Charles Lebeuf, VP of Human Resources for Bell Helicopter Textron of Canada, was asked to address the stockholders, employees, and reporters at the upcoming Annual General Meeting. After conferring with Hanna Gadomski, head of public relations, Lebeuf prepared the following speech:

It is a pleasure to address you here today at the end of one of our best years ever. It's now ten years since I moved to Montreal to take over human resources at our Mirabel plant. I believe this new plant constitutes a triple first:

(1) the first joint social and technical design of a highly complex, automated, and continuous process plant; (2) the first Bell Helicopters plant in Canada to successfully utilize all teams in the production process; and (3) the first plant to implement a team-based philosophy. We spent time and resources in the training employees to operate as a team, to make decisions as a team, and to take responsibilities as a team. This approach enabled us to flatten the organizational structure by eliminating the several layers of management. Apart from technical training, certain interpersonal competencies were needed in order to ensure good team cooperation. Thus, because teams are so critical to the operations, they were delegated the authority to recruit, select, and train new employees who join the team. Moreover, in order to reinforce this team-based management, we developed sophisticated team-based rewards that support this philosophy. Everyone at Bell Helicopters is excited about the new team-based philosophy. Morale is high, employees are satisfied, and productivity is surpassing expectations. We can all look back with pride at our accomplishments and to the future with confidence.

Thank you.

Gadomski phoned Scotty McPherson, a trusted and recently retired senior employee, and read him the speech. McPherson said, "If he gives that speech, they'll laugh him into the ground!" When she asked why, here's what he said: "All in all, we liked the team approach. But ten years of using it also taught us that it is not a cure-all. Problems came up every day, things we didn't think about, and we had to be creative to come up with solutions that fit into the team philosophy. I'll give you some examples.

"Each team operates independently, fine, but look what that did to our stress. When members of my team called in sick or took a personal-leave day, they knew that the burden on the other members of the team would increase. In the old system, it was the supervisor's responsibility to find a replacement. Now, the team was on its own and had to manage shorthanded.

"The company operates an individual incentive compensation plan that runs parallel to the team-based compensation. So a few people would not collaborate with the other members of the team in fear that their own contribution wouldn't be recognized and they'd lose the annual personal bonus. In other words, the compensation plan was based partly on individual merit, but the company expected everybody to function as though only the team mattered.

"And sometimes we had competition between the different teams instead of cooperation. We never knew whether our first loyalty was to the team or to the organization as a whole.

"I was the team leader, and upper-level management would set quotas and production standards that my team did not agree with. So I had to waste time and energy trying to explain and convince the teams to accept these decisions."

Questions

What would you do in Hanna's place?
What other problems can you envision for a company that is using a team-based approach?
If you were senior management, how would you solve the problems identified (a) in your answer to the previous question, and (b) by Scotty?