Taking an Organization to New Heights: An Interview with Christiano Schena
by Kali Saposnick

from Leverage Points Issue 50

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Christiano V. Schena is a vice president of Caterpillar Inc., the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. During a distinguished career that has taken him around the world, Chris has built a reputation for fostering workplace collaborations that lead to extraordinary results. He will be a keynote speaker at the 2004 Pegasus Conference, to be held on December 1-3, 2004, in Boston, Massachusetts. In the following interview, Chris describes some of the "soft" and "hard" tools he uses to build sustainable excellence in the various businesses he leads.

In 1996, Christiano Schena was sent to Brazil to improve the performance of Caterpillar's Brazilian operation, located in Piracicaba. His first step was to motivate the employees to rebuild the business themselves. This approach and the resulting employee engagement not only helped turn the company around, but also earned the facility a notable operational excellence certification and the country's most prestigious quality award.

Once internal issues had been resolved, Caterpillar Brazil used a similar empowerment approach to initiate a civil society project engaging area citizens in addressing community issues. Brazil's federal government has since adopted the program as a pilot for the whole country. How was this level of success achieved? According to Chris, "at the heart of managing for performance is good communication. Before you can implement any of the hard metrics, you need to be able to engage every employee in supporting the company's vision."

Communication That Reaches All Stakeholders
As a vice president of Caterpillar Inc., Schena now has responsibility for the company's Component Products & Control Systems Division, which has 44 facilities around the world and nearly 5,000 employees. The CP&CS Division manufactures and supports a wide range of components, which are used in Caterpillar products and by other Original Equipment Manufacturers (OEM)—including transmissions, hydraulics, electronic and electrical systems, and specialty products.

Having worked in Europe, Asia, Latin America, and the United States, Chris has found that communication poses the biggest challenge to effective collaboration. Whether trying to negotiate a joint venture or restructure a factory, until the leader can connect directly with people on their level, he or she is usually perceived as the outsider. So Chris makes it a priority to first learn the language of the country sufficiently (he now speaks six languages) so he can directly communicate with employees, better understand their culture, and effectively relate to the work environment. Employees recognize and appreciate these efforts and, as a result, become more open to listening and accepting his views. The trust level builds, and progress on the project starts to move forward more quickly.

To foster communication and understanding, Chris regularly conducts all-employee meetings to talk about the organization's vision, strategies, and activities. Each meeting allows time for open discussion. "This kind of two-way conversation is what allows you to be clear in setting directions," he says. "You need to be able to share your strategy in such a way that every single individual in the company—from managers and engineers to clerks and shop floor workers—understands what you're trying to do and what their role is in trying to achieve the common vision."

At Caterpillar Brazil, Chris managed about 3,300 employees—2,500 of whom spoke only Portuguese. He quickly picked up that the game of soccer, or European football, was close to the heart of most Brazilians. At the all-employee meetings he often used soccer analogies, such as that of winning the world championship, to motivate employees and give them a sense of pride and purpose. "Until you achieve this 'intimacy,'" says Chris, "in which they realize that you're serious and willing to make the effort to share and understand their culture, you don't get the buy-in and therefore the engagement you need to achieve your goals."

A Well-Tested Strategic Planning Process
While good communication—a "soft" tool—is crucial for engaging employees, Chris also blends "hard" tools into the strategic planning process he uses. For instance, any big project is connected to a set of metrics that is consistently disseminated and updated throughout the entire organization. Each work group in the organization is aware of its cost, quality, delivery, and lead-time performance versus established targets. These metrics provide feedback to the organization, because knowing how well a team is doing—the results—is not enough. The team needs to know if what they're doing—the means—is actually helping them to achieve their goal. This knowledge keeps people focused on the goals and motivated to work harder to get where they want to go.

Caterpillar Brazil is an example of successful application of the integration of strategic planning process deployment, communications, and metrics. In 1996, the majority of the products assembled in the facility were missing parts, resulting in missed shipping deadlines. "Looked at from another angle," says Chris, "the majority of my customers were unhappy. Not only were we losing sales, but we were inefficient because we were fire-fighting all the time, working overtime, and air-shipping parts to complete the products."

Together, he and the factory workers agreed on the vision to become their customers' preferred supplier. They set a goal of meeting promised delivery dates at least 98 percent of the time within 18 months. They applied accuracy and delivery metrics, with graphs posted at crucial points in the factory so people could see the improvements. They also implemented a daily system of raising green or red flags at each worker's station to indicate whether or not that day's assignment had been launched and completed on time. After two weeks of red flags dominating the floor, eventually more green flags started to appear. Chris explains, "They were motivated by the pride of belonging to a winning team. Also, people like to take charge of their destiny. When they see they are accountable for something, and are given the tools they need to deliver on those accountabilities, of course they're going to perform better."

Employee Empowerment That Benefits the Community
This philosophy of empowerment was equally at play in one of Schena's most challenging collaborations—a civil society project indirectly related to his work at Caterpillar Brazil. When he took over as general manager there, Caterpillar Brazil was trying to overcome a difficult economic environment. Chris's first priority was to give employees a sense of vision, ownership, and pride. Deploying the strategic planning process mentioned above, they transformed the business to such a degree that in 1999 they were awarded the Operational Excellence certification by the Oliver Wight company and received the Premio Nacional Da Qualidade, Brazil's equivalent of the U.S.'s Malcolm Baldrige Award. At that time, Caterpillar Brazil's employee engagement scores were the highest in all of Caterpillar, and Chris and his management team began to recognize that the state of the surrounding community could be a threat to sustainable success of their organization.

Indeed, the troubled urban environment surrounding the factory, which included a high crime rate and failing educational system, was one of the company's limiting growth factors. The team launched an initiative known as Piracicaba 2010. This effort brought together local officials, entrepreneurs, CEOs, and other community and media leaders to develop a vision and strategy for the city—from a citizen's standpoint—in order to attract talented people there. Caterpillar Brazil offered its resources and its strategic planning process to jump-start the effort, and many of Cat Brazil's employees enthusiastically volunteered their own time toward the effort.

Through a process of examining the pros and cons of different scenarios, the group began to see the kind of planning and organization needed to reach a positive future. Within six months, the initiative was mature enough for the team to hold a town meeting to expand community participation. "By getting citizens talk to each other regularly in the pursuit of a common goal rather than their own smaller agenda," says Chris, "the community was able to work together to make the environment more attractive and safer. In fact, now the city not only attracts more professionals but more businesses as well." A couple of years ago, the Brazilian government selected Piracicaba 2010 as a pilot program for the country to exemplify what needs to be done to regenerate its cities. Since 2002, Brazil's government has granted funding to run that program, and similar projects have sprung up throughout the country.

Personal Lessons Learned
Throughout his experiences, Chris has come to believe that building an organization for success happens over time. "You don't wake up one morning and say, 'Now I know how to do it.'" he says. "It's like building a house—one block and one floor at a time." Here are some lessons that Schena has learned over the years:

• Learn something from every situation you're in. Everything we do has the potential to teach us something.
• Observe your environment. A company is made up of people. If you don't observe the people, you don't understand the business. "
• Listen and try to understand what's behind the words that people say.
• Be humble. You can always learn from someone else, regardless of what position they're in.
• Be consistent in purpose. When you set a vision and direction, people are going to watch you, so you need to walk that talk.
• To be part of a winning team, give everyone around you an opportunity to grow and be the best. You cannot be the best if you don't make people around you the best.

"At the end of the day," says Chris, "to grow the organization means getting more people believing in themselves and in what they can do. They must be convinced they can contribute to achieving the common goals. This only happens through a shared and consistent vision. We need to provide each employee an opportunity to share their knowledge with others and demonstrate to themselves what they are really capable of. There is nothing more rewarding than to take a team to heights they never thought they would be able to reach."

Kali Saposnick is publications editor at Pegasus Communications.