1. Case Study
Motorola
Institutionalizing Corporate Initiatives
http://www.motorola.com/mu

2. Case Study
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In the seventies, Motorola faced stiff competition,
especially from Japanese competitors
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Then CEO Bob Galvin asked human resources to
prepare a five­year training plan, specifying how
Motorola employees' skills would be upgraded.
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He called for ten­times improvement (10X) in
product quality within five years.
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A corporate vice president for quality was
appointed, and each group and manufacturing
facility established a quality function

3. Case Study
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Product design and manufacturing were
closely examined, and several weaknesses
were identified.
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Although the engineering­driven company
was good at working with new technologies,
the process of translating technology
capabilities into new products was too slow.
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Product designs were too complex, leading
to high manufacturing costs.
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Product quality was inconsistent.

4. Case Study
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In one meeting, Galvin suggested that technical
solutions – such as better designs and automated
manufacturing – were necessary, but not sufficient
measures for competing effectively.
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Motorola needed to become more efficient, more
flexible, more responsive to customer needs.
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He suggested altering the organizational structure
by establishing smaller, focused business units
with decentralized authority, an by reducing
organizational layers.

5. Case Study – Participative management
Program (PMP)
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PMP teams ­ “quality circles”
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“I Recommends”
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Managers were expected to respond in writing to
each I Recommend within 72 hours.
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Each Facility has PMP steering committee which
included shop­floor reps.
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A 200 page PMP Manual specified procedures.
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Some managers complained that the PMP format
was too mechanistic

6. Case Study – MTEC, 1980 ­ 1987
●
In 1980 Bob Galvin advocated making a significant
commitment to training and education.
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He believed that new technologies created a more
pressing need to increase employees' skills, especially
for production workers,
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Many executives disagreed with Galvin.
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Galvin rarely issued mandates, preferring to delegate
most decision making to the group heads.
●
But this time, he overrode his manager's objection
and decided to allocate $35 million to establish the
Motorola Training and Education Center (MTEC)

7. Case Study – MTEC, 1980 ­ 1987
●
Bill Wiggenhorn, then a manager at Xerox, was
hired as vice president for training and
education.
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MTEC was expected to be self­supporting by
1986.
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Some managers proposed that MTEC be
required to assess the RoI. Galvin disagreed.
●
Each group is free to purchase training from any
source, so MTEC's revenues will be proof
enough of its value.

8. Case Study – MTEC, 1980 ­ 1987
●
MTEC had tow main goals: strengthen PMP and
support quality initiatives.
●
In the early eighties a five­part 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.

9. Case Study – MTEC, 1980 ­ 1987
●
Most courses were aimed at first­line employees;
there were few courses for supervisors, engineers
and managers.
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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 management program (SEP)
brought top managers together for a week to discuss a
topic suggested by the CEO and to formulate a action
plan for addressing it

10. Case Study – MTEC, 1980 ­ 1987
●
The topic for the 1984 program: Asia: Past, Present
and Future.
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Follow­up action plans included formation of a
country managers organization and task on
marketing and product design in Asia.
●
The SEP was well received, and it became an
annual event, with a new topic each year.
●
New programs were developed.
– Manufacturing management Institute
– Manager of Managers (MoM)
– Advance Manufacturing Technology symposium

11. Case Study – MTEC, 1980 ­ 1987
●
A positive word of mouth about MTEC began to
take hold. Training expenditure in 1985 were
approximately 2.2% of payroll
●
In 1986, the Galvin Center for Training and
Education was opened in Illinois. Executive
programs were held there.
●
MTEC began offering quality courses to
suppliers, in order to improve the quality of
purchased components.

12. Case Study – MTEC, 1980 ­ 1987
●
As manager sent more employees to MTEC, 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.
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Some were neither fluent in English nor literate in
their native language.
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Complaints about PMP intensified.
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A new corporate return­on­net­assets (RONA)
bonus was instituted. Employees received a bonus
if both the corporation overall and their business
unit hit its target.

13. Six Sigma and 10X Cycle Time, 1987 ­ 88
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All Motorola groups met their “10X” quality
improvement goal.
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Factors contributing to improved quality included:
– Investments in advanced production technologies
– Closer management attention to quality metrics
– Consistent effort by production employees
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However, benchmarking still revealed companies
with superior product quality.
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A senior engineer circulated a white paper, “Six
Sigma Mechanical Design Tolerancing”

14. Six Sigma and 10X Cycle Time, 1987 ­ 88
●
Six Sigma indicates a quality level of 3.4 defects
per million opportunities; the paper noted that
most Motorola products were being produced
with quality levels at or below 3 sigma. It
explained:
– Three­sigma design yields 2,700 defective parts per
million. A product design with 10,000 characteristics,
either parts or manufacturing steps, yields 27 defects
per finished product. Since such products are
becoming very common, traditional three­sigma
designs are completely inadequate

15. Six Sigma and 10X Cycle Time, 1987 ­ 88
●
Bob Galvin seized on “sis sigma” as a new rallying
cry.
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With much fanfare he announced in 1987 a Six
Sigma Quality effort.
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All product quality was expected to improve by
another 10X in tow years, 10X more two years
later and achieve six sigma by 1992
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A memo sent to each employee stated, “There is
only one ultimate goal: zero defects – in everything
we do”

16. Six Sigma and 10X Cycle Time, 1987 ­ 88
●
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.
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Versions were offered for both manufacturing and
non­manufacturing personnel.
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Courses on quality fundamentals, first developed
for PMP, were updated to reflect the Six sigma
goal.
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Videos, brochures, and speeches emphasized Six
Sigma.

17. Six Sigma and 10X Cycle Time, 1987 ­ 88
●
Although product quality was improving
significantly, product­development cycles were
too long. Some competitors were able to
introduce new products much faster, thus taking
market share away from Motorola.
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Quality alone was not the whole answer; to
achieve total customer satisfaction, Motorolans
had to learn to work both smarter and faster.
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MTEC developed 10X Cycle Time aimed at middle
managers worldwide.

18. Six Sigma and 10X Cycle Time, 1987 ­ 88
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In 1988 Motorola received the Malcolm Baldrige
National Quality Award.
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That year George Fisher was promoted to CEO.
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With the Six sigma and 10X Cycle time initiatives,
production employees were expected to know
their equipments and do their trouble­shooting.
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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.

19. Six Sigma and 10X Cycle Time, 1987 ­ 88
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Two steps were taken:
– First, pre­employment screening, using a 31/2 hour
Basic Abilities Test Battery (BATB), ensured
that new hires had the necessary basic skills.
– Secondly, remedial training was provided to
existing employees.
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Studies found that employees who passed the
BATB could be trained more quickly.
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So, management began to consider whether to
test all employees on BATB.

20. Six Sigma and 10X Cycle Time, 1987 ­ 88
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Many employees worried that revealing their deficiencies
would cost them their jobs.
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They were assured that nobody would be summarily fired
for lacking basic skills, but 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.
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Tighter screening yielded a new difficulty. HR managers
reported they could not fill all open slots because not
enough applicants passed the basic skills test.
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MTEC began to look into ways to help public schools
strengthen their curricula, so as to improve the pool of
available workers.

21. Motorola University
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By 1989 54,000 participants had taken the six
sigma course.
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MTEC was re­named “Motorola University”
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Bill Wiggenhon, now president of MU, reported
to the director of corporate human resources
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In 1993 Wiggenhon gave a presentation to
management, in which he stated that the need
for continuous education and concluded,
“Continuous improvement requires continuous
change, and that requires continuous learning.”

22. Motorola University
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By 1994 Motorola was pending about $120
million on training annually
– $200 million when cost 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.
– MU operated out of 14 facilities – the Galvin Center
and 13 “hubs” worldwide
– Sold about $10 million of training to suppliers and
customers.

23. Motorola University
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In 1994 MU using 200 permanent employees and
300 outside contractors, offered courses in
engineering, manufacturing, sales, management,
professional development and other topics.
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It also provided referrals to courses at colleges or
offered by outside vendors.
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Wiggenhorn described MU as a “learning
network, not a place”

24. Motorola University
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The 40 hour training mandate, six sigma and cycle­
time initiatives had intensified efforts to reduce
machine downtime.
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Computer­based factory equipment generated data
on­line.
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Operated who were training to extract this
information could generate timely reports on output,
quality, and work­in­process, which previously
supervisors prepared.
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The information helped operators and supervisors
make adjustments in scheduling, material usage or
other items.

25. Motorola University
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New tasks – setups, machine changeovers,
troubleshooting, report generations – demanded
new skills
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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.

26. Motorola University
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Executive programs and specialized courses
requiring expensive hands­on equipments were
held at the Galvin Center
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Wiggenhorn significantly increased the number
of courses available over computer networks
and delivered via satellite and interactive video.
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Most other training was delivered at work sites,
using a train­the­trainer approach.
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MU also published books and videos on quality,
technology and other subjects.

27. Total Customer Satisfaction Teams
1989 ­ 94
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A “Total Customer Satisfaction” program
replace PMP in 1989.
– Ad hoc problem­solving teams used techniques
adapted to identify problems, search for causes and
solutions, and implement them.
– In 1990, a corporation­side TCS competition was
organized, which became annual event.

28. Total Customer Satisfaction Teams
1989 ­ 94
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Project teams, with 4­12 members.
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Teams might be drawn from a single work­group or
assembled from reps of multiple functional areas and
disciplines.
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Four finalists per group (24 teams) competed at the
corporate TCS competition.
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12 minutes to describe their projects.
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An MU courses, Making Effective Presentation which
previously attracted few shop­floor participants, now
was in high demand by TCS teams

29. Total Customer Satisfaction Teams 1989 ­ 94
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Prizes, ranging from certificates to dinner vouchers to
resort holidays.
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There were no “losers” at the corporate competition, 12
teams awarded gold medals and the rest got silver
medals
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Many employees travelled on an airplane for the first
time out of home country.
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Managers began to see their employees in a whole new
light
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By 1993, 4,000 TCS teams were working on product
designs, improving quality, and reducing WIP inventory.
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TCS projects were estimated at over $2 bn. Since 1989.

30. What are the
learning
points?