Economic Darwinism
Economic Darwinism
The current market needs be looked on as Economic Darwinism. Those companies that are toughest and leanest are most likely to emerge from the other side, and emerge as the leaders of their market.
The economy and its effect on the future seems to be what everyone is talking about, so I’ll offer my thoughts on surviving the downturn since they dovetail nicely with the ideas I have been exploring in this blog lately. The Lean Manufacturing techniques that I’ve been introducing to my clients, which we began before this crisis, are well suited to carry them through. For the next few weeks, I’ll be exploring some of the typical responses to slowing business and how I think they should be adapted.
One of the first areas that some companies look to for cuts is in payroll. While this may be necessary, I advise saving it for much later. Laying off staff at the outset generates a lot of hard feelings on your shop floor, with the very people you’ll need to help squeeze the fat out. When working with clients, I very strongly advise them to establish better communications with their team. I begin this process during my initial visit, spending time with the employees. I remember being a worker on the shop floor, and seeing consultants come through the shop, dictating changes without understanding what we did or how we did it. I learned that if the people on your shop floor do not buy into your plans, they can easily and effectively scuttle them, and you might never understand why good plans have not had the expected results.
The man or woman standing at a bench or machine, working with it day in and day out, if they have any brains at all, can give you valuable insight into what works, what doesn’t and how to improve the overall process. In short, you have an entire team of consultants on staff already if you only take the opportunity to access the knowledge.
These folks are also likely to be nervous right now. They watch the news, see the dire predictions and wonder daily when and if they will be able to continue to provide for their families. Even if the news you have to share is bad, keeping them in the loop can’t really hurt you. If your company is struggling, they can help. Ask them to come to you with their ideas on cutting waste. Encourage them to let you know when things might be made more efficient. I’m not talking about trying to scare them into submision, I’m telling you that they will respond to your trust and honesty. It is in BOTH your interests to keep the shop alive through the downturn. They know that getting another job won’t be easy and will want to keep theirs.
One employee at a client suggested shifting the plant to a four day work week. By working four ten hour days, it would keep the production schedule full, allow for overtime without losing the weekend, and reduce absenteeism since chores like doctor’s visits and car registrations could be scheduled for the off day.
The system is working out very well for the client. The employees love having regular 3 day weekends, and are more willing to work overtime if needed. The company has realized several opportunities for more efficiency, and the crew is impressed and energized by seeing that management is listening to them. This encourages others to come forward with their ideas. This is just one example of how the people on the shop floor were able to contribute to their own and the company’s success.
Darwin told us that those who adapt the best to a changing environment will survive and even thrive in nature. Business economics is no less brutal, and you need to be looking for adaptive strategies. But you don’t need to be doing it alone. Enlist your team, from top to bottom. Be honest with them. Cuts may yet be needed, but they have worked with you to fend off those cuts as long as possible.
Please feel free to comment here or by email. I’m presenting these ideas in the hopes of spurring discussion.
Email: rbagnall@consultingwoodworker.com
Linkedin: http://www.linkedin.com/in/ralphbagnall
