Productivity and resistance to change
Posted: Tue Feb 06, 2007 11:21 am
Going Against the Flow
“Then there was this law of life, so cruel and just, that we must change, or else pay more to remain the same.”
— Norman Mailer (from The Deer Park)
A Norwegian folk tale describes a husband who became so frustrated by his contrary and argumentative wife that he thew her into a foaming river. Her body was found a few days later — upstream.
It is not easy to “go against the flow.” But it will bring you closer to the source. And it might lead you to the truth. It also may cause you to become very, very frustrated.
We all admired Japan when the country put Deming’s principles of quality improvement to work and started to make extraordinary cars, cameras, Walkmans and computers.
But Japan has been plagued by negligible growth for 14 years running. Toyota has just recalled 350,000 cars; Sony is being confronted over cell phone batteries that explode. A recent Wall Street Journal editorial bemoans the deterioration in the quality of Japanese products.
The companies that copied Toyota are faring no better: Ford, GM and Daimler-Chrysler are all making high quality cars that remain unsold. What’s going on?
If you were making a product of such high quality that only 3.6 out of every million are defective, would you change your production process? I think not. You have attained the standard for perfection in manufacturing.
No change means no increase in productivity. No change means that you are sitting still, while your competitors are making products faster, better and more cheaply — or offering new and better designs — or inventing something no one else has even thought about.
What happened to Sony’s fabulous Walkman when Apple introduced its iPod? Or to Kodak with the advent of the digital camera? Or to TiVo when cable and satellite TV providers offered their own inexpensive DVRs?
Apple is famous for being contrarian. It has the best and most innovative products, but cannot make a dent in Microsoft’s Windows market. But Microsoft’s stock price has been flat or falling for over five years. The power of a near-monopoly is not eternal. And somewhere out there, a certain individual is already inventing the next Microsoft, or the next Apple.
Going against the flow is risky. But going with the flow is even riskier. Think of the giants of the past: Montgomery Ward, AT&T, Westinghouse, Sears, Enron. They are either entirely gone, or they have become very different and much smaller companies. For the survivors, change is a constant. But change itself does not guarantee survival any more than quality does. No change, however, guarantees extinction in a changing business world.
These are the rules for survival:
1. Waste not — extreme lean is best for everyone.
2. Innovate, with both the customer and the competition in mind.
3. Lead — don’t follow.
It helps when everyone takes responsibility for their actions, and pulls together towards a common goal. But the questioning must never cease: Goals change, responsibilities change, and alignments change.
Mostly, the questioning comes from contrarians.
They are not your enemies.
They are your compass.
Leading, innovative companies understand the power of productivity as the strategy for achieving greater corporate performance and bottom line results. Yet, most companies do not apply a systematic and rigorous process for realizing their untapped productivity potential. 80% of all corporate initiatives focus instead on efficiency improvements that are not tied to overall growth objectives and do not produce any breakthroughs in performance. Productivity improvement, on the other hand, is so highly leveraged that even small increases can dramatically affect revenue, cost effectiveness and profits, while raising employee satisfaction and customer delight. For publicly held companies, stock prices and market capitalization can increase dramatically.
“Then there was this law of life, so cruel and just, that we must change, or else pay more to remain the same.”
— Norman Mailer (from The Deer Park)
A Norwegian folk tale describes a husband who became so frustrated by his contrary and argumentative wife that he thew her into a foaming river. Her body was found a few days later — upstream.
It is not easy to “go against the flow.” But it will bring you closer to the source. And it might lead you to the truth. It also may cause you to become very, very frustrated.
We all admired Japan when the country put Deming’s principles of quality improvement to work and started to make extraordinary cars, cameras, Walkmans and computers.
But Japan has been plagued by negligible growth for 14 years running. Toyota has just recalled 350,000 cars; Sony is being confronted over cell phone batteries that explode. A recent Wall Street Journal editorial bemoans the deterioration in the quality of Japanese products.
The companies that copied Toyota are faring no better: Ford, GM and Daimler-Chrysler are all making high quality cars that remain unsold. What’s going on?
If you were making a product of such high quality that only 3.6 out of every million are defective, would you change your production process? I think not. You have attained the standard for perfection in manufacturing.
No change means no increase in productivity. No change means that you are sitting still, while your competitors are making products faster, better and more cheaply — or offering new and better designs — or inventing something no one else has even thought about.
What happened to Sony’s fabulous Walkman when Apple introduced its iPod? Or to Kodak with the advent of the digital camera? Or to TiVo when cable and satellite TV providers offered their own inexpensive DVRs?
Apple is famous for being contrarian. It has the best and most innovative products, but cannot make a dent in Microsoft’s Windows market. But Microsoft’s stock price has been flat or falling for over five years. The power of a near-monopoly is not eternal. And somewhere out there, a certain individual is already inventing the next Microsoft, or the next Apple.
Going against the flow is risky. But going with the flow is even riskier. Think of the giants of the past: Montgomery Ward, AT&T, Westinghouse, Sears, Enron. They are either entirely gone, or they have become very different and much smaller companies. For the survivors, change is a constant. But change itself does not guarantee survival any more than quality does. No change, however, guarantees extinction in a changing business world.
These are the rules for survival:
1. Waste not — extreme lean is best for everyone.
2. Innovate, with both the customer and the competition in mind.
3. Lead — don’t follow.
It helps when everyone takes responsibility for their actions, and pulls together towards a common goal. But the questioning must never cease: Goals change, responsibilities change, and alignments change.
Mostly, the questioning comes from contrarians.
They are not your enemies.
They are your compass.
Leading, innovative companies understand the power of productivity as the strategy for achieving greater corporate performance and bottom line results. Yet, most companies do not apply a systematic and rigorous process for realizing their untapped productivity potential. 80% of all corporate initiatives focus instead on efficiency improvements that are not tied to overall growth objectives and do not produce any breakthroughs in performance. Productivity improvement, on the other hand, is so highly leveraged that even small increases can dramatically affect revenue, cost effectiveness and profits, while raising employee satisfaction and customer delight. For publicly held companies, stock prices and market capitalization can increase dramatically.
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