·
On-time delivery that isn’t meeting customer
expectations
·
A workforce that is disengaged and going through
the motions
·
A cost position that isn’t enabling sales and
profitability
·
Difficulty capturing and sustaining the gains of
continuous improvement activities
·
High inventories while experiencing stock-outs
·
Reactive scheduling—running the plant from “hot
lists”
·
Capital investments in equipment that don’t seem
to be paying off
·
Erratic financial performance
Why me? The first bug was a
passion for small-and mid-size manufacturers. I enjoyed leading a business as
opposed to running a department in a larger company. In a smaller company, you
can move fast and you own your decisions. There’s no place to run and no place
to hide. I loved it. The second bug was the rush and exhilaration that comes
from fixing struggling factories. The journey is always hard, but the emotional
rewards are great.
Setting the Stage
Fixing a factory requires a change
in direction and momentum, and that change will only happen if the leadership
team and the workforce are ready to embrace change and unite towards a common
goal. It is leadership’s job to break the Sisyphus trap. The workforce will be
thirsty for substantive hope that things are going to improve, and when they
see it, they’ll rally behind it. The key is that it must be substantive.
Rah-rah speeches, posters, and platitudes will not suffice. It’s going to take
visible, tangible action.
Leading a factory that is
struggling is rubber raft leadership. The precision of a racing shell can come
later. There are three factors that embody rubber raft leadership: Inspiration
for the mission, Senior leader engagement, Leadership style
Inspiration for the mission: People
will do amazing things when they believe that they are part of building
something special. The inspiring message is not a single event, a single
speech, or a single memo. It should be a series of messages that are woven into
multiple communication methods. The inspiring message to the workforce must
confront this paradox. It must communicate faith that you’ll get through the
challenges while simultaneously facing the harsh realities of the current
situation. People will look you in the eyes to see if you’re for real or not.
If they trust you, they’ll get on board and engage to make things better. If they
don’t, they’ll punch the clock and go back to being Sisyphus. An inspiring
message often contains the following ingredients:
·
An admission of the difficult situation that the
company is facing. The people will want to know that you get it and you don’t
have your head in the sand.
·
An expression of confidence that the company
will prevail. All companies go through difficult times, and this is our turn.
We’ll get through it.
·
A description of the specific actions that are
being taken to correct the situation.
· A “silver lining” message about how the
challenges are forcing us to build muscle that will make us stronger. Processes
that have been issues for years bit us in the ass, and now we’re fixing them.
There are painful lessons being learned that are going to make us much stronger
going forward.
·
A perspective confirming that customers,
shareholders, and suppliers all understand that difficult times happen. Our
partners are still with us and they will be there as we emerge from this, if we
band together and show the true spirit of our company and our people.
·
News about victories that indicate that you’re
making progress.
·
A reminder of the responsibility that we bear to
each other, our families, and the community.
· A subtle warning that difficult times reveal character.
It’s time to show the world our real character. Our values still hold true.
Let’s remember to…(insert your three or four core values here).
·
A heartfelt thank you.
Senior leader engagement: Every
member of the senior leadership team needs to be a guide on the rubber raft.
They aren’t passengers in a boat or, worse yet, on the shore just observing.
The senior leadership team can follow one of two paths. They can unite towards
leading the company through the rapids or they can fragment and become divisive,
blaming, and territorial. Leadership teams that unite have great odds of
working through their challenges, and leadership teams that fragment will
prolong their pain.
Leadership style: The best leadership style is
the style that the organization needs right now. There can be no engagement
without respect, and deep respect almost always engenders engagement.
“Watch your thoughts, they become
your words; watch your words, they become your actions; watch your actions,
they become your habits; watch your habits, they become your character; watch
your character, it becomes your destiny.” Lao Tzu
We may not be able to change our
height or even some parts of our personality, but we can change our thoughts.
·
Live your values; firing toxic people is one of
the best ways to earn the trust of your workforce.
·
Clean factory
·
Upgrade the facility
·
Provide transparent communication
·
Implement listening sessions
·
Know each person’s name
·
Involve them in problem-solving
Reveal the Issues
We’re going to question and
explore until we have insight into what is really happening—not what we think
should be happening or what the manual says.
Reveal the Issues: Paradigms Paradigms are
powerful, but they can also create blind spots and obscure the truth. Studies
have shown that we will filter out data that doesn’t agree with our paradigms.
Addressing paradigm blind spots The only way
that I know how to address paradigm blindness is to intentionally seek out the
input and perspective of others and to establish a mindset of curiosity.
Reveal the Issues: Denial, Addressing denial
Confronting a difficult issue usually requires the engagement of a trusted
advisor.
Reveal the Issues: Personal Loss It would be
natural to have concerns about how you might personally be impacted if the
issues were revealed. There could be a loss of status in the organization or
potentially even a loss of job security.
Addressing personal loss If you’ve done
something that has led to the challenges that are facing the factory, it’s best
to own up to them.
Reveal the Issues: Real Numbers I try to
establish a base of real-life numbers, and I work hard to avoid using dollars
as the unit of measure. Direct costing attempts to distill costs down to the
real dollars that are spent. Allocations and non-cash items, like depreciation
and inventory adjustments, are removed from the analysis.
Go See for Yourself
·
Is the workforce productive?
·
Is the factory leadership disciplined?
·
Is there a lot of inventory with thick dust?
·
“How do they know if they’re having a good day?”
·
Data is important, but remember the power of
seeing, hearing, and sensing firsthand.
Reveal the Issues: Process There are five
elements that create the right environment for healthy discovery:
1. Prepare to learn and listen:
bring a trusted adviser into the organization to help with the discovery and
learning. It would be ideal if this outsider has perspectives that may
challenge your own thinking.
2. Conduct listening sessions
from top to bottom: It doesn’t need to be a large number of people, but it
needs to be a broad range.
3. Gather relevant data: It’s
common during the listening sessions to hear people say “a lot.” The purpose of
this step is to put the numbers to the issue.
4. Synthesize the inputs: Here
are examples of typical summary statements:
·
On-time delivery has suffered because production
was not meeting targets for several weeks. As they got further behind, the
number of expedites increased, leading to more setups and thus eroding capacity
further.
·
As part of our implementation of Lean, we
dramatically reduced inventories in some key areas, and we are no longer able
to absorb some real-life issues, such as machine downtime and spikes in orders.
You may notice that the statements
above do not offer solutions and that is intentional. We need to resist the
urge to jump into solutions, if only for a time, to make sure that we have
clarity about the problem statement.
5. Present the findings to
senior leadership: It’s important for the entire leadership team to hear
the message together. This session can head down two paths that need to be
avoided. One path is the blaming path. The second path to be avoided happens
when senior leadership dives into a problem-solving mode.
Reset Expectations
If the factory has struggled for a
long period of time, it’s entirely possible that people are not in a good frame
of mind. It’s common to hear expressions of anger, frustration, and even
depression. We’re not going to win with people in that mindset. Likewise,
customers may have started to lose confidence as well.
The process of resetting
expectations has a lot in common with the actions that pilots must take when an
airplane is struggling and stalls. When a factory is struggling, sometimes
leadership responds by pushing harder and applying more pressure. This feels
natural and right, but it can lead to a death spiral.
It is similar to a plane that
needs to gain altitude. The right way to gain altitude is to apply more
throttle so that there is more airflow over the wings. The increased airflow
lifts the plane higher. Inexperienced pilots can make the mistake of pulling
back on the yoke to gain altitude. That feels right. You want to go higher, so
you point the nose where you want it to go—up! Unfortunately, this only feels good
for a brief period of time. The plane lifts higher in the short term, but it
also slows it down. The reduced speed reduces the airflow over the wing,
creating less lift, and the plane loses altitude. The pilot responds by pulling
back on the yoke further, and again there is a short lift up, but then it
drops. This yo-yo of short-term lift followed by a loss of altitude and a loss
of speed continues until the plane is going so slow that it reaches its stall
speed. A stall in an airplane doesn’t mean that the engine stalled. It means
that there is not enough air flowing over the wings to overcome the force of
gravity. When this happens, the plane just starts to drop. It’s no longer a
plane that is flying; it’s a rock falling from the sky. It is in a death spiral.
With enough altitude, a stall can
be corrected. The process is counterintuitive, which is why pilots train for
this scenario. The pilot needs to point the nose towards the ground. Yes,
that’s right—towards the ground. Doing this starts to get air flowing back over
the wings, and once there is enough air flowing, the wings generate lift and
the plane starts flying instead of falling like a rock. At this point, the
pilot can start to pull back on the yoke to gently level it out and get back to
the business of safely reaching his destination (and cleaning his pants).
We need to take similar actions in
the factory. Some of the things we need to do may seem counterintuitive, but it
will get air flowing over the wings again.
In order to get people energized
and ready to rise to the challenge, they need to see hope, and the reset of
expectations accomplishes that goal.
If your factory is having
difficulty living up to customer expectations, resetting expectations is
delicate but essential. You may need to reconsider: Customer due dates,
Production scheduling, Staffing and overtime Performance metrics
Customer due dates When production output has
struggled and backlog has grown, you need to come clean with your customers.
lead to difficult conversations with customers, and some may even cancel their
orders. But it is better to be up-front with them than to disappoint them down
the road. My recommendation is to be very conservative with the new due dates.
You don’t want to find yourself missing the revised due dates.
Production and scheduling It is common for
customer service to commit to due dates that are unrealistic given the mismatch
between order intake rates and production rates. This often happens in
factories that don’t have robust sales and operations planning processes.
Resetting the production schedule can be very challenging. It often requires a
team of people comprised of supervisors, schedulers, planners, and IT resources
to craft a plan to get the production schedule back in order.
Staffing and overtime over the course of weeks
or months, overtime becomes less effective. If you’ve been working more than 10
percent overtime in any area, it’s time to dial it back and address the need
for throughput by fixing the underlying issues and increasing staffing.
Creativity may be needed to find quality people to bring into the organization.
A final consideration is retention. When a factory devolves into chaos, the
workforce can become very frustrated. There is a finite supply of workers
available and the ones that you already employ have choices. You need to treat
your workers as if they are family and show them the respect they deserve.
Performance metrics It does no good to have a
metric that is a completely unachievable goal. Recalibrating the definition of
success will create small victories and give your workers something to strive
for. Qualifying every victory with a “but” will leave workers demoralized. That
isn’t the way to turn the ship around.
The Core 10 Systems are:
·
Talent System
·
Clean and Safe Factory System
·
Management System
·
Equipment Reliability System
·
Quality System
·
Supply
·
Inventory
·
Sales and Operations Planning
·
Data and Measurement
·
Operating System
Core #1: Talent System
·
What percent of the workforce has been here less
than one year? Two years, five years, ten years?
·
How have those numbers changed over the last few
years?
·
How many experienced workers have retired or
quit over the last few years?
·
What is the yield from the hiring process? I.e.,
how many people need to be hired in order to net an employee that stays for one
year or more?
There are five components of the
talent system that warrant brief exploration because each of these components must
be strong to uphold the entire talent system. They are: Talent brand, Talent
pipeline, Screening and hiring process, Onboarding process, Training and
development process
·
Talent brand: It is your reputation. Some
larger companies are getting very good at cultivating an employment brand, but
I find it rare in mid-market companies.
·
Pipeline: The term talent pipeline is
shorthand for describing the target population from which you want to hire and
the tactics that you’ll use to attract them to your organization.
·
Screening and hiring: The screening and
hiring process has two goals that may conflict with each other. One goal is to
vet the candidate enough to ensure a high degree of confidence in her success.
The second goal of the process is to leave a positive impression with the
candidate and sell them on the opportunity.
·
Onboarding: Onboarding is the initial
time that a new employee spends with a company. In a robust and efficient
factory, new workers will need to be fully capable when they enter the production
environment. They will need to know the work procedures and quality
requirements. For most companies, this will necessitate a more thorough
training program. The onboarding program must also account for the social and
team needs of the employee. employers need to embrace the challenges faced by
new workers and help them reach their full capabilities.
Developing a strong talent system
is a company issue, not just an HR issue.
Core #2: Clean and Safe Factory
System
The condition of the factory is a
reflection of the leadership’s biases and attitudes. Having a clean and safe
factory sets the tone for the workplace. Creating a clean and safe factory
isn’t complicated. It simply demands the desire and discipline to make it a
reality. The reason that the factory is dirty and dangerous is because of
leadership. As leaders, we get the behavior we tolerate.
Core #3: Management System
I am referring to the management
system from the plant manager down to the value-adding shop floor workers. The
management system is the combination of having the right people, with the right
skills and capabilities, armed with the right tools in the right proportion to
enable the shop floor to achieve its goals. Supervisors are the ones
orchestrating the activities with the value-adding workers every day to try to
achieve the goals for safety, delivery, cost, and quality. Most of the plants I
see still have a lot of people who need more training, support, leadership, and
management oversight than was needed before. Factories that don’t develop a
strong leadership structure encounter a number of issues:
·
High involuntary turnover is seen among the
supervisors and leads as management searches for the super-human person who can
excel in the role with little or no training.
·
Employees are disengaged because they do not get
enough positive interaction with their leader.
·
Changes and improvements are not sustained
because the supervisors do not have the time to reinforce the changes.
·
High turnover of new employees often occurs
because they feel inadequately trained and supported during the onboarding.
·
The needs of each company are unique, but an
effective leadership structure often follows these ratios:
Production manager 100-200 people,
Supervisor 20-30 people, Lead 8-10 people. Each of these roles has similar
accountabilities with the primary difference being the span of control. The key
accountabilities for production leadership often include:
·
Achieve goals for safety, quality, delivery, and
cost
·
Develop a high-performance team
·
Represent the culture of the company through
their actions
·
Perform administrative duties
Developing supervisors and leads
requires a well-designed and rigorous program executed over months and years.
The most effective programs that I’ve seen include classroom training in small
chunks followed by on-the-floor coaching with direct support from supervisors.
Production managers need to be coaching and reinforcing the training with their
supervisors, and the supervisors need to reinforce the materials with their
leads. In Lean circles, this is referred to as leader standard work. This is
the daily routine each person in the management chain of command follows to
ensure that operations are performing effectively. Leader standard work often
includes:
·
Key performance metrics for items such as cost,
quality, delivery, and safety.
·
A communication board that is used to convey
information to his team.
·
A series of “tier” meetings, usually one for his
direct team and one for one level up.
·
A daily action sheet to capture issues and
corrective actions.
·
A list of routine items that must be done
occasionally, such as conducting an audit of a process.
·
A method for capturing and implementing ideas
for improvement.
Core #4: Equipment Reliability
System
We can’t make quality products if
the equipment isn’t running properly. Most mid-market companies have poor data
about unplanned equipment downtime.
Core #5: Quality System
I find that the certifications
have little correlation with actual performance. The factory was relying on
inspections to catch defects and the defect rates were quite high.
Core #6: Supply
I have experienced three broad
categories of supplier issues that can dramatically impact the performance of the
factory:
·
Misaligned value streams: Problems arise
when there is a mismatch between the reality of how the business works and the
design of the supply chain value stream. The remedy for this situation is to
get the value stream aligned. This requires a cooperative effort between
operations, purchasing, and the supplier. The result is often referred to as a
Plan For Every Part (PFEP). Prioritize the parts or suppliers that are causing
the most pain. Get the value stream aligned on those, then rinse and repeat.
·
Ineffective supply base management: Supply
base management is the practice of deciding on the suppliers with whom you will
do business and the nature of the relationship. I recommend using a simple
four-square to determine the appropriate strategy for each supplier and compare
it to the current strategy. The four-square is shown below:
o
Commodity – high volume/low importance
o
Transactional – low volume/low importance
o
Critical – low volume/high importance
o
Strategic – high volume/high importance
· Weak
sales and opertaion planning
Core #7: Inventory
Accountants tell us that inventory
is an asset, and Lean tells us that inventory is a waste. It creates a buffer
to cover everyday situations such as: Long supplier lead times, Long setup
times, Inconsistent quality, Mismatched cycle times, Batch operations (e.g.,
nesting of parts on a sheet of steel to optimize yield), Transportation costs
(delivering a truckload at a time), Erratic customer demand
guiding principles for inventory
control:
·
There must be physical control of the inventory.
That means a designated place for everything. The warehouse needs to be
organized and labeled clearly. There must be space to accommodate unexpected
overflow.
·
Whenever feasible, inventory space should be
contiguous. It should be clear where the entry and exit points are to the
warehouse space.
·
There must be clear accountability for
transactions, with limited people putting and pulling inventory from the
locations.
·
There needs to be a clear accountability
structure in place for inventory control and accuracy. The person responsible
for inventory control should also be responsible for the people transacting
inventory on the floor.
·
Planning processes need to be in place to manage
inventories and adjust levels as business conditions warrant.
·
Processes for checking on inventory accuracy and
adherence to inventory management must be established and followed.
Core #8: Sales and Operations
Planning
Sales and operations planning
(SOP) is the practice of preparing a mid-range plan—typically three to twelve
months—that integrates the sales forecast and production plan. When done well,
it creates harmony between sales, operations, finance, and HR. Some people get hung up on the
technical aspects of an SOP process, like elaborate forecasting algorithms.
However, I think that the energy aimed at sophistication is misguided. The deep
benefit of an SOP process is its power to align the senior leadership team.
The SOP process consists of four
milestones that occur each month at regular intervals:
·
The sales forecast is updated to roll forward
one more month. Ideally, the forecast has product-line level detail. This
happens early in the month.
·
Within 10 days of the sales forecast having been
issued, the operations team develops a plan to respond to the forecast. This
plan includes headcount changes, inventory needs, and capital investment.
·
After operations has their plan together,
mid-level management reviews the sales and operations plans to reconcile points
of contention. They then prepare a recommendation for senior management.
·
The last step is for the senior management team
to review and approve the recommendation from mid-management. This should not
be a rubber stamp. There should be considerable discussion and debate.
Nobody can guess the future
precisely, but a monthly look into the crystal ball gets everyone aligned and
marching to the beat of the same drummer.
Core #9: Data and Measurement
I believe that having a core set
of accurate data is necessary for the operation of a stable and healthy
factory. three categories of data: Process data, Financial data, Transactional
data
·
Process data: Process data tells us if a
process is working as intended. Examples of process data would include: On-time
delivery, Productivity, First-pass yield, Percent of calls that roll to
voicemail, Machine uptime, Days to close the books. I recommend that the senior
leadership team focuses on process measures that are tied to strategy. the
senior leadership team must do the heavy lifting to ensure that nonstrategic
but important measures are being tracked within the functions.
·
Financial data: Good process data will
provide strong indicators of financial performance, but it must be validated
periodically with official financial reports. I knew that this accounting
system was compliant with Generally Accepted Accounting Principles (GAAP), but
it was pretty much worthless to me as a leader trying to figure out what areas
I needed to attack. One of the first changes that I like to see in the
accounting system is a move from a standard cost P&L to a direct cost
P&L. In this P&L, manufacturing costs are reported relative to a
standard cost for products. The issue is that this comparison obfuscates the
actual numbers. “Absorption Variance.” That’s an accounting mechanism that
tries to adjust overhead allocations based on the standard amount of volume that
is expected to be produced. It is an algorithmic method for the accountants to
produce a GAAP- compliant P&L, but it has almost no bearing on the
performance of the factory and provides little insight. I prefer a P&L that
shows actual costs. Materials are subtracted to get to value-added revenue.
This provides a clearer picture of the revenues that a company is collecting
from customers to cover costs. Actual costs are shown rather than standards and
variances. When these are plotted month by month, it is clear when there are
cost changes. Inventory adjustments are isolated so that the leadership team
can see the impact of changes on the income statement. This type of income
statement is easy to implement and it can be done in parallel with the traditional
financial statements. It’s worth noting the revenue, gross margin, and profit
do not change. This approach is not about making the numbers look better.
Instead, it is aimed at providing better insight into the data.
·
Transactional data: Transactional data,
as the name suggests, is needed to support day-to-day transactions—including
sales, customer service, engineering, scheduling, shipping, and invoicing. It
seems that everyone thinks that they are the only ones dealing with complexity.
We need to dispel this myth. Low-variety, high-volume manufacturing migrated to
low-cost countries in the late 20th century, and U.S. manufacturing is
predominantly lower-volume, higher-variety manufacturing. Strong companies
recognize that accurate transactional data is an asset to be maintained, just
like the physical assets of buildings and equipment.
Core #10: The Operating System
I define an operating system as a
set of practices and principles that are used to define and implement the
company’s strategy and objectives. It isn’t the strategy itself—it’s how the
strategy gets converted to reality. There are eight ingredients in a strong
operating system:
·
Core Values: I’m talking about the deeply
held values of the organization. Core values describe the behaviors you reward
and the behaviors that will not be tolerated. Core values are a key ingredient
for creating a healthy, aligned team.
·
Value Proposition: The value proposition
states clearly and succinctly who your customers are and how you choose to
compete to win their business. One company may choose to compete on price while
another one wants to offer the most sophisticated products in the marketplace.
Another company may highlight their responsiveness when another might emphasize
their ability to integrate with customers. The key is that there must be a
direction.
·
Organization Structure: Organizations
need to know who is responsible for what and a strong operating system provides
this clarity. A common challenge is that processes flow across functional
boundaries. Some companies are addressing this by going to matrix organizations
where a person is assigned ownership of a process while other people own the
function. This structure can be very effective in organizations that are
healthy, aligned, and have little issue with internal politics. However, it can
muddy the waters and create confusion in organizations that have low trust and
low team health. There is no perfect organization structure, and companies sway
back and forth as the warts of one structure become visible.
·
Strategy Implementation: approaches to
assist with the implementation of strategies.
o
Simplify the strategic plan to one or two pages.
o
Focus short-term activities on one or two vital
initiatives.
o
Establish a weekly meeting pattern to check on
the status and make course corrections.
o
Confront the reality of the day-to-day workload
of people.
If the operating system is strong, everyone in the company
should have clarity about the strategy, the short-term priorities, and their
role in making it a reality. This enables the company to continue to achieve
strong results today while still building for the future.
·
Systems and Processes: Good systems and processes
can make average people excel and poor processes can make great people look
terrible. Systems and processes are related but different. A process is a set
of procedures, information, and actions to accomplish a specific task. A system
is a collection of processes aimed at achieving a broader business objective.
Once the core systems are identified, the key processes involved in building
those systems should be identified. The processes need to be documented, Having
good, repeatable processes is an action, not a document. Getting people to
follow standard work can be a tremendous challenge, especially in organizations
that have a long history of letting people do their own thing.
·
Meetings: The operating system should
define two meeting parameters. First, it should define the number of regularly
occurring meetings that are integral to running the business. Second, the
operating system should clarify the tone, tenor, and expectations of meetings
so that they are effective.
Execute with Discipline
it is the practice of setting
priorities for the next 90 days, working hard on those priorities, and then
reprioritizing for the next 90 days. here is something magical about 90 days.
It is a time frame that is long enough to allow an organization to accomplish
big things, yet it is short enough that it creates some urgency. Another
benefit of a 90-day cadence is that it allows a leadership team to course
correct and reprioritize every 90 days. The last benefit of the 90-day cadence
is that it gets the leadership team realigned.
I’m a big fan of one-page project
charters. A charter defines the scope, objectives, team members, and milestones
of a project. The benefit of writing the charter is increased alignment of the
leadership team. Project charters also dramatically improve the odds of
successful implementation. Hint: Priorities should be stated as actions,
not goals. Focus and deselect. If you don’t do it, your staff will do it for
you and it will be unfocused, unaligned, and it won’t lead to great results.
Now that you’ve launched a vital
few initiatives for the next 90 days, we need to check in on the progress
regularly to ensure that things are on track. If the leadership team isn’t
feeling the urgency and drive to make these initiatives succeed, it’s likely
that you picked the wrong initiatives. It also signals to the organization that
these projects really are important. Your people pay attention to what you pay
attention to. When they see you checking in and making the success of these projects
a priority, they’ll get aligned with the same priorities. Do the weekly
check-ins. You won’t regret it.
Starting change is easy. Staying
with the program and making the changes permanent is a completely different
animal. We can only go as fast as the organization will let us go. The key is
to listen to the feedback you’re getting. There are clear signs when the rate
of change is exceeding the organization’s ability to absorb the change. The
ability of organizations to implement changes is strong, but the ability to
sustain the changes is not nearly as robust. most companies’ attempts to
change. They know how to start the change, but they don’t know how to hold the
change.
To execute with discipline, people
will need to change. The exact formula for fixing each factory will be unique. Somebody—often
many people—will need to do something different than they’ve done in the past,
which means that we’ll need to help them move toward the destination. Note that
I said that people would need to do something different. I didn’t say that they
will need to think something different. I suggest you should spend the
preponderance of your time with the pioneers. When implementing change, there
is a battle to win the hearts and minds of the settlers. you don’t need to get
everyone on board. You only need to get 15 percent of your team bought into the
change and embracing the new path. just requires that an individual does not
feel completely alone. Group norms of behavior are often described as
“culture.” They are the collective set of behaviors that are considered normal
and accepted, and shifting these norms is extremely challenging. If fixing the
factory requires a change in the norms of the group—a change in culture—then
the leadership team has its work cut out for it.
If a company has a history of
blame and low trust, you can expect the process will start very slowly. That’s
okay. Grab one small thing. Go fix it in a way that doesn’t blame anybody and
celebrate the change. Rinse and repeat. Just keep doing it. You’ll be
pleasantly surprised by how quickly people will start to get energy from the
improvements. The focus on making small, incremental improvements also helps
supervisors get the knack of being proactive coaches as opposed to traditional,
reactive, tyrannical foremen.
I’ve spent a lot of time
discussing the people component of executing with discipline and that was
intentional. Leading people through change is one of the largest factors that
will determine your success. Building an environment of respect and trust with
empathy and compassion is rocket fuel for your business. Place your focus on
changing behaviors, not minds, and put yourself in the shoes of those being
affected. Your team is not a bunch of robots they’re much better than that.
Meet them where they’re at and lead them.
When factories are working well,
everyone benefits. Customers are getting the products that they need. Workers
have employment stability and are engaged in being part of the business. Owners
are seeing financial returns that they deserve for their investments, and the
community-at-large is reaping the benefits of being part of the factory
ecosystem.
I’ve compiled a list of 20
questions to spur your thought process. This is not a scientific, numerically
precise, calibrated assessment. Rather, it is intended to help you reflect and
uncover the degree to which your factory may need tuning up.
1) The company produces consistent,
predictable, positive financial results.
2) Managing the company feels stable
(not chaotic).
3) Our customers feel that we serve
them well.
4) Our employees are engaged, and they
come to work for much more than a paycheck.
5) The entire organization is focused
on the critical few initiatives that will move the needle.
6) The company generates financial
results that satisfy ownership and allows for adequate reinvestment in the
business.
7) We can hire and retain the
workforce that we need today and for the future.
8) The workplace is safe and clean,
and we take pride in keeping it that way.
9) Our equipment is reliable and
maintained well.
10) The supply base is aligned with
our needs, and they serve us well.
11) We have appropriate inventory
levels that are well organized and controlled.
12) We do a good job of aligning the
sales forecast with the operations and financial plan.
13) We have good data and metrics to
run the business.
14) We are effective at implementing
the company strategy.
15) Everyone in the company knows our
values, and we live by them.
16) We have effective meetings.
17) All employees know the company
strategy and their role in implementing it.
18) Continual change and improvement
is normal, and we’re good at it.
19) Our employees feel that they have
a voice and they feel respected.
20) The changes that we implement
stick and generate positive results.
If you scored 75 or better, you
likely have a factory that is healthy but in need of improvement in a couple of
areas. A score of 50 to 75 is a fragile factory that may be tipping towards
unhealthy. A score of 50 or less is an indication that the factory is
struggling, and aggressive intervention may be appropriate.
Work isn’t something that you
dread. It’s a part of your life that provides intrinsic value and growth.
Getting to this point takes hard work and perseverance, but it is possible and
worth the journey. I wish you the best as you work to improve your factory. Be
strong, stay focused, respect your people, and be a leader.
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