Satellite Learning Centers
Provide Unique Opportunities

Looking for ways to improve employee productivity and reduce absenteeism? Satellite learning centers may be the answer.

SLCs are free public schools sponsored by employers and located on company property for the purpose of serving employees' children. The public schools system contributes teachers, books and curriculum, and the company provides the classroom space plus utilities. SLCs have been around for nearly a decade and are "one of the best kept secrets on the planet," according to Mary Anne Ward, president and founder of Schools At Work, an Orlando, Florida-based educational consulting firm that assists organizations in developing SLCs.

SLCs provide a variety of benefits for both the company and the employee. For the company, SLCs help reduce absenteeism, lower employer turnover, raise employee morale and increase productivity, as well as affording the company the opportunity to give back to their community, says Ward. For the employee/parent, SLCs provide monetary savings, the convenience of having one's children nearby and high-quality education for the child. Currently, there are 30 SLCs in the United States, involving companies such as Target Corporate Headquarters, Hewlett-Packard and Honeywell Space Systems.

American Bankers Insurance Group in Miami formed the first SLC in 1987. ABIG's overall turnover rate is 13 percent, but employees whose children are in its K5 elementary school have a turnover rate of just 5 percent. The onsite school is also credited with reducing absenteeism and increasing morale and productivity.

Ward expects the SLC trend to continue. "Parental involvement is a huge piece of how well your children develop, not only emotionally but academically," she says, citing recent studies. "The schools that are successful, the students that are successful, are the schools and students who have parental involvement."

For more information on SLCs, call Mary Anne Ward at     (407) 876-0837, or visit the Schools At Work Web site at  www.soundelux.com/.schools/

U.S. Postal Service
Outsources
Priority Mail

The U.S. Postal Service has turned to outsourcing in order to improve its service quality and control prices. It recently awarded a first-phase contract worth $1.7 billion to Emery Worldwide Airlines of Redwood City, California, to create and operate a new network for the exclusive handling of Priority Mail.

Priority Mail is one of the Postal Service's fastest growing products, with last year's volume increasing by 10.4 percent, to 959 million pieces, generating $3.4 billion in revenues. The Emery contract establishes fixed costs per piece for four years, subject only to adjustments for increases in fuel and wage costs. And as Priority Mail volume increases over the life of the contract, the cost per piece will decrease.

Under the 58-month contract, Emery will obtain, equip and fully staff 10 Priority Mail processing plants in major metropolitan areas along the Eastern seaboard, creating an entirely separate mail stream for the Priority Mail product line. Phase one of the creation of the Priority Mail network begins in July and is expected to be completed and operational within 10 months, creating about 1,400 new jobs.

In addition to sorting an estimated 300 million pieces of mail annually -- about 30 percent of all Priority Mail -- Emery will provide the necessary air transportation. The Postal Service will continue to handle all aspects of acceptance and delivery of Priority Mail.

Baldrige Foundation Embarks
on Fundraising Drive

The Malcolm Baldrige Foundation is undertaking a fund drive to endow health care and education categories for the Malcolm Baldrige National Quality Award. The Foundation's goal is to raise $15 million to fund the proposed categories. The Baldrige Award currently offers categories for manufacturing, service and small business, all funded through an endowment created by Congress in 1987.

The private fundraising efforts are just beginning, with the Baldrige Foundation soliciting pledges from health care, education and general business organizations.

The launch of the new programs is contingent upon the Baldrige Award's 1998 $5.3 million budget request, which is currently winding its way through Congress. If the current request is granted, both new categories could debut as soon as 1998. A decision is expected from Congress by fall.

For information on how to contribute to the fundraising effort, contact Joe Wilson, Eastman Chemical Co., at (423) 229-4002.

Travelers' Woes
Spurs New United
Airlines Program

The U.S. airline industry as a whole consistently fails to satisfy its passengers' expectations, according to an exhaustive study of U.S. domestic and international air travelers released by United Airlines.

United took the results as a wake-up call. "Initially, we set out to differentiate ourselves in the eyes of the industry," says Kristina Price of United. "We didn't realize the depth of customer dissatisfaction."

The study surveyed more than 1,800 customers in eight countries, and included United Airlines employee focus groups and interviews with travel agencies, corporate accounts and suppliers. It found that top business travelers -- who account for 9 percent of the industry's customers and 45 percent of its revenues -- do not feel the airline industry shows them enough respect. The customer-service shortcomings they highlighted cover every process from ticketing, to baggage handling and cultural sensitivity.

     Using the study's findings as a blueprint, United Airlines developed its Customer Satisfaction Philosophy, a new customer-driven initiative around which all current and future service improvements, employee training and communications will be centered. The CSP is based on three factors: safety, reliability and competitive prices. The CSP then focuses on six elements: providing warm, genuine attention to each traveler's needs; offering comfort as the minimum experience and enjoyment as the ideal; recognizing and rewarding loyalty; being open and candid and taking responsibility; designing a simpler, more hassle-free travel experience; and providing unsurpassed global access.

Price cited technological advances that will make hassle-free travel possible, including Windows-based software that will aid in faster check-in and boarding, and automatic gate readers to read boarding passes. The company is also planning to include new aircraft, new routes, improved meals, entertainment and airport improvements on its list of improvements.

Continental Soars in Satisfaction Survey

For the second year in a row, Continental Airlines has been ranked the top air travel carrier for domestic flights of 500 miles or more, according to the Frequent Flyer magazine/J.D. Power and Associates Airline Customer Satisfaction Study -- U.S. Flights. The annual survey was based on about 7,000 flight evaluations by frequent flyers who average more than 25 U.S. round trips each year.

Continental worked hard for the No. 1 position. At one time, they had a less-than-stellar rating among customers. Dave Messing, spokesman for Continental, attributes the turnaround to a change in management and a new vision for the airline. Continental researched what their frequently flying customers wanted, including on-time arrival and speedy check-in, and then set about providing the leadership and communication needed to improve service.

"To correct the deficiencies we had in the operations and customer service areas, the problems had to be attacked head on," says Messing. This head-on approach included committees, task forces and hiring employees to fix specific problems.

Gaining the No. 1 ranking for two years running has also dramatically improved employee morale, reports Messing. Continental has made a major effort to inform their employees about the survey and to give their employees credit for becoming the top airline.

Attitudes Provide Key to Success

Attitudes, not competencies and skills, are what will distinguish workers in the future, according to Beverly Kaye and Betsy Jacobson, two California-based organizational development consultants.

"Everyone is intent on competencies," says Kaye. "I don't think it is competency alone that makes you successful."

Kaye and Jacobson suggest that the following attitudes make people more employable, enable them to live with organizational change and help them bridge the culture gap in organizations.

 "Mentworthy." Mentworthy individuals are confident in their ability, can teach what they know and, at the same time, can learn from others in their field. They possess both confidence and humility.

 Helicopter thinking. This is the ability to hover -- to look at a process from a different perspective, asking how to improve it -- and land with a solution.

 Influence ability. The ability to push and pull. This person can influence others while also being open to someone else's ideas and influence.

 Opportunity-mindedness. This individual is open to both renovation and innovation, seeing opportunities in the old as well as in new, untried ways.

Pennsylvania Consumers
Receive Electricity Choices

CNG Energy Services Corp. has become one of the first nonutility companies authorized by the Pennsylvania Public Utility Commission to sell electricity directly to homeowners and businesses under the state-mandated deregulation of the electric industry. The company hopes that competition will provide consumers with lower prices as well as new products and services not available to them now.

CNG Energy Services and its affiliates expect to participate in all the electric utility pilot programs across Pennsylvania once the new programs begin. Under a pilot program scheduled to begin this year, 5 percent of all customers are to be allowed to choose their utility company. Choice for all remaining customers will be phased in through the year 2001.

Dan Donovan of CNG likens the future of deregulated energy and utilities to long distance telephone service. Customers will be able to buy their energy from anyone, even though a certain company may be responsible for the wires and meters that run into their homes. To succeed, companies will have to offer reliable services and supplies, as well as competitive prices. Donovan notes that the energy industry will be price-driven as the market opens up to private utility and energy companies, which can offer better prices than their public counterparts.

"Electricity will probably be federally deregulated someday," says Donovan. Because energy lines run across state boundaries, deregulation in other states and -- eventually -- federal deregulation will be necessary. "Federal deregulation will be needed to make true competition," adds Donovan.

Measuring Service Performance

Organizations can measure how effectively service personnel address their customers' needs. And this can be a mechanism for organizational change, says Grace G. Major, president of Sigma International Inc. of Fairfax, Virginia. Sigma specializes in advanced service consulting and training in the fields of telecommunications, high-tech and health care.

Major recently conducted a study on service performance measurement. In it, she defines a service skill as the ability to converse with a customer, which includes the ability to listen, synthesize information and personalize interaction with others. She places special importance on how the interaction is conducted, as opposed to the technical content of the interaction.

Managers originally moved to assessment and certification of service skills -- or service performance -- in order to establish a clear-cut standard for performance expectations, says Major. However, they soon discovered that the assessment process can also accomplish organizational change. Major cites Wellspring Resources, a company that provides benefits outsourcing for corporations such as Federal Express and Westinghouse, as an example of putting its service performance assessment to work. Wellspring implemented a process wherein they trained job candidates and then tested them to see how well they interacted with customers, a process that enabled them to hire people who could offer customers the best service possible.

In assessing service performance, Major has found it useful to embed service skills into a step-by-step process. "The advantage of defining performance in terms of a step-by-step process is it then is possible to look at each step of this process to delineate the observable behaviors you want to happen," says Major.

Knowledge Management Takes Teamwork

Three thousand heads are better than one. That's the idea behind Sequent Computer Systems' application of knowledge management -- the dissemination and leveraging of corporate knowledge.

The Beaverton, Oregon, computer company utilizes its Sequent Corporate Electronic Library to collect and share information with its employees around the world. The result is that Sequent sales and support staff are able to draw on a vast body of corporate knowledge to provide their customers with the best application solutions.

"We have created an environment where people can constantly and interactively share best practices," explains Barbara Gaffney, Sequent's senior vice president of customer services and quality. "Our customers get the advantage that the team they are working with has access to solutions we have designed all around the world."

Sequent's 3,000 employees access SCEL across their intranet using a standard Web browser. Information includes data provided by Sequent's corporate headquarters, salespeople, competitive marketing personnel and professional services people.

Although SCEL's technology plays an important role in Sequent's knowledge management system, it is not the driving force, emphasizes Gaffney. Collaboration and teamwork are the underpinning of knowledge management, she says -- the idea that what you are doing is not only useful for your situation but for a colleague's as well.

"What did I just do that I know is going to impact a customer someplace else around the world?" asks Gaffney. "That's what drives getting information into SCEL. That's what drives people to use SCEL for best practices, for not solving the same problem over and over again but for solving new problems. That's the heart and soul of what we get out of the system."

MES Software Increases Yields, Reduces Scrap

Software is quickly becoming the major player in an organization's quality and productivity improvement efforts. And manufacturing execution system software is perhaps the most sophisticated, allowing companies to track and control an entire production process in real time, identify process problems, perform statistical analysis and more, all leading to higher product yield and less scrap.

"In our business, we have to assume that almost every piece of material will be turned into product," says Pat McGinty, director of information systems at semiconductor manufacturer Silicon Systems Inc. in Tustin, California. "In the semiconductor manufacturing process, everything has to be exact. You have to have a core system that allows you to get accurate, reliable, usable data."

A sophisticated MES allows SSi semiconductor manufacturers to collect data from hundreds of process steps, both manually and automatically, run statistical process control in near real-time and identify out-of-spec processes. Before implementing an MES, there would have been a long lag between the time a wafer ran through an out-of-spec process until the time the problem was detected, explains McGinty. The result would have been scrapped wafers worth thousands of dollars.

SSi, which employs 2,000 people and has facilities in California, Colorado, Singapore and Tokyo, has used MES software produced by Promis Systems Corp. since 1981 to help increase yield and reduce scrap. In an industry where capital investments run in the billions of dollars and profit margins are highly variable, the benefit is crucial.

"If you don't have an MES at all, you can't produce semiconductor chips," observes McGinty. "But if you properly implement an MES and use it as a building block for advanced statistical process control and automated recipe management, it gives you a competitive advantage."