Corporate journey of harley davidson through the lens of knowledge management

NANYANG TECHNOLOGICAL UNIVERSITY K6201 Foundations of Knowledge Management Term PaperMORE THAN A MOTORCYCLE: THE LEADERSHIP JOURNEY AT HARLEY DAVIDSON ANTONY PRAKASH

TABLE OF CONTENTSTHE HARD TIMES .......................................................................................................................... 3THE AQUISITION ........................................................................................................................... 4RAYS OF HOPE............................................................................................................................... 4STRATEGIC DRIVERS OF THE BUSINESS .............................................................................. 5 THE BEGINNING OF THE CHANGE PROCESS........................................................................ 5 MAKING CHANGE WELCOME ................................................................................................. 6 AGREEING ON A ROAD MAP FOR CHANGE .......................................................................... 7 JOINT VISION PROCESS............................................................................................................ 7 A SUSPENSION ........................................................................................................................... 8KEY OBJECTIVES OF KNOWLEDGE STRATEGY ................................................................. 8 AWARENESS EXPANSION ........................................................................................................ 9 THE BUSINESS PROCESS .......................................................................................................... 9 ASSESSING THE BUSINESS PROCESS .................................................................................. 10 PERFORMANCE EFFECTIVENESS PROCESS........................................................................ 10KEY OUTCOMES OF KNOWLEDGE STRATEGY ................................................................. 11 PERFORMANCE EVALUATION AND CAREER DEVELOPMENT ....................................... 12 THE WHOLE PACKAGE........................................................................................................... 12 FROM ATTITUDES TO BEHAVIORS ...................................................................................... 13KEY ACTIVITIES OF KNOWLEDGE STRATEGY ................................................................. 14 LIFELONG LEARNING............................................................................................................. 14 AWARENESS EXPANSION SESSION ..................................................................................... 15 LEARNING LEADERSHIP ........................................................................................................ 15 IN-HOUSE LEARNING CENTERS ........................................................................................... 16 LEARNING MAPS ..................................................................................................................... 16 HARLEY-DAVIDSON UNIVERSITY (HDU) ........................................................................... 16 DETERMINED TO COMMUNICATE ....................................................................................... 16 FIXING COMMUNICATIONS .................................................................................................. 17 PARTNERING............................................................................................................................ 17 LEARNING FROM EXPERIENCE - AAR ................................................................................. 18 THE LEARNING LAB ............................................................................................................... 19 THE PDL2T ................................................................................................................................ 19CONCLUSION ............................................................................................................................... 19

“It is not the strongest of the species that survive, nor the most intelligent, but the one mostresponsive to change.” - Charles Darwin When we looked at Charles Darwin’s theory of evolution from the perspective of thechanges adopted by the businesses all over the globe, a realization dawned on us that themost successful organizations have indeed been the ones most adaptive to change. The speed,at which the world is moving on, makes change almost inevitable. Organizations which hadachieved great success in the past, have failed to sustain their success because of the lack ofchanges in their strategies in response to the changing world. On the other hand someorganizations have risen from the jaws of failure because of the time and energy they hadspent in various efforts to bring change across the organization. This essay explains howHarley-Davison managed to do it and also describes the corporate journey of Harley-Davidson that included a series of changes that were brought in during the twelve yearperiod between 1988 and 1999 (Teerlink & Ozley, 2000). The radical process changes that were implemented in Harley can also be consideredas the Implementation of Knowledge Management Strategy. So considering theimplementation of Knowledge Management Strategy as the heart of the organizationalchange management, this essay is divided into four sections namely:  Strategic Drivers of the Business  Key Outcomes of Knowledge Strategy  Key Objectives of Knowledge Strategy  Key Activities of Knowledge StrategyTHE HARD TIMES Harley-Davidson has always been synonymous with motorcycles that are more thanjust a vehicle used for travelling. However, the journey was not a smooth one for thecompany. Harley’s market share declined from nearly 80% of the 850cc+ category in 1973 toa meager 23% in 1983. Beset by a high cost structure and poor quality, the company couldn’tfight off its Japanese competitors on its own. In addition to these problems, the companyfollowed traditional ‘command and control’ approach thereby bringing in an attitude ofcompliance instead of commitment among the employees.

THE AQUISITION In the year 1969, American Machine and Foundry (AMF), headquartered in WhitePlains, New York bought Harley and appointed a group executive located in White Plains tooversee the motorcycle division. Harley-Davidson’s headquarters were unceremoniouslyrelocated to a white collar suburb of New York. Harley’s Milwaukee-based operations werereduced to the role of a major components supplier to the York factory. AMF officialsassured their Wisconsin employees that the relocation of final assembly and other operationsto the York plant would not lead to layoffs in Milwaukee which proved to be untrue. As aresult of these changes, relationships between the union (PACE) and Harley Managementdeteriorated and the union called a strike and the work stoppage lasted more than onehundred days. In the year 1981, Vaughn Beals, formerly AMF’s group executive for the Harleydivision purchased Harley from AMF and brought back Harley to its birthplace. Beals and hisassociates had purchased Harley from AMF with a leveraged buyout for $80 million. ThoughHarley regained its former status as a private and independent company, the company carrieda staggering debt load as a result of the leveraged buyout. Beals and his colleagues were convinced that the external threats to the company werereal enough-efficient Japanese competitors, declining markets and so on. But even moreresponsible for the company’s woes were its employees, management and labor alike. Theyrealized that this was where change had to occur. The various efforts to stabilize and improvethe company were hampered by severely limited cash. In 1982, Harley chopped its overallworkforce by 40%. All remaining salaried employees took a 9% pay cut and agreed to havetheir salaries frozen at the reduced levels for at least two years. Beals and his lieutenantsadopted a highly traditional command-and-control style of management. The company’smanagers focused on top-down fixes and short-term financial results.RAYS OF HOPE Beals and his colleagues after several notable product development failuresintroduced the Evolution engine for model year 1984. This engine combined with the excitingSoftail product line, an elegant variation of the classic Harley look, stormed the marketplaceand began making money. Among the several special programs to help its dealers attract andretain customers, the most significant was the Harley Owners Group created in 1983 as a way

of communicating more effectively with the company’s end users. It quickly grew into theworld’s largest motorcycle club. Manufacturing head Tom Gelb organized a group andintroduced them to three techniques borrowed from the Japanese: employee involvement(EI), just-in-time material delivery and statistical process controls which served as the basisof significant productivity improvements in the mid- to late 1980s. By 1986, all the relevantfinancial measures had turned positive. Quality improved dramatically and the dealer networkwas revitalized and growing. Richard F. Teerlink (Rich) who was a member of Harley’s senior executives duringthe early 1980s became the company’s President and Chief Executive Officer in 1988. Richset out on a path of inventing and institutionalizing a new approach to run Harley. He begantalking with the senior management to find alternatives for the command-and-control style ofmanagement adopted by Beals and his colleagues.STRATEGIC DRIVERS OF THE BUSINESS One of Harley’s important strategic drivers of business is to foster a culture that iscommitted to continuous improvement.THE BEGINNING OF THE CHANGE PROCESS As a way forward for the company, Rich along with Tom Gelb, Vice-President ofManufacturing and John Campbell, Vice-President of Human Resources held somediscussions and concluded that employee involvement on a broader scale was needed to getthe best out of its employees. Employees had to feel a sense of ownership and deeperinvolvement with the organization to take responsibility for leading the company. SinceHarley had a command and control approach until then, they wound up with people whodidn’t know what to do on their own. Rich, Tom and John sought expert advice fromconsultants to discuss gain sharing and other organizational issues. They met Lee Ozley,cofounder and president of Virginia-based Responsive Organizations, Inc. He had initiallyworked with labour unions which gave him a perspective of organization from the union’sperspective. Later, he worked with the organizations by serving in operating managementpositions to gain their perspective of unions. Having worked with both groups, he was awareof the dynamics of the groups which he used to become an arbitrator and mediator to solveproblems. This type of knowledge transfer which involves the transfer of very complexknowledge that impacts large parts of an organization is called Strategic Transfer (M.Dixon,2000).

The three Harley managers’ discussions with Lee led them to work as team workingat a root-cause level and come up with a tentative definition of a “leader”. Harley whichstated, leadership was the process of creating and sustaining an environment in which peoplework together toward the achievement of common goals-and not because they have to, butbecause they want to. Leadership was a process whereby everybody could makecontributions to the success of the company. In 1984, they had put together a booklet onHarley’s “business policies” which tried to capture and codify the company value system. Butthe effort was cut short because Harley was still effectively under the control of its primelender, which was in a position to dictate terms to the company. Lee was of the opinion thatit was important to avoid settling on a solution to a problem before the root causes of thatproblem had been surfaced and talked about. Too often, he said, corporations attempted totake solutions to their employees, rather than work with employees to solve a problem. The shortcomings of command and control included a lack of acceptance of personalresponsibility, a focus on narrow tasks and duties, frustration, limited or narrow input intoproblem solving and decision making, a not-my-job syndrome, and-most dangerous of all forthe company’s long-term health-compliance rather than commitment. When employees havethe opportunity to freely express themselves and describe their ideal organization, the visionthey come up with is often quite similar to that described by the organization’s leaders. If thehopes, dreams, and values of an organization’s leadership differ too much from their own,people either become compliant or leave.MAKING CHANGE WELCOME When an effective change process happens, it takes change a step at a time. People inthe process of large-scale organizational change lose track of the very real progress they havealready made. They get discouraged and lose faith in the process. Change is threatening andin some ways, planned change is the most threatening change of all. So Rich was thinking ofways to make the employees welcome change. Lee outlined a simple conceptual frameworkhe had developed which he labeled “the mathematics of change”: Change = (E X M X P) >Resistance E = Engagement; M = Model; P = Process Engagement would arise when people see and understand the need to do thingsdifferently. Model would provide everyone in the organization with a clear goal and if the

goal inspired people sufficiently, the model would reinforce engagement, thereby helping totransform the shared goal into a reality. Process includes the ways of giving people the helpthey need. This framework put authority over the change process where it belonged: in thehands of those who would be most affected by any envisioned change. Lee believed this framework would help people understand change, understand whereresistance to change comes from, and create the circumstances within which resistance can beovercome. A change that is imposed through command and control not only creates anxiety,it also creates a second kind of resistance: People don’t like change and especially they don’tlike being changed. But, Lee suggested looking at change in another way. He felt changeshould be self-motivated rather than imposed.AGREEING ON A ROAD MAP FOR CHANGE In order to launch a successful process of change, the organization had to create newvehicles for education and the sharing of knowledge. From the union’s perspective, gettingeveryone focused on the long-term success of the company was the biggest challenge. WhenLee held his meetings with groups of second and third level managers, he encounteredsurprisingly few challenges. Instead, he found a pervasive attitude of compliance. Thisconvinced Richard and his colleagues that they had put their fingers on a real problem atHarley. The insidious effects of command and control at Harley were coming into view, andthe first and best evidence could be found among the ranks of management.JOINT VISION PROCESS The union-management relationship change started with envisioning a desired futurefor the company. The individuals across Harley came together to create the ‘Joint Vision’. Allunions and management leaders were encouraged to come up with their vision of the future,where they are today and how will they get from here to there. The only problem in the JointVision Process up to this point was concerned with the assembly issue. Other than that onetough issue, it came together very rapidly. All participants signed their names on the finaldocument which was later printed and distributed as a vest pocket-size, twelve page brochurewith the roster of signatures taking up the last four pages. It addressed twelve topics: financialperformance, quality, product, customer satisfaction, compensation, benefits, safety, health,housekeeping, work environment and communication. Before the Joint Vision Process began, Harley was organized in a very traditional andhierarchical way. The meeting well suited information-sharing purposes but did not work

well for involving people in problem solving and decision making. Discussions tended to belimited to a reporting function. People would ask minimal questions for the purpose ofclarification. Members tended to be very passive. All the problem solving and decisionmaking was deferred to the Executive Committee. The consultants made a series ofrecommendations about how the committee could address its problems. First, a facilitatortrained by the Joint Vision Process was employed. Second, members had to speak their mindat the table and not away from it. Third, members had to refrain from third-party attributions.The Ops committee agreed to abide by the suggestions and a process of informal andextensive coaching began, with the consultants coaching members of the Ops committee andwith the members of the committee coaching each other. The joint groups in all of Harley’s Wisconsin locations continued to identify andaddress barriers to the Joint Vision. Slightly less than a year into the Joint Vision Process,Harley and its union had to reopen contract negotiations. They decided to approach it in aproblem-solving rather than adversarial mode. The two sides reached a new two-yearagreement with little acrimony.A SUSPENSION On February 26, 1990 the PACE Local Union 7209 requested a suspension of the JointVision Process. The salaried and management people were frustrated with the overall lack ofprogress and some even felt that the union leadership was not fully committed to the non-traditional approach of the Joint Vision Process. However, there were quite a few take a waysfor the team including:  Union and management officials had learned a great deal about each other.  People could work together even in the absence of perceived crisis.  All agreed that success cannot be achieved by doing things the old way.  The people of Harley wanted the same things for their future.KEY OBJECTIVES OF KNOWLEDGE STRATEGY The key objectives of Harley were to make the employees have a sense of ownershipand deeper involvement with the organization to take responsibility for leading the company. In order to accomplish their objectives, Harley conducted a series of awarenessexpansion sessions and developed a new business process.

AWARENESS EXPANSION A couple of months before the Joint Vision Process was abandoned, there wasconsiderable discussion about the shift taking place in the organization in terms of individualstaking on more responsibility and how to make this shift reach the upper management. Theidea was to have both Harley-Davidson and Holiday-Rambler on the same level in terms oforganizational learning and change process. In October 1989, fifty-five executives attendedthe “Awareness Expansion” session. Harley-Davidson Motorcycle Company (HDMC) andHoliday Rambler (HRC) had very different businesses and their executives had never metbefore for a working session. The outside presenters were a distinguished group. Theobjective of the session was to share ideas and information, get better acquainted, and getinsights and concepts from senior management to help them do their work more effectively.THE BUSINESS PROCESS In the period between 1988 and 1991 the Awareness Expansion sessions, the JointVision Process, the beginnings of organizational learning, and related initiatives releasedenergy. Those who had been pushing for this kind of organizational shake-up realized thatthey needed to invent structures for channeling this energy in positive directions. The mostimportant of these channeling devices was the “Business Process”. Rich said that the realvalue of the Business Process is that it provides an understandable framework for dialoguewithin the organization. It ensures that everybody has the appropriate level of information, asdefined by them, to allow them to do their job to serve the organization. The roots of the Business Process actually predated the Joint Vision Process.Although the Joint Vision Process was suspended and later was transformed into otherstructures, the Business Process emerged as an enduring tool in the larger reorientation of thecompany. The organization was relationship-centered, and didn’t value discipline. TheBusiness Process was the first effort to instill some discipline and logic in the organization. In December 1987, Rich prepared a three-year plan for the board of directors meeting.It included a mission statement, operating philosophy and selected strategies. This approachwent on to become the foundation for the Business Process.

TAKING THE NEXT STEP Rich was convinced that the people of Harley had to commit themselves to aparticular conception of the company – one that would focus on processes, actions andbehaviors rather than structures, and one that would concentrate on renewal rather thansurvival. To accomplish this, people across the organization would have to understand howwhat they were doing fit into a larger picture. They needed the tools to balance localresponsibility with the larger needs of functions, divisions and departments.ASSESSING THE BUSINESS PROCESS Over the course of several months, Rich and Jim spoke with more than 100 unionleaders about the means and ends of Business Process. Rich personally ran eight two-hoursessions with Harley’s York-based employees. The idea was to change a whole culture, awhole mindset. Harley’s senior leaders were convinced that only a thorough going processwhich was taught to all, visible to all, and adhered by all would enable Harley to get throughthe immense challenges that still lay ahead for the organization.PERFORMANCE EFFECTIVENESS PROCESS In order to ensure that each and every employee understood both the strategic andoperating plans and developed his/her own plan, Harley developed a process calledPerformance Effectiveness Process (PEP). The PEP pulled together the work units andindividuals. It gave all individuals the opportunity to participate actively in determining howtheir work units would function and how they themselves could make a difference in thecompany’s fortunes. Part of the previous performance evaluation system that the HR stafferscarried forward into the PEP was a performance rating form. This form represented a realimpediment to changing the review and compensation system. The problem lay in the sourceand content of the established performance measures. Historically, a few key Harleyexecutives had these measures, with additional input only from a small number of executivecolleagues and outside compensation specialists. The measures were presented in terms ofnonspecific traits and characteristics. So most of the employees were not aware of thecharacteristics and traits they need to possess for them to be recognized and rewarded. As there was a lack of clearly defined list of desirable behaviors, the leaders of Harleydecided to work with Lee to develop specific lists of expected behaviors. Drawing on a list ofmore than 250 behavioral descriptors that Lee provided, based on his work with manycompanies in previous engagements, the ad hoc group selected a list of 90 descriptors. In an

effort to test the validity and usefulness of this list of 90 descriptors, the group decided toconvert the descriptors into a data collection instrument, which each member would then useanonymously to evaluate each of his nine colleagues. To ensure more reliable results, somebehaviors were recast as negatives. At the end of the data collection process, each of the tenexecutives wound up with a pile of nine unattributed surveys, each of which evaluated hisbehavior along 90-plus distinctive axes on a “never” to “always” scale. An outside dataanalysis company was hired to process the data which compiled the results into one aggregatesurvey. These discussions differed from previous methods and some of the key differentiatingfactors were:  Respondents represented a broader peer population.  The individual leading to individual feedback review.  The participants themselves decide on which items they would receive feedback. This process facilitated individuals to participate in defining their performance measures,understand how their colleagues perceived them and they knew now how to improve theirperformance in the eyes of their colleagues. This helped them coalesce as a team. Thesummary version of the survey provided by the outside service bureau compiled the differentprofiles into a single profile of the group and this allowed the group to focus on areas inwhich the group as a whole either shone or seemed weak. The success of this mutualperformance review led to the adoption of a similar technique as part of the PEP system.KEY OUTCOMES OF KNOWLEDGE STRATEGY The key outcomes of Knowledge Strategy were the development of the final structureof PEP which also provided the employees a path for career development. PEP went through several iterations and it aimed to give every employee the opportunityand the responsibility to influence what happened in the organization. It did so in thefollowing ways:  By having a complete and accurate understanding of how information flowed within and across organizational units.  By participating in the dialogue during the development of work unit plans.  By participating in the meetings and formal presentations that finalized these plans.  By helping to define a desired performance on the individual level.

PERFORMANCE EVALUATION AND CAREER DEVELOPMENT The HR department also tailored PEP to serve as the principal vehicle for careerdevelopment at Harley. Employee development plan had two objectives:  To provide for growth in one’s current position  To prepare for the future The career development plan prepared as part of PEP provided the individual withopportunities to work on both of these objectives at the same time. The group also adoptedthe four stages of leadership model and its scope and complexity were:  Working with others  Contributing independently  Contributing through others  Leading through influence In the spring of 1996, these competencies were introduced to all salaried employeesduring the Leadership Business Module. The “upward-feedback” component was started in1997 and till date, it continues to be used in many areas of the company as part ofperformance evaluation.THE WHOLE PACKAGE As the leadership team continued their journey of restructuring the policies,procedures and processes to make Harley the kind of organization they envisioned, theyrealized their next step should focus on compensation. It is generally quite true thatcompensation is an important motivation factor for employees to make them achieve theirgoals. The discussions Rich and Lee had with other participants on motivation made themreach a conclusion that the real challenge for Harley was not to motivate people because, allhuman behavior is motivated and it might be just that the people may not be motivated in thedirections required for organizational effectiveness. The Joint Vision Process helped the Harley’s leader to learn that most of theiremployees wanted same things from their company. This phenomenon was not unique toHarley and it was true for other organizations as well. This reality implied that if employeesfelt the compensation system to be fair then alignment of motivations would not be difficult.Harley’s leadership team was also aware that money alone wouldn’t persuade people to givetheir best efforts to the organization. They knew that the employees cared about the

company’s products and reputation more than money. In order to better understand thedifferences between the theory of existing compensation system and its reality, Rich, Lee andother members of the leadership team decided to come up with points for the two aspects ofcompensation system. This discussion highlighted the gaps between the theory and reality of the existingcompensation system. So the leadership team decided that their next task was to come upwith a new compensation system that was better focused on reality. The team which wasresponsible for changing the existing practices found their work to be challenging because thenew standards were much more complicated and they had to deal with recognition as well. Harley’s leaders considered Performance Effectiveness Process (PEP) as a way ofaligning the individual’s efforts with that of the organization and they also saw it as thefoundation for the individual performance review and career development process. The firstpurpose of PEP was to link the individual’s objectives to that of work unit’s plans whichwould in turn be linked to the operating unit’s plans and finally to the organization’sobjectives. The second purpose was to help the employee understand how his/herperformance matched with the company’s expectations of his/her. The third purpose was tohelp the individual shape his or her development. Harley’s HR managers separated the meritincrease announcement from the performance appraisal process feedback and thedevelopment planning process. This change brought positive effects among the employees.FROM ATTITUDES TO BEHAVIORS Harley began its transition approach to compensation by focusing on an individual’sbehaviors rather than a person’s attitudes. Most supervisors assume that employees who oftencreate problems have attitude problems. Harley’s leaders decided to work with Lee on thisissue and after a series of discussions they reached the conclusion that they should focusstrictly on behaviors and leave out values, beliefs and attitudes. Once they arrived at aconsensus, Lee made a series of presentations to line managers and supervisors about howthey should look at supervision.CAREER BANDING AND FORCED RANKING Harley’s HR managers came across situation in which a salaried employee whowanted to move into a new functional area realized that a move would yield him a lower pay.So they came up with a career banding scheme which consisted of only six bands instead of

the seventeen pay grades that existed earlier. This was supposed to make employees movesideways in the organizations without taking a salary hit. But to the leadership team’ssurprise, when career banding was brought into practice in 1995, employees didn’t receive itwell thinking that the company was taking away opportunities and career paths instead ofcreating new opportunities.THINKING ABOUT TOTALITY Lee conducted a leadership training and development session in which theparticipants generated a list of forty-nine steps for the different forms of recognition. Most ofthe ideas were implemented and benefited from their positive impact. The forms ofrecognition which were not received well earlier were received properly now because theemployees had participated in the process of generating the forty-nine forms of recognitionand that made all the difference.KEY ACTIVITIES OF KNOWLEDGE STRATEGY Harley established a number of activities and corporate institutes to implement theirknowledge strategy. They are:  Awareness Expansion Sessions  Harley Davidson Leadership Institute  Lifelong Learning Centers  Learning Maps  Harley – Davidson University  Harley – Davidson World Magazine  Rapid Information Delivery and Exchange (Intranet)  Eagles News Network  After Action Reviews (AARs)  Learning Labs  Product Development Leadership and Learning TeamLIFELONG LEARNING Rich and his team strongly felt that if the company has to achieve successcontinuously then it depended on the employees to agree to be learners throughout theirprofessional lives. Harley’s leadership group decided on a new educational path with a few

assumptions in mind. The assumptions led to the creation of new institutions at Harleydesigned to foster teamwork, leadership and lifelong learning.AWARENESS EXPANSION SESSION The second awareness session was held in 1990 which enabled participants to hear thesame subject presented by speakers with different points of view. This session focused oncontrasting views of the organization and also included a factory simulation exercise whichhelped the nonmanufacturing managers understand the difficulties faced by theirmanufacturing counterparts. This made the participants feel that they are learning from eachother and increasing their understanding of respective businesses. So in order to make everyemployee a teacher and learner, the executive committee selected five topics as the focus ofAwareness Expansion IV. The topics were assigned to groups of six to eight participants eachand were given the responsibility to make a presentation to the larger group. Most of thegroups made spirited presentations and they all agreed that it was a real learning experiencefor them and the participants as well. This session demonstrated that Harley’s managers couldsucceed at both teaching and learning. These were some of the important lessons thatmanagers learnt in the evolving Harley culture.LEARNING LEADERSHIP The awareness sessions helped its participants to gain a new level of understandingand learning. But it was felt that the sessions had to reach many more people and morefrequently as well. In 1991, Harley established the “Harley Davidson Leadership Institute”which would centralize all the learning and development initiatives that were happeningacross the company. In August 1991, a number of experts were interviewed and finally David Ulrich andRay Reilly, who were faculty members at the University of Michigan’s school of business atthat time, were asked to do a two-week program on leadership. The consultants felt thatHarley need a basic course in management skills and they came up with “LeadershipFundamentals and Functional Excellence” course in 1993. The number of employees whoenrolled for the courses offered by the institute increased dramatically and the number ofprograms offered by the Leadership institute also expanded dramatically that the institute’s“Training and Development Catalog” consisted of more than 140 pages.

IN-HOUSE LEARNING CENTERS During the 1980s there was a need to provide union members with opportunities forlearning. In 1988, Bob and Ron Lewandowski created the Capital Drive Learning Center witha part-time instructional staff from Milwaukee Area Technical College. In 1991, Harleyreceived grants from the state of Wisconsin and created two “Lifelong Learning centers”.Harley’s HR managers took many steps to involve large number of employees in lifelonglearning and they also invited family members to attend specific class offerings. They alsocreated a group called “Peer Network” which consisted of fifty trained employees whoencourage their peers to enroll in courses offered by the learning centers.LEARNING MAPS Rich and his colleagues decided that the company should start giving specific trainingand education for all employees. They decided to adopt an approach called Learning Mapswhich is a process that forces to ask some proactive questions that focus on core businessissues. The employees of Harley-Davidson developed such maps which addressed four topicsnamely “Our Market”, “The Business Process”, “Our processes” and “The Money Cycle”.HARLEY-DAVIDSON UNIVERSITY (HDU) Harley depends on the skills of its dealers to build and sustain the overall market forHarley products. Therefore Harley felt it was critical to develop the skills of the dealers. SoHarley-Davidson University was founded in the year 1992 and it was aimed to increase thecompetency levels of dealers. The dealers were interviewed and found out what they wantedand an educational seminar was built around that. As in the case of Leadership Institute, thenumber of participants and the number of courses offered by HDU increases over the years.DETERMINED TO COMMUNICATE One of the most difficult challenges Harley faced throughout the twelve year journeywas the issue of communications. Though Harley spent a lot of time, money and energy onthe task of communicating with employees, communication problems were not solved.Harley sensed that they had to find a new path for communication as sticking with the oldpatterns of communication made no sense. Harley’s leadership team couldn’t determine whatthe employees wanted to know and needed to know. So they recognized that a practical andrealistic approach to solve the issue of communication is to ask the employees what theyneeded to know and wanted to know and give them the information.

Lee and Jim Paterson developed a simple worksheet to understand what employeesfeel about the information they receive or do not receive. They also initiated a series of focusgroup discussions. The surveys and focus group discussions revealed that the informationcompany was providing was perceived by employees as neither necessary nor valuable.However the results generated by one of the questions in the data collection form wereenlightening. They indicated that people were actually interested in how company wideinformation might help them in their own jobs and areas of responsibility. So Harley’sleaders decided to hold “Town Hall” meetings at plant level and focus on less company wideinformation and much more information of specific departmental interest. The tools andtechniques developed during the Joint Vision Process also helped managers and employeesengage in more effective dialogues. Plant Manager and other leaders revised the format assuggested by employees and Town Hall meetings occurred more frequently. Managers triedto focus more on face-to-face communications and less on written communications.FIXING COMMUNICATIONS A formal communications department headed by Kal Demitros was established in theyear 1996. Demitros and her colleagues focused on ensuring consistency of communication.They started a new magazine named Harley-Davidson World which was published twice amonth with fresh news written in USA Today style. They deployed electronic bulletin boardsand also launched an employee intranet called RIDE which stands for Rapid InformationDelivery and Exchange. A network of employees were formed at each plant to provide andreview content for the magazine, electronic bulletin boards, intranets and othercommunication channels. Computer terminals were set up in each plant to provide employeesaccess to RIDE. Demitros brought in a new tool called the “Eagle News Network” which playedvideos of Harley related information which included production, cost, quality data forlocation, news about visitors to plant, etc. These screens were kept in lunchrooms and breakrooms across the company. With the help of all these tools Harley made tremendous progressin communications.PARTNERING Harley had partnership with International Association of Machinists (IAM) andUnited Paper Workers International Union (PACE) since the late 1970s when the companystarted to face crisis. In 1994 Rich discussed with the presidents of IAM and PACE on how

Harley could solve its capacity problems. Rich wanted to enter into a true partnership withPACE and IAM which would serve the interests of all the three parties. Rich and thepresidents of IAM and PACE formed a group that was called the “Joint PartnershipImplementation Committee” (JPIC). In 1996, Harley announced that it would build a brand-new facility to meet thegrowing demand and it would be designed and located by representatives from Harley’smanagement, the IAM and the PACE. The JPIC’s subcommittee recommended Kansas Cityas the location for the new plant and Harley’s board of directors approved the decision. Theconstruction of the new Kansas City plant was started on August 24th 1996 and the firstmotorcycle was produced in the January 1998. The new plant found answers to new andrecurring questions with the help of principles articulated by JPIC.LEARNING FROM EXPERIENCE - AAR Harley-Davidson adopted and adapted the US Army’s learning from experiencetechnique called “After Action Reviews” or AARs. This involves transferring the knowledgea team has learned from doing its task in one setting to the next time that team does the taskin different setting. This type of knowledge transfer is called Serial Transfer (M.Dixon,2000). The main goal of AARs is to understand the root causes of a problem rather thanfocusing on quickly fix something. The steps in the AAR process employed at Harley are:-  Review the intent of the recent action  Reconstruct key events: What happened?  Discuss the lessons learned from that action  Define the action implications  Take action based on the implications  Share lessons with others The outcome of this process provided a high-level snapshot of what went right andwhat went wrong. It also provided an action plan for the people concerned to improve theiractions when they do the same task next time. All these efforts eliminated short-term fixesand offered reasoned approaches to help the company improve their quality and developproblem free launches.

THE LEARNING LAB A learning laboratory is a workshop in which participants “train” less and “practice”more. The participants learned new tools and applied them in a setting similar to their workplace. Though the learning lab session didn’t take off as much as Harley’s leadership wouldhave wanted, Rich felt that he saw signs of real progress as people were talking about it in thework place.THE PDL2T In 1993, Werner, who was a former employee of General motors was hired to workunder the Vice President of Engineering Mark Tuttle. In 1995, Werner’s group established anew group called “Product Development Leadership and Learning Team” (PDL2T). Wernerfelt engineering group alone couldn’t deliver a new product. So they invited members fromthe purchasing, service, manufacturing and other functional areas so that the new visionwould enjoy a broader base of ownership across the organization. PDl2T designed a ProductDevelopment Center in 1995, where new designs and products were displayed and discussed.CONCLUSION The experiences shared by Harley through this book are valuable lessons that can beapplied to any organization who want to continuously evolve and improve in whatever theydo. If an organization wants to succeed, then it needs to make sure that everybody in theorganization knows what the company is trying to accomplish. It is quite natural for anyemployee to feel he should be appreciated for the work he does and the difference he makes.Harley realized that in addition to expressing appreciation through compensation andbenefits, they need to find out additional ways to say thank you. It was also evident from theirinitiatives that it is equally important to give employees opportunities to develop theircompetencies so that they could operate well when they decide to move to new roles. It wasbecause of all these measures that were taken during the twelve year journey, the employeesof Harley were committed to continuous improvement and took more responsibility formaking the company more effective and efficient. The different kind of environment createdby the Leadership team where employees can thrive and the efforts made by the employees inresponse, helped Harley to get out of the slump and reach new heights.

ReferencesM.Dixon, Nancy. (2000). Common Knowledge: Harvard Business School Press.Teerlink, Rich, & Ozley, Lee. (2000). More Than A Motorcycle: The Leadership Journey at Harley- Davidson: Harvard Business School Press.

Corporate journey of harley davidson through the lens of knowledge management

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