NC State of Business

In my recent blog posts, I have outlined several reasons why manufacturing matters. My goal has been to highlight the tremendous importance of manufacturing while plenty of attention seems to be focused on its “decline”. Let me share another reason why manufacturing matters.

The global economy has changed the nature of competition. United States manufacturers can no longer focus solely on being a low-cost producer, rather need to focus on high-value products. Creativity and innovation unlock new customer benefits resulting in higher-value products. Consequently, innovation and creativity have been the center of economic development attention for some time. I recommend an excellent new blog on the topic: Change Papers: A shared effort to change North Carolina's climate for innovation

So, exactly how does creativity and innovation convert into economic value? Let me start with some definitions:

Creativity – the ability to transcend traditional ideas, rules, patterns, relationships, or the like, and to create meaningful new ideas, forms, methods, interpretations.

Innovation – introduction of new things or methods.

Manufacturing – the making or producing of anything especially on a large scale.

Given these definitions, creativity can be viewed as the input into innovations. Transcending traditional thinking and creating new approaches are building blocks to introducing new things to market. While creativity produces new ideas and approaches, innovation applies these ideas in some context. Once applied, if they are product innovations, they need to be produced and reproduced economically. Consequently, manufacturing converts product innovations into economic value. Therefore manufacturing is the key to unlocking the economic prosperity of creativity and innovation.

Creativity, innovation, and manufacturing matter! What are other ways that manufacturing matters? Let me hear your ideas.

This is a question that for most people never comes up in conversation. Sure, some of us grow a few tomatoes, plant a few peppers, or maybe tend a small bean patch. Do you know anyone who grows their entire daily menu? Think. Think some more. Anyone come to mind? It has certainly become rare in our society as grocery stores and restaurants have become the norm. Why not grow or raise your own food? Someone in your family tree probably did just that. Today, maybe it is harder? Maybe we like just more variety and options? Maybe it is too much work for our lifestyles? What if we had to go back to individually growing our own?

Why have we trusted others to furnish something that we absolutely cannot do without? Food is not like an 80 inch widescreen LCD television. We can do without the TV even though some sports enthusiast may disagree. Throughout human history, food has been one of the few defining items of each culture. If you stop and think about it, it is pretty scary to think just how little we know about the origins of the foods we consume, what chemicals are used, and a host of poor sanitation opportunities.

Let’s keep the same thought process and switch the topic to your individual business. What are you not doing that is essential to your existence? Are you letting others grow your food? Let me ask another way, do they provide the “value-added” portions of your products or services? Your customers expect more today than ever. Should you be doing more or less? In this time of vast economic hardships facing so many different industries and businesses, many organizations are looking at “growing their own food” again. I am not talking about going “vertical” or building “mega” companies that do it all, simply suggesting that organizations need to take an in-depth look at what their customers feel is valuable and turn their focus and resources into providing that value. I believe that this practice should be done all the time; but, certainly when cash is so tight and business is down. Can you really afford to be spending efforts and resources on waste? If we were really forced to grow our own food, what would you grow? You would certainly put significant thought and research into determining your answer. Now, ask that same question of your organization. What do you need to be focusing on right this minute to be producing food for your business? Please think about it and send me your thoughts.

Did you know that over the last decade, more than 65% of new jobs were created by Small Business. In these difficult times, the Small Business might be our version of the ‘Small engine that can!’

Innovation and business growth programs try to teach Big Business to act like Small Business; to act entrepreneurial with a purpose! Maybe the small business guys really have the edge. I have seen some reports that indicate that a small business is 10X more likely to be successful than the Big ventures. More than likely, you can count on dedication and perseverance as contributing factors.

An area that could be lucrative to small business but isn’t heavily mined is the magnitude of Government Contracts earmarked for Small Business. Government contracts worth over $1 trillion are issued to small businesses every year but roughly 2% of them participate in any type of government contract bidding. Unfortunately there are a number of loopholes in the system that allow for a number of big companies to participate in the small business bidding and contract process.

I see this as an opportunity for our Small Business owners to step up their efforts and pursue these contracts and use the same tenacity that makes them more successful than their big brother counterparts.

I recently was talking to the owner of a small business about a process to help innovate the company’s product line and expand into new markets. He told me that he “ has interest in exploring the government contract and bidding process, but the thought of exploring the vast chasm of unknown is a bit daunting”.

There is a roadmap to help navigate this process and can be found through your State agencies supporting small business development and export.

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.

In this dynamic changing economy, it might seem like the days of strategic planning are over and not relevant. Business survival is paramount today and taking the time to plan might rank low on your priority list.

I counter that having a strategic plan is more relevant now than ever. A strategic plan for your company is a roadmap on how you best can keep your efforts focused on a chosen strategy over the next year or more. (I will concede that a long term strategic plan could lose some its relevance towards the end of its tenure).

To be successful in today’s business climate, most companies have to be innovative and quick to respond. A strategic plan will help you do a better job in this business gymnastics environment. It will help you do a better job by focusing the energy, resources, and time of everyone in your business.

If you are serious about business growth, then a concerted focus of your efforts can build a competitive advantage for you. A strategic plan will accelerate your business agility to go from plan to action.