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| Volume 3, Issue 10 - October, 2004 • Interantional Conference on Appreciative Inquiry Report The title of the conference was “Creating Extraordinary Organizations for Business and Society.” One of the highlights for me was the Executive Roundtable where I learned about Rodrigo Loures, CEO of Nutrimental Foods in Brazil and the effects of globalization on industry in that country. I learned that about 80% of the manufacturers in Brazil became victims of globalization, but Rodrigo decided to use Appreciative Inquiry as a way to survive the onslaught and enhance the company’s competitive position. The implementation of AI was so successful that Earnings before Income Taxes have subsequently multiplied by 6 times what they were previously. Rodrigo was not alone in using AI to achieve phenomenal results. Karen Stefaniak, CNO of the University of Kentucky Hospital; Bob Stiller, CEO of Green Mountain Coffee Roasters and Bob Stull, president of Roadway Express all reported similar results. Roadway is particularly interesting to me because it is a very difficult situation and because I have experienced the situation first hand by participating in their Columbus Summit. This is a large company with roughly 25000 employees, 330 locations, a strong union orientation and a history of command and control management in a highly competitive industry. What the folks at Roadway have learned in the application of Appreciative Inquiry as a way to improve their competitive position has applications for all of us. The trucking industry like all industries is changing very rapidly and Roadway had to find a way to effect change rapidly if they were to survive when so many other union carriers were going out of business in the face of non-unionized competition. The management of Roadway decided that the best way to achieve their goal was to engage the people who knew the business best, the employees. Like most companies with any history, the management structure was based on the work of Frederick Taylor and was designed a century ago for a work force that was moving from an agrarian economy to an industrial economy with a limited knowledge base for the transition. Today, we are in a much different situation and a new paradigm is needed to fully employ, engage and capitalize on the human assets of our businesses. Roadway has undertaken a three-pronged approach to the situation with some amazing results including a $10 million savings in just one of the measurements currently being used. Primary to the effort was the idea of involving the people and encouraging decisions to be made closest to the issue. In order for this to work, Appreciative Inquiry was decided upon as the means of intervention that would best facilitate the change. The second approach that was needed was to insure that the employees had a basis of business financial understanding that would enable them to make sound business decisions and to that end, they undertook an education program that brought the financial situation into perspective for all of the employees. The program was based on the book, “The Great Game of Business” and has evolved into the 94 Now program. In effect 96 to 98 cents of every revenue dollar generated went to some kind of expense in the company and the goal became reducing that to 94 cents now. The program has been successful and they are working to get to 92 cents of expense for every revenue dollar generated for 2005. The third approach to enhancing their competitive situation was finding a tool that the employees could use to help them in their work in their own areas to reduce costs and improve productivity. Roadway decided to include LEAN training in their Summits and this has worked well for them. We all recognize that a quality product or service is the price of admission to the current marketplace. We also recognize that low price is not a sustainable competitive advantage. Patents and other forms of intellectual property provide some protection, as does a well-recognized brand. Cindy Frick, Vice President of Organizational Development for Roadway provided evidence that suggests that operational excellence can provide a competitive advantage that can last as long as 7 years. Bob Stiller echoed those remarks. Another presentation that was especially interesting was the Fireside Chat with Barbara Fredrickson, PhD. University of Michigan and recipient of the American Psychological Association’s 2000 Templeton Prize in Positive Psychology. Her work is providing scientific insight into positive psychology and her presentation on “What Good are Positive Emotions” has applications for all of us. This is but a taste of what kind of information was available at the conference. If you are interested, it is possible to virtually attend the conference for only $149 by registering for the Virtual Conference at www.pegasuscom.com/ai. • Earl Cunningham’s Response to the September Issue • What are High Engagement Organizations? If you have a subject that you would like to see covered in future issues of “Taking Aim,” please send me an email at aim@CannonAdvantage.com.
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