8 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 hasn’t made more successful changes to improve the business. Sometimes the claim is fact. Often, it 's a crutch. Let’s 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. There’s 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 we’ve had well-defined cycle counting practices that can prevent the necessity of "reworking" inventory records. Practice the proven steps to accurate inventory records, and you’ll never have to stop production to take the annual physical inventory again.

Many companies have proven it can be done! Auditors routinely approve financial statements, even though a physical inventory wasn’t 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? Not entirely.

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 you’re 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 commitment issue.

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 be done!"

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 don’t trust the sales forecast. Finance uses their own numbers because neither sales or manufacturing ever seems to come close to their projections.

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.

Comfort Zones
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. It’s new and the transition is downright frightening. Many times, most of us will continue old practices even if they aren’t 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 isn’t dead, but doesn’t have enough juice to start the car? It takes a Jumpstart.

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 business.
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 haven’t 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 meeting.

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. We’ve 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 the end.

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 they’ve trained, not in the results they’ve 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, we’re going to cost effectively manufacture quantities that match our need -- no "extras." We’re 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. We’re going to delegate responsibility for decision making and eliminate the costly layers of supervision. We’re 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. We’ve 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 it’s 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. It’s 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 following characteristics:

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 or less.

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, it’s 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. Here’s the good news. We’ve made changes before and not only survived, but are better off. We don’t 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 today!

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!