End Game at Wiremold

Wiremold has been one of the classic stories of lean success.  Some of the greatest lean practitioners, such as Art Byrne and Orry Fiume, came out of this company.  Many years ago Bob Emiliani told the story of Wiremold in his Shingo Prize winning book, Better Thinking, Better Results, and I have always considered this one of the top books on lean manufacturing.  It is also one of the few to accurately describe the power, and requirement, of the "respect for people" pillar of lean.

The executives at Wiremold, led by Art Byrne, understood that lean was not just about continuous improvement, but also required respect for people. That understanding let them create incredible lean excellence, with rather amazing and inspiring financial results. As Bob writes in the preface to the second edition,

Both "continuous improvement" and "respect for people" must be practiced, not just "continuous improvement" as is normally the case. Art Byrne and his management team understood this... and they thought deeply about what they were doing and its implications on employees, customers, suppliers, investors, and the communities in which they operated. Most executives don't do that.

Unfortunately, as we told you a couple years ago, Bob had to write a second edition of Better Thinking, Better Results in order to update the story.  And was not a pleasant update.

Legrand managers did not bother to learn about Lean and did not heed Art or Orry Fiume's advice to apply Lean management across the corporation. Instead they found reasons not to do Lean - basically, "we're different" - and Wiremold quickly backslid. In fact, Legrand management seemed to actively dismantle almost everything that Art and his management team and people of Wiremold accomplished.

In January of 2006, a standard-cost software system was installed at Wiremold, adding headcount to the finance function and thus completing the return to batch-and-queue thinking and management. Lean management at Wiremold was extinguished just three years after Art and Orry's retirements.

And now what might just be Wiremold's final chapter is being written.

The Wiremold Co., the West Hartford manufacturer once toured by corporate executives from across the country hoping to model its super-efficient operations, said Thursday that plummeting sales will force it to cut half of its workforce at its landmark factory off New Britain Avenue by early 2011.

The article does a good job of describing the company's illustrious history.

With Art Byrne, a nationally recognized expert of "lean management," at the reins in the 1990s, Wiremold was revered by business leaders as one of the first American companies to successfully adopt Toyota's "kaizen" method of teamwork. The company makes wire and cable management systems.  Revenue at the company grew by an average of 19 percent a year, to $471 million in 2000.

And the subsequent decline.

That year [2000], the century-old, family-owned business was bought by Legrand, a French competitor, and executives predicted that the company's reputation only stood to improve. Instead, Byrne and two other top executives left the company, and workers on Thursday said Wiremold seemed to have gone downhill afterward.

Innovative lean tools had been discarded for traditional batch and standard costing, but what about that other pillar, "respect for people"?

Workers leaving the factory during a shift change Thursday, most of whom declined to be identified for fear of retribution, said they were still in shock over the layoffs.

"Fear of retribution."  That pretty much says it all.

The Wiremold story shows how lean thinking can completely transform a company into a competitive powerhouse... and how quickly the success can be demolished by the return of a traditional mindset.  The second edition of Better Thinking, Better Results tells the story.

Comments

[Jon Miller]

Yeah, this one was a bummer to read about. A case study in what not to do. I am surprise Art Byrne and Orry Fiume haven't been more vocal about what was done to Wiremold.

[Mark Graban]

I guess Art and Orry also fear retribution???

[Stan Heard]

Sad. Organizations, groups and teams are either progressing or regressing. Successful organizations can fall apart without management leadership. Teams break down into disunited groups and groups dismantle into individuals. Art and Orry provided the leadership that pulled people together. Legrande destroyed it. The sad thing is that it doesn't stop there. Legrande is actively destroying every company that it buys.

[Adam_Zak]

A great piece on Wiremold, but also a sad one. Over the years I’ve seen a lot of great executives leave for greener (Leaner?) pastures and had the pleasure of recruiting a number of them myself. What can we say other than “the concrete-heads are back.” Adam Zak

[Orry Fiume]

Mark, Art and I have been retired from Wiremold since 2002 so there is no “retribution” that either of us has to fear. The fact is that there is nothing that either of us can do to change the situation here. This is truly a sad ending to the Wiremold story, but contains an important lesson. In both my Lean Leadership and Lean Accounting workshops I discuss the issue of sustainability. We now know that implementing lean is impossible unless leadership becomes knowledgeable about lean and personally leads the company’s lean strategy (not “supports”, but leads in a hands-on way). We also now know that sustaining lean is just as impossible unless successor leadership continues that hands-on approach. You can’t delegate knowledge or leadership. Orry Fiume

[Bob Emiliani]

Sustainability has been the Achilles’ heel of progressive management practices – of which Lean is the current best example – since the 1880s. So the Wiremold story is not at all unusual in this respect. There is a significant undercurrent of disruptive economic, social, political, and legal factors that most leaders sense with Lean management but do not explicitly grasp. Therefore, new owners/leaders will favor terminating management principles and practices that they do not understand or which generate conflict with their long-established world views. Hands-on leadership is certainly extremely important in Lean management, and so is picking the right successors over time (part of what I call “Lean Estate Planning”). Yet there is so much more that new owners/leaders must become aware of through daily thinking and studying in order to deeply understand the meaning and intent of Lean management principles and practices and to eliminate internal conflicts with respect to long-established world views (see, for example, http://www.superfactory.com/articles/featured/2007/0702-emiliani-selfish-thinking.html). Obviously, most new owners/leaders prefer to avoid the challenges that Lean management presents.

[Mark Graban]

Orry - thanks for the comment. I was being a smart-aleck and it wasn't appropriate. It's a sad story, to say the least...

[Ted Stiles]

Again the importance of leadership can't be overstated. As we all see in this community, visionary leadership is needed not only to ignite lean transformation but also to sustain it. My father, Lin Stiles, placed Art Byrne at Wiremold and the company's subsequent success was always a point of pride for us. Though Wiremold's decline has been gradual and this latest news is not necessarily surprising, it doesn't make it any easier to hear.

[Charlie Rubeor]

I worked at Wiremold for almost twelve years, 1996 through 2008. I can remember in crystal clear detail when it became obvious to me that Wiremold was abandoning Lean. In a meeting to discuss customer service, it was announced "We're going to increase inventory levels." No discussion was allowed, no alternatives were brought up, no Kaizen, just "We're going to increase inventory levels." It went downhill from there.

Very sad. People don't believe me when I tell them what a fantastic place Wiremold used to be. When Art Bryne and Orrie Fiume were there, anyone (myself included) could have gone to their office and talked with them. When I left in 2008, I couldn't even tell you who was in charge, much less their names or where their offices were.

[Nancy Castonguay]

It just breaks my heart to see what has happened to Wiremold. I worked there from 1982 through 2000. So I was there before and during the transformation to lean. I was so incredible proud to work there and be a vital part of the transformation process. What was amazing about that time was that every single employee was valued, management's job was to make things easier hence more productive for production workers. We saw the fruits of our efforts through record breaking profit sharing and notarity we all celebrated. I have been back in the comany several times and I can't bear to go into the factory. The accounting finance/department which was considered a "necessary evil" back in the day now rules the roost. It's a tragedy. Another sad example of finance people abusing their authority for short term personal gains. My biggest regret is how a friend from that era remains there, herself a VP, encrossed in the Legrand culture for personal salvation. Fortunately only a few sold their souls to the devil.

[Mike Pavano]

It is very unfortunate to read stories like this. But I'm not surprised. I interviewed there in 2006 and met the senior staff. I turned the job down after meeting the head of finance. His arrogance and pomposity surely played a huge role in the downfall of a leader in the segment. He was quite impressed with himself and his career. I wonder how he's spinning this "success story".