My last post discussed how a lack of confidence can creep into an organization.  It poses as an overabundance of oversight, checks and balances or controls. While review is vital, it can become counterproductive if it steals from your front-line workers their ability to independently solve problems, try improvements and own their success.

Confidence may be the most important improvement you can bring to your organization. It is the foundation of every sustainable continuous improvement initiative, and it is essential to leadership development.  The following five solutions are proven ways to spark confidence.

1. Communicate external objectives – Workers become much more confident and engaged when they understand the connection between their task and adding value for the customer.
2. Try-storm – Try-storming is a word we use for quickly giving an improvement idea a test drive. When a worker has an idea and a supervisor not only listens, but is willing to try it, even as a temporary experiment, the worker feels valued and becomes more confident.
3. Reward top performers – It is common to find yourself spending too much time fighting fires with new or under-performing workers. When we ignore our top performers, they disengage and lose confidence in their ability to make a difference. Make time for your best people and keep them challenged.
4. Find quick win projects – Quick wins are the surest way to prove to non-believers that improvement can happen. When your workers see change, they are more likely to want to be part of it.
5. Update management systems – Make changes that reflect the progress made by front-line individuals and teams. Re-balance work and responsibilities and set new goals.

When workers are motivated to contribute to improvements, supervisors gain confidence in their front line.  With confidence in the daily run, comes time to focus on big picture improvements and growth.  It’s a winning strategy with long-tail benefits that are felt all the way to the top of the organization.

Executives often tell me this kind of confidence reduced stress, gave them time to focus on transformational changes that grew the business and allowed them to leave work at work, improving family life.  It’s a win for everyone.

A common complaint we hear from business owners is that their operation seems to be bogged down, not able to get to the next level.  When we examine the root cause of the problem it often comes down to a lack of confidence.

Good business requires layers of review, but all too often we see companies that use checks and balances to cover up a lack of confidence in their workers.  Rather than develop the goals, standards and training that enable front-line workers to excel at solving problems and make smart improvements, there are approval processes, meetings, reviews and layers of documentation.  This high level of oversight keeps an organization from being nimble and it deflates employee engagement. Even small ideas that could improve the process or product become regarded as, “not worth the trouble.”

Here are some signs that a lack of confidence has crept into your organization and is holding back progress.

1. Too many Meetings with too many people that drag on too long – Meetings are a fact of life, but unless meetings provide collaboration with a result that moves the issue forward with someone in charge, they become a crutch to keep any one person from taking responsibility.
2. You find yourself un-delegating - As a leader you only have so much time in a day.  You have a duty to your organization to delegate work and decisions.  Delegating allows your management team to take on more responsibility and grow their skills but it also frees you to focus on the things that add the most value to your organization.  My rule of thumb is that if someone can do the job 80% as well as you would, you need to delegate that job.
3. You add a new position to provide more oversight - Much like un-delegating, creating another level of oversight for routine processes is a sign that you don’t have confidence in your people and processes.  It’s a far better use of your resources to develop the standards, training and trust that encourages and rewards your front line and middle managers for making good decisions about daily business.
4. You generate reports that never seem to be discussed - Reports are important when they are used to benchmark progress, identify problems and find opportunities.  If you create reports as a security blanket to prove what you already know, the only thing they prove is that you lack confidence.
5. You back off your goals or lower your standards – You have to have confidence in your organization to maintain or raise your standards.  When workers sense you don’t have confidence in them they hold back and become disengaged.  They lose interest in trying to do a better job or make a better product. It’s a downhill spiral that will lead to more errors, missed work time, high turnover and will in turn consume your time or the time of your managers.

In our next post, we will look at some of the strategies that allow you to find a new level of confidence in your organization.

Blog article by Ray Attiyah, Chief Innovation Officer

Manufacturing in China or using Chinese suppliers is not the bargain it once was.  Chinese wages are rising at a rate of about 17% per year and a new study by Boston Consulting Group predicts wage rates in China and the United States will converge in 2015. There’s more to the story than labor costs.

There are changes happening here in the U.S. that are contributing to the decisions more and more companies are making to manufacture a higher volume of products and components on U.S. soil.  Productivity in America is going up.  Companies that embrace a culture of employee led, continuous improvement are finding that they are driving out waste, improving quality and competing globally.  They are also putting more emphasis on innovation.

Our friends at PDI communications in Springboro, Ohio saw this first hand.  The changes they made in 2010 in their TV assembly area created capacity for a new production line that was cost competitive with manufacturing anywhere.

Not far away in Enon, Ohio, Seepex is preparing for seven million dollar plant expansion.   The expansion will allow Seepex, a worldwide manufacturer of industrial progressive cavity pumps and systems, to increase capacity and add capability as a research and development center of excellence.

Of course, China will always be a force in manufacturing and we recognize savvy business leaders need to evaluate their options very closely and come to their own conclusions about how to best meet their manufacturing and supply chain needs.

Good news all around in this recent article from Businessweek. The article confirms what my colleagues and I have been seeing since December.  Manufacturing is back and it’s better than ever.  By better, I mean companies have done major re-visioning during the downturn and emerged far more flexible, productive and competitive, even when compared to overseas options.

What I like most about this article is that the writer recognized something that  is central to our philosophy at Definity Partners.  The key to success in this “manufacturing  renaissance” is employee engagement.  Workers who actively contribute to making processes better, are making manufacturing better.  They are coming up with ideas that raise the bar on productivity, improve quality and increase customer satisfaction.  They are no longer merely  showing up for the paycheck.  They are taking pride in what they produce.  They are more skilled, more dedicated and they get more done.  At Definity Partners we call it a Run-Improve Grow Transformation. Front line workers are empowered to make their jobs run smoother,  freeing managers to focus on improvements, freeing leaders to focus on growth.

I hope you enjoy the article. Those of you who have been through our Lean Simulation training will enjoy the reference to the teamwork task involving LEGO vehicles.  If you would like to see a video that shows employee engagement at work, click here for a video about our client Bilstein.  The Hamilton, Ohio plant’s  Transformation Eagle project is a great example.

It’s been a hard few years; you don’t need me to tell you that.  For those of us in manufacturing, we have seen our customers become more demanding and we’ve all had to work harder to manage growing complexity.  Despite these challenges our industry has managed to improve.  We saw productivity increase over the past two years, and profitability increased in many cases as well.

Now, the news is telling us that we are recovering.  Orders are increasing and many of us are poised to expand.  The pendulum appears to be swinging back in our direction and the concern of many business leaders has changed from survival to scalability.  We’ve gone from cutting costs to making the right investments; from work force reduction to growth without adding unnecessary labor, and from riding it out to needed improvements.  The landscape has changed for our industry again and we need to adjust to stay ahead.

From my conversations with other manufacturing leaders, I have compiled fundamental action items needed to keep the fat off as your top line recovers.

#1 – Stay Ahead of the Changes – Develop the Baseline & Monitor Your Metrics:

Identify the key metrics in your business; especially the ones that you have improved during the downturn. Watch these metrics like a hawk. Have a plan to react if you see them trending back in the wrong direction. You should have timely metrics in place for labor costs, material costs, quality performance, and delivery performance. Finally, don’t make excuses for poor metrics. Yes, your business is changing, but you don’t have to change your standards.

#2 – Focus on the Improvements Before You Need Them:

Your tendency will be to avoid adding cost and overhead, which is understandable. But as your top line comes back, you will need to invest in your business. The key will be to make the right improvements and add the right people at the right times. If you wait too long to make these investments, your decisions will be reactive, driven by crisis which never turns out well. Create a plan with trigger points for your overhead additions and stick to it. Be honest when assessing your performance; you should focus on having solid processes in place before making these additions or you will lose productivity and, in turn, profitability. Consequently, you also need to create a plan for what improvements will be needed to hit certain business levels.

#3 – Grow Your Greatest Asset – Your People:

The past few years have been tough for your employees, as well. You’ve asked them to do more than ever and likely have not been able to reward them for it. I have read that as much as 50 percent of the workforce will be looking to change jobs, so how can you prevent that in your business? While compensation may be the obvious answer, it is a short-term solution. Your people are likely craving success. So how can you provide that to them? Get them involved and provide them the platform, tools, resources, and opportunities to be a part of improving the business.

There is no sure-fire method to scalability, but shoring up your people and processes needs to be at the foundation of any solution you pursue.

Dayton Business Journal 4.28.11

We would like to extend our most sincere congratulations to our Springboro, Ohio client, PDI Communication Systems. PDI’s 2010 improvement effort was recognized in the most recent edition of the Dayton Business Journal for its continuing improvement results, including a 20% increase in revenue. The company also recovered enough floor space through lean and 5S initiatives that president Lou Vilardo was able to increase local production without a costly plant expansion.

Those of you who joined us on our PDI plant tour in March saw the results first hand. The workers are engaged in a culture of employee led continuous improvement. Not only has productivity and profit increased but so has worker satisfaction.

In the article, “PDI increases local manufacturing” reporter Joe Cogliano called attention to the role Definity Partners played in guiding the company’s lean initiative. Definity Partners project managers were in the plant on a daily basis working side by side with managers, supervisors and line workers teaching lean tools and modeling employee engagement and leadership practices. Click here to enjoy the article.

Earlier in the month I had the pleasure of speaking before the Precision Machined Products Association, (PMPA) at the organization’s annual technical conference. I was asked to give a roadmap for a successful new product launch. As I prepared my presentation I found that I could not separate the concept of a successful new product launch from the need for innovation. In today’s increasingly complex and competitive market, the best way to create and keep an advantage over your competitors is to be the company that is ahead of the curve on product innovation. When you innovate, you are no longer competing on price. You are providing a solution that has value to your customer and that allows you to keep control.

I invite you to click on this image to review the slide deck from my presentation. You will see that I firmly believe that customer intimacy is the path to great innovation, but I say that with an important caution. Don’t expect your customers to be able to tell you what they want. Customers often accept what is and don’t imagine what could be. That’s your job; watch the process that involves your product and imagine what could be. Delivering what could be is what innovation is all about.

Several years ago, Nike embarked on a journey to build a massive ERP (Enterprise Resource Planning) system. I recommend ERP systems to any growing business, but what made Nike’s effort so significant was its intention to combine ERP with supply chain optimization and CRM (Customer Relationship Management) functions. For those that are unfamiliar with the size and scope of this kind of project, trust me, it is a massive undertaking.

Anyway, Nike’s $400 million investment ended up costing the sporting goods brand $100 million in lost sales and a 20% drop in their stock price, not to mention a bevy of class action lawsuits. The company’s VP of Global Operations (at the time) openly admitted, “For the people that follow this sort of thing, we became a poster child (for failed implementations).”  

What happened that caused such a disruption? The answer is unreliable systems and processes – our fifth obstacle that prevents organizational growth (in our series of seven).

ERP systems are only as good as the systems and processes that support its functionality. The same goes for an organization’s employees. While a failed ERP implementation is a symptom of system and process problems, so too are inflated lead times, poor on-time delivery, employee turnover and chronic miscommunication.

Systems and processes are an organization’s DNA; but unlike our own genetic makeup, we have the ability to strategize and select how we want our operations to function. I believe that every employee wants to succeed, but they need appropriate systems and processes that will allow them to do so.

Think about it like a mind-body connection. When systems and processes are streamlined, the organization doesn’t have to compromise between the health of the mind (strategy and objectives) and the body (day to day operations). When systems and processes are inefficient, there is a misalignment between the mind and body causing sluggishness and turmoil. Only when an organization’s mind and body are aligned through efficient systems and processes can top-leaders seize opportunities in the market with confidence that their front-line will handle the complexity that comes with growth. Without the most efficient systems and processes in place, growth is only in size, not sustainability.

So, keeping in mind the importance of having the most efficient systems and processes, let me leave you with a couple of questions to ponder:

• Is your organization prepared to truly grow?
• How would you personally handle a new customer and/or new market if it/they were added tomorrow?
• What would it take to give you confidence to add complexity?  
• What functions do you wish could be more efficient? What solutions can you provide?

Obstacle #4: Safe Change Mode

Last month I started blogging about the seven mistakes leaders make that prevent them from implementing transformational changes.  After a few worthy interruptions, it’s time to continue that theme.

Is it better to try to do one thing at a time or several things at once?  When it comes to transforming your organization, I have seen companies try to play it safe by making changes in sequence, but I have never seen it work.  Here’s what typically happens and why it doesn’t work.

A company will start the transformation with a process improvement effort and hire a consultant or use internal resources to score some quick wins.  Once that is complete they turn to leadership training, only to find their process improvement wins dwindling as they shift focus to personnel.

People learn through experiences and what this approach fails to capture is the opportunity for managers and supervisors to learn how to lead through the experience of putting process improvements into place.  When you integrate the leadership development and the improvement effort, change happens much more quickly and becomes sustainable.

I often compare it to a golf swing.  A quality swing demands attention to club set up, stance, grip, wrists, hips, shoulders, head, swing plane, and follow through.  You can’t do one at a time and expect to hit a long straight ball.  You have to put them all together.

When I talk to business leaders about Run, Improve, Grow^® they often see the benefit for themselves of forming the discipline of getting out of the daily run and spending more time on work that produces growth.  What they sometimes can’t see is what it would mean to their organization if their middle managers and supervisors spent less time fighting fires. “I don’t know what that looks like,” they tell me.

There seems to be an acceptance that good managers are good fire fighters. True to some degree, but wouldn’t it make more sense if what they did best was work with the operators to keep the fires from starting in the first place?   What does that look like?  Now I can show you.

At PDi Communication Systems in Springboro, Ohio, we recently had a chance to document, in video form, what employee led improvement looks like.  I hope you will take a moment to see for yourself. Clicking on the thumbnail will open a new window where you will click to play.  Enjoy, and please share with others.