“Potato-potato”: the sound of freedom
Rich Teerlink was hired by Harley-Davidson in the mid 1980s to rescue the motorcycle manufacturer. This liberated leader worked with the unions to implement changes implying greater worker self-direction.
Harley-Davidson, the American motorcycle manufacturer was on the brink of collapse in the early 1980s. A new CEO, Rich Teerlink, who had worked at Herman Miller, a freedom-inspired furniture manufacturer, was brought in to restore the company’s health. Harley was a unionized company and Teerlink chose to work with the unions rather than confront them. In 1998 the three year contract was up for renewal and the traditional negotiating pattern would have called for Teerlink to put forward work rule changes and productivity improvements.
Instead he proposed that the unions work with him for a year developing a joint strategic vision (the Joint Vision process). Teerlink knew that to acquire the trust of frontline workers he would need to acquire the trust of the unions. Accordingly, he opted to forego a traditional executive prerogative, setting strategy unilaterally, and decided to share it with the unions. This belief in partnership is summarized in one of Teerlink’s mantras: “people don’t resist change, they resist being changed”. Teerlink could be a midwife to change, but he could not impose it.
On top of partnering with the unions, Teerlink sought to instil a new spirit of equality. One action involved reorganization of the physical space. The doors inside Harley’s Milwaukee headquarters were removed, except of course where confidentiality was required, in Human Resources and the bathroom.
Teerlink had to overcome a few oversights in his team-based approach. He had been successful in acquiring union and frontline worker trust but had not brought middle managers into the process to the proper degree. Leaving middle managers out of the equation is a common mistake among would-be liberating leaders and one that Teerlink eventually corrected, by turning in particular to town-hall type meetings.
A further step was to move away from the rigid functions of the “how” company organizational chart. Fixed teams were replaced by natural work groups in which the right people come together to do the right work and do it right. Natural groups would be self-organizing, experimental and provisional by definition. They would exist both on the factory floor and in support offices. At the top level, Teerlink and his team arrived at three work groups or circles: “create demand,” “produce product,” and “provide support” circles. Each circle had a coach, with Teerlink, for example, becoming the coach of the “provide support” circle.
By 1994 demand for Harleys had grown to the point where there was an 18 month waiting list. Harley needed a new plant. For most American companies that would have meant installation in a union-free Southern state. But Teerlink did not want to destroy the good union relationship he had built up. His first step was to present the idea of the new plant with its radically redesigned work rules to the unions. The unions responded by saying that would be willing to implement the new rules in the existing plants and that the resulting capacity gains would obviate the need for a new plant. Management then agreed to scale back the new plant and included two union representatives in the three person plant search time. Kansas City came out the winner. But as an indication of the union’s new strategic open-mindedness, the second choice was in a right-to-work state where the unions could never hope to organize the workforce.
Rich Teerlink led the Harley turnaround by acting on his belief that people don’t resist change per se, they resist being changed. Teamwork and trust can make change possible. Many readers will have in their ears Harley’s distinctive “potato-potato” sound – Carney and Getz show that, for 20 years now, liberating leadership and teamwork have been making the sound possible.
