I am not sure what it will take for manufacturers to fully understand what it takes to succeed in today’s market place. More evidence of the solution to Australia’s manufacturing woes was to be found in a news article I found on Yahoo Finance this morning. It was discussing the worst and best selling vehicles in the US. Cars to feel major declines in sales due to the slowing economy and subprime issues in the US economy were: Chevrolet Silverado, Cadillac XLR, Jaguar S-Type and X-Type and Audi A8 and S8. Other models that weren’t on their list of worst sellers but had sales downturns this year included the Chevrolet Monte Carlo, Honda Element, and Volkswagen Passat. Guess who had improved sales…(wonder if I really need to fully explain it, I have alluded to it before…) Toyota !!! Sales of the Camry and Prius are both up by more than 6%.

One of the main benefits of Lean is to be flexible to the market place… however it is the application of the whole system, not a cherry-picked version of the system that makes it work. Yet again more evidence of how this philosophy works… hopefully Australian manufacturers will catch on one day……………soon possibly???

I finally returned to my routine of sending out regular newsletters yesterday and in response a good friend of mine mentioned that I should add it to my blog as people might like to comment on it. So here it is…… I look forward to seeing your responses.

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Well I know it’s been a long time coming but I have finally made the time to re-visit my newsletters. With Christmas 2007 fast approaching I have taken the time to re-examine my business. Upon reflection I have fallen into the inevitable trap for consultants when they are busy I let some little things go. Just like I ask my clients not to. So just like I ask my clients what are they going to commit to, I am committing to providing you with better service through my newsletters.

This blinding flash of the obvious came to me during my recent trip to the USA and was reinforced when I was reading a newsletter from an associate of mine who lives and operates in New York. Because in his newsletter he covers a subject that I confront in nearly every project I undertake. In it he makes the following observation;

He set out in his doctorial dissertation (yes he is a dreaded Phd) to prove that innovative tendencies were correlated to behavioural predispositions, however he actually found that: Environment was everything, and that all types of behaviours might end up innovative or non-innovative, depending upon the surroundings and support.

Think about that for one moment that the condition of your surroundings and the level of support provided within your workplace will determine the ability of your people to be innovative or not. After reading this I reflected upon a number of past projects that I have been involved in where the results were not as good as I felt they should have been. I have been taking a lot of pain to re-examine what it is I do and how I present my offerings to clients (and much good has come from this) to ensure that it wasn?t something I was doing that was causing these projects to under perform compared to the level that I wanted them to be at.

It is somewhat comforting to know that in many respects the ultimate result is completely out of my control. It comes back to that senior executive who sets the surroundings and culture of the business that ultimately determines whether a project will achieve its potential or not. I do understand that my role is often that of a lone voice standing against the company’s habits and old comfortable ways. Anyone who has worked with me knows that I am not shy and I do have an ability to make a stand for what I feel is in the best interests of the company. And yes I guess I have upset one or two senior executives in my time, although not on purpose and always with the best intentions in mind. But it is comforting to know that when projects do not achieve the level of transformation I felt was possible, there is little more I can do but to point out my advice, which after all is what clients pay me for.

My associate goes on to say that if you surround yourself with positive, honest and supportive people (and here comes what I think is the really important point) especially those courageous people who are prepared to tell you when they feel you are wrong, you are apt to be successful. This unfortunately is a rare attribute in companies.

When was the last time you were involved in a meeting and you could see everyone waiting for the boss to say what he thought so others could support their thoughts. Or worse still, someone tentatively spoke their mind only to quickly change direction once the boss had made his/her opinion known. You can cut the air with a knife; everyone knows there has been a level of backside kissing going on but no one says anything. My recent projects have all had their fair share of this and when I question those involved they all have some great REASON/EXCUSE why the boss’s opinion was right. This is their way of saying that they didn’t want to ‘Look Bad’. Lets be honest, this is a major driving force in human behaviour. People will move heaven and earth not to look bad; they will break every principle they have not to look bad.

Likewise, Jim Collins in his book ‘Good to Great’ found two of the determinates of Great companies were:
1. Their ability to face the brutal facts and then make decisions based on those facts
2. The ability of the organisation to have volatile debate (drag them down, bash it out discussions) without holding grudges about issues within the business. The ability of the leader to create the environment where his people are ?Heard? not just allowed ‘to have their say’. (The difference being that action is actually taken in response to employees having a say). He found this provided the right groundwork for sound decision making.

All of the above sounds awfully familiar to my associate’s reference to surroundings and support to me and a lot like companies having cultures where different viewpoints make people look bad.

I am a firm believer in taking action so please take a couple of minutes to reflect on the surroundings within your business and to look for ways where it can be more supportive and where action rather than words (read hot air) are the norm. Look for places within the business where people are reluctant to fully express their views for the fear of looking bad and provide them with a safe environment to play full out. Your success will thank you for it.

I would like to take this opportunity to wish everyone a happy Christmas and a successful New Year. I look forward to helping everyone again next year.

Until next time, keep generating success.

Sincerely,
David Ogilvie

Well as you can see it has been ages since I actually contributed anything to my blog. Business has been very good and I have had little time between living a balanced life, project managing the implementation of an ERP system, helping another client choose an ERP system and my two coaching roles not to mention travelling to the USA for two great conferences and working with some fantastic supply chain consultants there.

While in the US I was reading USA Today one morning over my morning coffee and there was a story heading the business section of the paper with the Headline of, “GM forced to take a $39B charge”. The essence of the story was that the GM had been forced by the tax department to take write downs so that it remained compliant because, (and here is the really interesting part of the story)……. “accounting laws say a company cannot keep booking tax credits if it doesn’t have any track record of making money”.

Isn’t this one of the worlds biggest companies??? And the taxman is indicating that you don’t have a track record of making money?? Something is seriously wrong here. It is, however, an example of something that I find is all too familiar with companies, at least here in Australia and of the size I work with. There is an addiction to adhere to the old ways no matter what.

It would seem obvious (at least it does to me and the world I live in) that if you had continually operated at a level where the taxman is now considering that you don’t have a track record of making money, that you should start to think about doing something differently. Especially when there are only a few players in your market that actually make any money (read Toyota).

Here are two companies competing in the same markets globally, selling the same type of products and one is making more profit than all the other competing companies combined and the other is losing money like a drunken gambling addict in Las Vegas. I’m not sure how much money the executives of these companies are being paid but it would seem to me that maybe there is some credence in what the company making money is doing.

I found it ironic that about two days later there was a very small mention in a side section of the same paper of Toyota’s profit announcement. I still fail to understand why it is that decent men and women who are obviously intelligent fail to grasp concepts like Lean Thinking???? The results are obvious. Maybe its because they are counter-intuitive, maybe its because they need the whole system to be applied but our managers today want to cherry-pick the bits they want and to hell with the other disciplines - they are too hard. Maybe the devil is in the detail????? What do you think?