Keys for a Guaranteed Jumpstart
to World Class Results
by Dave Garwood
"Lack of management
commitment" is the most frequent comment I hear when asking why
a company hasnt made more successful changes to improve the business.
Sometimes the claim is fact. Often, it 's a crutch. Lets look
at the problem from a different angle.
Fact: the proven, effective practices we learn in seminars and read
about in books and magazines are being applied in only a fraction of
companies today. Theres too much talk and not enough action! In
short, we know but we don't do. What we know to do today to make the
business run better and what we are actually doing are often quite different!
Some Specific Examples
1. While there are a few exceptions, most industries today shut down
the factory at least once a year to count everything. It's called the
Annual Physical Inventory. In many companies, just the thought of not
taking a physical inventory is enough to send shock waves up and down
the corridors. Ironically, for at least 20 years weve had well-defined
cycle counting practices that can prevent the necessity of "reworking"
inventory records. Practice the proven steps to accurate inventory records,
and youll never have to stop production to take the annual physical
Many companies have proven it can be done! Auditors routinely approve
financial statements, even though a physical inventory wasnt taken.
Yet physical inventories continue to be a common practice in most industries.
We know better, but we still do it! Is the lack of progress in applying
this effective concept rooted in the lack of top management commitment?
I think not.
2. We know an industry runs better if we develop supplier partnerships.
Selecting partners on reliable quality, short lead times, frequent deliveries
and sharing technical knowledge pays off handsomely. Yet we continue
to select suppliers based on the lowest price. It is well-documented
that better supplier performance is the result of looking at total costs,
not just purchase price. We talk a good game about partnerships, yet
continue to use leverage and clout as a prime tool for better supplier
performance. The recent craze to open business to auction-type bidding
wars is a good example. Again, we know better, but we continue to use
the same old practices. Is lack of top management commitment the roadblock?
3. The merits of making only what you need when you need it are proven.
In other words, smaller is better. Yet we continue to see factories
running at full speed just to keep the equipment busy. We continue to
see long runs justified by economic order quantity calculations. "While
youre making a thousand, might as well make another three thousand
because the rest of them are practically free," is a common attitude
that drives long production runs. Keeping all the equipment busy and
getting the direct labor up to absorb more overhead and create the illusion
of profitability continues to be a common practice! Once again, we know
better, but the same old practices still dominate many, if not most,
companies. Again, the lack of progress is more than a top management
4. Walk into most factories and do a quick process map. Material flows
look like spagetti tossed randomly all over the floor. Some material
travels thousands of miles and stops for days between operations before
it is finished. No wonder the quality is bad ... those little molecules
are pooped and have aged by the time the work is done! Yet, the library
is full of books on how to "Lean" the processes and take the
lead time (and cost) down to a bare minimum. We know that creating flow
lines or focused factories streamlines the flow, shortens the time to
get product made, slashes WIP by 50% or more, improves quality and cuts
costs dramatically. In spite of the golden opportunity, the material
still zig zags for miles and weeks around the plant. The processes are
still not lean. I can't remember a CEO dictating "this shall not
5. Should we only make as much as we are selling? The answer is absolutely
YES! This requires close coordination between sales and manufacturing.
Should we put together a plan that meets customer needs and simultaneously
is within our current manufacturing capability? Absolutely! This is
just common sense. Yet in most industries, sales plans and manufacturing
plans reside on separate islands. Product promotions are not formally
communicated. Manufacturing marches to their own forecast because they
dont trust the sales forecast. Finance uses their own numbers
because neither sales or manufacturing ever seems to come close to their
We have well-published and proven practices of how to follow an effective
five-step Sales & Operations Planning process that guarantees that
plans are integrated. Phenomenal improvements in operating performance
is always a by-product of carefully following these five steps. But
do we religiously follow these steps in most companies? No! We know
better, but once again, we don't get proactive and take advantage of
this proven technology. Why? The problem is much more than a lack of
top management commitment.
I believe a major root cause of the problem lies in the fact that these
current practices represent a "comfort zone" that many people,
not just top management, are not anxious to move out of. The new approaches
would require people to do their jobs differently. Its new and
the transition is downright frightening. Many times, most of us will
continue old practices even if they arent the most effective,
because we are more comfortable with what is familiar. Moving from one
comfort zone to a new one can be traumatic! For example, I think many
of us know the right things to eat to live a long-term healthy life.
We know exercise is essential. However, we regularly turn into the golden
arches and avoid the gym. Why do we continue these habits? We are comfortable
doing things in a familiar way. As one manager confessed to me, "
I know many of the things we do are wrong but we're good at them!"
Alternatives are scary. What is the answer to this dilemma? The answer
is rooted in understanding the human factors that cause all of us to
avoid moving from our current comfort zone to a new one. It appears
that the companies that have been successful have been able to incorporate
change because they have the courage to stop talking, stop promising,
stop debating and just jump in the pool. In short .... take action!
How do you get a car started on a cold morning when the battery isnt
dead, but doesnt have enough juice to start the car? It takes
8 Keys To A Jumpstart
Here are the critical elements to an effective jumpstart for moving
from one comfort zone to the next:
1. Clearly link desired changes to meeting strategic goals of the
Top management commitment and leadership are certainly going to help
implement changes in existing practices faster and easier. Why wouldn't
the boss be all for the improvements? It may be because the benefits
of the new changes havent been communicated in terms that clearly
illustrate a contribution to meeting the key business objectives, particularly
financial ones. And those are the goals the boss is accountable for
2. Declare that change is not up for a vote. We must immediately
end the debate about whether significant changes in how we run the business
are going to occur or not. They are! Pritchett & Associates have
identified three absolutes for change:
Declare that change is here to stay.
Acknowledge that change will not be problem-free.
Make it clear that individuals are accountable for leading themeselves
and others through the change process.
In short, make sure everyone in the organization understands that if
they are not prepared to change, they should probably get prepared to
make new friends and work in a differnent environment. We need to end
the debate about whether changes will occur. They will. We do need to
help people understand what they can expect to experience and how to
constructively overcome the human emotions that resist change.
3. Focus your resources. Too much to do in too little time is
a common feeling in many companies. No company, rich or poor, large
or small, has the resources to do all they would like to do. We
have too much on our plate already, is a common reaction. The
thought of adding more tasks
immediately causes resistance. The answer? Pick a few things and do
them really well. Pass up all the other "golden opportunites"
intially. We simply cannot allow the organization to simultaneously
focus on a multitude of tasks. Acronym camps that focus on the latest
craze such as Lean, ERP,TQM, TOC and SCM are killing us. Weve
made it appear that these are separate alternative approaches. Most
people view these buzz word initatives as trying to do too many things
at the same time. While acronyms served an effective purpose at one
time, we let them become the objective. We must focus on the business
problems and recognize these terms represent a means to the end, not
4. Results-oriented efforts. In many companies, training everyone
in the new concepts appears to be the objective! Implementing software,
ISO certification, Team Building 101, SPC 303, etc., appear to be the
objective. Many companies even measure the effectiveness of their efforts
by the number of people theyve trained, not in the results theyve
achieved! We must identify the critical performance areas that need
improvement, such as inventory reductions, shorter delivery times to
customers, defect-free production, shorter times to market or whatever
is critical, and focus on those few first.
5. A consensus vision. Where are we headed and why? We need everyone
in the organization to share a vision of how the processes are supposed
to work. For example, were going to cost effectively manufacture
quantities that match our need -- no "extras." Were
going to have Win/Win partnerships with suppliers and measure supplier
performance on other than just invoice price. We're going to replace
manufacturing departments with lean, product-focused flow lines. Were
going to delegate responsibility for decision making and eliminate the
costly layers of supervision. Were going to have schedules that
everyone believes and meets 100% of the time in the factory, with suppliers,
engineering, etc. These are a few of the critical elements of the vision
we need to explain to the masses. In short, we want everyone to have
a common understanding and a consensus vision of how the company will
operate in the future. The challenge then becomes overcoming the obstacles
of getting from where are are today -- the as-is environment -- to the
as-it-should-be environment. Progress will be measured on hitting the
short-term goals that are consistent with the vision.
6. Spread ownership throughout the company. Weve picked
all of the low-hanging fruit. The obvious opportunities with mergers,
cutbacks, downsizing, acquisitions, etc., have been orchestrated by
senior management. Today we have millions of twenty-dollar problems
that need to be solved. And we have the people to do it. It requires
pushing the ownership for change and delegating the responsibility for
making decisions down to the hundreds of men and women who carry out
the daily tasks of running the business.
7. Increase the knowledge base. We can't expect people to reinvent
cycle counting, methods for reducing changeover time, sales and operations
planning steps, flat bills of material, flow lines, kanban and a host
of other tools that enable us to turn the vision into reality. Put a
bunch of farmers in an underdeveloped third-world country that currently
farms by turning the soil with a stick and planting the seeds one at
a time into a room and ask them to brainstorm, and they will simply
recommend sharper sticks. We must expose the masses in our companies
to the modern tools for re-engineering our business processes.
8. Build confidence with results. The transition from the current
comfort zone to a new one is inevitably disruptive. People are skeptical
and rightfully so! There is a lot of apprehension. As Joel Barker puts
it, "When a major paradigm shift occurs, everyone goes back to
zero." We're asking people to abandon the skills that probably
allowed them to get a promotion, increase their income and raise their
self-esteem. A purchasing agent that has been effective using hardball
negotiations, an expediter who is the champion of the hot list, and
a supervisor who makes all the decisions, all of a sudden see themselves
as obsolete. They're not, but their methods are! We do have a place
for them, but its a different place. Many people see these new
ideas or new paradigms as high-risk. A small minority will be enthusiastic.
Another small minority will be firmly entrenched and immovable. Most
of the people will be curious and skeptical. Its the curious and
skeptical that we must win over.
How do we win the enthusiastic support of the masses? Prove to them
that new ideas can work by doing it! While it is tempting to identify
only a handful of opportunities that will achieve the maximum results,
these opportunities will also be the highest risk, take the longest
to do, and will be the most difficult. The initial focus must be to
build momentum, not build immediate impact on the income statement and
balance sheet. Focus initial efforts on opportunities that contain the
1. Are small, not global.
2. Can be solved by small groups, not large teams.
3. Require little, if any, executive approval before proceeding.
4. Are low-risk.
5. Result in making progress in areas that are important to executive
management, particularly the General Manager or CEO.
6. Will result in measurable results that can be achieved in 90 days
Everyone wants to be on a winning team. A prime intial objective is
to prove this is a winning effort. The volunteers will flock on board
immediately, people will find time to participate and the momentum will
build as the masses see a few people reaching the new comfort zone!
Top management commitment will escalate when they begin to see results,
especially results that help them meet their objectives!
Fear and Excitement
On one hand, this is a frightening new decade. On the other hand, its
an exciting decade! Competitive pressures make it mandatory that we
raise performance in our companies .... or else! Doing more of the same
will only yield the same results. Therefore, change is inevitable. Heres
the good news. Weve made changes before and not only survived,
but are better off. We dont use the same equipment that we used
twenty years ago. Typewriters, white out, carbon paper and kardex panels
have been replaced with PCs. Drawing boards and T-Squares in engineering
have been replaced with CAD terminals. The paint booth is manned by
a robot. Yet when we brought in the word processor, the numerical control
machine tool and the 3D modeling equipment, many people resisted the
change from the old. Just try to get them to return to the old ways
Focus on these critical elements to help structure an effective change
process and I GUARANTEE you will see a jumpstart in your quest
for World Class Performance immediately!