The setting is the Quest for Excellence Conference XXI held at the Hilton Hotel in Washington DC. There is a stage at the end of the ballroom with a podium, plants, and a big projection screen. An audience of about 550 conference attendees is seated about the ballroom. Dean Smith: Thank you Terry. Our next presenter is Ron Fiala, process improvement manager for Cargill Corn Milling. Ron currently oversees Corn Milling's business excellence activities. He joined Cargill in 1997 when ProGold, a competitor in the corn milling industry, was acquired. Prior to ProGold, he worked for Tate & Lyle. Ron's work is focused on annual business planning, employee engagement, best plant processes, and business excellence, including the Malcolm Baldrige National Quality Award. Ron received a Bachelor of Science degree in mathematics from Western Illinois University. Please welcome Ron Fiala. Ron Fiala: Thank you Dean. Good morning. I feel very privileged to be here today, with great role models like Iredell Statesville Schools and Poudre Valley Health System. And I just want to say you all are fantastic. I've earned anything there Terry? Iām also honored to be representing the thousands of Cargill Corn Milling employees, both current and past, that have worked for Cargill Corn Milling. Without their foresight and without their hard work, I certainly would not be here today, in front of you. Today I'm going to discuss Corn Milling's path to excellence. This is a journey that we've been referring to as from kernel to crystal. While I discuss this, I'd like you to listen for four key points. One is leadership involvement and support; relentless determination; utilizing resources; accepting feedback. Every one of these was very critical on our journey. Cargill Corn Milling started over 40 years ago when Cargill acquired a small plant in Cedar Rapids, Iowa. This plant processed 10,000 bushels of corn every day, which is about equivalent to 12 trucks of kernels every day. Now, in our nine plants across the entire United States, we process over one million bushels of corn every day. Now that's equivalent to a corn field the size of the State of Connecticut every year. To accommodate the rapid growth in both customers and product offerings we had to grow. So we expanded our Cedar Rapids plant. In 1973 we built a plant in Dayton, Ohio. Three years later we built another plant in Memphis, Tennessee, and then in 1985 we built a much larger plant in Eddyville, Iowa. Now our growth wasn't just about continuous expansion, it was also about continuous improvement, as we improved our process control and our product quality. It's important to understand in this journey what our early business model was like. We ran each one of our plants as an individual company. We were what we would refer to as plant-centric. Each one of the plants had a profit and loss statement. We not only competed with our competitors but we also, in some cases, competed between plants. And even though that may sound strange, we were very, very successful with this business model in our early growth years. Corn Milling was the pioneer of the quality process for all of Cargill. Like many manufacturing companies in the early '80s we were pushed into total quality by customer requirements. They wanted to see things like in process statistical control to guarantee final product quality. We had a lot of successes with our early total quality efforts, utilizing things such as the price of non-conformance and quality teams, and those successes were noticed by the Cargill Corporation, and Cargill decided that they wanted to share these successes across the entire organization. So in 1987 Cargill created the Corporate Quality Department, and several of the early consultants to this department came from Corn Milling. In 1991 the Corporate Quality Department created the Chairman's Quality Award. This was an annual, internal award and assessment process utilized to single-out the best run plants across all of Cargill, and it was based on the Baldrige Criteria. At this time Corn Milling had over 50 different businesses, or Cargill had over 50 different businesses and hundreds of plants that were eligible for this particular award. Because it was plant-based, it fit our plant-centric business model perfectly, and our leadership encouraged us to utilize this internal resource to our benefit. So we did, and Corn Milling was- the pioneer of the quality process for all of Cargill was very successful utilizing this internal process. As you can see from this chart, our plants received this award 16 different times. We used the feedback from this process to improve, and each one of our plants was at this time developing pretty much a culture, a process-oriented culture. By 1995, the future looked very bright for Corn Milling. Because of industry growth and predictions of future expansion, we built another plant-- this was our fifth plant now-- in Blair, Nebraska. It was really great right now to be a part of Corn Milling. Now this chart shows the earnings of Corn Milling, or the profitability of Corn Milling through the mid-90s. And I know there's no scale on the chart, but it should be noted that we were a very, very profitable part of the overall Cargill organization. We were earning a good portion of the overall profits for Cargill. We were operating five plants at this time, and our plant-centric business model was working to perfection. But nothing lasts forever, especially in business. After years of scrambling to keep up with demand, there was a convergence of several different factors that led to over-capacity in our industry. The flip-flop in the supply and demand curve caused the price of sweeteners to drop to record or historical lows, affecting, as you can see on the chart, the overall profitability. Now this didn't just affect Cargill Corn Milling, it affected every competitor in the corn milling industry, and it led to several consolidations. Now Corn Milling benefited from one of these consolidations when we acquired a plant, a newly built plant, in Wahpeton, North Dakota. And I personally think that this was one of the most brilliant decisions ever made by Cargill Corn Milling, because this plant brought in 120 Wahpeton employees into the Cargill mix, and one of those employees was me. Now because of over-capacity in the marketplace, we had to re-evaluate how we operated. The biggest difference between us and our competitors was that we operated more plants in more locations than anyone else. So we could turn this difference into a huge benefit if we could tap into the skills, the knowledge and the ideas of every one of our employees and then learn somehow to transfer those ideas and skills across all of our plants. To accomplish this we had to shift from being plant-centric, which we had done for years, into every plant operating together as one enterprise. We had to change from being every plant for itself to all for one and one for all. The first thing we did was move the profit and loss statements away from each one of the plants, and we moved that up to the enterprise level. From now on there would only be one bottom line, and that was for the organization as a whole. The second thing was to start out best practice teams. We wanted to find out who was best at what, and then we started different systems; started using different processes to try to transfer that knowledge across each one of the plants. Now it may sound like- these may sound like simple changes, but really they were very tough because we were talking about deep-rooted cultural changes here. About the same time that we were making these changes in our operating model, there was also a refinement going on in the Corporate Quality Department. For one thing, the name of the department was changed from Corporate Quality to Business Excellence, to reflect the broader goal of organizational improvement. We retired the Chairman's Quality Award, where we had been so successful with, and created a new award called the Business Excellence Award. Now the basis of both awards remained the Baldrige Criteria. The timing of the award was changed. It was no longer going to be an annual process; it was now going to be changed to an every two-year process, to allow more time for plants or businesses to work on improvements between award cycles. And then probably the biggest change was you could no longer apply as an individual plant; now you had to apply as an enterprise. Now finance and enterprise, that was new to us, but heck, we were Cargill Corn Milling. We had received 16 Chairman Quality Awards. We were the pioneers of the quality process across Cargill. So how hard could that really be? So in 2002 we wrote and submitted our first Business Excellence- our enterprise-wide Business Excellence application, and when we got the results back, were we ever shocked. We scored extremely poorly; so poorly that we didn't even receive a site visit. Wow. And we thought we had hit a homerun and apparently the examiners had though we'd struck out. So we started evaluating what was different. Of course, we applied as an enterprise rather than as an individual plant, but we were still using, or utilizing, the Baldrige Criteria. So the game may have changed slightly, but the rules were still the same. Our team, it was basically still the same. So the only thing we could really put our fingers on was it had to be the umpires. So we objected, we protested that the scoring was flawed, that the process didn't work right. And our objections went all the way to the desk of the president of Cargill. Sometimes you really don't want what you wish for. He actually agreed to spend one entire day with us. And I remember that day well. It was November 6th, 2002. It was a very long day, it was a grueling day, and we went through the application item by item. It seemed like everything was moving in super-slow motion. I'll tell you, I went into that meeting with a full head of hair. At the end of the grueling day our president walked to the front of the room. Here we are sitting in the room waiting, anticipating. Most of us thought, "Hey, the commissioner's going to reverse the decision; maybe we're going to actually receive the Business Excellence Award." But our president, Greg Page, apparently didn't believe our protest was legitimate. So what he simply said was, "If you truly think that you are better than what this score indicates, then get to work and prove it." Wow. This was our defining moment in our journey. This is the point where we really had to confront the brutal facts. Many of our processes worked different from plant to plant to plant. We had not done a good job of systematically deploying processes across every one of our plants. This opportunity, it was kind of lucky for us, because this opportunity wouldn't have manifest itself unless we had had to apply as an enterprise. So on November 6th, 2002, our leadership committed from this point forward to be a process honoring culture. We needed to accept the feedback that we had been given; we needed to come together by getting to work, as our president suggested; and we needed relentless determination in our approach to improvement. From this point on we improved many of our different systems. I'm just going to highlight a few of these; I'm not going to go into depth in each one of these systems. We refined our strategy review process; we made it more robust by including more employees in the overall process, and we ensured that we got the voice of the customer into this process by creating expert panels. We formalized our annual review, our annual business planning process, to improve line of sight of every employee to the Corn Milling strategy. Our goal is that every employee understands how they fit and why they matter. We improved our best practice model. This model is used to identify, standardize, document, implement and review best practices across every one of our plants. We started an innovation process used to capture, track and implement ideas across every one of our plants and all our facilities. All of these improvements paid off in 2004 when we rewrote an internal business excellence application and resubmitted. This time we did get a site visit, and this time we did receive our first internal Business Excellence Award. We used the feedback from the award to improve. Now I'm going to switch gears slightly. In 2005 Cargill made the decision to merge our dry corn ingredients business with the corn milling business. This added a whole new product line to our business, and it also added two additional plants, one in Paris, Illinois, and one in Indianapolis, Indiana, which increased our overall complexity. But this also gave us a good opportunity to deploy many of our systems, to work on our communication mechanisms, and it gave us a chance to share best practices between the two new plants and the six existing plants at that time. To further prepare for our Baldrige Award, we continued to utilize our internal business excellence process. So in 2006 we wrote another application and received the award; and also in 2008 we received the award. Now let's shift and talk a little bit about our Baldrige journey. In the fall of 2005, our leadership made the decision to actually apply for the Baldrige Award. We wanted to get an outside set of eyes in to take a look at our processes and give us some candid feedback about how we were doing. Our goal was to receive a site visit, and we fell out at the consensus stage. Now that was really disappointing to me, because I really didn't know how good this feedback would be without the examiners coming to our plant and talking to our people and actually seeing our processes live, instead of just giving us feedback from a written application. But I was really greatly surprised by the feedback report that we got, and it identified lots of different things that we could work on. It was really excellent. And one of the things, for example, one of the things that it was pointed out was that we needed to have more definition around our leadership system. So our leaders got to work and came up with this Cargill Corn Milling leadership system. And this model is based on the Baldrige Criteria. And we have utilized, and we've probably displayed this model in every one of our presentations here at Quest. Our leadership also made the commitment to continue with the Baldrige process at this time, and decided that we would reapply in 2008. That gave us some time to work on improvements. So, when 2008 rolled around, we set the same goal for ourselves. We wanted to receive a site visit, and this time we had two resources that we utilized very extensively. One was Cargill Kitchen Solutions, formerly known as Sunny Fresh Foods, a two-time Baldrige Award recipient; and the second was our Business Excellence Department, our internal department. This department, the consultants in this department, are experts on the Baldrige process and also on the Baldrige Criteria. In September of 2008, we learned that we were going to receive a site visit. So we had achieved our goal, which was great. In October of 2008, we went through that whirlwind that's called a site visit. Our employees found it very engaging and they had a great chance to actually tell their story. So there we sat on November 24th, 2008, waiting for a phone call, and at 7:52 in the morning Alan Willets received the call, and we learned that we were going to receive this prestigious award. Now this was really exciting for us and it was really a magical moment for Corn Milling. This was a culmination of over 40 years of hard work, by many people. I don't think there was one person that was in the room on November 6th, 2002 who would ever have thought that six years and 18 days later we would be at this point. I know I didn't believe that. Now I hate to leave any loose ends in a story, so I'm going to try to clean this up. Remember I started talking about the profitability of Corn Milling and how over-capacity in the industry in the late-90s drove the price of sweeteners down and profits down. We made several different changes. For one, we changed the way we were operating from plant-centric to being an enterprise wide operation. But we also went through several strategy review processes to really take a hard look at our business and make some tough calls on what we were going to be in the future. Execution of our strategy really turned the tide, and you can see how our profits have been over the past ten years. Now we believe, even in today's tough economic climate-- and we've heard quite a bit about that today-- that our good people, and our great- and our good processes, will help us weather the storm. Now way back in the beginning I asked you to listen for four points, and I want to just talk a little bit more about each one of these points. Leadership involvement and support. As Alan Willets, our president, said in the opening plenary, leadership won't guarantee success, but lack of leadership will ensure failure. This is a powerful statement. Leadership is the beacon of light in the darkest storm, providing the vision and clarity needed for success. In the Corn Milling journey, our leaders were called upon to make many decisions, and then support those decisions. Support means, in my mind, getting into the game, not just cheering from the sidelines. Our leadership made the decision to truly become a process honoring culture in 2002, and has supported that decision ever since. Relentless determination. We just discussed an over 40 year journey here. And I'm not sure I emphasized how disappointed or how low we felt in 2002. You have to remember that our profits were way lower than what we expected at that time, and we submitted a Business Excellence Award application, and failed miserably. We were definitely struggling. And Corn Milling, within Cargill, has always been looked to as a leader, and at that time there were many questions about whether or not we would ever make it back. On November 6th, 2002, we made the commitment to be a process honoring culture. We got to work, we dug in. It takes relentless determination by every employee, each and every day, to be successful, to navigate the highs and the lows that you have on your journeys. Using resources. We were blessed because we had-- we could tap into both Cargill Kitchen Solutions and our internal Business Excellence Department. We also have a very well developed internal Business Excellence Award process that we can use for feedback and improvement. And we, of course, have utilized that process extensively over the years. I realize that not everyone is that fortunate, but there are resources available to everyone. If you think about the Baldrige website with its case studies; those are excellent to use. We've heard today about State programs; those are excellent resources. And then utilizing award winners, or recipients of the awards-- didn't want to do that-- that's also another possibility to everyone. Accepting feedback. The hardest part about feedback is having the courage to accept what has been said. Sometimes an outside set of eyes are your best bet to identifying your blind spots. In 2002, it took us a long time to accept the fact that we had not done a really good job at systematically deploying our processes across every one of our plants. I've added one more nugget on here, and that is STORI. And STORI is an acronym that stands for Steps, Timing, Owners, Results and Improvements. This is an example of adopting a best practice from another source. We first learned about STORI from this very Quest for Excellence conference about three years ago, and we've utilized that very effectively in writing our applications, and also in preparing for site visits. So I just want to leave that little nugget with you. Now you've patiently listened to me describe our journey, and now I'd like you to hear from our employees. This video clip was recorded right after we learned that we were going to be a recipient of the Baldrige Award. You're going to see, in this clip, employees from all levels, from operating technicians all the way to the CEO of Cargill.