The Three Keys to Change

Delancey Street would sound crazy if it hadn't worked so brilliantly for so long. Silbert entrusts the residents--remember, many of these people have been diagnosed as psychopaths--to care for and take responsibility for one another. They kick out anyone who uses drugs, drinks alcohol, or resorts to threats or violence. Although most of them are illiterate when they first arrive, the ex-cons help one another earn their high school equivalency degrees, and they all learn at least three marketable skills. Together they run the top- rated moving company in the Bay Area, a thriving upscale restaurant, a bookstore- café, and a print shop. In the winter they set up sites around the city where they sell Christmas trees. Whenever I'm a customer of a Delancey business, I marvel at the honesty, reliability, and politeness of the workers and wish other companies were like theirs. While taxpayers spend $40,000 a year to support a single prison inmate, Delancey supports itself with profits from its businesses. It never takes money from the government.

After staying at Delancey for four years, most of the residents "graduate" and go out on their own into the greater society. Nearly 60 percent of the people who enter the program make it through and sustain productive lives on the outside.

While the criminal justice system watches more than six out of ten convicts return to crime, Delancey turns nearly as many into lawful citizens. How, exactly? What's the psychology behind transforming the most hopeless 1 percent of society, the ones who experts believe are incapable of change?

In the early 1980s the managers at General Motors and the workers on its assembly lines viewed one another with hostility and fear. The situation was especially troubled at the factory in Fremont, California. You could tell this right away by the number of beer bottles littering the parking lot. On any given day, more than a thousand of the five thousand workers wouldn't bother showing up for work. The ones who did show up were distrustful and embittered. They rebelled when their bosses forced them to speed up the production line. They thought GM was trying to eliminate jobs by making the work go faster and by replacing them with robots. They were right: GM's top executives in Detroit blamed the company's problems on its unruly employees, and they were investing a staggering amount of money on automation--$45 billion--so they could cut back on human labor.

Tension pervaded the Fremont plant. Workers and managers battled incessantly. The workers fought with one another so fiercely that the national headquarters of the United Auto Workers had to seize control of the local branch. GM's vice president for labor relations called the plant's workforce "unmanageable." A large percentage of the workers had been there for twenty to twenty- five years, and they were considered impossibly "resistant" to change. Maryann Keller, who was Wall Street's most respected analyst of the auto industry, wrote that Fremont was "notorious" even among GM plants. Considering the situation hopeless, GM closed down the factory and laid off five thousand workers.

Then something really strange happened. Toyota offered to revive the plant and produce a GM car there--a Chevrolet. The two companies created a partnership named New United Motor Manufacturing Inc.--"Nummi," which sounded like "new me." Toyota wanted to recruit fresh new hands rather than rehire the plant's laid- off workers. But the UAW insisted otherwise, and Toyota reluctantly took back the ornery old hands.

The workers returned with just as much distrust for their new bosses as they had had for the previous ones. The union leaders believed that the rise of the Japanese car companies had come on the backs of the Japanese workers, whom they thought of as "coolie labor": underpaid and overworked. The workers' fears seemed vindicated when Toyota said it would need only half as many workers as GM to build the same number of cars. When the Toyota people talked about creating a new sense of mutual trust and respect in Fremont, one union leader called it "a load of bullshit."

But that's exactly what happened. Three months after the assembly line started up again, Nummi was rolling out cars with hardly any defects, which was an incredible feat. During this time many GM factories struggled to keep their average down to forty defects a car, and plants would celebrate when they had "only" twenty- five defects a car. A Wall Street Journal correspondent wrote that Nummi was producing "some of the best cars that GM had ever sold." And Nummi did it with half as many workers. The cost of making the cars fell dramatically. Absenteeism at the Fremont factory went from more than 20 percent down to 2 percent, even though Toyota banned practices that once made the shifts seem tolerable, such as smoking and listening to the radio.