the answer to that question is improvement. Improvement represents the key to any organization’s ultimate success and to effectively addressing today’s customer and competitive realities. Improvement must therefore be each CEO’s central and enduring imperative. From the CEO’s perspective, improvement should be of
two primary types: people building and process improve- ment. We used both, extensively, during the past four years. People building involves improving the caliber, competence and cohesiveness of the management team and, through them, the workforce as a whole. We catalyzed this process by providing clarity of purpose, increased autonomy, and a professional development system rooted in high expectations, top quartile pay, transparency about roles and responsibilities, biannual formal performance appraisals, targeted education and training, and intensive, ongoing, one-on-one mentoring and development. We used an array of tools to drive process improvement, including those which underpin the familiar advanced manufacturing and quality management systems (e.g. Lean, ISO/TS, SPC, Six Sigma and others). But our most impor- tant tool was business process reengineering. Through this approach, we analyzed work flows, redefined roles to eliminate functional specialists and create generalists, and both eliminated and combined jobs. As a result, we reduced the administrative staff by an additional 25% beyond the year-one payroll reductions, while creating several new positions, increasing overall effectiveness and improving customer satisfaction.
Lesson 3: 20th
Century Management Is a Competitive Liability The 2009 recession
reminded us once again that all businesses need to dramatically reduce costs, including over- head. And they need to do so permanently. While it’s easy to slash the payroll and expect the remaining employ- ees to work harder, this approach is not sus- tainable. As normalcy returns, such futile “do more with less” cam-
paigns must inevitability give way to new hiring, thus negating anything resembling sustained improvement. Given today’s economic realities, we can’t afford to fall back on those old habits. As some of us have long known, when it comes to build- ing an effective staff, the management practices of the past
Change and results came fast. We first changed the product mix, which quickly led to huge improvements on the shop floor.
MODERN CASTING / March 2010
are incompatible both with present day business require- ments and today’s employees. We put this knowledge to work with great effect over the past four years by replacing a traditional system of financial rewards and punishments with a contemporary one rooted in autonomy and positive employee development. This created an environment where our staff actually wanted to be highly productive and had the tools, training and freedom to do so.
Lesson 4: Communication Is Critical Early in a turnaround, the
focus must be on actions rather than words. However, after the first several months and once some measure of control is achieved, commu- nication becomes a top prior- ity. This is necessary for the turnaround to be sustainable and because communication problems are at the root of almost everything that goes wrong in the normal course of business. A large part of the CEO’s job is to communicate and teach and thereby create a climate for improvement and one in which internal mistakes and customer dissatisfaction is minimized. My first communication priority was to make sure every-
one understood the management systems I was putting in place. This began with the business strategy and financial management system and continued for the systems used to manage and improve each key functional area—operations, marketing, quality and human resources. Communication of this sort never stopped. I explained over and over again verbally and in writing what goals we needed to achieve and how each staff member needed to work in order for that to happen. Specifically, I met with nearly every member of the salaried
staff at least twice per month, and as many as four times per month, to provide clarity and direction. Daily email corre- spondence and informal conversations nearly always included tie-backs to key messages the staff needed to internalize. Furthermore, monthly company meetings were held, which were attended by every employee, on every shift, and from the office as well as each of the shops. But there’s more to driving improvement and eliminating
mistakes through effective communication than what the CEO alone can do. For example, we needed to create ac- curate work instructions and educate our workers so they could use them effectively. We also created a cross-functional team to ensure strong internal and external communication during the critical contract review and production design processes. All employees also had the opportunity to par- ticipate on improvement teams so communication from the shop floor up could be just as vibrant as that from the CEO’s office down. This investment in effective communication enabled the
organization to achieve major productivity and performance gains and sustain and improve on them over time. It also was important for minimizing day-to-day confusion, preventing mistakes, avoiding rework, driving costs down and improv- ing customer satisfaction.
43
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92