Jan 27, 2011 | Change, Collaboration, Customers, Lean, OE, Operations
Lean is at its core a management system, a holistic way of looking at the way an enterprise manages itself through a culture tuned to improvement, group and personal responsability, while six sigma is a quantitative process of managing in quality by getting it right first time.
Six sigma quality requires 99.997% perfect, or 3.4 defects/million. When you are manufacturing and supplying to customers even simple products, this is a very high bar indeed.
Motorola was the first US company to recognise and articulate the challenge in the face of Japanese competition in the 80’s, and they boomed, becoming the gold standard for western manufacturing, and inspiring thousands of others to lift their performance, from which we have all benefited. The article that first bought Motorola to public attention is this Fortune article from 1989, and it started a revolution.
Now the revolution appears to be over as Motorola is broken up into two separate listed companies after almost 2 decades of failing to build on the foundations built in the eighties. The leadership that followed those that built the foundation did not recognise the importance of the management systems necessary to support the continued improvement and Motorola fell back into the trap of conventional management accounting where inventory is an asset, cycle time and flow ignored as core metrics, functional management over-rides bottom up innovation, and all the other stuff that makes a lean environment work, got squeezed out.
As I work with clients on improvement initiatives that usually start with marketing and strategy, my patch, the necessity to improve operational processes to support those that engage with the customer is always a major driver, and the failure of Motorola after being the icon it was simply drives home the difficulty of not just improving current performance, but in the process, building the management and leadership processes that make the performance improvement process self sustaining.
Jan 26, 2011 | Management
Being in a position of senior management offers the opportunity for the exercise of power, and as we know, power corrupts. But why should it be so, and how can we protect ourselves, and our colleagues from the adverse impacts of power poorly exercised?
It seems that as power increases without an equal balancing force, active regulation, or my preference because the regulators by default also have power , transparency, the normal person starts to lose the perspective that comes from accountability for their actions. They start to dismiss the behaviors that led to them being considered for the senior position in the first place, a paradox of power that is as old as human society.
Jan 25, 2011 | Leadership, Personal Rant, Strategy
Amidst all the public utterances on Australia Day by elected representatives keen to be seen for a moment on the tele, in print, or lauded in the blogosphere, calling for a wiser, more compassionate, considerate, and outward thinking Australia, ….. (add your own platitude) it may be impertinent to list a few questions that will get no space, but from the perspective of this blogger require some consideration. This is where I show my colors as an unrepentant optimist, as I really think we can do more than just consider these things, we can do something useful, take action.
- Do we get value for the (roughly) 30% of GDP chewed up by the public sector? Do we really need three levels of Government to have the sort of communities we aspire to?
- Why are our kids graduating from University to no jobs, when we have been extolled to be a “clever country”? and why are we not training the builders, plumbers, electricians, and mechanics of tomorrow, rather we seem to be denigrating these skills compared to a university education.
- Why are the less fortunate than most of us not improving their lot, despite the $billions thrown at their problems? Perhaps it is because but so little gets through to where it is needed, as all the rent seekers clip the ticket on the way through to those who need it?
- Where has manufacturing in this country gone? Why? And what do we need to do to renew Australia’s position as an innovative creator of technology and then producing the products that result?
- How are we going to realistically maintain a standard of living as the baby boom generation retires, when the ratios of taxpayers to “taxconsumers” is reversed ?
- And while we are on baby boomers, why is it that many hundreds of thousands of experienced, talented, and motivated baby boomers cannot be employed fully?
- Why are we not having a fair dinkum debate about what sort of Australia we want to leave for our kids and grandchildren?
- Why can’t we see far enough ahead to recognise that the training we are giving our kids may have been good for last century, but no good for tomorrow?. We need to encourage creativity in all its forms, an understanding of personal responsibility and accountability, a willingness to have a go, not the structured, left brain dominated, narrow vision emphasis we seem to so value. Without these skills, our kids will struggle with a society profoundly altered over the course of their lifetimes. Consider, a child starting school in 2011 will retire around 2070. We cannot predict what the world will be in 5 years, let alone 55, so we must educate for creativity, action, and intellectual agility, not the rigid structures that may have served to date.
- Why have our elected representatives walked away for the “greatest moral issue of our time?”
I could go on, but you get the drift. Lets talk about things that are important, indeed vital to our long term prosperity and sustainability, but not necessarily going to bite us on the arse today, but if we do not do something now to start to address these long term challenges, the cost down the track will be huge.
Happy Australia day.
Jan 24, 2011 | Collaboration, Communication, Social Media
Linux started with a promise, one that formed the basis of what has become a major player in the server operating system market, with a current share somewhere around 45%.
Linus Torvalds back in 1991 posted the following message on a discussion board inhabited by systems engineers “I am doing a free operating system (just a hobby) and I’d like to know what features most people would want. Any suggestions are welcome, but I won’t promise to implement them”
Torvalds, knowingly or otherwise, tapped a vein that has proven on many occasions (Wikipedia.org & Meetup.com being just two), that a community has the chance to form when several conditions are met:
- The community is driven by a need, or interest, rather than profit for the initiator
- Participation is welcome, and encouraged, but a transparent “peer review” process dictates if the contribution will be used
- Recognition is offered to all participants.
The promise is that these conditions will be met, and when they are not, the community fails, as did the first iteration of Wikipedia. Does yours measure up?
Jan 20, 2011 | Demand chains, Management, OE, Operations, Strategy
Some time ago I mused that perhaps the worm was slowing if not turning, in relation to local manufacturing, rather than buying in from China as the default option.
The crisis in the US, far worse than anything in this country, had to lead to structural change in the US economy, as the sort of structural change necessary usually only ever occurs when there is little option but to change, as continuing on is simply not an option.
It seems the swallows are appearing in the US, the early trendsetters are thinking twice about the downside of “offshoring”. Loss of IP control, sovereign risk, long and inflexible supply chains, transaction costs in the supply chain and management, and so on.
It makes economic and social sense to manufacture amongst the network of services and capabilities required to be sustainably successful, rather than taking the short term apparent cost reduction that really ends up costing more.
With China suffering increased inflationary pressure, their western export markets tightening wallets, an undervalued currency, and increasing domestic pressures around human rights, pollution, and the distribution of the new wealth, something has to break, somewhere. Wise businesses appear to be weighing the costs and benefits of offshoring, Vs building local capability, considering the long term benefits of development of clusters of innovation and service providers, and lean operations including shortened supply chains, and coming to the conclusion that some things are better done locally.
It will take a long time for the tide to turn, and it will turn very selectively, as many commodity, low value, low technology items will always be cheaper from a low cost environment, but the manufacturing that adds real value will start to trickle home.
