09 Jul A Race without a Finish Line!
When times get difficult, it’s the companies who don’t panic, that will continue to grow and serve their customers. About ten years ago, I was working on a project for the Council for Continuous Improvement (CCI), a non-profit organization based in San Jose, California. I was arranging and conducting seminars for executives in the auto industry in Detroit, who were once again going through a “make or break” situation with many quality control issues. During those meetings, the theme of having a “quality race with no finish line” was discussed often. To many executives, this thought of a race without a finish line was overwhelming, but some fortunately understood the message!
When times get difficult, as is the case with today’s domestic and global economy, it’s the companies who don’t panic, and who continue to work diligently by paying attention to improving their business processes, be it product quality or customer service, that will continue to grow and serve their customers! These companies are open to change and realize that there are multiple solutions to most problems. The real challenge for most business executives is making sure you completely understand the problem, and all of its potential consequences, before committing money and limited labor resources to the solution.
The auto industry today is shaped by the monumental challenges facing the executives of the big three manufacturers in Detroit. The two major drivers causing most of their problems are excessive inventory and gigantic pension costs. Pension costs alone are making the big three noncompetitive against the Japanese manufacturers.
The Japanese build their auto assembly plants mostly in the south, and don’t have to deal with the union issue, or costly pensions of Detroit. General Motors is currently trying to sell ten billion dollars in bonds to deal with their under-funded pension problem, which in total is almost twenty billion dollars.
To further add to their woes, there is currently over eighty billion dollars of unsold auto inventory from the big three sitting on auto dealers’ lots! That is huge, considering autos are still being manufactured and shipped to dealers. Given these realities, it is not unreasonable to think that in ten years or less, there may be only two manufacturers left in Detroit.
Building a successful business requires tremendous sacrifices, but when the results of your collective efforts start to show profits, the rewards are most gratifying, and sometimes difficult to put into words! Continuous Improvement means just that: never stop improving, and always be open to new ideas from many sources!
After closely watching and studying the business processes for some four decades, my observation is that it mostly comes down to the basics. Study your market closely, understand how and where you fit, know who your real competitors are, hire and train the best people you can find, and take great care of the “people asset” of your company! When push comes to shove, it’s the people who always make the difference, whether a company can move forward, or fall behind and be acquired by a larger, stronger competitor.
Remember, a race without a finish line is not really all that scary; it’s just a matter of visualizing continuous improvement as a better way to serve your customers. It’s all about attitude, and hopefully the executives in Detroit will implement this as their mantra!
William Dollar is a Senior Contributing Editor for the Wisconsin Technology Network, and has his own consulting company at www.billdollar.com. You can also contact him at William Dollar.