NC State of Business

I had the privilege of recently seeing one of the great guitarists of my generation, Robin Trower, at a small venue in Charlotte. Although Robin is about 65 years old, (and looks every bit of it) he performs with the talent he has always had and demonstrates a passion for the guitar. You can see the passion in his face, and feel it through his music.

You see this same passion in the faces of other great musicians (from my generation) such as Bruce Springsteen, Robbie Robertson and Eric Clapton. And their talent and success shines through this passion.

I believe a similar passion inspired many of us to pursue a career in manufacturing. Transforming raw materials into a product that a customer really wants, adding value and continuously finding ways to do it better, faster and cheaper can be inspiring activities. I still see the passion in the faces of managers and production operators in many of the plants I visit.

There is a somewhat dated best selling publication from 2001 titled “Good to Great” by Jim Collins (Harper Collins Publishers) that still holds some excellent core concepts about passion and success. Jim describes 3 intersecting circles to help determine your business and personal passions that take you from good to great. He names it the Hedgehog Concept and describes the 3 concept circles towards a personal analogy as:

1. You are doing work that you have a genetic or God given talent and perhaps you can become best in the world in applying that talent (I feel I was born to be doing this)

2. You are well paid for what you do (I get paid to do this, am I dreaming?)

3. You are doing work that you are passionate about and absolutely love to do, enjoying the actual process for its own sake (I look forward to getting up and throwing myself into my daily work and really believe in what I am doing)

Jim indicates that if you can drive toward the intersection of these 3 concept circles and translate that intersection into a simple crystalline concept that guided your life choices then you’d have a Hedgehog concept for yourself. But you need all three concept circles to be successful.

So, maybe by evaluating ourselves personally or in our business we can see how we stand within this Hedgehog concept. Focus of our personal talent and passion will drive our business success. It may be in manufacturing or it may be in music.

In my last blog post, I highlighted the strength of manufacturing output and exports. These statistics may appear contradictory to the prominent attention given to manufacturing job loss. Yet, did you know that the decline in manufacturing employment has been taking place since an employment peak in 1979?

Let me suggest the contradiction in strong manufacturing output and job loss is related to several factors. Indeed, these factors help explain the paradox between the strength of manufacturing output in the face of manufacturing employment decline. It is important to understand these factors and recognize the important role we have to keep manufacturing strong. I will focus on two factors.

First, competitiveness in any industry relies partially on being productive. Simply stated, this means producing more outputs with less inputs. Therefore manufacturing outputs can remain strong while fewer inputs, such as labor, are needed. As technology has been integrated into manufacturing processes less labor, particularly low skill/ low wage jobs, are needed. While manufacturing output remains the greatest contributor to North Carolina’s Gross State Product, the number of people needed to produce these outputs has declined. This is good for us as consumers as we watch product costs decline and as citizens while we witness an increase in high skill/high wage jobs. Furthermore, increased outputs can be exported bringing new money into the local economy.

Second, the outsourcing trend has gained tremendous momentum in recent decades. Manufacturers have focused on outsourcing “non-core” processes in order to devote resources to enhancing productivity and performance of their core processes. In other words, logistics and transportation, attorneys, and many other professions that were once on a manufacturer’s payroll are no longer. Consequently, positions that used to be counted in manufacturing employment numbers are now counted in other occupational categories even though their primary customers may be manufacturers.

These two factors, productivity and outsourcing, should offer you optimism that we can affect more than we may realize with respect to the success of North Carolina’s manufacturing. This optimism should be a call for action to support this vital economic sector. Here are a few of my ideas for supporting manufacturing success in our state:

1) Advocate and educate about manufacturing’s role as a vital economic engine.

2) Market manufacturing as a viable career choice. Over twenty manufacturing occupations are expected to have “average” to “much faster than average” growth nationally. Yet, this message does not appear to be getting out.

3) Align education and skills development with the growing high technology jobs needed for manufacturing productivity.

4) Support manufacturers in their development of innovation. For innovation, I mean both new approaches and products for customers as well as continuous improvement of processes within the organization.

These are just a few ideas….....what are yours?

Over the Labor Day weekend, one of my closest friends completed her first half marathon. It was a great accomplishment mostly due to the fact that she used to be overweight. A little over 3 years ago, she decided to get healthy and joined a gym.

As she told her story, I could not help comparing her experience with some of my clients that have made a decision to become a world class organization. I know it is an odd comparison, but let’s try to match the principles behind the continual improvement process in both cases.

My friend started by setting goals and deadlines to accomplish them. It was important that she knew where she wanted to go. Companies striving for world class status must also set such a goal.

My friend looked for experts in the health area to help her to create a plan and to coach her along the way. When she saw the plans, she got discouraged as they covered a long period of time. However her coach explained to her that they had to be realistic and that she should start focusing on small pieces of the plan at one time… “try to achieve the milestones, don’t look at what you have left, but look at your accomplishments, and how you will move forward”. I thought wow! That is the same type of response I give my clients when I explain that their process to become a world class organization may take them several years.

During the first year of my friend’s journey, she took small but steady steps. She started walking and doing some weight training. She could hardly see improvement until her coach told her that she was ready to run. Actually, running was something that she never thought would be possible. So she started running short distances first until it became easier. Just being able to run was a great accomplishment. We see the same with clients. When they start, they have to handle small steps at a time. Early programs sometimes do not seem like much progress, but those small steps are necessary to lead us to reach our goals.

At the end of the second year, my friend was running her first 5K race. Then a year later… a half marathon. She couldn’t believe she actually did it, and now she is thinking of her next challenge. Looking back, the long term plan she drafted with her coach has been completed and even exceeded. The same happens to organizations when they achieve their early goals. They quickly forget as they raise the bar about how differently they feel about the challenge. What once seemed so far away has been reached and in some cases exceeded.

“Champions do not become champions when they win the event, but in the hours, weeks, months, and years they spend preparing for it. The victorious performance itself is merely the demonstration of their championship character” ~T. Alan Armstrong

So often in the past, I have seen companies devote huge amounts of cash, personnel, materials, and other valuable resources on initiatives and strategies without putting forth the upfront work to make sure that all of the effort will yield a bountiful harvest. While I am sure the reasons vary and all appear to be justified, I have always been amazed that so much hinged on so little actual sustenance. I am starting to see a change in this type thinking.

My clients have been much more focused on: what type results they should expect, how they will get the results, what commitment level will be required, and so on. I have always gotten these type questions; but, now I see significantly more focus on the details. This may be one of the few pluses of the current slow economy. Maybe now, leadership is more cost conscience? Maybe it is lack of funds? Whatever it is, folks are asking the right questions.

On your core initiatives, make sure you are asking the right questions. Here are a few that I think need answers:

(1). How and to what extent will this help you? Dig down into the weeds here. Do not just accept that you will benefit. Will this benefit your customers? Your company finances? Your associates?

(2). How much will you have to commit? Time, money, materials, organizational involvement, supplier involvement, customer involvement, etc…

(3). Do you have the expertise to execute the initiative? Can you draw help from other sources in your company? Do you need outside assistance?

(4). Do you have time to make this happen? Most changes do not happen in short periods of time. Avoid running out of gas before you get a successful implementation by making sure you are robust in PDCA.

(5). Will your culture support the initiative in both the short and long term? If not, this will have to be addressed or failure is certainly a likely outcome.

I believe you have to have these and other core questions answered in detail as part of your upfront work. If you do not know where to start or what questions to ask, please call us at IES. We know the questions to ask and can provide real examples and data to support your efforts.

Readers may be surprised to learn that I'm a big NASCAR fan. That's why I love the work we do with Performance Instruction and Training out of Mooresville, using pit crew exercises to demonstrate lean manufacturing principles. But that's another story.

I always find it amusing that our "born in North Carolina" stock car racing -- which, if you didn't know, got started by moonshiners trying to outrun the law during the Prohibition era -- now draws crowds across the country. This past weekend Mark Martin won in New Hampshire; this weekend they race in Dover, Delaware.

One unmistakable thing about the "stock" cars they race on Sundays is that they're not "stock" any more: they're as customized as any made-to-order piece of machinery can be, because they've been optimized for performance and for driver protection. And that's okay: a NASCAR race car has a much different job to do than the typical family sedan, which in turn has a much different job than a transfer truck.

But think about that car, and about your business. Is your business optimized for performance and protection? Those are about the best things you can emphasize in terms of what will make your business succeed and what will keep it going over the long haul. Your business should be optimized for performance in terms of providing the best goods and services at the lowest cost and the least waste. It should be optimized for protection in terms of worker safety, environmental responsibility, and sustainability -- you might not think of those as being vital to your company's survival, but they can be: they keep you in compliance with government regulations and provide the best working environment for your people, so you can stay in business for a long time.

What would it take for you to optimize your business the way NASCAR teams optimize their vehicles? And how can we help?