Realistic Job Creation

 Basic Business Cents

Realistic Job Creation

“Improve quality of work processes  » costs decrease because of less waste and rework » productivity increases  » capture the market with better quality and lower price » stay in business » provide jobs and more jobs”

Chain reaction theory by Dr. W. Edwards Deming

Much is being debated today on how to best put more people to work and decrease our unemployment rate. Politicians argue about decreasing business taxes so the companies are better able to compete in the world market. Others argue that we should put up trade barriers to protect our industries from cheap foreign labor. Still others say the consumers should only buy American. To all these arguments, Deming would say, “Wrong! All wrong!”

Dr. Deming was an American physicist who was a leader in the application of statistical methods to improve work processes. He applied these methods to help the United States quickly ramp up production of war goods during World War II and later was credited with helping the Japanese turn around their economy after the war. He taught that work is made up of a series of processes, no process is perfect, and waste and rework is prevalent in all organizations because of defective processes. No process can ever be perfect but they can all be improved.

To those who say the answer to our high unemployment rate is to tax business less, it would just reduce incentive to improve their processes. It should be noted that there is much more opportunity to reduce waste and rework in administrative and management processes than in production areas. Firms have long used industrial engineers to improve production processes but seldom in finance, marketing, service, sales, and personnel areas. Usually only management has the authority to change processes so this drive to improve processes must be led from the top. As Deming said, those who are relentless in their efforts to make their processes more efficient and effective will be better able to compete and be increase their business. With success will come growth in payroll and more people hired.

To those who say we should put up trade barriers to keep out foreign goods will only serve to deprive American consumers from good products that will make their life easier and even put some of our producers at a disadvantage because they have to pay more for products needed in their business. We say we believe in free enterprise, so we need to practice it and learn to be competitive. Besides, it would lead to an escalation of barriers that would in time haunt us. The cheap foreign labor is less of a factor because of robotics and automation that make the labor content of production less of a factor. More of a factor than labor content is the cost of administration, shipping, travel, communication, warranty, and service. I am aware of a company who, after they focused on process improvement throughout their organization, shut down their Mexican production plant and moved the jobs back to Minnesota. I do not know of any company who improved productivity by process improvement in which any employees lost their jobs. The companies simply increased market share and created more and better jobs.

And for those who argue that patriotic Americans should only “buy American”, we must ask what is American made. Some reports say that some foreign named automobiles with production plants in the United States actually have more American made parts than American named autos. The reason for that is the foreign named producers have a manufacturing concept of maintaining a close relationship with suppliers and demand that they be located in close proximity to the auto assembly plant. Therefore the components are of necessity American made.

It is reasonable to assume that our product and service companies should stop looking to the outside for help, whether it be from government or consumers, and improve their own in-house processes to eliminate waste, rework, and redundancy so they can better compete in the world market. From this we see the promise of the improvement in unemployment is revealed in Deming’s chain reaction:

Improve quality of work processes > quality increases and costs decrease > higher customer satisfaction > increased market share > jobs and more jobs.

Focus Efforts Where You Can Win

In mature markets, there is usually room for two organizations to prosper, one to eke by, and the others eventually fall by the wayside.  That niche market is necessary to identify and then work towards domination no matter what type of body it is with which we are involved.

Community

A community needs to have a widely recognized drawing point to attract people, residents and visitors.  The community must think through a niche where they can be outstanding and noted far and wide for this area of excellence. Examples might be natural phenomena, national parks, educational facilities, visual and/or performing arts, shopping, restaurants, etc. Park Rapids has many things going for it with the lakes and rivers, the beginning of a local college presence, shopping, and restaurants, but where can it dominate? The opportunity seems to be with the arts because of the art museum, many very good local visual artists, and several excellent performing arts companies. Concentration of these activities into an easily accessible location and promoting them widely could bring people into the city from afar. Then services would naturally appear to satisfy the needs of the influx of people and the entire city would prosper.

Company/Organization

No organization can successfully be all things to all people. The Japanese have a saying that there is danger in chasing too many rabbits; you won’t catch any. The company needs to understand what they do really well, the market that it satisfies, and focus their efforts to dominate that niche. They should strive to be one of the two organizations that can be successful in that niche but also work towards being number one. Just identifying the niche will not ensure success; it must be communicated to all employees and everyone work toward the aim of becoming the best in that focused area. Research, development, production, marketing, and service must all make decisions on a daily basis as to what will help achieve that goal.

Individuals

Each individual should do careful career planning to identify the niche where they can be the best; in other words the niche where they can dominate. This niche must satisfy their needs so as to be something they enjoy doing and derive great satisfaction from doing it. Once this goal is determined then education, training, experience, and location can all help prepare the individual to eventually achieving the objective. It is never too late to identify the niche and make plans to achieve it. The need for flexibility and mid-course corrections are a fact of life.

This points out that no matter what you do in life, it is important to know your strengths, where you can be the best, the area where you can dominate, and what will bring you satisfaction. Then focus all your planning and efforts into achieving that goal. Focus! Focus! Focus!

Requirements for Happy Employees

Dr. W. Edwards Deming was fond of saying people deserve to have joy in their work and managers have no right to take that away from them.

Most people will agree that happy employees perform better and make customers happier. Some interesting studies have been done to attempt to discover what makes employees happy in their work. The results are interesting.

One of those studies conducted by Workplace Dynamics and the Minneapolis Star-Tribune lists four factors as most important: Conditions, Direction, Career, and Execution. Notice that pay and benefits are not included. This fits with other studies, which usually list money in the top ten but most often in the second five. Money is not normally a motivator but it can be a demotivator.

Conditions include feeling genuinely appreciated by the company, the job provides a feeling of being a part of something meaningful, and the company follows strong values and ethics.

Appreciation is very key element to happy employees but it has to be genuine because they will see through the sham of mere words. Deming also used to say that dogs like a pat on the back and people do too. Positive reinforcement not only helps to guide employees but also gives them energy and the drive to perform even better.

The feeling of being a part of something meaningful is another strong intrinsic motivator. People want to be proud of their work and take great satisfaction of doing something worthwhile. Strong values and ethics contribute to the personal satisfaction and pride of the employees.

Direction involves believing that the company is going in the right direction and having confidence the leadership is capable of getting it there. Providing the aim of the organization is the responsibility of the leader; painting the picture of what the organization will look like at some point of time in the future in memorable, inspirational, and compelling terms. This vision must be communicated to all employees so that they may make timely decisions that help the company reach that vision. Remember, communication has two equal parts; sending and receiving. In order to ensure that employees completely understand the vision, it should be provided in both oral and written format. The Japanese have a saying that it takes more than one of the senses to communicate. Discussion opportunities should be provided so that understanding and buy-in are achieved.

Career satisfaction is achieved when the employees feel confidence in their future at this company and that they are on the path to achieving their personal vision of what they want to be doing at the height of their careers. Both of these factors should be discussed with supervisors on a regular basis. The leaders need to have a clear understanding of the wants and needs of the employees and the employees need to have a clear understanding of what they should do to advance and stay on the path to achieving their vision of their career.

The execution factor means the employees feel that management is leading the company to top-level performance. They do the best job they can with the processes they are given but rely on management to constantly, relentlessly, forever improve the work processes so the employees can do their job better.

Paying attention to these four key factors will not only result in happier employees but also happier management, customers, and owners. It is a win for everyone.

Teaching versus Preaching Management Styles

Work should be so enjoyable that employees look forward to coming in each day. One of the detractors from that enjoyment is a boss who constantly preaches on how to do the job or what is being done wrong. He/she may even threaten dire consequences if the work isn’t being done exactly as they like or if employees don’t do exactly as he/she is expecting at the moment. This type of leadership is passé in today’s society.

Preaching talks down to employees while teaching lifts them up to a higher level.

Preaching treats subordinates as inferiors and destroys their self-confidence Management’s over-bearing mannerisms and constant criticisms inhibit the development of capable employees. Fear tends to make employees hesitant to make decisions and the organization loses the ability to adjust to situations in real time. Self-confidence and assuredness is key to an effective group of employees.

Additionally, preaching builds resentment. After a while, employees may tend to ignore the preaching because they do not understand the reasons why their bosses are constantly critiquing them. Devastating deterioration of morale and effectiveness results from this behavior.

A leadership behavior of teaching on the other hand elevates the employees in skills and self-confidence and builds a better team. They understand their work processes and systems and what will contribute to better products and services. They know the aim of the organization long-term and their role in achieving it. In other words, they understand the “what, how, and why” of their role in the organization. They are excited about their role and take pride in their work. They like the feeling of satisfaction of doing something worthwhile.

Teaching is the role of leadership. Having a “worker training worker” system is an abdication of leadership responsibility. Remember the children’s game of having people sit in a circle and something is whispered in on person’s ear and they pass it on around the circle? What comes out at the end is usually nothing like what was started. Can anything better be expected from worker training worker? It is the responsibility of leadership to train.

One of the most effective ways to teach is to model the behavior expected. Employees watch the leaders feet more than their lips.  In other words, they will model their behavior by watching what managers do rather than what they say. Jack Welch, the former CEO of General Electric, would teach one Six Sigma class a month at the GE Training School so he kept in touch with what was being taught, received first-hand feedback from employees, and more importantly sent a clear message of what was important. This did not go unnoticed to managers and rank and file employees alike throughout the organization.

Last but not least, modeling the way builds respect for the leadership team and employees enthusiastically follow management’s lead. A teaching style of leadership, as opposed to preaching, will build mutual trust and respect, up down and across the organization, each to the other, in equal amounts. That makes the ride into work each morning more exciting and the ride home more satisfying.