Avoiding the No. 1 Cause of Failure in Business
August 14, 2011 | 6:33 pm CDT
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As frequent readers of business periodicals know, lean has been a hot topic for a long time. Certainly, readers of this column can attest to the fact that I have made it a constant theme in Management Matters. Maybe it is due to overload, but there are still many in our industry who seem overwhelmed with the whole concept. That is a shame, because lean does not have to be a complicated, academic-based exercise.

I want to review lean in a different light during the next three months, in hopes of exposing the simplicity of this pragmatic management concept. It is my goal that every reader who has not already embarked on the lean journey will realize that they can adopt and implement this strategy, no matter how small their company. If you are part of a larger firm, you can also benefit from a fresh look.

It is interesting how many times I am asked the question: “What is the most common cause of failure in the wood products industry?” This happened again the other day during a meeting with the management of a company that serves our industry. Don’t get me wrong, I don’t mind the question because I happen to know the answer. In fact, as I reflect back over my years in this industry, I first realized this in the infancy of my career. The odds are that you also know the answer, along with many of your associates.

I find it interesting that Merriam-Webster Dictionary states: “Innovation is the process of making changes in the way we do things.” Thus, I could just as easily say that the single most common cause of failure in our industry is the failure to innovate.

My answer the other day was the same as always and to the point: “The single most common cause of failure in industry is the failure to change when change is needed!” I’ve written about this before and when you confront someone with it, there is usually a combination of nodding of heads, open mouths and blank stares. Some know it, some haven’t thought of it and some don’t believe it.

Lean is about continuous improvement or positive change, to eliminate waste and maximize the value of your product or service to your customers. Beginning today, I want to focus on the Lean Enterprise and not just on Lean Manufacturing, so that you will consider lean essential to your entire operation — whatever it is. I will cover this in detail in November.

Some will hold to the notion that they are too small and unsophisticated to innovate. But that is because they are thinking about innovation as inventing the replacement for the wheel or some other earth-shaking advancement in technology. Lean is about Continuous Incremental Change and innovation (CIC) in the way we manage our business in order to focus our resources on those activities that add value to what we make or do as perceived by our customers. Without an effort toward lean, we just keep on coasting and spending our time and resources on unimportant and wasteful activities. Meanwhile, competition here and abroad is working hard to take market share right from under our noses.

The justification for lean thinking — for change and innovation — is to survive and thrive. The old axiom that if you’re coasting you are going downhill is true, and too many of us have been coasting for too long. Recognizing when change is needed, defining the innovation needed, and implementing it is the only way to stay competitive in the 21st century.

So, why are so many ignoring this critical management strategy — creating a lean enterprise — that is right in front of our eyes?

Resistance to Change: 3 Reasons

The reason most companies have not successfully embarked on creating a Lean Enterprise is the resistance to change. We have already established that, by its very nature, lean embodies continuous incremental positive change. Let’s face it — resistance to change must be in the human gene and manifests itself in various ways. Volumes have been written on the subject of why this is so, but I think there are three main reasons there is resistance to lean in the smaller companies within our industry.

1. The first is the fear factor. Many don’t understand the concept of lean and therefore don’t want to get involved for fear of showing a degree of ignorance or of outright failure. Others resist promoting or participating in continuous improvement because they fear their ideas will be deemed irrelevant and be rejected altogether. Some CEOs actually fear change because they perceive the risk of CIC as far greater than the risk of continuing to coast along.

This reminds me of a story I have related before: Yogi Berra admitted to his family when he got lost driving the back roads to the Hall of Fame in Cooperstown. He exclaimed: “We’re lost, but we’re making good time!”

Rather than take time to analyze where they are and make corrections, like Yogi, some CEOs just keep going because they are clicking along just fine and will get there someday — somehow. If you are like this, you must begin fearing the status quo, stop and find out where you really are, and begin making the changes necessary.

2. The second cause of resistance to change is what I call the plate-spinner syndrome. Many of us are so busy that we just don’t have time for any “new programs.”

It is as if you had eight to 10 poles with a plate spinning on top of each. It takes a lot of time and energy to keep those plates spinning fast enough to prevent them from falling and breaking. Picture yourself running from one to the other as a plate starts wobbling, and giving it a spin, spin, spin to keep it going. As soon as you get that one going again, you notice another one teetering on destruction. So, you have to run over to that one, and then another, and another, and then back to the first one, and on, and on. It’s a never-ending cycle and you spend all of your time trying to avoid catastrophe and putting out fires.

We have to learn to spend time doing the things that are important to the survival of our company and getting others involved in taking care of the plates (or firefighting). What creating a lean enterprise does is to eventually take the plates off the stick and stack them up. Put another way, lean removes the fuel so there will be fewer and fewer fires. Being too busy simply cannot be accepted as a legitimate resistance to change.

3. The third major driver of resistance to change is that employees feel part of the corporate family, whether in the plant or office, that embraces things as they are today. We like to be emotionally and intellectually connected to those we work with and don’t want to be perceived as the one who is going to rock the boat. After all, if it is ok with my buddies, it is ok with me. This is why creating a culture of change is so important and why I have written about it so often. (See the July 2009 Management Matters: Can the Culture of Your Company Carry You Through? Past articles can be found at iswonline.com/managementmatters).

One or two managers, office employees or factory workers cannot drive CIC by themselves. Moreover, we don’t want it to be an individual effort because that will fail. Therefore, it is essential to remove this form of resistance by motivating everyone in the company to embrace Continuous Incremental Change (or Continuous Improvement). How to go about accomplishing this will be a focus of next month’s Management Matters column.

Procrastination Is No Option

In order for an enterprise to become lean, the CEO or owner must make the first big change on his or her own. This is to reject the status quo, embrace the lean concept and create a culture of change within the company. Unfortunately, the same three sources of resistance to change, mentioned above, will confront this person. The presence of these three roadblocks to change — as well as others — can lead the owner or CEO to uncertainty and a paralysis by analysis, as he or she ponders and weighs the pros and cons of all we have discussed above.

Procrastination is a deadly sin in the corporate world. The business environment of every reader is changing every day. There is no time to delay in shifting the focus of those in your company to reducing waste and better serve your customers with better products and service with greater value.

Wouldn’t you want all of your employees or associates focused on improving productivity and profitability? Wouldn’t you want them working to reduce lead times and reduce the inventory required to do that? Wouldn’t it be great to see everyone working to improve quality?

Make the decision today to avoid the #1 cause of failure in our industry — the resistance to change and innovation.

We will take the next step next month.

Tom Dossenbach is the president of Dossenbach Associates Inc., a Sanford, NC-based international consulting and research firm. Contact him at (919) 775-5017 or e-mail [email protected].

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About the author
Tom Dossenbach