Volume 41 August 23, 2004
Message From Charles Loew
Comments From Our Readers
New On The Maset Web Site
Helpful Hints from fellow Practitioners
Feature Of This Issue
Second Feature Of This Issue
Coming in the Next Few Issues
Welcome to MASET News. A monthly publication dedicated to the communication between MASET and our many interested friends, customers and potential customers
MESSAGE FROM CHARLES LOEW:
The people in your organization are the most important element, the differentiators between you and your competitors. The US airline industry serves as a good example Members of the airline industry all use the same planes, the same jet fuel, the same airports and most charge the same for a flight between city A and city B. However, if we look at the financial condition of the major carriers we see a tremendous difference. Only one is making money, has contented employees and happy customers. Why? I believe one reason is that everyone in that company is aware of the vision and goals of that organization. Furthermore there is tremendous time and energy spent on training their employees from the time they join the organization until the time they retire.
Training and education are critical for your employees to grow and to improve. Maset LLC offers a wide array of training workshops covering many areas. A complete list of our current workshops can be found at www.masetllc.com/training.shtml we also design specific workshops and training courses for your organization and can train your people to deliver the courses. Please contact me if you want to improve your organization through a training intervention. I may be reached at Charles.Loew@masetllc.com.
We have received a request to establish a forum or method by which some Maset readers will be able to communicate with each other. Before developing this project, we would like to know how much interest exists in adding this capability to our web site. We welcome your comments and suggestions.
The feature article is the final one in our five part series "Creating Organizational Excellence", by H. James Harrington. This month's article discusses resource management, examining the assorted resources in an organization. Harrington's initial focus is on management, specifically, "selecting the right management team-because it's so critical to every organization." There's no substitute for experienced, qualified, proven executives.
The second article, written by A. Blanton Godfrey, Dean and Joseph D. Moore, Professor at North Carolina State University's College of Textiles indirectly covers a very sensitive issue prevalent in the United States, outsourcing. There has been a great deal of whining and complaining about all the jobs that have been outsourced from the US. Readers from around the world need to take heed as they read this article, since I believe the issue can affect you unless you do something to stop it. On a recent trip to Mexico the subject most discussed at the conference was that of outsourcing work from Mexico to Asia. Our article addresses how each organization can stop outsourcing and keep the jobs at home. Maybe you need to consider changing your organization's focus towards your customer. If this article generates some thoughts regarding doing things differently within your organization, we can help make that happen.
Our QBQ article by John G. Miller, this month talks about how organizations can help people become more personally accountable for their actions.
COMMENTS FROM OUR READERS:
- Congratulations on the revised format of your newsletter. Although I have always found it to be informative and enjoyable, I now find it more attractive and easier and faster to read. - Utica, NY
NEW ON THE MASET WEB SITE:
Watch for new items which will appear on the Maset web in September. We look forward to enjoying the remainder of summer and wish you the same.
HELPFUL HINTS FROM FELLOW PRACTITIONERS:
Leader, facilitator and instructor mantra: LEAD (acronym)
Love what you do, leverage your time, lighten up
Attitude (own it), Add value
Drive, decision making, discipline
ONE LINERS - "To make you think and/or smile"
- Never argue with a fool. People might not know the difference.
- If you can't see the bright side of life, polish the dull side.
FEATURE OF THIS ISSUE:
CREATING ORGANIZATIONAL EXCELLENCE - PART FIVE
H. JAMES HARRINGTON
Resource management is easily overlooked until the competition increases
This is the fifth and final column in a series about organizational excellence, which comprises five elements: process management, project management, change management, knowledge management and resource management.
When I talk about "resource management," I'm using the term in its broadest sense and mean the management of all resources and assets available to an organization. This includes stock, managers, employees, money, suppliers, inventory, boards of directors, alliance partnerships, real estate, knowledge, customers, patents, investors, goodwill and facilities. Effective resource management is one of the most critical and complex activities within any organization. Considering its complexity, you might ask, "Where do you start?"
There's no right answer. However, I like to start with management-specifically, selecting the right management team-because it's so critical to every organization. There's no substitute for experienced, qualified, proven executives. Management is the first thing that professional investors examine. What are the executives' track records? Have they led other successful organizations? Are they visionaries? Do they attract successful managers to their team? A good executive offering a fair product will have a successful business. (Just look at the amazing turnaround Lou Gerstner led IBM through during the 1990s.) On the other hand, a mediocre executive offering a good product has a high probability of leading the organization into bankruptcy.
Some of the things that must be considered in resource management are:
- Good governance
- Staff resources
- Product and service mix
- Suppliers and alliance partners
- Financial status
- Research and development
This list includes only a few of an organization's resources and/or assets. We could also discuss money, equipment, inventory, customer goodwill, facilities, patents and other topics.
Looking at the varied resources, you might wonder what approach best manages all of them. The answer is strategic planning, which defines how the organization will use its resources to optimize value-added opportunities for its stakeholders. The organization must determine the best use of its limited resources. Strategic plans put an organization in the clearest and best possible position to compete in this complex, changing world. They align the organization's resources toward a common business objective that sets it apart from its rivals. In terms of customer service and value provided, strategic plans define the organization's external focus and identify areas in which it must excel in order to succeed. A well-crafted plan can provide the roadmap to success and let each individual know how he or she can contribute to the results.
A thoughtfully developed strategic plan encourages creativity and communication. It mobilizes the efforts of the total organization. It provides competitive insight into your business field and develops buy-in and commitment to the organization's short- and long-term objectives.
However, in most organizations, management usually prepares a strategic plan, updates it a couple of times a year, shares it with just a privileged few and then files it away in the corporate vault so that competitors won't get their hands on it. Unfortunately, this policy prevents the plan from accomplishing its true objective of uniting the organization and focusing on a set of common goals. It's likely that your competition already has a good idea of what your strategic plan entails. You're keeping your employees in the dark.
A strategic plan includes three main objectives that support 11 documents.
- To set direction
Mission statement (Top management)
Value statements (Top management)
Organization vision statements (Top management)
Strategic focus (Top management)
Critical success factors (Top management)
- To establish expectations
Objectives (Top management)
Goals (Top management)
- To define actions
Strategic (Middle management)
Tactics (First-level managers and employees)
Budgets (First-level managers)
Performance plans (First-level managers and employees)
The most important thing to remember about resource management is that it must not be an afterthought but rather the basis upon which all executive decisions are made. To excel at resource management requires much planning, coordination, reporting and continuous refining. Too many successful organizations manage their operations by throwing more resources at them. They may be successful with this approach as long as they have very little competition, but even the giants fall if they fail to do an outstanding job of resource management. Just look at what happened to Big Blue.
Jack Welch, former CEO of General Electric, summed up the correct attitude toward resource management when he said, "The essence of competitiveness is liberated when we make people believe that what they think and do is important-and then get out of their way while they do it."
About the author
H. James Harrington has more than 45 years of experience as a quality professional and is the author of 20 books. Visit his Web site at www.hjharrington.com.
Reprinted with permission of the author H. James Harrington. Originally published in Quality Digest, May 2003, p. 14.
SECOND FEATURE OF THIS ISSUE:
FLYING HIGH IN FASHION
What can save the United States' investment in this industry?
By A. Blanton Godfrey
I recently participated in a special conference called "Reindustrialization: Prospects for the Fashion Industry," which brought together many top executives from the fashion and home furnishings industries. The conference's unofficial intention was to explore how-or if-fashion products could continue to be manufactured in the United States. The industry is only too aware that low-cost labor in developing countries may soon become an insurmountable obstacle.
The answer to this fundamental question was a resounding yes. If we drive waste from all processes and deal with factories close to market. If we partner with workers and create high-quality, fast-response production. If we remove unnecessary inventories, reduce unsold or discounted goods and reduce missed sales opportunities.
To someone with my background, this all sounds like quality management. For me, the only surprise was how often the issue of speed to market was cited as the critical success factor. Close partnerships with key customers were also considered critical. Without these, it's almost impossible to have the information needed to design, produce and deliver the right product to the right place at the right time.
Professor Medini Singh presented a case study that he, Nelson Fraiman, Linda Arrington, Carolyn Paris and other colleagues at Columbia Business School compiled on Zara, a Spanish designer, manufacturer and retailer that has stunned the fashion retail world with its unique design model, production and sales. It creates more than 10,000 designs a year but produces only 500 to 700 items from each design. With more than 450 stores, this means each store gets only a handful of each. Customers must buy the items they want quickly or they're gone; the clothes are never gong to be around long enough to buy on sale.
The keys to Zara's success are obvious. The company moves fast. It often identified which styles are not at fashion shows and moves copies into production even before the original designers can. It designs, produces, distributes and sells its products itself. Each store manager watches what customers buy and don't buy, and what they wanted but didn't find. Managers report this information daily to the company, and it acts.
Deirdre Quinn, senior vice president of the fashion company Lafayette 148, echoed this message. After years of working for others, she and her partners started a company in New York's Chinatown. They now have a seven-story factory there. Their key success moves included partnering with their production people, investing in design and moving quickly. To ensure fast response to the company's New York retail customers, 85 percent of their product is made in the city. In just a few years their sales have grown from $6 million to a project $36 million this year.
Bob Coppage of VF Corp., the world's largest apparel maker, presented a case study from the producer's side. VF has partnered with one of its large customers, J.C. Penney, to deliver a custom line of product to each of Penney's more than 1,100 stores. By investing heavily in information technology and setting up flexible manufacturing plants and distribution strategies, VF now creates individual shopper profiles for each store, and then produces and delivers custom product line packages. This approach demands an intense customer focus, design and manufacturing flexibilities as well as incredible speed.
Tom O'Connor, president of sales for Springs Industries, added a supporting view to these points. Springs is a large $2.5 billion company focused on home furnishings. Ten major accounts cover 85 percent of its sales. The company created close partnerships with each of these retailers to design, produce and deliver a wide range of high-quality products quickly. Whether they're produced in the United States or in partner factories abroad is a function of a complex model of distribution and labor costs, quality and need for speed. For many of Spring's product lines, the need to design, produce and deliver quickly means these products are manufactured in the United States.
Herb Spivak, executive vice president of New Balance Athletic Shoes, stressed the issue's human side. The company's sales have grown sixfold during the eight years Spivak has been there. He attributed New Balance's success to moving from piece-part work and pay to team-based production and pay to today's model of creating a team from the entire company. Consequently, productivity and quality have both gone up, even though New Balance continues to manufacture all its product in the United States.
The lessons learned by these fashion companies apply to all industries. What matters most is meeting customers' needs better and faster than anyone else. The only way to do this is through close, working, real partnerships with all members of an organization.
About the author
A. Blanton Godfrey is dean and Joseph D. Moore Professor of North Carolina State University's College of Textiles. He is the co-editor of Juran's Quality Handbook, in its fifth edition, and co-author of the recently published Modern Methods for Quality Control and Improvement, Second Edition (John Wiley & Sons, 2001). E-mail him at firstname.lastname@example.org. Letters to the editor regarding this column can be e-mailed to email@example.com.
Reprinted with permission from Quality Digest, where this article appeared in June 2002, on page 16.
QBQ! (THE QUESTION BEHIND THE QUESTION)
QBQ! (The Question Behind the Question) QuickNote #15
"Helping Organizations Make Personal Accountability a Core Value!"
"Why isn't anyone accountable anymore?"
- McDonald is blamed for obesity and sued by the overweight and their attorneys.
- Youth violence is blamed on video and computer games.
- The Democrats blame the Republicans and the conservatives blame the liberals.
- The parents of the infamous Illinois PowderPuff girls blame the school.
- Hollywood is blamed for our culture of "moral decay."
- The guy who jumps out the window several floors above the pool landing on the edge blames MTV's "Jackass." (Smart!)
We look at these examples of blame and wonder where has personal responsibility gone? We miss the "good old days"" when people accepted and practiced personal accountability.
Before we get too focused on all those other "bad people," consider these questions:
- When I was late to work did I blame the morning traffic?
- When my daughter's grades fell did I blame the teachers?
- When I lost my job did I blame President Bush?
- When I returned a call late did I tell the other party, "I've just been so busy!"?
- When I was in a bad mood did I blame my family and co-workers for my feelings?
- When the sale fell through did I blame our product pricing or the customer?
- When I got a poor test grade did I blame the professor?
- When I used an ATM and was charged the $1.50 fee did I blame the banking industry?
- When my customer didn't get the product on time did I blame the shipping department?
- When my portfolio crashed did I blame my broker?
- When my son got into trouble did I blame the "crowd he runs with"?
- When my drive put the ball into the rough did I blame the wind?
- When I rear-ended the car in front of me did I blame its driver for stopping too abruptly?
- When my church failed to grow did I blame my pastor?
- When I forgot to follow through on a promise did I say, "Life is too hectic!"?
- When our team lost Saturday's soccer/baseball/hockey game did I blame the officials?
- When I didn't get a raise (or my pay was cut) did I blame management?
- When the project didn't get completed on time did I blame the team or "committee""?
- When I read this QuickNote and felt a little guilty did I blame the author?
Ouch! Okay, so maybe I'm one of those "bad people" sometimes, too. Blame is a natural response. Everyone slips into it now and then. That's why the QBQ! can make such a difference in my life. It helps me recognize the blame, pause my thoughts, and get back to accountable thinking.
So instead of asking, "Why isn't anyone accountable anymore?" the better question - the QBQ! - is this:
"How can I eliminate blame from my life today?"
This question helps me focus on myself where I can actually make a difference. And what a difference it is! Not only will it make me more effective and productive in all areas of my life, I might just have more fun, too!
And there's nothing wrong with that!
John G. Miller
author of the QBQ! book
COMING IN THE NEXT FEW ISSUES:
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