Leadership Skills Needed in Order to Make 5S a Part of DMOS6 Culture

LEADERSHIP SKILLS NEEDED IN DMOS61

Leadership Skills Needed in Order to Make 5S a Part of DMOS6 Culture

By

Elizabeth Shockley

A Paper Presented in Partial Fulfillment

Of the Requirements of

LEAD 500: LEADERSHIP STYLES AND THEORIES

Dr. JeniMcRay

September 25, 2011

Abstract

A leadership strategy-to-performance gap analysis has been conducted on the business entity of DMOS6, Texas Instruments, Incorporated and the results indicate that execution of the organization’s vision with regards to implementation of the quality philosophy of 5S reveals the need to emphasize top-down buy in with leaders at all levels setting the example, communicating with all employees the relationship between 5S success and achievement of the quality goals, and how daily activities support these priorities. In addition, leaders within DMOS6 must work to foster an environment of trust throughout the organization in order to maximize employee support of the 5S initiative.

Introduction

Corporations may work diligently to identify goals for their way ahead, but without leadership engagement at all levels they may not succeed in executing the best of plans. In other words, it can look perfect on paper but the execution is the real product as well as the measuring stick of the success or failure of the plan. Texas Instruments, Incorporated is a leader in the semiconductor and electronics industry and does have corporate goals each year that all employees are expected to support. These goals are business priorities which are communicated from the top throughout the company to both leaders and followers. Each level of leadership does communicate the priorities as well as how their sub-organization will support these goals. There is evidence that we will discuss indicating a strategy-to-performance gap between the leadership skills and support of the corporate vision by one of its factory leadership teams. Specifically, in its support of the corporate vision, the DMOS6 organization has opportunities for improvement in its leadership emphasis of the quality philosophy of 5S, leadership example or walking the talk, communication to all employees, and fostering an environment of trust.

Background

Texas Instruments, Incorporated (TI) is a Fortune 500 company headquartered in Dallas, Texas with approximately 27000 employees worldwide. Its 2010 rank by Fortune Magazine (2011) was 175th out of 500 and is known for its world-class product quality as well as being one of the top companies recognized by the Ethisphere Institute as one of the World’s Most Ethical Companies (2011). Within the corporation structure is the Technology and Manufacturing Group (TMG). This group is further segmented into six divisions, including Worldwide Manufacturing (also referred to as One Make). It is the One Make organization that is responsible for the global manufacturing, assembly and test of TI’s integrated circuits. These circuits are fabricated in one of eleven wafer fabrication facilities located in eight countries. Figure 1 is a map of One Make factory locations worldwide. These manufacturing sites are not all wafer FABs but could also be assembly and test sites (A/Ts) where the integrated circuits are packaged and tested prior to shipment to the customer.

Figure 1. One Make Factory Locations Worldwide, Retrieved from:

These facilities or factories are also referred to in the semiconductor industry as wafer FABs. DMOS6 is one of these wafer FABs and is the subject organization of this strategy-to-performance gap analysis.

TI is led by its Chief Executive Officer (CEO), Richard K. Templeton. Each year, the CEO publishes and communicates the corporation’s vision and business priorities. Each subsequent level of organizational leadership, from TMG to One Make to DMOS6, then disseminates what their organizational priorities will be that in turn support the vision and goals of the corporation. These priorities are carefully linked to specific business goals. In 2011, Rich Templeton stated that it was the goal of the entire workforce of TI to “Accelerate growth to gain share. Again.” The “again” part was added because the 2010 goal was “accelerate growth to gain share.”

The leadership style of Rich Templeton is much like that found in transformational leaders. According to House, the charismatic leader has the ability to skillfully influence followers to “set or accept higher goals, and have greater confidence” (1977). His expert knowledge of the semiconductor business exemplifies his leadership trait of “knowledge of the business” or that trait which Kirkpatrick and Locke write about (1991). He also demonstrates effective communication abilities which enable him to clearly state the corporate vision as needed. In addition, by leading the company and supporting such reward programs as profit sharing, Templeton’s leadership fits the Path-Goal Theory of leadership behavior referred to by House & Mitchell (1974):

“The second proposition of this theory is that the leader’s behavior will be motivational, i.e., increase effort, to the extent that (1) such behavior makes satisfaction of subordinates’ needs contingent on effective performance, and (2) such behavior complements the environment of subordinates by providing the coaching, guidance, support, and rewards necessary for effective performance.”

Specifically, TI has established a formula tied to the corporate Profit from Operations and every employee regardless of job or position, receives a percentage of the yearly profits (2004). This motivates employees because it directly affects them and their financial position. For example, in 2001, TI paid a record-setting 26% Profit Sharing bonus to every employee in the company. This percentage is multiplied by an employee’s yearly base pay to determine the actual dollar amount paid.

What is 5S?

5S is a methodology taken from a Japanese “philosophy for life” (Kobayashi, 2008) and each “S” stands for seiri (sort), seiton(set), seiso (shine), seiketsu(standardize), and shitsuke(sustain). These terms mean much more to the Japanese way of life than simple applications to manufacturing processes, Kobayashi explains, and goes on to add “the philosophical concept of 5S has been embedded in Japanese society through the principles of Shintoism, Buddhism and Confucianism for several hundred years. Japan has traditionally emphasized cooperation, advocating the values of trust, self-restraint, harmony and organizational loyalty” (Kobayashi, 2008).

This 5S concept has been adapted by many different businesses, especially those with manufacturing operations. 5S is also referred to as a tool that when implemented successfully can improve quality (Howell, 2009). Effective 5S programs also impact worker attitudes: “operators readily take ownership of problems and offer opinions on how processes can be improved” according to Howell. 5S is part of continuous improvement and lean manufacturing. It ultimately allows for the organization of materials needed to perform a task which leads to efficiency, as well as specifying a place for everything so that no time is wasted in trying to locate what is needed. Shine is also known as cleanliness and implies reduced fault and “embedded quality” (Kobayashi, 2008). Standardization includes establishing the consistent method by which the first three S’s are maintained. It also makes identification of anything out of the ordinary easy to detect (Howell, 2009). Sustain is to implement 5S as part of the daily routine and manufacturing way of life. Figure 2 graphically represents the continuous quality methodology of 5S.

Figure 2. One Make 5S Continuous Process.

The One Make organization is TI’s manufacturing workhorse, comprised of over 12,000 employees on five continents. DMOS6 is one of its factories where semiconductor wafers are fabricated. DMOS6 has been operational since 2002 and has over 400 employees throughout its organization.

In late 2008, DMOS6 began its journey towards 5S in its factory operations. DMOS6 leaders established that making 5S a part of the factory culture would directly support the corporate business priority of quality. Much of the activities were geared towards establishing the first of the 5S or 1S. Sort is the first S and can be time consuming if practices haven’t already been established that maintain orderly work areas. DMOS6 is a world class clean room factory but the leadership had not established consistent methods by which employees could help achieve 1S. Information was posted on the factory intranet about the 5S program and what its definition was; however, the branches of DMOS6 were not in synch with one another in their efforts. DMOS6 is made up of three branches, Manufacturing, Engineering, and Product Engineering. Figure 3 is an organizational chart representing the DMOS6 structure.

DMOS6 Wafer FAB
Manufacturing & Operations / Engineering B1 & B2 / Product Engineering

Figure 3. DMOS6 Organizational Chart.

While the Manufacturing branch is where the factory main effort is, it relies on its support branches of the Engineering Branch as well as the Product Engineering Branch to assist in keeping the product moving through the factory with minimal delay or loss of yield. The personnel assigned to the Manufacturing branch are machine operators (work in factory), supervisors, or managers (don’t work in factory). Their efforts are directed towards pushing wafers through the line as quickly as possible without error and with the highest quality. Personnel assigned to the Engineering branch are technicians who repair the equipment in the factory, supervisors, equipment engineers, process and yield engineers, or managers. They support the Manufacturing branch but do not report to anyone in their branch of management but to the FAB manager. Product Engineering branch personnel handle product development, submit wafer flow data, and publish cycle time estimates to predict and track when wafers will be completed in the factory. They also do not report to manufacturing but are held responsible by the same FAB manager. With each of these branches reporting to different managers, there exists opportunity for disconnects when executing on the organization’s goals, even when clearly stated by the organization’s leader or FAB manager.

5S Assessment Process & Clean Room Teams

DMOS6 leaders have emphasized and executed thoroughly on setting up an online system by which the 5S program is accessed, work documented, and automated communication is sent to employees identifying items out of 5S compliance. The process is that audits or assessments are conducted at a minimum once per month by members of the DMOS6 Leadership Team (section manager and above). The size of the factory area warrants involvement of over 15 members of DMOS6’s leadership. The FAB is divided up into areas to facilitate an organized method by which these audits take place. In addition, all of these areas are assigned to one of five Clean Room Teams (CRTs). Figure 4 is a snapshot of the online Self Assessment Management System (SAMS) which DMOS6 uses to maintain all things 5S.

Figure 4. DMOS6 Online Self Assessment Management System (SAMS).

In this figure an example of an entry being made to begin an assessment by the DMOS6 leadership (DM6 Monthly Leadership Audit) of the area assigned to CRT1. The leadership conducting the audit uses a checklist made up of questions which support maintenance of each of the 5S pillars --- sort, set, shine, standardize and sustain. However, prior to 2011, these audits were subject to the person’s viewpoint or perspective of what items were not in compliance with one or more of the 5S standards. The DMOS6 leadership team placed emphasis on the infrastructure to bring 5S into the culture, but not part of the culture. As a result, while monthly assessments were conducted on schedule, action items identified and published, emails sent to personnel responsible for correction, not all action items were closed out. This is a classic example of transactional leadership or contingency model theory which places an emphasis on the contingent reward or punishment based on performance of the follower (Fiedler, 1972). Fiedler further explains that it is the position power dimension of this leadership theory that allows the leader to use their position to influence follower behavior because of their ability to “hire and fire, to discipline, to reprimand.” In the case of the DMOS6 Leadership Team Assessments, the action items identified with corresponding email sent to the responsible party were perceived similar to the issuance of a speeding ticket or other violation. These emails while set up to be sent automatically via the Self Assessment Management System, were many times followed up by a manager with pictures showing the 5S violation or finding. The corresponding tone in these emails also was not conducive to the recipient jumping up and down with joy or rushing to correct the action item. In 2010, 599 action items were identified in the assessment process yet only 520 were closed out. This delta of 79 action items, or 13%, is an indicator that leaders were not successful in following up on items in need of correction. This same statistic indicates that DMOS6 leaders did not have 5S buy in from all employees. While the DMOS6 organization does list 5S as its quality initiative in support of the corporate 2011 business priorities, it has a gap in the leadership skills being utilized amongst its management in their efforts to support the goals. If all leadership team members who are conducting the monthly assessments would realize that they are not “5S-ing” the organization’s open action items, then maybe they would try to improve communication to remove the “speeding ticket” perception. Until they 5S their own methods, they are not walking the talk. Setting the example for followers in any organization takes self-sacrifice and “plays a key role in organizational effectiveness” (De Cremer, 2004). De Cremer and van Kippenberg explain that this behavior in leaders exemplifies their commitment to the organization’s goals and positively influences followers (2004).

Figure 5 contains the assessment action items pareto chart. This chart indicates that through August 2011, action items are being consistently identified but not necessarily being closed.

Figure 5. CRT1 Leadership Team (LT) Audit Actions Pareto.

One dynamic of DMOS6’s 5S program that is limiting the full embrace of 5S is the amount of participation at the grass roots or manufacturing operator and engineering technician level. Personnel working in the factory see firsthand items that need to be made 5S whole, or in compliance with 5S standards. The five CRTs have 6-8 personnel per shift (4-12 hour shifts) assigned. The individuals not assigned to these teams may therefore see their roles as having limited 5S responsibility. As these responsibilities are inferred to be the team responsibilities rather than being the responsibility of every individual, then the 5S program potential becomes very limited. This is because the factory has over 400 personnel assigned and team population of at most forty percent of that number. A culture cannot be developed without buy in from all members of the organization, and that is most directly impacted by the DMSO6 leadership.

“It is important for leaders to be trusted” is a strong and true statement supporting the behavioral component of charismatic leadership (Conger, 1987). DMOS6 leaders aren’t fostering an environment of trust if their followers perceive the 5S action items are punitive in nature or will negatively impact their performance reviews. If leaders instead celebrated ideas submitted to minimize or eliminate 5S assessment actions or findings, then employees would develop an improved attitude towards the 5S program in DMOS6. Dirks and Ferrin remind us that the social nature of the relationship between the leader and follower can be of such a quality that the follower perceives a “contract of goodwill” as well as equal trust and this is referred to as a relationship based perspective (2002). Communications should also send the right message and refrain from placing blame and emphasizing cooperation to resolve action items. The design of the DMOS6 SAMS action item generation, for example, could be modified to add a “Thank You” email when action items are closed out by employees. In addition, allowing for feedback from the employee on how the item could be prevented in the future may solicit needed suggestions to improve quality in the organization. This would better tie the employee’s daily activities to support of the corporate and organizational vision. Lastly, these types of improvements would begin to establish trust between employees and leaders because personnel would see that their leaders were there to support them in addition to leading them. The Four-Factor Theory of Leadership as well as the Ohio State theory list consideration as a dimension of leadership that contributes to organizational effectiveness (Bowers, 1966). DMOS6 leaders should also consider incorporating this dimension into their 5S initiative.

Future of 5S and DMSO6

Some of the points discussed here were identified recently by a special cross-functional team formed to address the assessment process as well as the standards used for audits. This team, called the 5S Assessment and Standards Team, was one that I was fortunate enough to have been assigned to participate on. This team was formed to provide feedback to the DMOS6 Leadership Team in order to improve the current system and to prepare for a One Make 5S Audit of the program in DMOS6. Team membership totaled twelve and consisted of personnel from DMOS6 Manufacturing Branch, Engineering Branch, and Product Engineering Branch. This mix also included supervisors, engineers, and managers, and helped foster cooperation as well as teamwork devoted to the leadership’s needs of receiving relevant feedback as well as structured suggestions on how to improve the assessment process. The formation of the team and its charter (as well as support) from the FAB manager was a huge step acknowledging improvement is needed. This type of behavior is an example of transformational leadership in that the FAB manager is encouraging employee involvement in “thinking critically and to seek new ways to approach their jobs” (Walumbwa, 2004).

Conclusion

Goals are made to be achieved. How they are achieved, how well they are sustained, and how much everyone in the organization buys in to this collective effort is significantly impacted by the leadership styles and traits of those leading the way. Texas Instruments, Incorporated, is no different than any other for-profit organization in its efforts to clearly communicate the business priorities to all who work to achieve them. It is timely and consistent in how and when it communicates these priorities from the CEO to the factory worker at the helm of our FAB equipment operating in a 24-hour seven day-a-week environment. It takes every leader as well as every follower to understand and execute to accomplish these goals. The TI corporate goal of achieving the highest quality product is supported by the DMOS6 goal of making 5S part of its culture and daily activity. We have highlighted in this strategy-to-performance gap analysis of the leadership skills in DMOS6 that there are opportunities for the Leadership Team to improve performance in support of the corporate vision. These opportunities exist in the everyday leadership emphasis on the 5S quality philosophy and how it is communicated. Other opportunities can be found when observing how well the leadership themselves walk the talk of 5S and the relationship to the number of open assessment action items. In addition, DMOS6 leaders should be thoughtful in their communication and perceived intent when trying to identify items that need attention. Some suggestions have been made in the scope of this analysis which demonstrates that DMOS6 leadership could potentially identify similar course of action in order to further ingrain 5S into all factory daily activities. Finally, leadership within DMOS6 should strive to improve their transformational leadership styles such that followers will trust management and share in the satisfaction of working towards the collective benefits of a factory that is 5S compliant and “then some.”