Management And Accounting Web

Saturn Field Visit and AAA Luncheon Speaker

Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

General Motors and Saturn Main Page

Notes on Jack O'Toole's (Saturn Consulting) talk at the SEAAA Friday luncheon 4/25/97

To improve, you must change. If you always do what you've always done, you always get what you always got. Definition of insanity - doing the same thing over and over expecting a different result.

Solutions to problems cannot be solved at the same level of thinking we used when we created the problems. If all you have is a hammer, every problem begins to look like a nail.

Dream things that never were and ask why not?

Saturn values how people are different, rather than pointing it out. The New people system. Don't compare people, just ask them to do all they can and provide training so they can. Saturn employees get an average of 147 hours of training per year. At Saturn, training is not viewed as a cost. It's an investment.

Cooperation and partnerships produces synergy - the whole is greater than the sum of the parts. They have Union partners. Supplier partners rather than vendors. Vendors sell hot dogs. Retail partners rather than dealers. Dealers work in Las Vegas. A Retail Partner gets the whole area so they don't have to compete with other Saturn retailers in the region. They are very profitable. Saturn has community partners and a partnership with government.

Saturn focuses on customer enthusiasm, not satisfaction or contentment. Cows are contented. Exceeding the customer's expectations produces enthusiasm. Saturn's customers help sell Saturns.

Some people say, let me tell you why we can't use Saturn's concepts and methods.
Jack's response - you just did. If you don't think you can change, you can't.

To change, you must:
1. Believe in what you dream.
2. Then create your dreams.
3. Commit. Contributing is not enough. (Breakfast - the chicken contributes, the egg commits).
4. Measure your progress.
5. Involve people.

From Gerry Wolf and Frank Kirby (not sure of spelling on Kirby) at the Saturn plant in Spring Hill Tennessee. 4/24/97

No dress code. We didn't see any white shirts or ties anywhere. Gerry and Frank had on golf type shirts. Gerry's shirt appeared to be old.

Saturn has no hourly people. All employees are salaried.

Every employee got a $10,000 bonus last year.

The accounting and finance people don't push reports. They have a pull system. Users ask for what they want.

No paper retailers - all communication on electronic data interchange - EDI

They use ABC, not standard costing and provide actual product costs.

They also use target costing and benchmarking.

No accounts receivable. No uncollectible accounts. Collect all sales within 7 days.

Focus on what they do best and outsource the rest. Nations Bank does their payroll.

No paper expense reports. Recycle everything. The river going out is cleaner than when it flows into Saturn's property.

Have cafeteria benefit system - employees choose what they want.

Employees get substantial discounts on Saturns.

Two people run the plant - one from management, one from the union. They work together in the same office in the plant.

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For more on these ideas and Saturn's history see the following:

O'Toole, J. 1996. Forming the Future: Lessons from the Saturn Corporation. Oxford: Blackwell Publishers, Inc.

For some history on what happened to Saturn see https://en.wikipedia.org/wiki/Saturn_Corporation