netrashetty
Netra Shetty
Leadership Style at United Parcel Service : United Parcel Service, Inc. (NYSE: UPS), colloquially referred to as UPS, is a package delivery company. Headquartered in Sandy Springs, Georgia, United States, UPS delivers more than 15 million packages a day to 6.1 million customers in more than 220 countries and territories around the world.[2][3][4]
UPS is well known for its brown trucks, internally known as package cars (hence the company nickname "The Big Brown Machine"). UPS also operates its own airline (IATA: 5X, ICAO: UPS, Call sign: UPS) based in Louisville, Kentucky.
While UPS faces an impending change of leadership with the retirement of Kent Nelson and the arrival of incoming CEO, James Kelly, Kelly flatly states "there will be no major changes" (Fabey, 1996). Given the sweeping changes implemented within the past six months, concentration on continuing the plans already in motion and capitalizing on the family atmosphere seems wise. Kelly also cited a great espirt de corps and the employees' mutual respect as factors he will use to strengthen and continue the company's success. However Kelly cites issues beyond Nelson's initiatives in quality, service, and technology as the top of his list. These issues include getting the company finances into the black and tapping the potential of the newly formed logistics group (Mitchell, 1996); the achievement of/implementation of which imply future change. However, for the time being change is likely to be subtle as the behemoth whose "U" use to stand for such things as "unyielding" and occasionally "unbeatable" (in the words of one writer, Fabey, 1996) shifts to representing a company whose revitalized world view and new vision now stand for "unbelievable," and "unlimited."
Corporate Culture
"Once upon a time, there was a company named United Parcel Service. It had spent decades leveraging tried-and-true practices built upon tried-and-true strategies. It faced one competitor, the U.S. Postal Service. At Christmas time, those brown trucks were as reliable as Santa Claus' sleigh---which is why customers always did business pretty much the way UPS asked them to. Then one day the company looked upon its business and saw that times had changed. The practices had become 'inoperative' because the strategies had become outdated. The strategies had become outdated because smaller upstart rivals and old foes had become competitive. Profits declined. So UPS examined what its customers wanted, sought ideas from its employees, swallowed hard, and decided it had better start doing business differently--or there might not be any more business to do. So it did. Now UPS is living happily ever after once again. For now." (Day, 1995, p.15)
Organization development is a long-range effort to introduce planned change throughout an organization and provides a renewal process enabling managers to adapt their style and goals to meet the changing demands of the environment. These changes---improving quality, increasing innovation, adopting a customer orientation---are so fundamental that they usually require changing the organization's culture. As mentioned earlier, UPS is striving to manage its own changes by emphasizing and refocusing its philosophy from efficiency to quality, increasing innovation by investing in technology and expanding into different business opportunities (passenger charters), and by adopting more of a customer orientation. In recent years, strong competition has forced UPS to realize that efficiency is not necessarily synonymous with effectiveness. So, after more than 80 years as an operations-oriented company, UPS has taken significant steps to transform itself into a market-driven company with a distinct customer focus. This transformation has affected every part of its organization, including employee functions and roles within the organization. UPS has realized that its corporate culture must first change if any other organizational changes were to be successful.
"A corporate culture is a system of shared values and beliefs which interact with an organization's people, structure, and systems to produce behavioral norms (the way things are done around here). It gives the whole organization a sense of how to behave, what to do, and where to place priorities in getting the job done" (Harvey & Brown, 1996, pp. 68-69). Managerial factors such as philosophy, values, actions and vision, combine with organizational factors such as roles, structure, systems, and technology to form the shared sayings, jargon, actions and feelings that make up a corporate culture.
Because UPS is in the service sector, its culture (image) helps set it apart from its competitors. The fast-moving UPS driver in his "browns" is easily recognizable, while the clean brown truck driving down the street is almost as American as apple pie. UPS is synonymous with its brown color (Pullman brown), which as noted earlier, was selected for its neat, dignified, and professional qualities. In his November 3, 1996, article in The Courier-Journal entitled, "Henry County misses its special UPS man," Byron Crawford writes: "Although most of his customers never saw Bud Collins more than two or three minutes during his visits, over his 21 years as the UPS man in Henry County they came to know and admire the man in the brown truck who always had a smile and a pleasant greeting. " This is just one story of a UPS driver who helps UPS customers see him and the entire organization in a different way.
Internal changes will allow the organization to become more effective if its employees possess the skills and competence to implement these changes. To give its managers these necessary skills, UPS dedicated $550 million to training in 1996. Workshops, developed by The Atlanta Consulting Group, Inc., were the major expense: Trust & Teamwork (developed in 1994) and Quality at Work (developed in 1995).
The objectives of the Trust & Teamwork workshop were as follows:
Build teamwork and collaboration in our work with others.
Understand the role trust and credibility play in our personal effectiveness.
Create an environment of win-win problem solving.
Listen with skill and understanding.
Take responsibility for producing desired results.
Give and receive feedback effectively.
Confront others in a caring and constructive way.
Build self-confidence.
All management and full-time business professionals (non management) were required to attend the three-day workshop, which was comprised of lectures, games, and various learning exercises. The workshop concentrated on showing the relationship between trust and organizational performance, and how teamwork requires a win/win mindset as opposed to a win/lose mindset. "We believe that trust in teams and organizations is an essential ingredient. It is built slowly and can be destroyed almost instantaneously" (Trust & Teamwork Workbook, 1995, p. 16).
The workshop also dealt with five fundamental (HEART) principles of human interaction:
Hear and understand me.
Even if you disagree, please don't make me wrong.
Acknowledge the greatness within me.
Remember to look for my loving intentions.
Tell me the truth with compassion.
"The five principles of Managing From The Heart are not a series of techniques to get other people to do what we want them to. They are a way of life, a way in which we as human beings can truly stand together and support each other. They build self-esteem and strong relationships and, ultimately build satisfying and productive workplaces" (Trust & Teamwork Workbook, 1995, p. 22). Every person who attended the workshop received a copy of the book referenced above (Managing From The Heart by Bracey, Rosenblum, Sanford, and Trueblood, 1990) and was encouraged to read it and apply its principles to his/her personal and professional life. The HEART principles were seen as a definite indicator of change at UPS---never had UPSers been asked to look for loving intentions. In fact, the word loving was not heard around the workplace prior to the workshop.
The Trust and Teamwork workshop portrayed a "soft-side" to UPS, which is something many employees did not think existed, and as a result, the principles of the workshop were not immediately accepted. Many questions and suspicions had to be confronted by workshop trainers in order for the participants to know that UPS was serious about this part of the change process; however, the workshop has been viewed as a success and one big step in the direction of change. "To survive and prosper in today's and tomorrow's global economy will be difficult, if not impossible, for organizations in which people don't trust each other. Trust is the `miracle ingredient in organizational life---a lubricant that reduces friction, a bonding agent that glues together disparate parts, a catalyst that facilitates action.' We believe that trust is the most fundamental fabric of any organization. Without trust, collaboration and teamwork are impossible" (Trust & Teamwork Workbook, 1995, p. 5).
A "New Language" resulted from the Trust & Teamwork workshop and to reinforce the "new language" and remind employees to use it, posters (Appendix A) can be found on walls in almost every office. It is common for the phrase "I'm going to trust my partners" to be heard around the office; however, many times it is said in a reluctant tone. To encourage workshop participants to keep the principles learned fresh, reminders summarizing key learnings were sent out via housemail (Appendix B).
Much of UPS's policies and vision are based on the founder's beliefs. In 1907, Jim Casey founded what is now known as UPS. Pictures of Casey and the other 3 founders can be found on the walls of every UPS building. UPS traces its culture back to its influential founder, who personified a value system and relentlessly hammered in the basic values which became the cultural core of the company. UPS's culture is based on past successes: "but we've always done it like this...look how profitable we are." This strong tradition enforced an operations-oriented approach that was warranted to make UPS successful for most of its 89 years in business. However, the company has had a difficult time transitioning from efficiency to effectiveness because of the traditional policies and procedures.
UPS's transformation from an operations-oriented to a market-oriented company with customer focus has drastically affected one groups' function and role within the organization--- its industrial engineers. When increasing competition forced UPS to take a hard look at itself, the company began asking serious questions such as whether it was really doing the right things to meet its customers' needs. Did all those MOPs (master operating plans) on the shelf collecting dust do anything for the customer? As a result, UPS reevaluated many of its departments and made numerous changes. One of the most significant changes was the formation of an IE Reassessment Group in 1993. This group was formed to study ways to reengineer UPS's industrial engineering department, which had not been seriously modified since 1962. While the rest of the company was being redirected towards the customer, the IE department was still geared for internal operations. Instead of being responsible for tasks such as auditing, reporting, and time measurement, the IE department was reengineered around outcomes such as customer satisfaction, volume development, and customer logistics.
With the help of consulting firm Coopers & Lybrand, the IE Reassessment Group identified and eliminated a variety of sacred cows that inhibited necessary changes. They determined that IEs at UPS were spending up to 80% of their time doing work measurement, planning, auditing and reporting. While efficiency and work measurement was still important for keeping the operation running smoothly, the daily tasks of the IE departments contributed little value-added service for UPS customers. Which hand the UPS driver should hold his keys in, which foot to use when stepping up into the package car, and how long it should take to deliver one package were not beneficial to the UPS customer; however, UPS still reminds its managers of the need to "run the business" and not lose sight of the importance of departing an aircraft on time or making on-time deliveries. However, the "efficiency tradition" and the goal of "running the tightest ship in the shipping business" are being challenged and rethought.
Value-added activities have been given much attention. Today, if the value of an audit or report does not exceed its cost, the audit or report is simply eliminated. One recent example is a Daily Operation Report that automatically prints every morning at 6am at all UPS region offices around the world. This report gives a summary of the airline's activity for the night before; for example, which flights were late, why they were late, and what happened as a result. The UPS Air Service Center in Louisville, Kentucky, is responsible for updating this report; however, the report's effectiveness is being put to the test. On October 24, 1996, the report stated "No report." What better way to measure the value of the report than stop completing it to see if anyone notices? It was two weeks before someone noticed the report was not being completed. Tradition has a strong-hold on UPSers, but many are starting to see the importance of re-directing their time and energy into achieving internal and external customer satisfaction.
New goals were developed for UPS's industrial engineers:
Become more focused on the external customer;
Set as a goal a 90% rating for internal customer satisfaction;
Identify and apply new technology that would improve existing operations and develop new business;
Decrease time spent on auditing and reports;
Concentrate on improving operational areas that have value to the external customer; and
Spend less time on time study, and more time on training UPS management and hourly employees in job methods.
To help realize these goals, the IEs were reorganized into three functional groups that can work in any UPS environment or operations. The planning support group assists operations managers with the development and implementation of a master operating plan, while the operations improvement group works closely with operation managers to develop and achieve improvement goals, and the package operations support group is responsible for supporting technology applications in the operations.
In just three years, the IE Reassessment plan and the new IE structure have resulted in excellent results. Many processes that do not make sense are being eliminated and saving money. Non-value-added activity is being assessed, customer interaction is being emphasized, a better vision of the planning process is realized, and time spent on work measurement has decreased from 20% to 8%. However, the IE Reassessment Project has also resulted in some noticeable adverse effects. With the emphasis of the IE departments identifying the important tasks and discarding the rest, there has been some lack of support identified. When traditional IE responsibilities were no longer required, nothing was done to make up for this change. For example, there have been many critical operational changes that seem to be ignored. There have been many instances where time and money have been wasted because of a lack of planning and control was required of the IE departments in the past. It seems as though the responsibilities that the IE departments gave up were not delegated to anyone else; therefore, frustration and disappointment are frequent results.
" 'Watching our people embrace the change has been the most rewarding thing I've experienced, and the most enjoyable', says Kent C. Nelson, the man who helped ignite it." "UPS employees, Mr. Nelson recounts, "were ready for the change--more ready than you might find in most companies." Nelson attributes this readiness to the fact that UPS managers and supervisors are also UPS owners. Their life's savings are tied up in it. Change meant UPS people would have to tackle their jobs differently. "But first we had to change the mindset of our people," Mr. Nelson says. In the past, UPS was always focused on how to become more efficient and reliable in order to effectively serve its customers. UPS went so far as to tell its customers why it was in their best interests "to use the services we provide in the way we want you to use them." Ownership is the key to a successful change effort at UPS.
UPS is well known for its brown trucks, internally known as package cars (hence the company nickname "The Big Brown Machine"). UPS also operates its own airline (IATA: 5X, ICAO: UPS, Call sign: UPS) based in Louisville, Kentucky.
While UPS faces an impending change of leadership with the retirement of Kent Nelson and the arrival of incoming CEO, James Kelly, Kelly flatly states "there will be no major changes" (Fabey, 1996). Given the sweeping changes implemented within the past six months, concentration on continuing the plans already in motion and capitalizing on the family atmosphere seems wise. Kelly also cited a great espirt de corps and the employees' mutual respect as factors he will use to strengthen and continue the company's success. However Kelly cites issues beyond Nelson's initiatives in quality, service, and technology as the top of his list. These issues include getting the company finances into the black and tapping the potential of the newly formed logistics group (Mitchell, 1996); the achievement of/implementation of which imply future change. However, for the time being change is likely to be subtle as the behemoth whose "U" use to stand for such things as "unyielding" and occasionally "unbeatable" (in the words of one writer, Fabey, 1996) shifts to representing a company whose revitalized world view and new vision now stand for "unbelievable," and "unlimited."
Corporate Culture
"Once upon a time, there was a company named United Parcel Service. It had spent decades leveraging tried-and-true practices built upon tried-and-true strategies. It faced one competitor, the U.S. Postal Service. At Christmas time, those brown trucks were as reliable as Santa Claus' sleigh---which is why customers always did business pretty much the way UPS asked them to. Then one day the company looked upon its business and saw that times had changed. The practices had become 'inoperative' because the strategies had become outdated. The strategies had become outdated because smaller upstart rivals and old foes had become competitive. Profits declined. So UPS examined what its customers wanted, sought ideas from its employees, swallowed hard, and decided it had better start doing business differently--or there might not be any more business to do. So it did. Now UPS is living happily ever after once again. For now." (Day, 1995, p.15)
Organization development is a long-range effort to introduce planned change throughout an organization and provides a renewal process enabling managers to adapt their style and goals to meet the changing demands of the environment. These changes---improving quality, increasing innovation, adopting a customer orientation---are so fundamental that they usually require changing the organization's culture. As mentioned earlier, UPS is striving to manage its own changes by emphasizing and refocusing its philosophy from efficiency to quality, increasing innovation by investing in technology and expanding into different business opportunities (passenger charters), and by adopting more of a customer orientation. In recent years, strong competition has forced UPS to realize that efficiency is not necessarily synonymous with effectiveness. So, after more than 80 years as an operations-oriented company, UPS has taken significant steps to transform itself into a market-driven company with a distinct customer focus. This transformation has affected every part of its organization, including employee functions and roles within the organization. UPS has realized that its corporate culture must first change if any other organizational changes were to be successful.
"A corporate culture is a system of shared values and beliefs which interact with an organization's people, structure, and systems to produce behavioral norms (the way things are done around here). It gives the whole organization a sense of how to behave, what to do, and where to place priorities in getting the job done" (Harvey & Brown, 1996, pp. 68-69). Managerial factors such as philosophy, values, actions and vision, combine with organizational factors such as roles, structure, systems, and technology to form the shared sayings, jargon, actions and feelings that make up a corporate culture.
Because UPS is in the service sector, its culture (image) helps set it apart from its competitors. The fast-moving UPS driver in his "browns" is easily recognizable, while the clean brown truck driving down the street is almost as American as apple pie. UPS is synonymous with its brown color (Pullman brown), which as noted earlier, was selected for its neat, dignified, and professional qualities. In his November 3, 1996, article in The Courier-Journal entitled, "Henry County misses its special UPS man," Byron Crawford writes: "Although most of his customers never saw Bud Collins more than two or three minutes during his visits, over his 21 years as the UPS man in Henry County they came to know and admire the man in the brown truck who always had a smile and a pleasant greeting. " This is just one story of a UPS driver who helps UPS customers see him and the entire organization in a different way.
Internal changes will allow the organization to become more effective if its employees possess the skills and competence to implement these changes. To give its managers these necessary skills, UPS dedicated $550 million to training in 1996. Workshops, developed by The Atlanta Consulting Group, Inc., were the major expense: Trust & Teamwork (developed in 1994) and Quality at Work (developed in 1995).
The objectives of the Trust & Teamwork workshop were as follows:
Build teamwork and collaboration in our work with others.
Understand the role trust and credibility play in our personal effectiveness.
Create an environment of win-win problem solving.
Listen with skill and understanding.
Take responsibility for producing desired results.
Give and receive feedback effectively.
Confront others in a caring and constructive way.
Build self-confidence.
All management and full-time business professionals (non management) were required to attend the three-day workshop, which was comprised of lectures, games, and various learning exercises. The workshop concentrated on showing the relationship between trust and organizational performance, and how teamwork requires a win/win mindset as opposed to a win/lose mindset. "We believe that trust in teams and organizations is an essential ingredient. It is built slowly and can be destroyed almost instantaneously" (Trust & Teamwork Workbook, 1995, p. 16).
The workshop also dealt with five fundamental (HEART) principles of human interaction:
Hear and understand me.
Even if you disagree, please don't make me wrong.
Acknowledge the greatness within me.
Remember to look for my loving intentions.
Tell me the truth with compassion.
"The five principles of Managing From The Heart are not a series of techniques to get other people to do what we want them to. They are a way of life, a way in which we as human beings can truly stand together and support each other. They build self-esteem and strong relationships and, ultimately build satisfying and productive workplaces" (Trust & Teamwork Workbook, 1995, p. 22). Every person who attended the workshop received a copy of the book referenced above (Managing From The Heart by Bracey, Rosenblum, Sanford, and Trueblood, 1990) and was encouraged to read it and apply its principles to his/her personal and professional life. The HEART principles were seen as a definite indicator of change at UPS---never had UPSers been asked to look for loving intentions. In fact, the word loving was not heard around the workplace prior to the workshop.
The Trust and Teamwork workshop portrayed a "soft-side" to UPS, which is something many employees did not think existed, and as a result, the principles of the workshop were not immediately accepted. Many questions and suspicions had to be confronted by workshop trainers in order for the participants to know that UPS was serious about this part of the change process; however, the workshop has been viewed as a success and one big step in the direction of change. "To survive and prosper in today's and tomorrow's global economy will be difficult, if not impossible, for organizations in which people don't trust each other. Trust is the `miracle ingredient in organizational life---a lubricant that reduces friction, a bonding agent that glues together disparate parts, a catalyst that facilitates action.' We believe that trust is the most fundamental fabric of any organization. Without trust, collaboration and teamwork are impossible" (Trust & Teamwork Workbook, 1995, p. 5).
A "New Language" resulted from the Trust & Teamwork workshop and to reinforce the "new language" and remind employees to use it, posters (Appendix A) can be found on walls in almost every office. It is common for the phrase "I'm going to trust my partners" to be heard around the office; however, many times it is said in a reluctant tone. To encourage workshop participants to keep the principles learned fresh, reminders summarizing key learnings were sent out via housemail (Appendix B).
Much of UPS's policies and vision are based on the founder's beliefs. In 1907, Jim Casey founded what is now known as UPS. Pictures of Casey and the other 3 founders can be found on the walls of every UPS building. UPS traces its culture back to its influential founder, who personified a value system and relentlessly hammered in the basic values which became the cultural core of the company. UPS's culture is based on past successes: "but we've always done it like this...look how profitable we are." This strong tradition enforced an operations-oriented approach that was warranted to make UPS successful for most of its 89 years in business. However, the company has had a difficult time transitioning from efficiency to effectiveness because of the traditional policies and procedures.
UPS's transformation from an operations-oriented to a market-oriented company with customer focus has drastically affected one groups' function and role within the organization--- its industrial engineers. When increasing competition forced UPS to take a hard look at itself, the company began asking serious questions such as whether it was really doing the right things to meet its customers' needs. Did all those MOPs (master operating plans) on the shelf collecting dust do anything for the customer? As a result, UPS reevaluated many of its departments and made numerous changes. One of the most significant changes was the formation of an IE Reassessment Group in 1993. This group was formed to study ways to reengineer UPS's industrial engineering department, which had not been seriously modified since 1962. While the rest of the company was being redirected towards the customer, the IE department was still geared for internal operations. Instead of being responsible for tasks such as auditing, reporting, and time measurement, the IE department was reengineered around outcomes such as customer satisfaction, volume development, and customer logistics.
With the help of consulting firm Coopers & Lybrand, the IE Reassessment Group identified and eliminated a variety of sacred cows that inhibited necessary changes. They determined that IEs at UPS were spending up to 80% of their time doing work measurement, planning, auditing and reporting. While efficiency and work measurement was still important for keeping the operation running smoothly, the daily tasks of the IE departments contributed little value-added service for UPS customers. Which hand the UPS driver should hold his keys in, which foot to use when stepping up into the package car, and how long it should take to deliver one package were not beneficial to the UPS customer; however, UPS still reminds its managers of the need to "run the business" and not lose sight of the importance of departing an aircraft on time or making on-time deliveries. However, the "efficiency tradition" and the goal of "running the tightest ship in the shipping business" are being challenged and rethought.
Value-added activities have been given much attention. Today, if the value of an audit or report does not exceed its cost, the audit or report is simply eliminated. One recent example is a Daily Operation Report that automatically prints every morning at 6am at all UPS region offices around the world. This report gives a summary of the airline's activity for the night before; for example, which flights were late, why they were late, and what happened as a result. The UPS Air Service Center in Louisville, Kentucky, is responsible for updating this report; however, the report's effectiveness is being put to the test. On October 24, 1996, the report stated "No report." What better way to measure the value of the report than stop completing it to see if anyone notices? It was two weeks before someone noticed the report was not being completed. Tradition has a strong-hold on UPSers, but many are starting to see the importance of re-directing their time and energy into achieving internal and external customer satisfaction.
New goals were developed for UPS's industrial engineers:
Become more focused on the external customer;
Set as a goal a 90% rating for internal customer satisfaction;
Identify and apply new technology that would improve existing operations and develop new business;
Decrease time spent on auditing and reports;
Concentrate on improving operational areas that have value to the external customer; and
Spend less time on time study, and more time on training UPS management and hourly employees in job methods.
To help realize these goals, the IEs were reorganized into three functional groups that can work in any UPS environment or operations. The planning support group assists operations managers with the development and implementation of a master operating plan, while the operations improvement group works closely with operation managers to develop and achieve improvement goals, and the package operations support group is responsible for supporting technology applications in the operations.
In just three years, the IE Reassessment plan and the new IE structure have resulted in excellent results. Many processes that do not make sense are being eliminated and saving money. Non-value-added activity is being assessed, customer interaction is being emphasized, a better vision of the planning process is realized, and time spent on work measurement has decreased from 20% to 8%. However, the IE Reassessment Project has also resulted in some noticeable adverse effects. With the emphasis of the IE departments identifying the important tasks and discarding the rest, there has been some lack of support identified. When traditional IE responsibilities were no longer required, nothing was done to make up for this change. For example, there have been many critical operational changes that seem to be ignored. There have been many instances where time and money have been wasted because of a lack of planning and control was required of the IE departments in the past. It seems as though the responsibilities that the IE departments gave up were not delegated to anyone else; therefore, frustration and disappointment are frequent results.
" 'Watching our people embrace the change has been the most rewarding thing I've experienced, and the most enjoyable', says Kent C. Nelson, the man who helped ignite it." "UPS employees, Mr. Nelson recounts, "were ready for the change--more ready than you might find in most companies." Nelson attributes this readiness to the fact that UPS managers and supervisors are also UPS owners. Their life's savings are tied up in it. Change meant UPS people would have to tackle their jobs differently. "But first we had to change the mindset of our people," Mr. Nelson says. In the past, UPS was always focused on how to become more efficient and reliable in order to effectively serve its customers. UPS went so far as to tell its customers why it was in their best interests "to use the services we provide in the way we want you to use them." Ownership is the key to a successful change effort at UPS.
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