Although Harley was very profitable during World War I and World War II, this status quickly changed during the 1970's. After the leveraged buy-out, Harley's new owners realized that in order to make the necessary improvements, they had to determine what went wrong. After careful analysis, the management team developed the following list of practices which were main contributors to the problems previously experierienced.

Corporate management focused mostly on short term returns. Management did not listen to its employees or give them responsibility for the quality of what they made. High inventories of parts gobbled up cash and reduced productivity. Belief in quick fixes for problems, such as throwing in computers and state-of-the-art machinery to improve productivity. High break-even point that left the company vulnerable to unpredictable market fluctuations.

Management that woke up too late to the threat of foreign competition because of the "it can't happen here" syndrome. As with anything in life, recognising the problems to any given situation is only half the battle. The development of methods for improvements and gaining company wide support for implementation was the key.

The first accomplishment was for management to learn the importance of relationships. Strong relationships with workers can aid in the advancement of new company practices. A good example can be seen in the following conversation between a machinist and the Vice President of the power train plant at Harley. "You are new here, aren't you?" asked the machinist. "Let me buy you a cup of coffee!". It was a simple gesture which quickly taught the new VP how important "relationships" were in the workplace; one of the major components of HarleyDavidson's corporate culture.

Harley's new management realised to survive they needed to become a perpetual learning and improving organization. Open communication between all levels of employees was essential. Everyone needed to understand their roles and the consequences their roles contributed to the company. But to develop employees to a greater degree, management had to get them to understand the business environment of the corporation. Harley-Davidson wanted the ability to develop processes and people which would ensure employees would have the capability for rapid, effective change based on an understanding of the whole business environment in which they operated. In order for that to happen, Harley-Davidson realized that individuals needed to have a shared vision of the company values: tell the truth, be fair, keep your promises, respect the individual, and encourage intellectual curiosity. Management needed to earn the respect and trust of their employees. Incorporating all of these high moral values into the entire company structure and expecting nothing less from employees, at all levels, helped emphasize Harley's commitment to its team of workers. Since Harley's workers were unionized, this could have been a major problem. But, because the unions stuck to Harley-Davidson when times were tough, Harley today sticks to them. The unions even censure their workers for shoddy performance. This commitment allowed for Harley to switch to "self-managed" teams. The plan was to create semi-autonomous workgroups, who were cross-trained and could set their own work schedules. Therefore, HarleyDavidson created the Harley-Davidson Learning Center. This is a facility dedicated to life-long learning. Its primary role is to serve employees who want to keep their skills current. In some cases, this means remedial training in basic skills, but mostly the Learning Center is a place to come with requests for specific job-training courses. Harley-Davidson is driven by a constant vision of what an excellent company should be: one that is never satisfied with the status quo but is always searching for ways to do things better. This is best exemplified by a manager's comment,

"The day we think we've arrived is the day we should all be replaced by managers of greater vision" (Reid 38). All companies can and should learn from this position and adopt the idea of continuous improvement. Harley Davidson has an untypical relationship with the union. Continuous improvement techniques could have been stopped if the company did not have a good relationship with the union. The union viewed management as a partner instead of an adversary. Management's good-faith dealings with the union was a factor in this special relationship. Harley-Davidson has a history of in-sourcing; it tries to bring as much work as possible into the plant to forestall any layoffs. The union has considerable control over what kind of work is outsourced to other companies.

Demonstrate how Harley-Davidson could implement a Total Quality Management (TQM) program to improve its operations.