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Rolls Royce is Flying High
Rolls-Royce engine services soar on its employee engagement program
By Christopher Hosford
When people think of Rolls-Royce, it's luxury automobiles that usually come to mind. The fact is, however, British-based Rolls-Royce PLC hasn't had anything to do with cars for years (the car brand is now owned by BMW). Today, Rolls-Royce makes its mark as a world leader in aerospace, manufacturing and repairing engines for military, civil and corporate aircraft customers.
But it's a leadership position that continually faces stiff competition. As a result, Rolls-Royce over the past few years has come to recognize its global workforce of 38,000 employees as a possible source of gaining a competitive edge. The company launched an initial Global Employee Engagement Survey in 2004, but the results were only fair.
That caught the attention of Rolls-Royce Engine Services–Oakland division, the company's California-based aircraft engine overhaul and repair facility. In particular, it snared the imagination of the division's president, Raj Sharma.
Sharma had a personal interest here; he was formerly president of what had been National Airmotive Corporation (NAC) prior to its 1999 acquisition by Rolls-Royce and its renaming as Rolls-Royce Engine Services. Continuing as president of the division, Sharma was determined to raise his employees' scores and pride as relatively new members of the Rolls-Royce family.
"We were a little bit better than some other divisions in the survey, but we were still not pleased with our employee communications and engagement," says Sharma. "I made the decision to really improve the workers' perception—and the reality—of our company."
The results—termed Winning Workplace—have powered Sharma's 500-employee division to the top of Rolls-Royce North America's employee engagement ranking and well beyond corporate expectations. Last spring, Sharma was invited by the president and CEO of Rolls-Royce North America, James M. Guyette, to make a presentation about his program at corporate headquarters in Chantilly, Va.
"I picked three employees to come with me to talk about the program," Sharma says. "We presented for one and a half hours, and mesmerized them."
What fascinated Rolls-Royce executives was not only the powerful financial results the Oakland facility enjoyed as a result of the division's new program, but also the daring empowerment that Sharma put into the hands of his workforce.
Where Does It Fit In?
Employee engagement combines various aspects of communications, motivation and recognition. In fact, each of these can be a key driver in an overall attitude- and performance-enhancement program. But human resources or marketing initiatives alone don't tend to achieve the hard business results that sound employee engagement programs do, say experts.
In these situations, employees go "above and beyond" and feel personally connected to their company and its financial success. Call it the ultimate in incentive and motivational programs.
But it isn't very common.
A 2005 study by professional services firm Towers Perrin showed that just 21 percent of employees in the United States (and only 14 percent worldwide) are fully engaged on the job and willing to go the extra mile for their companies. The survey—of 85,000 people working for large and midsize firms in 16 countries—revealed a vast reservoir of untapped employee-performance potential that, the firm also discovered, can drive better financial results.
"To be fully engaged, we believe employees must have a rational understanding of their company's goals and values, that they have an emotional attachment to the organization and a motivational connection—a willingness to make an extra and discretionary investment of time and energy," says Julie Gebauer, managing director of workforce effectiveness for Towers Perrin, based in Stamford, Conn.
Kicking Things Off
Acknowledging long-standing employee cynicism at his division about previous similar efforts, Sharma enlisted the help of employee engagement consultancy L.M. Dulye & Co., based in Warwick, N.Y., to help craft his employee engagement program.
"We knew that the first thing employees might say was, 'We've heard all this engagement stuff before,' " says Sharma. "So the first decision we made was to involve a third party as consultants. I don't like consultants in general, but I felt if we really wanted to hear the opinions of employees and to change our culture, we needed a third party to help them open up."
With the Dulye firm shaping the program, the company held focus groups in early 2006 to gain a better understanding of the results from the 2004 survey. The company then asked for volunteers to work on two key issues—increasing both mutual trust and business knowledge. Of some 70 volunteers, 26 were selected to brainstorm and poll their fellow workers. While leadership was not involved in the process, they were kept informed of the teams' progress through monthly program reviews.
Importantly, Sharma's initiative was created as an institutional effort, not one emanating solely from human resources, say, or marketing. Also essential was that the employee volunteers were budgeted for. Team members spent an average of 10 paid hours a week away from their machines, toolboxes or offices to work especially on the project.
"If this is not introduced as a business initiative, it will fail very quickly," notes consultant Linda Dulye. "Otherwise, what usually happens is, by week three the manager starts getting ticked off and goes to yank them back to their 'real' jobs."
Dulye and Sharma decided on a "quick hit" to demonstrate the seriousness of the division's commitment to change, focusing on the company's quarterly town hall meeting. Typically—and this was true at Rolls-Royce Engine Services—this type of gathering brings an entire workforce (or significant chunks of it at a time) into a large auditorium to hear hours of financial reports, executive speeches and long-term projections. Employee participation is generally slim to nil.
By contrast, the division's very next town hall meeting, staged only weeks after the program's kickoff, was radically restructured. Its length was halved, a heavy emphasis on financial reports was reduced, and discussions on how the company could improve were added.
"Before, it was all Raj all the time," says Dulye, of Sharma's former domination of the meetings. "Now, it's rank-and-file employees who welcome people, who serve as the masters of ceremonies, and who field questions from attendees." Sharma admits having difficulty giving up ownership of the meeting; he now contents himself with providing a brief overview of the company's future.
The Core of The Program
Meanwhile, the front-line employee lead action team produced six recommendations for change. Every recommendation was approved and implemented by management, Sharma says, and included the following:
- Weekly leadership walk-arounds. Here, employees specifically asked that executives make regular visits to areas outside their specialty (the CFO visiting the shop, for example).
Notes Kristen Denney, one of the original 26 team members and now program manager of the engagement effort, "One of the goals of the teams and the program was to ultimately create partnerships between all levels of the business, thus improving mutual trust. Therefore, one of the things done early on was to begin referring to management as 'leadership.' Now we call our top executives and managers Leadership Partners."
- Weekly employee huddles. Departmental meetings had not been held consistently, and when they did occur they were often late in getting started and had shaky agendas. Employees rankled at the disrespect this implied. Now, all departments hold well- organized 15- to 20-minute meetings every Monday. They follow a structured process to ensure consistency throughout the facility. And they start on time.
- Meeting effectiveness program. Helping the huddles, the town hall meetings and other gatherings, training programs in meeting effectiveness were established, and a guide was produced on facilitating them. Now, with consistent standards, meetings are efficient and there is increased departmental and personal accountability. The program includes tools and processes outlined in a resource guide.
- Employee-driven communications team. This group produces weekly newsletters, feeding off the departmental huddles. No company communications specialists are part of the team. Rather, the five team members get five to eight hours a week each to produce their newsletters, while handling other communication responsibilities.
- Leadership learning and development. Eager to make a difference, the employees asked for a core curriculum on leadership expertise at all levels,to provide a formal and consistent method for developing, improving and maintaining world-class leadership skills.
- Voice of the customer. The volunteer teams observed that while repairing engines they didn't really know their major aviation company customers or their needs. As a result of this employee-driven initiative, representatives from various customer companies are now invited onto the shop floor individually. Employees receive the customers at the door, conduct a tour of the facility, and introduce them to the entire shop to talk about their guests' products and requirements.
"It's necessary for the troops to know the needs of the customers," says Maurice Carter, a bearing technician lead and program team member, in explaining why he and his fellow workers proposed this initiative. "We work on airplane engines, but individual employees work on different parts, and don't necessarily know what the customer uses it for. It could be for a medevac helicopter, for example, but for most of us it's just a component.
"But when the customer gives his presentation, it draws us closer to him," Carter adds. "It allows you to know that your quality is key to the rescue of someone who may be stranded in a remote area, who relies on your ability to make sure that engine starts and continues to run in any adverse circumstance. Your quality and focus becomes critical."
Brad Burkett, a machine programmer and one of Carter's fellow team members, agrees.
"I've worked here for ten years, and it's easy to get complacent," Burkett says. "But the work we do affects lives. The voice of the customer program is a reminder of that."
Significantly, these moving observations come from a front-line employee, not management, perhaps because the initiative itself was employee driven. It underscores just how potent an effective program of employee engagement can be.
Sharma says since the initiative began in January 2006, his division has seen a 19 percent improvement in annual operating profit. Increased interdepartmental teamwork has resulted in a 400 percent reduction in the error rate in one area, and an 18 percent improvement in productivity in another. The Oakland facility's engagement program, Winning Workplace, currently is maintaining an employee satisfaction rating of more than 85 percent, with some initiatives topping 92 percent.
In addition, employee knowledge levels of such areas as customer needs, financial results, products, competition and the marketplace have improved by as much as 30 percent.
"Before we participated, the program was explained to us," says Carter, the bearing technician lead. "And just listening to the fact that the company was asking employees to participate, that says a lot. If you're going to be a team member, you try to be part of the solution. For me, it was time-out for complaining and time to get hands-on."
The particular results for Rolls-Royce Engine Services may be a matter of "If you think it's possible, it is possible." According to the global Towers Perrin study, among those employees who are judged to be engaged with their company, 84 percent believe they can help improve the quality of their company's products (compared with 31 percent of the disengaged); 72 percent say they can positively affect customer service (versus 27 percent); and 68 percent believe they can help reduce costs in their job or unit (only 19 percent of the disengaged think this is feasible).
And here's the payoff, according to the survey: Overall, those companies with highly engaged employees enjoyed a one-year improvement in operating income of 19.2 percent, while the companies with low engagement suffered a decline of more than 30 percent. Net income and operating margins also were significantly higher for the companies with engaged employees, while employee turnover was less than half that in the unengaged group.
As for his division, Raj Sharma can barely contain his enthusiasm.
"It's been like a tidal wave," he says. "Employees couldn't believe that we'd listen to their suggestions, that decisions would involve them."
Gearing Up for the Future
Following that presentation by employee engagement program team members last spring to executives of Rolls-Royce North America, Oakland employees are now telling their story to other Rolls-Royce sites globally, not just in North America. Some divisions already have begun rolling out similar initiatives.
"But my message is, this isn't a canned program," Sharma says. "What worked and succeeded here won't necessarily work elsewhere, unless you have management that truly wants to make a difference."
Discussions of employee engagement programs always seem to focus on its definition. Is it an HR initiative? A marketing program? A recruitment tool? Maybe it's all of the above. Or none.
"It's an initiative to improve business, not to make employees happy," Sharma states flatly. "If you're thinking of doing it for any other reason than improving business results, don't do it. And in fact, unless it does make a difference in the marketplace, you won't get the true employee involvement that you need."
Adds Denney, the Winning Workplace manager, "Something that can't be stressed enough is that the work done through this employee engagement program has come from the bottom up, directly from our front-line employees. And whenever possible, it's those same employees out there spreading the message."
Sharma says he and his employee teams are committed to picking up two additional recommendations a year to go with the initial six.
The employee engagement program at Rolls-Royce Engine Services has produced strong financial results to date, but the program also provided a new perspective on in-house talent.
"One of the big payoffs for a lot of team members, for us and for leadership, is that this was a huge talent-finder, uncovering skill sets of employees we had no idea they had," says Kristen Denney, Winning Workplace program manager. "For example, there were two public speakers we had in the building who made presentations to other Rolls-Royce facilities, and nobody knew they could do it.
"I'm another example," she continues. "I was a senior buyer of helicopter parts for eleven years. Now I'm program manager for Winning Workplace. It has been a pathway to promotion."
But even for those not promoted through their participation in the program, peer recognition and the respect afforded to them by management offer deeply personal rewards.
"I saw people around me, all front-line employees, who were leaders," says Brad Burkett, a machine programmer and team member with Denney. "They weren't actually leading the company, but they were people you would listen to and follow. We didn't have titles, but people had respect for what we did."
Blunting the Cynicism Factor
All too often employees see themselves as victims of decisions and mandates that waft down to them from on high. It's a problem that must be overcome for any employee engagement program to have a chance of success.
But the challenges are formidable. According to studies conducted by professional services firm Towers Perrin, employees don't generally have much faith in management to inspire and lead.
Even when employee attitudinal programs are tried, they're often so poorly structured or managed that the level of worker cynicism can go through the roof.
"From what we see, among the majority of companies we work with, the number of tried-and-failed employee engagement initiatives is huge," says Linda Dulye, president of engagement consultancy L.M. Dulye & Co., in Warwick, N.Y.
For a true employee motivation and engagement program to succeed, Dulye says, the program has to have substance and genuine buy-in by company leadership. She remembers one client who seemed committed to improving employee engagement, but when workers produced a slew of new ideas, management shot down every one at the first meeting.
"You can't extend the invitation, and the first time people show up, you slam the door in their faces," Dulye says.
For full details on this case study, contact Roger Gibboni (845) 987-7744.