A tougher game at the top: Champion Paper pioneered team building in its mills. But building teams in the executive suite took ten years. Was it worth it?

Champion Paper pioneered team building in its mills

But building teams in the executive suite took ten years

Was it worth it?

In the early 1980s, Champion International Corporation decided to build a state-of-the-art paper mill in Quinnesec, Michigan. Its aim was to become the leading low-cost producer of quality paper. But most of its competitors shared the same aspiration, and, like Champion, their solution was to invest heavily in big machines. So CEO Andrew Sigler sought another means of differentiating his company from its rivals: a new set of management and operations systems that would help the mill workforce to meet the highest standards of productivity, yield, and quality.

What this meant in practice was that the mills would be run by teams - in those days, an unproven and risky approach. Champion's quest for team performance eventually spread to dozens of mills and took a decade of effort. There were many stops, starts, and stumbles along the way, but Sigler's determination and his executives' conviction ensured that Champion stayed the course. The mills were transformed both technologically and culturally. In 1995, Jaakko Poyry, a consulting firm that benchmarks worldwide paper-mill performance, rated Champion's mills in Quinnesec and Brazil as among the best in the world.

Perhaps surprisingly, it was not until four or five years after this transformation that team performance began to penetrate the company's senior leadership group. Why did it take so long? Largely because team performance was less obviously needed at the top, and more difficult to achieve. Champion's continuing journey shows why team performance down the line does not readily translate into team performance at the top. It also illustrates how valuable top-level team performance can be. The story covers three separate eras, the latest of which is still unfolding.

Era 1: Pioneering teams at the mills

A paper mill is no place for the faint of heart. The first time you walk through one, you fear for your life. It is a tumult of terrifying noises and rumbling machines. Huge logs roll about in apparent chaos while tough mill guys yell orders at one another. There is no time here for consensus management.

Mistakes in this frenzied milieu of men, machines, computers, logs, pulp, and water are costly and dangerous. It's no wonder that paper mills remained firmly under the control of strong hierarchies for more than a century. Nobody in their right mind would tamper with such an environment without good reason. Even Andrew Sigler and his COO Robert Longbine were wary at first when some of their best leaders pressed them to turn key elements of production over to self-directed work teams.

The paper industry of that time was not an obvious setting for teams. A relentless commodity business, it suffered unpredictable cycles of over-and under-capacity that continue to dismay investors to this day. Success depended as much on timber holdings, market position, and timing as anything else. This made it difficult for large paper companies to improve their competitive performance without restructuring their asset base and market position - steps with enormous financial implications. On a global level, meanwhile, exchange rate shifts could have as much impact on returns as most other factors did.

Given these economic constraints, operations at the mills emerged as the primary management target for improved performance. By 1985, the quest for teams at the mills had become a strategic imperative in Sigler's mind.

Not easy to implement

Getting teams to run paper mills was not as simple as it might sound. The typical mill management structure consisted of a formal hierarchy controlled by a strong mill manager. The product of a long tradition of single-leader discipline, these mill managers could be characterized as "local CEOs." Since the mill was often the main or only employer in town, the mill managers were also a powerful force in their communities.

The shift to teams in the workplace invariably meant replacing the mill managers, who were unable to …