Source: Forbes.com/ Willem Sundblad
Manufacturers are facing unprecedented demand for their products in the aftermath of the COVID-19 crisis and this is forcing many of them to make tough choices between running their plants at full capacity and reserving time for innovation.
This makes GAF’s decision to embark on a bold innovation initiative during this crisis seem almost foolhardy, but as their Chief Growth and Innovation Officer, Ashish Kulkarni, says “you really only have one choice, be the disruptor or prepare to be disrupted. Demand is up, opportunities are ripe, and we should strike while the iron is hot.”
In truth, the process may have started as far back as 2017 when Standard Industries named Jim Schnepper the President of GAF and he set the company on a journey towards more agile and lean ways of working. Over the last 3 years, the company has made substantial investments in tools, technology, and capabilities to enable it to deliver products and services more rapidly. Now Kulkarni is building upon those efforts to unlock the next set of opportunities.
While all leaders are crucial in driving innovation, GAF has come to believe that in a manufacturing context, operations is one of the critical four innovation partners (alongside Sales, Marketing, and R&D) because:
• Operations brings the discipline needed to drive innovation through clear rules of engagement and sticking to them.
• Operations is key to figuring out how to scale an idea. Many innovations work in small pilots but fall apart when brought to scale.
• Operations helps improve cost over time. If innovation costs go unmanaged, the scaling will be limited and may not work at all.
Below are some of the lessons GAF learned about partnering with Operations on innovation.
Realigning incentives to remove barriers
Limiting innovative thinking and action to just a few senior operations leaders wasn’t getting GAF to where they wanted. “If we needed operations to be a key innovation partner, we needed to get everyone rowing in the same direction,” Randy Bargfrede, Chief Operations Officer at GAF, shares.
Kulkarni knows that when it comes to change, everyone fears making bad decisions. “There is a natural resistance that comes with innovation, driven by opposition to change, and GAF is no exception,” he says.
In the past, leadership’s performance was incentivized based on cost reduction and as a result , disincentivized innovation. Operations leaders were incentivized, says Gerald Lackey, VP Business Optimization and Agility, to drive costs down but not use their valuable machine time to run trials. “You would be penalized if you ran trials. If we needed to start somewhere, it was to make sure we didn’t have a system that drove behavior opposite to the team’s target.”
To solve this, GAF realigned incentives for plant leadership teams so they were no longer penalized for trials and instead incentivized for identifying specific innovation initiatives that each plant wanted to support. It allowed discretion on behalf of the plant leadership teams around what innovations they supported, while also creating space for corporate groups who wanted to drive innovation through plant trials.
Practice What You Preach
Production professionals—operators, process engineers, maintenance technicians, quality managers—are steeped in a deep culture of cost control and efficiency gains. They are the factory-floor equivalents of world-class forensic accountants; they leave no stone unturned to save machine time.
“You are not going to convince them to ‘give away’ hard-earned efficiency gains to some R&D group to run innovation trials by talking systems theory and market dynamics. The easiest way to do this is to put them on the innovation team,” Lackey shares. “Stop talking and start doing.”
“If we wanted to get product innovation right,” Bargfrede, a GAF veteran reveals, “GAF needed to draw on the wealth of resources that have been doing those jobs for years. Real knowledge is about how to do things better—that’s how we move to a state of nimbleness.”
GAF put this philosophy into practice when it engaged 3-5 production professionals across each of its shingle plants as part of the 2020 launch of its new Timberline HDZ Shingles, the first shingles with innovative LayerLock technology that mechanically fuses the common bond between overlapping shingle layers. This new product was not just a first for GAF but also an industry-first, launched in only 9 months. Popular Science recognized it on its Best of What’s New Awards list as one of the “100 greatest innovations in 2020” and OpEx International recognized GAF with an honorary mention in its annual awards for “Best Enterprise-Wide Transformation Project.”
“Anyone can do this—pick a pilot initiative, form a team with direct access to senior-level decision-makers, then remove all the guardrails. Low risk and high return,” Kulkarni says.
Build on your pockets of excellence
When GAF started to embed lean and agile working practices in its operations environment, it initially began by bringing in external experts to point out their gaps and try to fill them. The approach was positioned as a pilot in one plant, with the intention of moving to a plant-by-plant rollout. But this top-down, expert-led approach didn’t live up to expectations.
“I think it would have worked if we had either no excellence to speak of, or had a highly centralized set of expertise that needed updating. What we had was, instead, dispersed pockets of expertise in different areas across different plants,” Bargfrede explains the catch.
Previously, GAF’s different manufacturing plants had a lot of autonomy, isolating great ideas and efficiencies. The leadership realized that rather than starting from scratch, their goal was to rapidly identify, harvest, and export those best practices across their network.
As a result, it signaled an opportunity to GAF leaders to deploy a combination of lean capabilities and agile teams to identify areas of excellence and spread them across the network using agile communities of practice.
In turn, it built innovation right into the production infrastructure by closing the loop between the production professionals driving innovation and the same individuals driving efficiency gains to support innovation.
The company’s new agile teams include plant personnel from line operators to plant managers, taking local expertise and working with other plants to share ideas and improvements. Plants retain their independence; what is additive is a cadence of knowledge sharing and communication, along with coordination of major efforts through a central council.
Agile lets GAF scale faster in two ways. First—accelerating decisions by delegating them to communities of practice, like maintenance or quality; and second—using regular collaboration meet-ups to synchronize otherwise independent plant-level activities, as opposed to running traditional, plant-by-plant transformations.
There is no destination, just a relentless journey
GAF may be early in its journey, but the lessons learned are many, and more are sure to come. Innovation can only happen when space is held for it, and in a manufacturing environment, that space has to include time on machines. By combining Lean and Agile practices, new innovations can be tested and scaled versus proposed and shelved. Many advanced industrial manufacturers have already discovered this, but GAF is among a more traditional breed of manufacturers that are starting their journey with the tailwinds of the past 15 years.
Lean and agile are GAF’s systems of choice; but at the end of the day, it’s about people, not the system, says Kulkarni, “I can tell you that we are getting some great people to raise their hand and say, ‘I would like to join’. For me, that’s the most beautiful definition of success I can think of.”