Category Archives: Growth
I am way behind on a couple of great blogs I saw on the Harvard Business Review Blog. One of them is Get Your Workers to Disrupt Their Jobs by Brad Power.
The blog is about engaging employees to improve their processes.
…start process innovation by asking front-line workers how to improve their jobs. Competition and customer demands mean that the most efficient and effective process should always be sought — but finding it requires contributions from the people doing the work. The benefits of the front-line driving improvements include pride of ownership that sustains the changes, less worry for managers about whether the changes will be adopted, and reduced costs for outside consultants. Changes that are imposed are at best accepted grudgingly and at worst sabotaged.
Bingo! I think Brad nailed it well. Then a friend of his asked a good question that I have also gotten in the past.
But a friend was skeptical that workers will identify radical, cross-functional changes to a process that will step on others’ turf or could eliminate their jobs. Is it really possible he asked, to create the conditions where workers will disrupt or even eliminate their jobs and the jobs of co-workers?
Short answer is yes, if there is no fear of losing their jobs do to continuous improvement. I have worked for companies that have made that promise and it has worked to engage the people. When I worked for an automotive supplier, three employees came to management and said they could get the work cell from 3 people to 1 person and meet the demand. The management said do it. It worked beautifully and the other two people were assigned to other work cells that needed help.
Brad got the same opinion from Orry Fuime.
Consider Wiremold, a manufacturer of cable management systems. In 1992 the company was in cost-cutting mode, and, as former CFO Orry Fiumetold me, it was consequently offering an early retirement package designed to reduce headcount. But the company also needed to make its processes more productive, and didn’t want employees overly focused on headcount reduction, so immediately following Fiume’s announcement, the new CEO Art Byrne told employees that nobody would lose employment due to process improvement activities. He felt this was necessary to encourage employees to identify all the changes the company needed, including those which might disrupt their jobs. W. Edwards Deming, the guru of total quality management, called this “driving out fear.”
But most CEOs will strenuously resist making a qualified job guarantee like Art Byrne. Why? Because they believe that nobody can guarantee employment. Notice, however, that Wiremold did not guarantee employment. It assured employees that they would not lose their job as a result of their participation in continuous improvement activities. It didn’t say their jobs wouldn’t change, or that the company wouldn’t lay off people for survival in the event of a major economic downturn, or that individuals couldn’t lose their job due to poor performance.
I found the blog interesting because all but one company/person mentioned were well respected lean companies/people (Orry, Art Byrne, Dr. Deming, Wiremold, Parker-Hannifin, Lantech). The overriding theme was the respect for people. Ask for their ideas to improve, share the big picture with them don’t hide it, reward them for their help. These all have to do with respecting the people of the business and organization.
I hope this blog gets circulated around. These are the behaviors to look for within a company. These are behaviors a lean company exhibits whether they use the term lean or not is not important. Respecting the people is. With their engagement in the continuous improvement process a company can make great strides in productivity and growth.
I had a conversation recently with a very smart and talented consultant. He is a Lean Six Sigma consultant. He knows the tools of lean and Six Sigma backwards and forwards. The consultant also talked ab out the importance of having leadership buy-in from the top all the way to the bottom to be the most successful at both lean and Six Sigma. Overall, he was a very astute about both lean and Six Sigma.
During his presentation, there were two misinterpretations that stuck out to me. I found them to be quite a difference in thinking.
1. Six Sigma is focused on the customer while lean is focused on elimination of waste. I find this to be a significant difference in thinking. Lean’s #1 tenant is to focus on the Customer first and foremost. By focusing on the customer, an organization can learn what the customer finds of value. What is not of value can be considered non-value added (waste) or non-value added but necessary (government regulations). These should be eliminated or at least reduced.
Most people focus on the elimination of waste and miss why eliminating the waste is important. It is because it is of no value to the customer which is the main focus. Once the waste is eliminated it frees up resources allowing an organization to grow the business without having to invest in more resources.
2. Six Sigma focuses on making the product right while lean just focuses on making the product. The consultant mentioned the 7 types of wastes. One of the 7 types of wastes is directly solely at making the product right. That is the waste of defects. Not to mention the concept of building in quality (jidoka).
As mentioned above, when a company focuses on the customer first it will recognize quality is very important. This is why building in quality is one of the two pillars of the Toyota Production System.
After the presentation, the consultant and I had a very good discussion on these points. I admitted to being raised in the Lean House. I wasn’t arguing that Six Sigma was wrong or companies can’t benefit from it. Just that I have a different perspective of lean on the points mentioned above.
Thanksgiving is in the rear view mirror. Now it is time to brace for the Christmas season and the craziness it seems to bring. More people will have jobs over this time of year with stores and companies needing the extra holiday help, but it usually ends up being a quick blip on the radar since the work is short-term help.
It is a time to be grateful that more people are working, but lets remember we as a country have a long way to go in order to turn the unemployment rate around. In general, it won’t be large companies that hire large numbers of people that will turn the unemployment situation around. Most of the large companies have too many people already from years of hiring faster than their growth rate.
The small companies that are getting started and growing are the ones that can really help with changing the unemployment situation in the U.S. or anywhere for that matter. During the holiday season, maybe consider buying gifts and services from smaller companies. It may help spark them to bigger and better growth which can lead to more jobs.
A bunch of little guys can spark the change that is needed.
BizTimes.com which is an online magazine focusing on business in Milwaukee and Southeastern Wisconsin had a great article about small businesses that are growing during the economic downturn.
The overall article is good and highlights several companies. The first company highlighted was Bradley Corp. which makes commercial bathroom fixtures and equipment. The article mentions the expansion to a new facility with a lean design. In fact, that is the only mention of lean in the three page article.
What I liked was the approach and and strategy the company took to growth and planning. Brian Mullet is the president of Bradley Corp.
“As a company, one of our foundations is we don’t look to make changes on a quarterly basis, we look more towards a long-term vision,” Mullett said. “There’s no better time than now, than today, to build a new building.”
In an example of Bradley’s forward-looking investment plan, the company purchased the 32-acre property for its new lean manufacturing plant in 1997, knowing it would allow for flexible use in future expansions.
More from the article…
The key to Bradley’s success, Mullett said, is a family focus on planning far ahead for growth. There are always five-year, three-year and current year plans in place.
“I’m the fifth generation here in the business, so I think that’s been distilled into our family,” he said. “It allows us to plan and be more effective in our business.”
This is more evidence of how thinking long-term has helped a company grow even during uneasy times instead of changing directions several times because of short-term thinking. It sounds like they may not be a publicly held company which can make it easier sometimes, but it sounds like the family values planning long-term. The family bought land in the 1990s and held onto it for over a decade waiting for the right time to build on it. It would have been way to easy to think short-term and build immediately on the land so they were paying for two pieces of property or sell it to get more cash during hard economic times.
I can’t say if they are a lean company or not, but thinking long-term is a good quality to have to build a foundation of lean thinking. Small businesses are going to be where more jobs come are going to come from to help with the employment rate. I hope more of them are thinking long-term.
I don’t know what is in the cheese in Wisconsin but I hope it spreads to other states and if it has how do we advertise it more.
Innovation is one of the key buzzwords nowadays. When you hear the word innovation, what do you think of? Most people think of product or something tangible. And that is what a lot of companies are hanging their hat on.
But innovation isn’t just about products. Innovation is about process too. Innovation is about setting up a process in a new and distinct way. Setting up a process that can create a step change in results taking your business to a new level.
I’m not talking just about manufacturing processes, but also business processes. If you can have an accounts payable process that is fast and easy would banks be willing to loan your company more money? Would you even need to borrow money? What about a quick, reliable process to assess the quality of suppliers? How would that help?
Next time your company talks about innovation, bring up the idea of innovative processes…not just product.
I am slow on getting up to date on some blog posts I wanted to write. One is on an article about Meggitt Polymer I found a couple of weeks ago. I have not been there and have no affiliation with anyone there.
Meggitt is getting fantastic results from implementing lean out on the manufacturing floor.
…Meggitt was able to cut its excess inventory by 70 percent, freeing up 35 percent more floor space for additional manufacturing. He said it was able to reduce its production time 25 percent while increasing its volume 20 percent.
The article said they produce 11,000 different seals. Considering the high number of finished products the results seem even greater.
Meggitt doesn’t see lean as just a way to cut costs, but as a way to grow their business.
At first glance, operational streamlining would seem to mean cutting the workforce — something the county, state and nation can ill-afford, with unemployment so rampant. However, it actually has just the opposite effect, advocates say.
They claim companies that learn to operate more efficiency are able to accelerate productivity, cut unit costs and increase market share. Before long, they need more workers to cope with growth.
Fackler said Meggitt is a good example. It has added about 30 employees in the last 90 days, he said.
In today’s economy more cases like Meggitt’s need to be spotlighted on a bigger stage. They didn’t hire hundreds or thousands like GM or Ford may do when they re-open a facility, but they did grow and they did hire 30 people in 90 days. That is significant for an area. It will be the small companies, like Meggitt, that will play a significant part in turning the unemployment situation around.
Meggitt also got their employees involved in the decision making and improvement process.
Lean philosophy extends beyond managerial and engineering ideas, however. It requires input from those who do the actual work on the factory floor, as they often have the keenest feel for workplace inefficiencies.
At Meggitt, employees on the line worked side-by-side during the process, rearranging pieces of the manufacturing puzzle on a magnetic board.
This is great for the bigger moves and events. I hope they have found a way to continue to do this on a day-to-day basis. Have they created a process to maintain their engagement, so it isn’t a one time event?
Overall, it sounds like Meggitt is doing a good job of implementing and understanding some of the nuances of lean. I would hope they are working at developing their thinking as leaders too, so they can sustain the growth they have experienced.
I had no idea the article was about growth from the title. The article started out:
Top line growth will require a different kind of plan that should be developed in parallel with any process improvement projects. If not, the company will get to the end of its lean journey with plenty of new capacity and no new sales.
This right on. As a company improves and becomes more efficient, then space, people, and equipment start to free up. A company practicing good lean thinking does not lay off people due to improvements. The company asks the question, “What value added things can I do with the freed up equipment, space, and people?”
This is a growth question. It allows the company to produce more product which will generate more revenue using the same amount of people, equipment, and space.
More from Mike:
Several years ago I was doing a seminar in Orlando on growth planning. The audience was comprised mostly of consultants who sold lean manufacturing and Six Sigma services to manufacturing companies. At the end of the seminar, I asked them what measurements they used to tell if their clients had become lean. They told me that they were lean if the manufacturing company had excess capacity for more sales.
I am a little worried that “Lean Consultants” had such a narrow definition of whether their clients were “lean” or not. I really like Mike’s question back to them:
I then asked them: If they had created this excess capacity, how did they ensure there would be more sales?
Mike’s explanation of the importance of a growth strategy was a great one:
My response to these people is that a marketing plan should be part of the CI process. Increasing top line sales and overall growth are not going to automatically happen because you are Six Sigma certified. Top line growth will require a different kind of plan that should be developed in parallel with any process improvement projects. If not, the company will get to the end of its lean journey with plenty of new capacity and no new sales.
I couldn’t agree more with Mike’s view on this. Improvement and growth should be thought of in parallel. That is what I talk about with the facilities I am working with. The improvement part is fantastic, but now what are you going to do with the freed up people, space, and equipment?
I don’t know Mike’s understanding of lean, but when he mentions coming to the end of the lean journey. I think he is referring to becoming efficient but having nothing to do with the freed up people, space, and equipment. So now where does the company go?
Mike comes from a perspective of wanting to save American manufacturing. The rest of the article goes on to explain some growth strategies.
It was a very good article. The title does not convey the true message and makes me wonder if the person writing the title knew that Lean is about growth.