Kevin Meyer

Life and leadership at the nexus of lean and zen.

The Customer is the Boss at FAVI

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By Kevin Meyer

A couple years ago I told you about a rather unique manufacturing company in Florida where no one had job titles. That is, except for the “plant manager”… the guy in charge of watering the plants.

A $170 million public company that manufactures high end hydraulic
manifolds and values, profitable since it was started in 1970, six
plants around the world employing roughly a thousand people.

What's unusual about that?  How about this:

  • There is no organization chart
  • There are no job titles or job descriptions
  • No performance criteria
  • No bonuses and no perks
  • No regularly scheduled meetings
  • No approval levels for capital or expense spending
  • No goals
  • No offices or high-walled cubicles
  • If the peers accept the idea, then "management" is presumed to accept it – hence the need for very little management
  • Every employee is simply expected to figure out where they fit

Organizations that unique, especially ones that unique that thrive, are a rare breed. Our friend and author of In Pursuit of Elegance, Matthew E. May, has stumbled on another: FAVI. Thanks to regular reader Peter from Denmark for bringing this to my attention.

Take the case of French company FAVI, an autoparts supplier manufacturing copper alloy components. CEO Jean-Francois Zobrist eliminated the personnel department immediately upon taking the helm of the company in 1983. But that wasn’t all he got rid of. Says Zobrist: “I came in the day after I became CEO, and gathered the people. I told them tomorrow when you come to work, you do not work for me or for a boss. You work for your customer. I don’t pay you. They do. Every customer has its own factory now. You do what is needed for the customer.” And with that single stroke, he eliminated the central control: personnel, product development, purchasing…all gone.

So how are they “organized?”

The company formed twenty teams based on knowledge of customers like Fiat, Volvo, Volkswagen, etc. Each team was responsible not only for the customer, but for its own human resources, purchasing, and product development. There are two job designations in the team: leader and compagnon—or companion—which is an operator able to perform several different jobs.

This places accountability where it belongs.

Accountability is to the customer and to the team, not a boss, so FAVI people are free to experiment, innovate, and solve problems for customers. They’re known for working off-shift to serve customers or to test out new procedures. Equipment, tooling, workspace, and process redesign all rest in the hands of those doing the work. FAVI people are encouraged to make decisions and take quick action to improve their daily work and respond to the needs of their customers. Control rests with the front lines, where it adds the most value.

A traditionalist would run away in fear… or at least bring up all the reasons why it couldn’t work. Duplication of resources, abdication of economies of scale… I can hear the arguments now. But guess what. It does work.

It works. Still, customers visiting FAVI are often astounded at what they perceive to be a total lack of control. A favorite story Zobrist tells involves a customer’s site inspection at FAVI: “They asked to audit our procedures,” he says. “They were not pleased because we had no measurement system for tracking late orders—nothing in place, no plan, no process, no structure in case of delay. They are a customer for over ten years, so I say, ‘In that time, have we ever been late?’ They say, ‘No.’ I say, ‘Have we ever been early?’ They say again, ‘No.’ And so I ask them why they want me to measure things that do not exist.”

Good point, and I’ll stay away from exploring that concept for now except to ask how many of us are measuring something irrelevant.
The larger point is to take a look at how your organization, and especially the structure and hierarchy, align to presumably (although I probably shouldn’t be so presumptuous) to create customer value. As Mr Zobrist realized, value flow may be completely unrelated to traditional functions, information flow, and reserved parking spots. In fact, as many of us in the lean world have realized, organization structures not aligned to the value creation process can remove considerable value themselves.

Comments

  1. I hate job titles. I always tried to avoid them personally. I think the sheer act of assigning a job title is to impart limitations of scope and interest. Even if you aren’t ready to get rid of all the rest of the stuff, getting rid of job titles should be pretty easy.

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