The Modest sized manufacturing sector in Australia has a huge problem. It is being wiped out like an insect pest at your backyard barbie. The problem with that is that they provide the bulk of employment and training in the economy, and without them, we will become a nation of baristas.
Perhaps it is not that gloomy, there are some exceptional little businesses out there, intensely competitive on the world stage, aggressive, and innovative, but they are a rarity.
For the average manufacturer, the task of just surviving is daunting.
In 20 years of advising these sorts of businesses on change and improvement there are some leadership lessons that seem to crop up time after time, in one form or another.
The survivors learn them, rarely an easy path, the others just go the way of the Dodo.
Management of people and their capabilities.
Successful leaders manage their people and their capabilities on an individual basis. When you have a bunch of people performing well and growing individually, you get groups of them doing the same as the group, and then the enterprise benefits. For the person at the top of an enterprise, even if it is a small one, this aspect of managing cannot be left to chance. This is first on my list, as it is the most important by a long way.
Identifying the molehills early.
Every enterprise has more than its fair share of molehills that need attention, The challenge is to address them, smooth them out before they become mountains, or even little hills that get in the way of performance. The impact of even a tiny molehill on the performance of an enterprise is like the ripples in a pool when a rock is thrown in. They radiate out, and when meeting up with ripples from elsewhere, there is rough water. The job of everyone in a business is to remove the molehills as they emerge, before any ripples can be sent out.
Get it right first time.
The fundamental lesson of ‘Lean’ can be summarised as getting it right first time, every time. While this is hard to achieve, but every corner that is cut, every expedient decision and compromise that is made, will come back to bite you hard, some time, in some way. Never settle for less than the absolute best that can be done, every time, and improve the processes that deliver that outcome to increasingly demanding specifications, relentlessly.
Focus, Focus, Focus.
The 80/20 rule works every time in every circumstance I have ever seen. Do a limited range of things for those who really care, and do it better than anyone else. Anything else means you are compromising the things you do by spreading them too widely, and as a medium business, you simply cannot afford to do that. Be opportunistic only if it can be done from within the existing narrow definition of what you are great at doing.
Team alignment.
Alignment has unfortunately become a bit of a consulting cliché, which must be some indication that it is right. Having everyone pulling on the same direction is essential, but you never get there without hard training and robust debate on the way through. The metaphor I always like is of a rowing eight. The best team always wins, but to get the best team in the boat on race day, and working in that absolutely coordinated way that seems so fluid and natural, is really hard, the result of training, mutual respect, and the subordination of the individual to the performance of the team.
Right, not popular.
It often happens that the right decision is not always the popular one. That is why business is not a democracy, someone always holds the right of veto. It is the responsibility of that person to make the right decision, best made after robust debate amongst those affected, what I call ‘Due Process’. At the end of the debate, the leader has to make the call, and those who may not have agreed with the decision need to line up behind it and support it in every way. Any ongoing dissent needs to be behind closed doors, and between the parties involved only.
Humility and Agility.
Having made the point about right not popular, not every decision taken will be the right one, so the really good leaders amongst us moderate their right to the veto by being able to acknowledge mistakes, change course and get on with it. Managers are usually loathe to admit they are wrong, as they consider that it shows weakness, the leaders amongst us know that being able to admit they were wrong shows strength of character, which is what we follow.
Balance the competition between today and tomorrow.
Taking the short term easy route at the expense of the longer term good rarely pays off. The urgency of the immediate often outweighs the importance of getting the foundations right for tomorrow, and while doing so may make for an easier weekend, it usually makes for a crap year.
Write it down, and create a rhythm.
Documenting your plans makes them available to everyone else who needs to know, and provides the framework for decision making, without which, there can be no chance that everyone will be working off the same hymn sheet, another worthwhile cliché.
A really effective plan is a combination of a number of elements that add to the clarity of the plan, which makes it something that can be effectively implemented, managed and improved.
Your ‘why’ or business purpose, or Mission, however you choose to describe it will only evolve slowly over time.
Your strategy also evolves, but over a shorter period, a few years. it used to be that 5 years was a reasonable evolutionary period, but the speed and aggression of competitive pressures have shortened that to three in most cases.
Operating plans, usually called budgets are the financial expression of what you will and will not do over the next 12 months. Allowing the numbers to determine the activities is a common mistake. It is way better to manage activities by the objectives that need to be achieved and then measure the outcomes and adjust as necessary by the numbers. Having your sales, marketing, and operational plans in place that have been derived from a combination of the objectives and zero based budgeting , rather than fitting the activities to some vague notion of the acceptable cost, is the way it should be done.
Unless you measure the outcomes of what you are doing, you will have no idea of the effectiveness of your activities and investments. Having said that, you cannot measure everything, and trying to do so will tie you up in administration, and compromise the learning that comes from having a few key metrics where you understand clearly the cause and effect chains in place.
Learn and adjust. Plans that do not change in the face of contrary outcomes are worse than no plans at all. Therefore your metrics need to drive adjustments in your activities and costs as you cycle through the year.
Someone is the driver.
That leader, the one with the veto, is the one doing the directing, the cox if you like in the rowing eight metaphor. They are the ones with the overall view of the progress, both in the scull and across the competitive arena, and should be the one most sensitive to the changes necessary to achieve the optimum return from the assets, financial and otherwise, invested.
When you, as the leader get all that stuff right, or close to it, the performance improvement will be considerable.
