn at Nissan plant[4]. It seems that GM still did not learn how to unleash the power of teamwork and multifunctionality. A major innovation at Nissan, just like at NUMMI, was the creation of Cross-Functional Teams, however, they were designed and utilized differently. These teams consisted of approximately 10 members each and reported to two supervisors. Although the teams had no decision making competence, they reported to nine-member executive committee and had access to all company information. This innovation helped to increase the motivation of the employees, gave them a better sense of responsibility for the company’s decisions, and alleviated the communication problem.
In a multifunctional team, people are likely to have different experience and sum of knowledge. This variety can offer a creative approach to solving some problem. However, the problems might include misunderstanding of the basic terms of cooperation and prejudices against other team members. To avoid them, the team leader should establish a clear framework for cooperation and enforce ethical standards.
References
Magee, David. Turnaround: How Carlos Ghosn Rescued Nissan. New York: Collins, 2003.
Senge, Peter M. ‘The Leader’s New Work: Building Learning Organizations.’ MIT Sloan Management Review 32(1) (1990): 7–23.
The European Association of National Productivity Centres. ‘Case 2: NUMMI: You only live twice.’ http://www.eanpc.org/memorandum_link_3.php?page=2 (accessed June 19, 2007).
[1] The European Association of National Productivity Centres, ‘Case 2: NUMMI: You only live twice,’ http://www.eanpc.org/memorandum_link_3.php?page=2
[2] Ibid.
[3] Peter M. Senge, ‘The Leader’s New Work: Building Learning Organizations,’ MIT Sloan Management Review 32(1) (1990).
[4] David Magee, Turnaround: How Carlos Ghosn Rescued Nissan (New York: Collins, 2003).