KIMBALL INTERNATIONAL SUCCESS STORY - IMPROVING TEAMWORK AND TURN-AROUND TIME AT KIMBALL INTERNATIONAL WITH THE 7 HABITS

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Executive Summary
This case study examines the efforts and success of Kimball International's Lodging Group division in:

• Developing cross-functional teams of people with different skills to respond more effectively to dynamic customer needs
• Laying the foundation for effective cross-functional teams through the in-house workshop-The 7 Habits of Highly Effective People¨
• Improving internal communication and custom product through time, culminating in a better working environment and increased customer satisfaction

Fame in the Kimball Name
Chances are you've had firsthand contact with Kimball International products. The $1 billion company, headquartered in the small, southern Indiana town of Jasper, manufactures furniture for offices, homes, and hotels, as well as cabinets, pianos, electronic contract assemblies, and processed wood parts. Facilities are located throughout the U.S. and in Mexico, England, France, and Austria.

The company's Kimball Lodging Group division-with revenues of $100 million-has the mission to provide furniture products of exceptional value to nursing homes and assisted living facilities, hotels and motels, and government projects, such as military base housing. The Lodging Group's Custom Projects business unit has furnished a wide variety of notable theme hotels, including Fort Wilderness in Disneyworld and the pyramid-shaped Luxor Hotel and Casino in Las Vegas.

Such market and customer diversity requires responsiveness, vision, teamwork, and improved communication. Kimball Lodging Group vice president Jim Birk attended The 7 Habits of Highly Effective People workshop and recognized the organizational potential of the 7 Habits. He brought the training in house to implement a visionary idea in teamwork to increase productivity and profitability.

Building a Stronger Organization
Roughly two years ago, Kimball Lodging Group embarked on a plan to dismantle traditional departments and create Circles of Excellence-cross-functional teams of people with different skills to respond more effectively to dynamic customer needs. Individuals would lead out when a problem required their expertise and contribute ideas when someone else was leading. It's a system that demands high trust, understanding of the company mission, and a willingness to listen and collaborate to serve customers better.

"Our customer is our business," says Birk. "We must provide products and services that create customer intimacy and exceed their expectations of quality and features. We also must recognize and respond quickly and creatively to ideas of others, both internally and externally. We could not have reorganized with the required level of teamwork without the 7 Habits coming first."

Birk explains that 7 Habits training employs an Inside-Out Approach, which builds stronger organizations by first strengthening the individuals who comprise them. The 7 Habits lay a solid foundation of principle-centered behavior that supports organizational initiatives, such as the Lodging Group's Circles of Excellence.

Birk says, "We saw both change and opportunity coming our way, and so the first step was to develop the personal trustworthiness and interpersonal communication of our employees." Birk himself became a 7 Habits facilitator to lead this effort. John Light, the Lodging Group's employee development manager, who also facilitates creative problem-solving training, was charged with the key responsibility to drive 7 Habits training throughout the organization.

The two executives spent the first year teaching the 7 Habits to all Kimball Lodging Group employees. Once employees had an opportunity to learn and live the principles on and off the job, Birk and Light focused on managerial effectiveness and empowering team members with Win-Win Agreements, greater decision-making authority, and accountability.

"Ultimately," says Birk, "we worked on aligning team efforts with the Lodging Group's mission to improve lead times, create customer intimacy, and exceed their expectations of value and quality. The Inside-Out Approach was culminating in a cycle of greater effectiveness within the organization as a whole."

Communication Is Key
"Many results of 7 Habits training have been measurable," says John Light. "Turn-around time or through time on custom products is a good example. We can now deliver customized product in 8 to 12 weeks. There's no way we could achieve that without the improved communication and cooperation among our teams. Our vendors tell us our competitors can't match our through times."

Joyce Kibby, manager of Order Fulfillment, has firsthand experience with the value of 7 Habits training and its impact on the Circles of Excellence in improving through times.

"Prior to forming the Circles of Excellence, we'd have customers, sales reps, or both calling our different departments requesting that we develop or reengineer a product. Often what was requested of one department had already been addressed by another. The Circles of Excellence are the forum for weekly interchange of communications. One team member will mention a development request, and another member will say, 'We've already done that; let me help you with that.' "

Kibby says they are saving valuable engineering resources and not repetitively contacting the Quote Department for a cost factor. Much of the work is already done. "Sometimes we can save three to four days of work in a single meeting because of the suggestions and ideas offered. This works very well for us. We've discovered the bottom-line value of synergizing, of helping each other out and growing as a team. It's a very positive thing for Kimball Lodging Group and our profitability."

John Light says the focus on improved communication was largely a result of implementing the FranklinCovey Organizational Health AssessmentTM (OHA), which provides a 360-degree view of the marketplace and the organization's place in it. The resulting OHA Baseline Report analyzes data collected from all of the organization's stakeholders on key success factors, such as mission, strategy, structure, systems, and culture.

"It became clear to us that communication and valuing the diversity of experience among our employees were key issues. Through our organizational effectiveness efforts, team members are at the point of not just valuing differences, but celebrating them in order to find new solutions to meet customer needs."

He adds, "With the 7 Habits and our Circles of Excellence, we're no longer operating in silos. We're beginning with the end in mind to meet customer expectations, the walls are broken down, and we're saving time, resources, and money."

Expanding the 7 Habits Influence
Once word started getting around about the 7 Habits training within Kimball Lodging Group, more and more people from other Kimball divisions and business units wanted to get involved. "So we opened up our classes to more people, and the circle of influence keeps getting bigger," says Light.

Adds Jim Birk, "It's really quite thrilling to see what has happened in a two-year period. Sometimes I think two years is a long time. It takes patience to implement genuine organizational development and change. But the more I think about it, two years have gone by fast, and we've achieved a lot of change for such a big company."

Birk summarizes the benefits of the 7 Habits training at Kimball Lodging Group this way:

• An ability to view differences as strengths, enhancing problem-solving and conflict resolution
• Increase planning and preparation time, resulting in shorter, more focused meetings and more productive individual work time
• Industry-leading, on-time product deliveries, achieved through improved clarity between teams and reduced redundancy

He concludes, "Executives should view the 7 Habits as a cost-effective means to achieve their business objectives because the training is aligned with natural principles leading to success. As vice president of Kimball Lodging Group, it's thrilling to witness what we're achieving-real business results and more focused and balanced employees because of this program. The 7 Habits help us realize our mission."