A Flash-Back to 2008… What Can We Learn?
Think there is uncertainty and possibly fear for 2018?… Well – the following is a look-back at our concerns at the beginning of 2008. (Remember it?). It turned out to be the largest recession since the Great Depression of the 1920’s. There is much going on now that was concerning us back in 2008. So let your gut tell you what content might be worth considering now.
The following is reprinted – as it was – from the January 7th, 2008, Weekly Updates from the South Western Ontario HPM (High Performance Manufacturing) and AFEE (Alliance for Enterprise Excellence) Consortia. Can you find any parallels to our entry into 2018?
“Ponderings to Begin a Dangerous 2008
This 2008 New Year’s Ponder appears in both the AfEE and HPM Weekly Updates, as both Consortia are facing the same issues – but as is ever so – the issues of this year will be addressed very differently by our individual companies and by our consortia right across the land.
“Can you remember facing a more challenging or uncertain year? There must be something up because the media & government have re-discovered the word ‘manufacturing.’ Prudence and care probably permeate most thinking right now as we have projections covering the range from “not buoyant” to “extreme pessimism”.
When uncertain times are before us, folks usually shift to their ‘comfort zones’ until the pain goes away. But that is for companies who do not have the depth or the resources of a Consortium to draw upon. It is at times such as this where the true value of membership in a Consortium can really pay off. It may be to remind you that your natural comfort zone may not be the right refuge right now – or perhaps to serve your need for a safe means of validating that your vision and strategy are solid. The deep value lies in the fact — that employees at all levels have access to employees at all levels in other companies who are trying to cope as well.
However, those who succeed usually put together a shared and supported vision and deliver it well in advance to provide the direction and alignment of resources their people need to rely on to survive through difficult times. This is one reason one of the bestselling Lean books right now is “Getting the Right Things Done”, by Pascal Dennis. The book is all about ‘Policy Deployment’ – others call it Hoshin Kanri or Hoshin Planning… But no matter what you call it, the simple intent is to enable every human being in a company to understand just what their role is in making the company successful. It is a matter of communicating clear expectations openly, so we can get everyone rowing in the right direction and able to commit their all to it because they understand the outcome.
Some Observations of What We May Face
In speaking with some US manufacturing leaders who have seen before just what economic waves can yield for business, here are some disturbing thoughts over the past weeks including:
• A belief that the US has so far seen only about 20% of the subprime mortgage issues as most will foreclose in 2008 and 2009
• Following that will be the wave of foreclosures of the big residential mortgages which reset every 5 years
• The credit expansion (the subprime issue) will be followed by a long wave of credit contraction that will affect just about everything else – nationally & globally.
• Europe will be/is slowing and may follow the US – Japan & China show signs of slowing as well
• Two issues that don’t help: 1) Economists are some 18 months behind the real events, and, 2) Stock marketers normally beetle toward their comfort zone which is ‘picking stocks’ – with nary a thought of the economy’s direction
• Suspicion that the housing impact will bottom out in 2010 makes the unfolding downturn troublesome
On the local scene, HPM’s original Knowledge Supply Chain Link, Jay Myers, who now heads up the Canadian Manufacturers and Exporters across the land, put it quite bluntly when he stated last month:
1.0 The global credit crunch will get worse
2.0 The US will slow, and we will be impacted
3.0 If you are struggling in your day-to-day business, you are not alone. At $1.03 US, Canada’s currency has appreciated in value by 65% against its US counterpart since January 2002. It has not helped that the loonie has skyrocketed by 21 % against the US dollar since January
4.0 Current projections are for a $1.05 for the coming year with above par expected beyond 2008. Par will be with us for a while
5.0 GDP in Ontario to decline by 40% to 1.9% in 2008
All in all, there is some consistency of prognostication – and that is without considering the outcome of the US election. So, what are some of the things we might think about doing in 2008? Since Visions for 2008 are likely well set in place – there will be an emphasis on short-term operational things that can make a difference. The following is based on NA observations with some Aussie & UK logic sprinkled in (thanks, folks). Broadly stated, for some there will be big decisions that will be needed to protect margins – and there are a zillion small things. We of course will need to do both – while we ‘grow into’ the right emerging Vision – which our leaders are determining right now. So how about some specifics…
Extracts from Practitioner Experience
We all understand that companies are like DNA – there are no two the same. Hence, in difficult times every company must harvest the best relevant information they can to fashion a long-term and short-term Vision that will work for them. Again, those companies fully committed to a Consortium have an edge.
The long-term Vision must include the necessary cultural adjustments – and today there will be some – including changes in how we work together, adjustments in values, and the process needed to grow the leadership to make the company vision happen and sustain it. The most urgent Vision is the ‘future desired state’ for the next few years. To exploit it, it must be made operational now.
Short Term Impact On Current Visions
1.0 Focus on the customer like never before – and, internally focus on the only three things you have to work with: People – Processes – and Technology (the accelerator) – with unwavering intensity!
2.0 Communicate like never before. We might stop using words such as Lean, TOC, Six Sigma and focus on ‘The elimination of waste everywhere while adding value to every internal and external customer.” Terra Nova Shoes did it by asking folks, “What do you need to make your job easier?” (They are now the largest of the 3 boot makers left alive in Canada – there used to be 65!)
3.0 Focus on clarity of outcomes & their measures – so everyone can understand the expectations
4.0 Adopt an immediate “GOSEE” strategy… wherever there is a problem do not talk about it… go to the location and see it all together. Observe the environment, see the issue, talk with the people… then solve it
5.0 Think simple – “Just imagine the improvements we could make if everything was made so simple that everyone could understand,” and, “If your commitment is not to simplify everything you can every day – then you are really preventing folks from contributing. We need everyone in 2008”
6.0 Adopt zero tolerance for any signs of lack of respect
7.0 How about this: Focus on determining by July 1st, what the company/ team doesn’t know – but will need to know to succeed in 2008.
Then form your strongest teams and prepare them thoroughly to attend the largest Lean Conference ever held in North America – with deadly intent. That is, make ‘bringing home top value’ the expressed purpose of attending Go after every scrap of experience, know-how, and relationship access (networking) you can extract from the 2,500 practitioners who will be there.
For example, one of the keynotes we can all learn from is a pioneer who has been thinking and implementing Lean for the last 15 years. He has used it to grow his company from nothing to the world’s second largest office furniture mfr. – and the largest fireplace maker. There are things to be learned because the language of Lean will be the mode of exchange as there will be practitioners there from 30 countries.
Longer Term Thoughts
1.0 Build in a total commitment to: “The elimination of waste everywhere – from research to where the value is added – while adding value for all internal and external customers” – Draw all you need from Lean but call it “YPS” (Your Production System). You need never mention the word Lean.
2.0 Develop a process to grow the management team needed to deliver the discipline, consistency, and commitment to sustain your vision and the processes that support it. (Ref: Good to Great, by Jim Collins)
3.0 Develop a strategy to “make it all so”. Ref: “How to get the right things done”, by Pascal Dennis.
It is not looking like a good year. In fact it has the earmarks of one where some folks will feel pain – and some of us are already. However, by building on the Consortium values that have gotten us this far we will have an edge which will come in handy under fire.
At every Board Meeting, it will be useful to keep each other informed of the problems and steps to be taken. We should remember the old Steelcase adage… “No one is as smart as all of us.”
Some incidental final thoughts from the Jan. 07, 2008 Update:
Remember: “If you don’t know where you are going you may never get there” – Yogi Berra
“Individuals do not sacrifice their personal interests to the larger team vision; rather, the shared vision becomes an extension of their personal visions.” – Peter Senge, The 5th Discipline.
Plus, “Science is defined as the systematic arrangement of knowledge. Systematic thinking and analysis is the key to successful problem solving and improvement. – Improvement, the act of bettering things beyond their current status, can only occur after one has captured and understood the full nature of a current problem.” – Shigeo Shingo “Kaizen and the art of creative thinking“