Magdi Batato at Nestlé Malaysia (A): Introducing team-based production

In June 2005, Magdi Batato, executive director of production for Nestlé Malaysia, was frustrated, having spent the last four months trying to convince the Nestlé Malaysia Production Management Committee to adopt a new approach to organizing production improvement: team-based management with goal alignment across teams and increased team autonomy. However, the committee had yet to reach a consensus on whether or not to endorse such an initiative. Batato, a 14-year Nestlé veteran with an excellent track record in leadership and production had been transferred from South Africa in September 2004. Soon after arriving, Batato concluded that his biggest challenge was to ensure the long-term sustainability of the seven local factories, despite their above average performance. His experience and research convinced him that this approach was the best way to make the next performance leap. He did not face active resistance, but there was a seemingly endless parade of reasons to “examine the options further,” to “wait for better conditions.” Working in a semi-autonomous work team (SAWT) required internal motivation and initiative, so forcing the Committee to move might backfire. There was no urgent need to turn productivity around, but Batato knew that implementation took time and he had already been in Malaysia for nine months of what was likely to be a five-year assignment. He wanted to push ahead, but how could he do so without jeopardizing the effectiveness of the changes?