W&WP May 2003
Values That Make a Successful Woodworking Company
By Tom Dossenbach
During the last few years, we have seen evidence of an alarming trend that suggests the lowering of corporate values and even an erosion of ethics in industry. This month’s column attempts to stimulate a review of ethical considerations within this country’s woodworking industry by looking at values that make a successful company in this climate of rapid globalization.
I can remember back almost 40 years in our industry when all it took was the word of two people to make a contract that was honored by both. While that may still be the case between close associates in the industry, it is the exception rather than the rule today. Ethical issues are only one of the considerations in evaluating our company values or those of our suppliers.
With the rapid globalization that has occurred in our industry, it is very likely that companies will be challenged by those who do not hold to our traditional business values. Woodworkers are vulnerable to severe financial setbacks if they do not quickly and accurately identify and assess the values of a potential supplier or partner.
1. The Customer Comes First
Of course you would expect me to list this one first. We often say that we are in the business to make money. This is true. No company can survive without making a profit. However, there is a component that must precede profit. That is customer satisfaction. Without it, a company will not maintain a mutually beneficial relationship with their customers.
This is evidenced by examples from the past few years during the rush to import products from overseas. While it is not a universal problem, most efforts to import finished products have resulted in at least short-term problems for the majority of first-time buyers and importers. Let me explain why.
Many small companies overseas recognize that making money is essential for their success. After all that is why they have gone into the woodworking export business — to make money. The difficulty lies in the unfortunate fact that there are often no values to sustain their efforts.
Often a container of product is shipped after many months of careful negotiations and discussions of specifications only to arrive with major problems destined to render the products unuseable to consumers. The exporting company has received their payment for the merchandise and looks at this situation as your problem, and looks for you to resolve it internally. Maybe you did purchase the products at 40 percent of your costs, but now you have unusable products on hand that must be reworked or scrapped.
If your overseas supplier had customer satisfaction as a core value of the company, this would likely not have happened in the first place and certainly would have been promptly corrected without hesitation.
2. Maximum Quality Effort
In order to satisfy any customer, a company must continually focus on maximum quality effort. It doesn’t matter what final product is being manufactured, the quality effort has to be maximized every day until the company regularly ships products with zero defects.
Would you buy sandpaper from a supplier that had splice failure in 5 percent of its sanding belts? Of course you wouldn’t. Nor do you want to ship products to your customers that are not of acceptable quality. Likewise, you must make sure that all of your suppliers share your company value of MQE. If you do not, you will lose customers as surely as you will sharply reduce or eliminate your profit margins.
3. Continuous Improvement
If any woodworking company is to remain competitive, it must abide in a state of continuous improvement. I have written a lot about this and it should come as no surprise that this must be a key component in the core values of a company. If you believe in continuous improvement and all of your suppliers share the same commitment, you have the formula for a powerful, long-term competitive punch. Only those who continually innovate and adjust will survive.
Thus, you must ascertain the level of commitment of your suppliers to change to suit your requirements and those of the marketplace. To do as you did yesterday is a formula for destruction, and the same goes for your suppliers. Successful companies agree to have continuous improvement as part of their company core values.
4. Maximizing Productivity
World-class companies make maximum productivity an integral part of their core values. There is no room for waste of men, materials, money or information. Much has been written about lean manufacturing — an effort to rid our woodworking enterprises of all waste.
The world is demanding shorter lead times of products with higher value than those of yesterday. Achieving maximum productivity must be in the minds of every manager and employee of every company and supplier in order to provide the best value to the customer.
A successful company must believe in the value of each employee. Not only is this essential, but it has to be such a part of the core values of the company that every effort is made to empower each and every employee to contribute in the realization of the goals of the company and the execution of its values.
Too many woodworking companies are still treating their employees as if they are mere machine operators, fork lift drivers or lacquer sprayers. Every necessary job is honorable in itself because without it the product or service could not be completed. Most will admit this much but there is more.
An employee is a storehouse of knowledge gained through the exercise of his or her job and the observation of the surrounding environment that includes the actions of others. Believe it or not, they have a better perspective than many supervisors of what is effective in implementing the values mentioned above.
Teamwork means that these employees are empowered to share these observations and use their creativity to make the company more successful. If given the chance, they will develop incredible solutions to difficult challenges.
I read once that being honest was simply being consistent with reality. Therefore to be dishonest is to be in conflict with reality and this will surely be self-defeating. Reality is truth and vice versa. We expect others to be honest with us and we therefore must be honest with them. There should be no exceptions — none.
Unfortunately, there are some companies and some in top management that do not accept reality or truth as an important ingredient of success. The only reality to them is that they must do anything to make money and this means doing anything to their business partners to get the upper hand. Surely no reader of this column would subscribe to this philosophy, but be forewarned as you begin to look to form relationships abroad.
What is justice? The best one-word definition is fairness (another word that seems to carry less meaning as we get into the 21st century). Again, this is an essential part of the values of a successful company. It is imperative that we demonstrate fairness in dealing with colleagues, suppliers, and customers. There is always the fair or just thing to do in every circumstance. For my part, I want to deal with companies who recognize this and do it.
Integrity is the conviction to adhere to the values we have set in our woodworking companies. To do less is an abomination of all we stand for. If you have integrity, you (by my definition) have all of the above. It is a joy as well as highly profitable to conduct business with companies consisting of men and women of integrity.
It is important to remember that no matter what the values of others; our values must set the standard of how we conduct our business. Give your company a value check and see how you stack up. If (and only if) your house is in order can you demand the same of others.
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