by BILL WADDELL

A curious observation on the Apple article

Kevin covered the New York Times Apple article quite well, so I won't repeat. I had to point out, however, the curious incongruity between the Dow Corning exec who said they had to make the glass in China, rather than in their plant in Kentucky because " We could make the glass here, and then ship it by boat, but that takes 35 days. Or, we could ship it by air, but that’s 10 times as expensive. So we build our glass factories next door to assembly factories, and those are overseas." Makes sense. Somehow that logic has eluded the Chinaphiles at Apple who can't seem to hang a $$$ on the 35 days and, as a result, pay to have that same glass shipped by slow boat back to the USA embedded in their products.

Also, I appreciate Kevin making the disclaimer that he owns the whole Apple line-up. Good idea for us to disclose any personal interest we have in the companies we mention in EE, so I will do the same: I own nothing made by Apple. The thought of sending a nickel earned from my work with lean companies to those guys - even a single iTunes download - is abhorrent to me.

The Outsider, not Insider Trading is Killing Us 

The President forcefully asserted his expectation that Congress pass a bill banning insider trading among the distinguished gentlemen and gentlewomen leading us, and that honored group was only too happy to join him on such lofty moral ground.  We might want to be more concerned about what they are doing right out in the open light of day.

For the last few decades Congress - with rare but total bipartisan support - has passed a stream of bills fueling the housing boom, most notably their near unanimous support for Fannie and Freedy to keep the boom well energized.  They have also been all for deregulating the financial sector, providing tax breaks to oil companies and investing taxpayer money in fostering innovation.  At the same time they went along with an endless stream of regulations and trade agreements crushing manufacturing with an unbearable burden, going along with the theory that it was a thing of the past - better done in China.

Perhaps it is nothing - you can be the judge of that - but this is the wealthiest Congress in history, and where they put the almost $2 billion they have to invest in recent years:

A coincidence that they put 93% of their money into the economic activities in which they have a personal stake, and sit idly by while the sectors in which they have no stake go to hell in a hand cart?

The 'All other' includes a hefty chunk of oil & gas, and computer/Internet.

You might want to spend a little time bouncing around OpenSecrets.org, the source of this data.  It is always good to know who bought and paid for your representaives in Washington.

By the way, what group is Barrack Obama's leading financial backer?  Unions? Environmentalists? Not even close.  The correct answer is Wall Street.

 Another Great Article (and not just because they quoted me, although I may be biased)

Inc Magazine published a pieceby Eric Markowitz about the benefits of re-shoring manufacturing, citing a interesting apparel company called American Giant.  Their gig: "At American Giant, we eliminate all the unnecessary layers of traditional selling and marketing: big advertising budgets, fancy retail stores, expensive wholesale partners. That leaves us room to bring American Made craftsmanship to you at a great value, made here. So what’s the downside? We ask you to tolerate purchasing on our website before actually putting your hands on the garment. That’s why we offer free shipping both ways. If you are not 100% satisfied, send your product back and we’ll refund the total price."

In the article, "Exposing the Myths about American Manufacturing", American Giant suggests that it is a matter of time before cloting goes the way of books, videos and music and becomes primarily an Internet based market without the waste and cost of the middle men. They cite Zara (a company we have mentioned often) as a model for the direction retailing is going, and take it a step further.

 Gotta love Margaret Thatcher

It is often difficult to find something new to write about in Evolving Excellence.  The insanity of the Wall Street driven multi-nationals and thei off-shore foibles, success stories among many small and mid-sized domestic manufacturers, nonsense from government that would be humorous if it were not so destructive to so many hard working people ... how many different wasy can we comment on the same things.

And then I came across a great quote from the iron lady: "Of course it's the same old story. Truth usually is the same old story."

by BILL WADDELL

 
So .... Golden Bear Ltd gets the contract to produce the official mascot for the 2012 British Olymic Team, and decides labor costs - excuse me, labour costs - are way too high in England to make them there.  So they make them in China and, as a result of 26p per hour Chinese labor is able to sell this thing for $20 (12.99 pounds). 

Meanwhile, West Paw Design in Montana makes something called a Spring Chicken - 2" bigger and filled with recycled material (instead of God knows what Golden Bear's Chinese friends put in the Lion), pays something like $15 an hour and sells it for $14. West Paw is a profitable, rapidly growing, enterprise.

Maybe the difference is that British accountants are mostly a serious, professional bunch who would not be caught dead working without a suit and tie, and just maybe those ties are choking the flow of oxygen to their brains, while the last West Paw accountant I saw was wearing blue jeans and a sweat shirt to work. 

Maybe the problem is that Golden Bear has to factor the cost of their "Hong Kong office which, co-ordinates production and oversees quality in the manufacture of product.", while West Paw "coordinates production and oversees quality" through kanbans and hiring the best people Bozeman has to offer. 

Or maybe the problem is that I have never seen Golden Bear - or any other British company for that matter - at the Lean Accounting Summit while West Paw sent a small army last year.  West Paw seems to have 'labour' in a bit better perspective. 

In all seriousness, there is no excuse for a manufacturer in England, the USA or anywhere else, making critical decisions based on traditional accounting.

by BILL WADDELL 

If ever a man deserves sainthood it is John Vicklund of Impact Washington - the MEP out there.  By way of background, the governor - Christine Gregoire - has gone all in on lean.  She has reduced the number of government agencies and departments, has everyone engaged in value stream mapping and has made lean mandatory for the whole state government.  So far, so good - in fact, so far, great. 

Someone came up with the idea that an executive order from the governor was not good enough.  All of leadership should stand in support, hence House Bill 2138 Maximizing the Use of Lean Strategies in State Government. 

A hearing was held a couple of weeks back so the august members of the Washington State Legislature could investigate the matter before deciding whether to support it.  If you have a little better than a half hour and need some comic/tragic relief you can view the hearing.  Settle in for a clown parade the Ringling Brothers would envy. 

First up, John explains lean in layman's terms to the committee, citing a value stream mapping exercise that had recently been conducted including state employees from several agencies aimed at rooting out all of the redundancy and needless waste and delay facing small businesses when they have to deal with the state.  Then the comedy begins. 

First up is a career political hack by the name of Gary Alexander.  Concerning all of the waste, redundancy and delay facing small business, he says, "we have been knowing this for three decades, so why do we need a new process?"  I would have come unglued and said something like, "Precisely because you do-nothing, pin-headed morons have known about it for three decades and have done jack squat about it."  John, however, after pausing for a moment clearly trying to figure out how to formulate a non-offensive response to such an inane question, goes on to do just that.  How he maintained his composure in the face of such idiocy I cannot possibly imagine.  

Next out of the chute is a lawyer named Arthur West from some outfit called the Northwest Poverty Law Center.  After qualifying himself with the acknowledgment that he knows nothing about lean, and has not bothered to take the time to learn the first thing about lean, he launches into a tirade about the ineffectiveness of it, declaring that improvement can only come from slashing headcount.  He ends with the proclamation that lean is the purview of condo-living, brie eating, chardonnay sipping consultants who do nothing but toss buzz words about. 

For Crissakes, Kevin is a brie-eating chardonnay sipper, but I am a midwestern wings and beer guy. Brie and chardonnay are left coast things - not lean things.  I even had to look up how to spell chardonnay to write this post.  The real issue is why this guy was allowed to speak at all.  In any other forum in which you begin by announcing that you know absolutely nothing about the topic at hand and haven't spent a minute trying to learn, you are promptly told to shut up and quit wasting everyone's time. Not here, of course, where we see democracy in action.

It doesn't end there, however.  Another blowhard named representative Overstreet weighs in with the observation that lean may well work in the private sector because the profit motive creates an incentive to improve, but for the life of him he can't see why anyone in state government should want to improve.  Through it all, long after I would have reached the limits of my professional vocabulary and arrived at the point at which I could not respond to any of these guys without dropping an f-bomb, John maintains his composure, although it is painful to watch him struggle to do so. 

One sane voice on the panel, Representative Miloscia who is the sponsor of the bill, tries in vain to put in a plug for some funding for leadership training for the various state agency department heads, but his peers will have none of it.  No doubt every nickel they could sweep up in the state treasury has been invested in pork and stuffed into every barrel they can find - none left for leadership training. 

To John's great relief, the cavalry finally arrives in the form of Wendy Korthuis-Smith from the governor's office who politely informs the 'idiots on parade' that they really don't need their money.  The governor has gone begging, hat in hand, and lean outfits around the state such as Boeing and the Seattle Children's Hospital have volunteered experts to do the training.  The governor just thought it would be nice if the the state employees could see that the representatives stood with the governor for the long haul in supporting the cultural change lean represents. 

With that, the reps decided that, so long as no one was spending any money they guessed lean was OK by them.  And with that rousing support they all went home ... for a well deserved brie and chardonnay refreshment break after another tough day dealing with the affairs of state no doubt.

By Kevin Meyer

The New York Times created a deserved furor last week with their article describing how the U.S. supposedly can't compete with China on manufacturing - specifically the manufacturing of Apple products.  As our fellow blogger Mark Graban points out in an excellent summary of that article, we shouldn't want to compete in that manner.  The stories of worker abuse and managerial tyranny are appalling.  Time magazine, in typical Time "hey please read us too" fashion, jumped on the bandwagon with an article on the human price of success.  And Apple CEO Tim Cook tried to deflect the PR carnage with a long email describing all that Apple supposedly does.

Don't get me wrong - I'm a huge fan of Apple... products.  I made the leap from PC to Mac a few years ago and haven't looked back.  I also own an iPhone and iPad, a 27" Thunderbolt display, use iTunes - the whole kit and kaboodle.  Those that haven't used Apple products for more than a few hours simply don't understand - the bloomin' stuff just works - and works like I want it to work - every time all the time.  That has value, and is why I happily pay more for Apple products.  Just this past weekend I watched a friend spend nearly an hour trying to get his Android phone to do what he wanted it to do.  Wow.  Really?  There's a reason why less than 1% of Apple users leave Apple.

I've heard several people call Tim Cook the world's greatest supply chain executive.  Sorry, I've never bought that.  Tim Cook executed a traditional "chase cheap labor" supply chain strategy in a great way.  But in my book that's not excellence - that's being the shining star of lemmings - the golden sheep if you will.  The China factory isn't necessarily a bad thing - one valid reason to have a factory overseas is to be closer to your customers, and there are a lot of potential customers in that part of the world.  But as nearly a singular factory serving the whole world?  With employees that are abused?  Sorry, no dice.

Apple, and Tim Cook, has done some good things.  They do audit their supplier's factories more than most companies.  They are taking some strong workers rights positions in their industry.  They are opening their kimono and exposing more of their dirty laundry.

Apple has $96 billion in the bank - think of what they could do.  More than just words and policy statements and such.

They could significantly increase the wages of their employees in China - even if they doubled their wages Apple would still have record profits.  But that could actually cause more harm than good.  Many workers simply want to earn enough to eventually go back to their home town or help their remote families.  Some social destabilization dynamics need to be understood.

However consider this, Mr. Cook:

How about immediately hiring and sending an Apple observer into every plant, perhaps every line in every plant, full time.  That way Foxconn wouldn't be able to shift workers from one line to another to hide abuses before audits occurred.  How much would that cost?  A million or two a year?  Put Foxconn on notice that this is not acceptable, with milestones that could transfer manufacturing elsewhere.  Difficult?  Sure.  Ethical business often is.

How about publicly saying (words...) that chasing low cost labor is not a long-term "manufacturing" option and then back it up by sinking a billion or two into developing truly innovative manufacturing methods and systems. Imagine what could happen if the same level of design prowess that was applied to product design was applied to manufacturing design.  Perhaps Apple could become the next Toyota - instead of just another cheap labor chaser lemming.

I could go on - and I'm sure there are lots of other ideas out there.  The bottom line is that thanks to its success - built on the backs of abused workers - Apple has the unique opportunity to change a global dynamic.  But that will take more than just words.

As my friend Shrikant Kalegaonkar tweeted this morning, the world is changing.  Voice of the customer now extends beyond products, and now includes the process for making the product.  As an Apple customer - and also a shareholder - I care about Apple's financial performance.  I want it to do well so it can return value to me in terms of new products and direct shareholder gains.  I don't have a problem with wealth being created and distributed commensurate with individual effectiveness.  But I also have a conscience, and increasingly I hate battling my conscience when using my Apple products.  I bet many Apple customers are feeling the same way.  That's dangerous for any company, and especially one like Apple which claims to embrace people.

So imagine.  Imagine what would happen if Apple took the high road, then backed up the words with serious, solid, perhaps expensive action.  Action that would change a global dynamic, showing that it is possible to be very profitable, very global, and very human-centered.  $96 billion gives Apple the ability to do something truly incredible. 

In addition to the actual improvement of the global condition, I bet a lot of folks would be impressed with the company - and would be inclined to buy its products.

By Kevin Meyer

That old retail icon, JC Penney, is undergoing a transformation thanks to Apple.  Apple?  Yep - JCP's new CEO is one of the guys responsible for creating the Apple Store.  Anyone that has been in one knows it is a bit of a different experience.  Where else can you pick up a $2000 piece of equipment at the back of the store and walk all the way out without a receipt - because it was emailed to you - with no one batting an eye?  Where else can you sit for a couple hours playing with the equipment with no one trying to give you the hard sell?  Apple believes that if you help people to use and like the technology, the technology will sell itself.

So now that concept is coming to JC Penney.

The first significant change will be embracing a new pricing strategy, consisting of "fair and square" pricing. It includes three types: everyday, regular prices; monthlong values; and best prices, on the first and third Fridays of every month. To determine new prices across its product range, Mr. Johnson said that the retailer looked at what it was charging and what customers most often paid after numerous discounts. He found that only one in 500 items sold at full price, while 72% of revenue was derived from selling products at 50% off or more.

Ok, perpetual sales are sort of useless.  Sounds good.

The strategy will trim JC Penney's promotions to 12 a year from 590.  "Steve [Jobs] would have called this insanity," Mr. Johnson said of the sheer volume of promotions. "At some point you, as a brand, just look desperate. JC Penney spent over $1 billion, and the customer didn't even pay attention."

Funny, I have always thought of JC Penney as something of a "desperate" brand - never quite understanding what they stood for.

Working with PMH, JC Penney created a personality and color palette for each month that will be carried throughout marketing, in-store displays and even external lighting on stores. By focusing on one month at a time, Mr. Francis said, JC Penney can highlight important consumer events, such as Valentine's Day, Super Bowl or the Academy Awards.

Ok, ok... I get it.  New logo, new store colors, streamlined promotions.  All good... except...

What about the product?  Advertising does not create value, a new logo does not create value.  If your product is valuable in the eyes of the customer, it will sell.  Advertising may mask true value to a customer, but just for a short while.  Apple has a great store experience... but there are great products inside. 

So, Mr. Johnson, is all the glitz to just sell the same old stuff? 

by BILL WADDELL

The task of the die hard Toyota defenders just got tougher. The company just sold out sixty plus years of being able to assure job security at a level no one else could. To save one tenth of one percent of their global payroll they sent the message to all 317,000 of their employees that their long-standing pledge to keep them on the job no matter how tough things got was no longer part of the culture.

Toyota has announced the layoff of 350 employees at their Altona Australia plant. For this paltry savings they sold out a vital part of their culture. The hand of Fujio Cho is at work here. The leader of the gang of outsiders who have spent the last ten years 'Americanizing' Toyota with disastrous results thus far, Cho has pursued growth for growth's sake and is deeply imbued with the sort of thinking one can get at the likes of Wharton business school.

As I have pointed out in the past, Toyota's abandonment of their culture in no way detracts from the credibility of lean thinking. It is way past that. If Toyota were to be wildly successful in their pursuit of imitating GM and less like their heritage, that would repudiate lean, but the odds of that happening are almost nil.

by BILL WADDELL

My disdain for Mitt Romney was made clear a few months ago - I was bashing Mitt before Mitt-bashing was cool. I am compelled to do it again if for no reason other than the fact that his supporters have the unmitigated gall to sneer at anyone who opposes him as anti-capitalism. There is no one on the planet more committed to capitalism and free enterprise than me, unless it is the legions of lean proponents who follow Evolving Excellence. Creating value for shareholders by creating the maximum value for customers, and fully engaging the rest of the stakeholders - employees, suppliers and communities - is capitalism and free enterprise at its finest. What Romney and Bain did all too often was the sort of thing that has a lot of Americans looking at the Occupy Wall Street crowd and thinking, 'they are a bunch of economically clueless, off the wall nut jobs, but that doesn't mean they don't have a point'.

You see, even the most scorned robber barons in our history - guys like Andrew Carnegie, Cornelius Vanderbilt and John D. Rockefeller - created wealth by creating value. The criticism of them is that they kept it all for themselves, sending labor into a probably well deserved conniption fit. But there is no questioning the fact that they left oceans of oil, miles of railroads and mountains of steel behind making the country as a whole much better off for their efforts. Romney, however, merits all of the criticism these guys deserve with none of the redeeming qualities. In fact, many of his ventures destroyed value. The robber barons began with a legitimate, value creating business proposition, then found every legal way (and some not so legal ways) to exploit that business to their maximum personal benefit. Romney and Bain began more often than not by finding value others had created, then finding every legal way to grab it for their own, often destroying it in the process.

Case in point: GS Steel. Romney and Bain put $8 million into the company along with a big chunk of bank loans - enough to take control. They promptly paid themselves a $36 million dollar dividend out of money they had the company borrow against its assets. Now playing with house money, they plowed $16 million back in before they saw it was a goner, crushed under the weight of the loans Bain had it take out, and let it go bankrupt. Their net profit on the deal - $12 million ... and I almost forgot, they paid themselves another $4.5 million in 'consulting fees' from the money they had the company borrow. So Bain walked away with $16.5 million and GS Steel went belly up. Every other stakeholder got screwed. 750 employees unemployed. Suppliers and lenders up the creek, communities devastated, and the steel from GS Steel was to be had no more. And the icing on the cake, while Mitt was sending his share of the $16.5 million to the Cayman Islands, the US taxpayers - you and me - got stuck with the tab for GS' $44 million in unfunded pensions.

If you are reading this, odds are you work for someone who actually creates a product or provides a service of legitimate value. For the Romney supporters to suggest that not your company's owner, but Mitt, is the job creator and paragon of capitalism is beyond absurd. It is an insult to all of the people who have risked their fortunes and careers on the prospect that they had an idea for a product of value, and stood ready to reap the gains if they were right, and suffer the loss if they were wrong. Romney and Bain too often created nothing and risked nothing. Instead they took advantage of companies that had value - earned from long hard work - but were either so desperate or so naive they got into bed with the likes of Bain.

To be sure, at some level Bain hoped the company succeeded, much the same as the pawn shop owners, payday lenders and buy-here-pay-here used car guys hope the loan works out for their customer. In the end, however, it doesn't really matter. Bain and these guys come out ahead no matter what and the fact that most of their business deals end up in disaster for the other party has little or no bearing on their profits. Like the afore-mentioned 'capitalists' Romney did nothing illegal, but just because the loan sharks are legal doesn't mean you want your kids to be one of them, and you certainly don't want one of these legal leeches in the White House.

Oh, to be fair and honest, Romney's claims to have created lots of jobs are true. The bulk of the jobs he created are barely above minimum wage retail jobs at the Sports Authority, Staples and Dominos, while the jobs he destroyed were manufacturing jobs that were taking people to the middle class, but technically he did create jobs. Of course, in light of the fact that the shelves at Staples and Sports Authority are sagging with goods from China he probably created a half dozen jobs in the People's Republic for evey one minimum wage job he created here, but, again, he did create jobs.

Obama with all of his convoluted wealth redistribution schemes, passion for bringing back the glory days of the AFL-CIO, and his tunnel vision on creating economically unsustainable alternative environmental boondoggles is killing the manufacturing economy the slow way. Romney and his bottom feeding buddies in the investment banking world will kill it off quickly. Not sure there is much difference in the end.

In the meantime, I think I will take a harder look at Rick Santorum and Newt Gingrich. Both are a bit on the nutty side, but neither leaves the trail of slime behind them Romney does.

by BILL WADDELL

Gender discrimination comes in a lot of forms, and with all of the hundreds of companies I have visited and the thousands I have researched I expect I have seen them all. There is the overt 1950's neanderthal style like the manufacturing guy who explained to me just a few months ago that set up reduction was not practical in his plant. His reasoning: most of the machine operators were women and set ups were men's work - too physical, dirty and mechanically difficult for the female body and mind to handle. That kind is easy to spot and arises from sheer stupidity, and is pretty easy to overcome. Any woman who cannot intellectually match wits and succeed against such an idiot is probably doomed to failure any way.

Equally blatant and grounded in a comparable level of ignorance are the business advice articles such as the one in Bloomberg/Business Week of a few days ago providing tips and pointers when you find yourself in Las Vegas for business and "need to network and give the impression that you’re a high-roller to your more hedonistic colleagues and boss." It includes advice for women who find themselves in a strip club with such "hedonistic colleagues" and the boss. One helpful tip: "If you don't mind getting a lap dance, it will endear you to your male colleagues ...", and "... chat up the strippers. They may well appreciate the female companionship. To thank them for their time, either purchase them a drink or buy a man in your party a lap dance."

My advice to the woman who finds herself in Las Vegas with colleagues and a boss who require such networking and are impressed by the impression that you are a "high roller" would be to tell the louts to stick their job where the sun doesn't shine and find yourself a new job with decent normal colleagues and bosses. And then cancel your subscription to Bloomberg/Business Week at once, of course.

I think the worst kind of gender assault, however, is the more insidious kind - the kind that comes in sheep's clothing. It creeps up on women, treats them as 'sisters in bond' and leaves them lesser for it in the long term. It is the kind in seemingly supportive articles such as this one: "5 Reasons Why Women Are Good Leaders". The article, and many like it, is built entirely on the premise "Women’s skills are different than men’s." If that is true then there is absolutely no reason why women deserve equal consideration for jobs. If that's true then there are some jobs better suited to 'women's skills' and other jobs better suited to men's skills - it's 1950 all over again.

In fact, lucky for all, that premise is absurd. I have worked with plenty of female managers who embody the points in the article ... but there is no shortage of examples of the polar opposite. Carol Bartz who slashed and burned Yahoo to oblivion, and just today Irene Rosenfeld of Kraft who is laying off 1,600 people in their relentless downsizing effort come to mind as women who set the notion that "Female leaders are more concerned with helping everyone feel like a necessary part of the team" on its ear. No one ever accused Margaret "Iron Panties" Thatcher of "leading with empathy".

I have long believed, (and drilled into every one of my kid's heads) the principle that anyone who begins a sentence with "women are ...", or "black folks are ... ', or any other broad class of people are ... is about to say something very stupid or outright dishonest unless the subject is biology. There are no universal character attributes - just individuals, each with their unique set of talents and shortcomings, each to be taken on their own individual merits.

The person who asserts that someone is better than others, or just different from others, because of thier gender - or their race or ethnicity - is just as demeaning and just as intellectually dishonest as the person who says someone is worse than the rest because of gender or race. Respect for people means respect for people individually - one on one - as they are, with all of their unique human capabilities, values and flaws, and anything else strikes me as extremely disrepectful.

By Kevin Meyer

The last couple weeks have brought the story of yet another icon of business, Kodak, collapsing and filing for bankruptcy.  Yes, failure a key component of capitalism, and when you try to skew things so they feel better you get some crazy outcomes... like $250,000 Chevy Volts.

But failure doesn't have to happen.  And that's the story we also read about last week - the story of a successful textile company, no less - and in the United States.  Milliken.

Milliken & Co. of Spartanburg, S.C., arguably should have been crushed by global competition, just like Kodak. Its roots are in the textile industry, a labor-intensive business that long ago decamped for lower wages abroad, leaving abandoned mills throughout the Southeast.

And yet a visit to Milliken's vast campus finds the company thriving. "All of Milliken's traditional textile competitors are gone," says John Fly, a top executive who just wrapped up 45 years at the company. "They're out of business. And Milliken is having the best economic performance it's ever had. It's clear we did something different."

So what did they do?  Well at first they joined the folks that whine and complain about how all the external forces... regulations, taxes, and the like... are crushing them.

What Milliken did was first try to hold back the flood of cheap imports—a strategy that chewed up management time and ultimately failed.

But then, unlike many of their brethren and unfortunately most manufacturers for that matter, they took a good hard look at their business.

Milliken diversified rapidly out of traditional textiles and moved deeper into niche products that built off its knowledge of textiles and specialty chemicals. And it bore down on scientific research and manufacturing innovation.

Today, Milliken makes the fabric that reinforces duct tape, the additives that make refrigerator food containers clear and children's art markers washable, the products that make mattresses fire resistant, countertops antimicrobial, windmills lighter, and combat gear protective.

Along the way it has amassed thousands of patents, focusing on specialty fabrics and chemicals, floor coverings and performance products. Milliken boasts that we come in contact with its many products almost 50 times a day.

"They were different because of their willingness to change," says Bill Fischer, co-author of "The Idea Hunter" and an expert on innovation. "And they moved fast."

Not too shabby.  And that last statement by Mr. Fischer is critical.  A willingness to change.  Not ask for handouts, not ask for bailouts, not spend millions lobbying for less regulation and the like.  And then they did it fast.

While Milliken doesn't disclose its financial data, Mr. Fly says revenue and profit have been rising steadily. Mr. Salley says the company is also debt free, has double-digit returns on invested capital, and has increased in value more than 30% since 2007 alone.

Yes, a textile company.  In the United States.  So tell me again why your business is in trouble?  And in which direction are you pointing the finger?

By Kevin Meyer

Over the weekend I was chatting with a couple friends on different sides of the world and the subject of Occupy Wall Street came up.  I'm not exactly sure how, but our common response was along the lines of "wow - I had almost forgotten about them."  That prompted me to dive into various internet news feeds, from all sides of the spectrum, and it turns out that many are feeling the same way.

In many ways it's too bad.  Many of us are smack in the center of the political spectrum, socially liberal yet fiscally conservative, wondering how the crop of guys on the right can both claim to be for small government yet still wanting to dictate what happens in our bedrooms and bodies, wondering how the left can both be for jobs yet presiding over the greatest increase in job-busting regulation the country has ever seen.  The top 1% does control a larger amount of wealth - and power - than ever... but also pays a higher percentage of total tax revenue than ever.  Folks on the other end are hurting - but by over-borrowing we've raised our standard of living faster than it should have been raised, and therefore claim hardship and request handouts to stay at that inflated level.  The system is broken from many angles.  The fixes will be painful - even more so if we continue to kick the can down the road.

So OWS was interesting for many of us to watch.  Also an interesting experiment with a new method of groupthink and groupaction.  Unfortunately that has also created the downfall of the "organization."  Somehow it seemed to morph from using occupation tactics to make a statement, to being about occupation itself.  And that turned off a lot of folks, especially many local small business owners who happen to be in the 99%.  It turned violent, including the blurb (finally something!) on tonight's news of a Occupy Oakland protester threatening police with half a stick of dynamite.  The majority of people, including in the 99%, still respect the law, respect the rights of property owners, and don't like violence.  And it got cold.  Donations have fallen from tens of thousands of bucks per day to under a hundred right before Christmas.

But the real reason is the lack of clear principles, and especially clear goals and tactics supporting those goals.  The Occupy sympathizers, such as Marianne Schnall, try to claim this is a positive.

One of the criticisms of the Occupy movement here in the U.S. has been that there is no clear cut agenda. But that is what makes the movement so dynamic and exciting - it is decentralized, still evolving, and incorporates many different important causes that need addressing.

Sorry, that doesn't answer the criticism.  Dynamic and exciting doesn't create success - ask any number of dot-coms when they become dot-bombs a decade ago. 

It turns out a bunch of the original Occupy Wall Street folks are debating the same thing - what happened to their numbers and is it due to the intentional decentralization?  Welcome to reality.  I said the same thing when the OWS guys had to set up sanitation, protection, and even a bank when the numbers in Zuccotti grew.

So I spent some time exploring the "About" section of the OWS website.  There's a Principles of Solidarity page that lists eight items ranging from "engaging in direct and transparent participatory democracy" to "endeavor to practice and support wide application of open source."  Huh?  There's a very direct correlation and analogy between "open source" and "free trade" but I bet those guys wouldn't be happy with it.  There are other documents detailing "Autonomy" and such.  Clear?  Not exactly.  Think of the worst vision and mission statements you've read - paragraphs and paragraphs of redundant, superficial words.

This leads to problems such as Occupy Portland calling for a national day of action to shut down corporations and Occupy Oakland trying to shut down ports.  Guess who work for corporations and ports.  Yep, the 99%.  Hence the rather shrill if not almost violent comments on those potential actions.  It's not pretty, and it's highly destructive to the Occupy movement.

Don't get me wrong.  I'm not wishing for the demise of OWS.  Really.  I believe that growth and improvement come from healthy debate between differing opinions - and that's been lost as the left moves more left and the right moves more right.  OWS was - perhaps still is - something different.  Similarly the Tea Party could be as well, if it doesn't continue to be hijacked.

OWS could use a nice dose of hoshin - perhaps after accepting the reality that there needs to be some basic layer of organization and leadership.  Hoshin begins with an input of a small number of very defined principles.  Transparent, participatory democracy?  Perhaps -although that's still a bit vague.  Open source?  Not so much.

Then there needs to be a long-term strategy and plan.  What does the vision of the future look like?  Translate that into three-year breakthrough objectives and those objectives to annual goals.  A small number of them so there is focus, ownership, and coherence.  Defined so that what success looks like is obvious and understood.  I, and most if not all of the employees of my company, can tell you what our principles, strategies, and annual goals are - we don't need to look on a wall or in a binder.  Setting goals isn't enough - you have to execute, monitor the execution, and take defined corrective action when things go off track.  Finally you need to regularly review progress, do some hansei reflection, and use that as an input to begin the planning and execution cycle again.

Being decentralized and leaderless is idealistic.  But idealism by itself doesn't create change.  There needs to be a clear, concise, actionable message and purpose that adds value - supported by principles and driving goals.  Exciting and dynamic organizations come into being every day - and also die every day.

by BILL WADDELL

What does an Ivy League trained Commander in Chief with his Ivy Leaue trained staff mean when they describe their strategy with the words "lean", "agile", flexible" and reliant on "innovation"?

Of course, those buzzwords mean only one thing to an Ivy Leaguer: headcount reduction.

Read it here

by BILL WADDELL

For lots of reasons Henry Ford has been written off as a not-too-bright, mean-spirited guy whose only claim to greatness is the assembly line, and even that is quite often trashed as demeaning to workers and the heart of an out-dated 'mass production' concept. Make no mistake, Ford gave his critics plenty of ammunition, but the simple fact remains: Taichi Ohno, one of the core architects of the Toyota Production System, wrote:

"We see that automation and the work-flow system invented and developed by Ford and his collaborators was never intended to cause workers to work harder and harder, to feel driven by their machines and alienated from their work ... Ford's successors, however, did not make production flow as Ford intended."

And he wrote: "I, for one, am in awe of Ford's greatness. I think that if the American king of cars were still alive, he would be headed in the same direction as Toyota."

Ninety eight years ago today, on January 5, 1914, Ford announced the $5 day. Four days prior to that, on New Years Day, Ford met with his key reports and they played with numbers. Wages in the plant ranged from 26 to 54 cents per hour, or an average of about $3.10 a day. The $5 per day rate that came out of that meeting and was approved by the directors on January 5 was not a flat rate, but the new average, with almost all employees receiving proportionate increases. The $5 average was about twice the average rate for manufacturing work in Detroit at the time.

Why Ford did it is complicated, but one thing is certain - it was not done to combat high employee turnover resulting from the grueling nature of assembly line work. That is a latter day myth and pure hogwash. the company had implemented sweeping reforms in just about every aspect of employee relations and the pay system earlier in 1913 - including an across-the-board 13% pay increase just three months before the $5 day announcement,and employee turnover had dropped from around 48% to about 6%. There was no turnover problem to address, especially one that would justify doubling the payroll.

The impetus seems to have come from four sources. First is the little known but hugely significant experience of Ford's assembly plant director in Manchester, England, Percival Perry. He had recently doubled the wages of his employees to a rate he calculated as a basic 'living wage' - a rate at which people could live a decent life, rather than the least wage possible. Perry realized a substantial improvement in production and quality as a result.

Second, John Lee, Ford's first real HR manager was urging him to do the same thing based on the conviction that if people did not have to worry about financial pressures at home they would be much more productive.

Third, Ford's wife Clara read all of the mail Henry received from employees and, more important, from many of their wives. She put a great deal of pressure on Ford to make the work he was doing more meaningful and to be more driven by "social justice".

Finally, there was Ford himself. In 1913 the company had paid $11.2 million in dividends out of an after-tax profit of $27 million. The suppliers were enormously profitable. Car prices had been reduced for the 5th year in a row and a Model T could be had for $500. All of the stakeholders were benefiting, except the employees. That seemed to be the straw that broke the camel's back in his thinking and the $5 day was hatched.

After the near doubling of pay, total Ford payroll costs - not just direct labor - were 11% of sales in 1914. The $5 day clearly meant a lot more to the employees who received it than it did to the company that paid it. Profits in 1914 went up to $33 million, dividends increased to $12.2 million, and the price of the car dropped again - to $440.

It seems fitting to give the thinking behind the $5 day some serious thought, to consider the results, and to see how our thinking stacks up against Ford's. There is a reason Ohno and Toyota were so impressed by Ford. Given their track records, the snubs of Ford on the part of 'serious' business professionals on Wall Street and the great minds of academia should be taken as all the more reason to take him and the $5 day seriously.

by BILL WADDELL

I am an unabashed Michigan State fan which makes me an unabashed Kirk Cousins fan. Their big win over Georgia on Monday was fun to watch, but every Spartan football fan is sad to see Cousins, their record setting quarterback finish his career.

Cousin is not only Michigan State's all time passing leader and the three time captain of the school's best team of all time over his four year career, he is the recipient of Lowe's CLASS Award: "The award, chosen by a nationwide vote of FBS coaches, media and fans, is given annually to the most outstanding senior student-athlete in the FBS. To be eligible for the award, a student-athlete must have notable achievements in four areas of excellence: community, classroom, character and competition." At the Big Ten preseason luncheon this remarkable young man was asked to represent the players of the conference and speak to the coaches and media on their behalf.

The speech he gave showed a level of humility and wisdom far beyond his years. It gets to the essence of leadership and carries a powerful message for everyone who sees him or herself as a success. Cousins does not see his success as validation of his superiority over lesser athletes, but a privilege. He says in part, "It's here in this place of privilege where perhaps danger lies. I have been taught that human nature is such that the place of privilege most often and most naturally leads to a sense of entitlement - the notion that I deserve to be treated as special because I am privileged. The truth is, privelege should never lead to entitlement. I have been raised to believe that privilege should lead to responsibility - in fact, to greater responsibility. The Bible says in Luke 12:48, 'From everyone who has been given much, much will be demanded; and from everyone who has been entrusted with much, much more will be asked.' "

When I reflect on the companies I have come to know that have succeeded over the long haul, they have virtually all been led by people who embody Cousins' message of privilege and the responsibility that comes with it. The less successful seem to be led by people who give themselves a disproportionate share of the credit - 'I deserve to be the boss and I am entitled to more money and better perks because I worked harder, I am smarter, I made better decisions along the way, I, I, I ..."

It seems to me that Cousins has hit the principle of Respect for People that is so fundamental to a true lean transformation squarely on the head. In looking at a company that strives to be lean, or claims to be lean, we have only to look at its leaders and ask whether they behave in a manner that reflects their position as a validation of their superiority leading to entitlement, or a privilege that leads to greater responsibility to all of the stakeholders.

When challenged to justify outrageous compensation levels, far too many executives offer up the entitlement argument. Far too many political leaders see their office as entitling them to special treatment. They would all do well - we would all do well - to listen and take to heart the powerful message Kirk Cousins sent.

Here is the extraordinary speech:

By Kevin Meyer

When Bill makes a point it usually makes the rest of us a bit hypersensitive to similar situations.  And so it was with his two posts on the silliness of advertising.  Ford spending $3.9 billion on advertising, more than they spent on direct labor?  And since ROI on advertising is difficult to quantify it gets a pass while every penny of direct labor or direct manufacturing "cost" is scrutinized.  Crazy.

So now we're all on the lookout for analogous examples of value justification screwiness, and this morning's Wall Street Journal smacked us in the face with one.

The big-name rock concert is an annual rite at otherwise geeky tech conferences. Oracle has featured Elton John and Billy Joel in past years. SAP has booked Bon Jovi and Eric Clapton. Microsoft Corp. hired Dave Matthews last year.

Seriously?  And guess how much these gigs cost.

Producers and planners say a top band costs a company $500,000 to $1.5 million, before production costs. "It's like a barometer of their health," says Steve Einzig, CEO of BookingEntertainment.com, which brokers private shows by famous acts. "If they don't bring in acts as big as the year before it might hint that they're having trouble."

Now sure, these aren't manufacturing companies, but that doesn't really matter.  They are still in the business of creating value for their customers.  Supposedly.

It gets even better... sometimes they can't even get those bands to mention their brand.

Rockers help fire up customers, but tech companies would really like their hired musicians to lavish a little praise on their brand names, too. Sometimes it works: On one blurry YouTube clip making the rounds, pop star Christina Aguilera bellows "Mi-cro-soft!" at an event for the company's top salespeople.

But most stars decline to plug their tech benefactors and bands usually insist on control over how visible a corporate logo can be—the smaller the better—and how the event is described on a company's website, planners say.

Fire up customers?  Oh you mean the relative handful of folks that actually go to these customer conferences?  Let's not pretend that the money spent on these bands actually benefits more than a fraction of the customer base... unlesss the company is really in it deep.

Paying the piper for bands, over-the-top trade show booths, glitzy advertising - it's really the same thing.  A rebate or discount from the price to the true value of the product.  If the value is there, customers will pay.  If it's not, and you insist on pricing the product higher, then you need to throw money at customers to make up the difference.  Informing customers of the value of your product is real selling.  Bribing them isn't.

by BILL WADDELL

A wise person, lost in anonymity to the ages, described the platypus as a duck designed by a committee. It is exactly the sort of useless thing a committee would come up with.

Committees can be counted on for two things - delay and compromise. GM demonstrated this point quite ably. While its chairmen and CEO's over the decades made financial decisions with authority everything related to products and processes was decided through the ponderous bureaucracy of its Automotive Strategy Board, and a blizzard of lesser committees - no big surprise that decisions were made slowly, cultural transformation was non-existent and every innovative suggestion was thoroughly watered down before taking effect, if it ever came out of the committees to take effect at all.

Committees are also effective tools for ducking responsibility and accountability. If the decision can be made by a committee, then no one is individually to blame for failure.

That is just what committees do, and they are no substitute for clear vision and decisive leadership. Committees are a way of life in government and academia, and neither is much of a model for aggressive action.

A lean transformation cannot be driven by a 'steering committee' or any other kind of committee. It has to be driven by senior leaders who know exactly where they want to take the organization.

by BILL WADDELL

In the interest of protecting client confidentiality I won't name the town. Recently, however, I was out west in a beautiful spot in the Rocky Mountains working with a company doing extraordinary things in its commitment to lean. Like a few of my other clients they are making money doing what is supposed to be impossible - manufacturing low-tech consumer products and not only selling them in big quantities in the USA, but exporting them. By coincidence I happened to be staying in the same hotel as a film crew.

Thirty four people - count 'em - thirty four of them - were there to spend four days filming 2012 Toyotas driving in the snow. They were not actually filming a commercial mind you - just creating fim footage for an advertising agency that would sit on the shelf in case either Toyota or its dealers wanted to make a commercial that included Toyotas driving in snow. Most of the 34 were flown in from Los Angeles for the task.

A few weeks ago I wrote a piece that pointed out the fact that Ford spent $3.9 billion on advertising in 2010- a billion more than they did on value adding direct labor. They are right in there with the rest of the auto industry and well behind the spending levels at major league advertisers like P&G - $11 billion plus. Now I am sure there is a lot to the advertising game I don't know, but I do know that 34 manufacturing people working 4 full days would create a pretty impressive pile of valuable stuff and I have to wonder exactly what the value is of the product of these folks work. They are basically creating inventory that may never be used.

More important, I know that 34 manufacturing people would be micro-measured and there would be relentless pressure to challenge whether what they are doing is needed at all and, if so, to see how it could be done with 33 people. I have to wonder exactly where is the value in this - and in advertising in general? It seems to me that advertising spending is driven more by conventional wisdom than by the relentless pursuit of data and the continual cost/benefit focus on the operating side of the business. This was at least a $25,000 venture by the time they were finished and what executive would spend $25,000 on a manufacturing investment without demanding precise justification, cash flow and ROI analysis and a comparison to alternatives?

Perhaps I am the odd person out there, but I do not buy cars or beer, book airline flights or do much of anything else based on advertising. (Oh I know that the ad folks would say that I actually do based on some subliminal impact - sounding a lot like the global warming folks who say that blizzards are also proof of global warming - the old, no matter what happens I'm right argument). I TiVo through all the ads I can and hit the delete button on virtually every ad that pops into my email inbox. If the occasional ad sparks my curiosity and I try something I certainly do not decide whether to buy it again based on advertising once I have personal experience with the product.

So I have to question just how a company - the fact that the company in question is Toyota notwithstanding - claim to be lean and focused on customer value and send 34 people into a resort town to take film of cars in snow that create no value at all for its customers?

By Kevin Meyer

It's that time of the year again when many mortals look back on the year and basically say "crap I should have been able to do more."  The end of the year holiday, Christmas or otherwise depending on your particular faith, but eventually New Year's to most.  I've become sensitive to such retrospection and resulting future planning occuring at the end of the year ever since I heard Steve Player at a Lean Accounting Summit long ago ask what is so special about December 31st magically becoming January 1st.  Good question.  Based on that aha moment my company eliminated traditional budgeting.  Eventually I noticed that the arbitrary nature of the end of the year applied to many aspects of business - and life - including the desire to create a step change via usually unattainable New Year's resolutions.

So here we are yet again at the end of year holiday period.  My wife and I always travel at this time to escape and rejuvenate.  Last year we were in Phuket, Thailand.  This year we're in Kauai.  We didn't wake up Christmas morning to snow shoveling and presents under trees.  We woke up to...

Yep, that's right.  Coffee made by someone else.  And a halfway decent view.  And warmth.

But as much as I have become sensitive to the silliness of the changing of the year, to the extent that I try to use academic year calendars to mask it, I do take advantage of this time to ponder the past and consider the future.  Hansei, by any other name.  This year was no different.

Each year for the past twenty or so I've had a simple annual goal: visit two new countries and do something "different."  In the past that "different" goal has led me to learn how to scuba dive, ski in Europe, learn html programming, publish a book - you name it.  This year it was to run a marathon, which I did in June.  I learned a couple things from that experience: I sometimes need group support and a meaningful reason to keep me on track.  I also learned that training for a marathon doesn't necessarily mean you'll lose weight.  Realizing I could finally eat a whole pizza and not gain weight pretty much counterbalanced that notion.  And yes, once again I did visit two new countries.  In 2012, an arbitrary time period by the way, I'm thinking I'll try to learn Mandarin as something different.

However in my ruminations over the course of the year, and especially over the past month and most especially on this trip, I've come to realize the power of two words, both questions: "why?" and "how?"  Those two questions are beginning to radically change my life, professionally and personally.

Many of us are already aware of how "why?" can play an important role in root cause analysis.  But I've also found that it is a key question when looking at projects, tools, and lean initiatives.  Fellow leanie Mark Graban and I had a discussion recently on the subject, specifically in response to one of Mark's readers asking why his lean programs weren't being supported.  My first response was to guess that the company had simply thrown together a bunch of tools... some 5S, some value stream mapping, a dash of kaizen or TPM, and ended up with nothing more than tools and a Japanese language lesson.  No solid meaning and culture.  I've seen it many times.  The first thing you need to do is ask "why?"  Why is that tool important?  What is the problem, what is the desired future state?  Then and only then figure out what is the most important tool.

But that same question applies everywhere.  Folks like me who are never lacking for ideas and could basically be thrown in a plain white room and not get bored, often have a problem with too many projects.  So why do we want to take on that new project?  Why is it more important than the other projects that are also competing for our time?   Or work processes, even individual. Why can't I answer that email right now?  Why is this meeting important?  Why do I need a personal assistant?  Why is cooking a chore?

That single question of "why" becomes a great simplifier and discriminator of projects, tasks, and even ideas themselves.  It helps define relative importance, works to dig deeper into rationale, and uncover hidden issues.  By asking why, and giving yourself an honest response, I've found you can free up all kinds of valuable time.

Now on to "how?"  I hadn't thought too much about this until reading one of Jamie Flinchbaugh's posts a year or more ago where he discussed why "how?" was very important as part of the hoshin planning process.  Bingo! I immediately understood why (!) certain projects weren't being completed - we didn't spend enough time on "how."  How will it compete for resources, how will it be staffed, etc. Once again that same question can apply to personal projects and life.  How will I achieve this year's "different" goal?

So now, as I'm using the results of this hansei to recalibrate and plan for the future, those two questions are front and center.  Why is a project important?  Why must I still keep doing this activity?  How will I stop?  How will I achieve this goal?  Why is it necessary?  Why can't I make progress on writing this book? I've found conventional wisdom gets challenged at every turn.

It could be an interesting few months, with some potentially radical changes.  Stay tuned.

So think about that as you look forward, even if you are making those resolutions.  Why?  How?

by BILL WADDELL

I went online with walmart.com Friday evening – bought a barbecue grill for my son in California to be picked up at Anaheim Walmart. Got an order confirmation, and $160 hold was put on my debit card.

Woke up Saturday morning to an email from Walmart telling me the grill was unavailable at the Anaheim store – order was canceled – the hold would drop off of my debit card within 5-10 days depending on my bank policy. Suggested I try another Walmart nearby.

Thought I can only stand so many $160 holds so this time I would check to be sure grill is in stock before I ordered again. Found five more Walmarts near Anaheim – all had the same grill in stock. In fact, the Anaheim store showed it in stock. Not trusting the computer, I called Anaheim Walmart. Delightful lady offered to check – confirmed they have four of the grill I ordered in stock.

Called walmart.com – asked why my order was canceled due to non-availability when, in fact, they have four at the store. Young lady named Alberta explained to me that walmart.com is a separate company from the store, and store inventory is not the same as walmart.com inventory.

“Really?” I asked. “So you are not part of the Walmart Corporation in Bentonville, Arkansas?”

“Yes we are,” she answered.

“Then the Walmart store in Anaheim is not part of the Walmart Corporation?”

“Well, yes,” she said, “It is.”

“Which part of this deal is not a part of Walmart?” I asked, “And if Walmart Corp owns four grills in Anaheim, and Walmart Corp confirmed that I paid for a grill in Anaheim, why did Walmart Corp cancel my order and tell me there are no grills available for me in Anaheim?”

“We are all Walmart,” she replied. “It’s just that walmart.com is a different department, and the stores decide whether they want to make any of their inventory available for walmart.com or whether they want to keep it for themselves. They might charge a higher price in the store than we do.”

“So Walmart Corp makes promises then each Walmart Corp store manager gets to decide whether he feels like keeping those promises?”

“Walmart didn’t make a promise to you,” she answered clearly not liking where the conversation was going.

“Sure you did, Alberta. You promised me a grill when you sent me a confirmation and reached into my bank account and put a $160 hold on it.”

“No,” Alberta said, “That’s just the way our computer is set up.”

“It sounds like whoever set up the computer set it up for an auction,” I said. “You should have told me that I wasn’t buying a grill – that I was actually bidding on one, and some Walmart guy in Anaheim had the right to reject my bid and take a better offer if he could get one.”

“Would you like to talk to my supervisor?” Alberta asked.

“Does he know anything you don’t know?”

“No, but he can explain it to you better,” she said.

I then essentially repeated the conversation with a guy named Michael. The conversation was beginning to bore me until, in closing, Michael said, “Your satisfaction is my highest priority.”

“C’mon, Michael. I’m sure you are supposed to say that but we both know that’s not true,” I said, “If it were you would sell me the grill I paid for.”

“I can’t do that,” said Michael, “But how else can I satisfy you?”

“What do you have in mind, Michael? I don’t want or need anything from Walmart other than the grill I bought and paid for. I am not poor but I can’t afford to keep buying grills at Walmart stores around Los Angeles until I find one that has a manager who feels like giving up some of his inventory to make a sale. I could be out a thousand bucks in a big hurry without ever actually getting a grill. Can you do anything about that?”

“You could call the store first,” Michael suggested, “and be sure they will sell one before you place the order.”

“Are you listening to yourself, Michael? Seems like Walmart.com ought to call the stores first to see if one is willing to deliver the stuff before you try to sell it,” I said. “You sound like a good guy. Doesn’t is bother you to make promises all day with absolutely no ability to keep your promises? If anyone else ran a business that took money from people online, knowing they had no control over whether the customers ever got what was promised they would probably go to jail. I would think it would bother you to be the front man for what strikes me as basically a criminal enterprise.”

With that, Michael chose to end the call, politely apologizing for not being able to help.

I then called the Anaheim store and asked to talk to the manager. A young lady put me on hold, then returned and told me the manager was "busy with something important". She offered to take a message.

I asked how she knew what the manager was doing was more important than what I wanted to talk to her about.

She said, "I don't know but she said to take a message."

"Ask her to call me and explain the organizational structure at Walmart and how the accounting system works," I said.

"What?" the young lady asked.

"On second thought, just ask her if she is in cahoots with a guy named Michael in a criminal enterprise."

"What?" the young lady asked again.

I was trying to formulate an even better message when my wife pulled the phone from my hands and said to me, “Will you leave those poor people alone!” To the young lady in Anaheim she said, “Thank you for your time,” and hung up, so we will never know if the store manager and Michael are aiding and abetting each other in a larcenous conspiracy.

My wife then told me she had found a better grill for the same money at Lowes in Anaheim and directed me in no uncertain terms to leave Walmart alone and buy it. I did as I was told, of course. The grill was picked up the same day by my son.

By Kevin Meyer

Once again I'm honored to be part of John Hunter's Curious Cat Annual Management Blog Review.  Check out the link for a variety of other management blog reviews.  The four blogs I selected to review provide a wide range of lean and leadership thinking that generally ranges a bit outside of the traditional - and regular readers know that's a sweet spot I love to play in.

First off we have Jamie Flinchbaugh who writes at a blog of the same name.  I feel a connection to many of his posts as we have both started and run our own manufacturing and service companies.  Yes you really do get a different perspective when you have to sign the checks - and those checks draw from your own funds.  Waste truly becomes evil, if not outright deadly.

•  In Four Myths About the Principle of "Respect for People" Jamie tackles a passion of mine, the oft-forgotten second pillar of lean.  Conflict can be respectful, being nice may not be respectful, only giving positive feedback is not respectful, empowerment can be dangerous.  A very good read.
• Most of us have always thought that effective lean transformations should be driven from the top - the very top.  But in The CEO Can't Champion Everything Jamie provides a different perspective.  In the right circumstances and environment, a lean effort may be best led from lower down the totem pole.
• Jamie confronts another common perception in The Fine Line Between Micro-Management and Surfacing Problems.  Micro-management is evil, right?  Well... not necessarily.  The devil truly is in the details, and without diving into details you might not uncover problems.  The difference between micro-management and an effective problem identification system is how management responds to the transparency.

David Kasprzak writes at My Flexible Pencil, and the name immediately tells you that he sometimes approaches leadership from a bit of a different perspective.

• In Management Excellence: The Joker he wonders if The Joker in the Dark Night might be the perfect manager.  Really.  From stating clear objectives to leading with action instead of just words...
• In October David wrote about The Management Lessons of Angry Birds.  How did he know that only a few months prior I had spent an entire 13 hour flight from Hong Kong to San Francisco launching those damn birds at crazy structures?  To preserve even a tiny amount of productivity I removed that app a couple days later.  He comes up with such gems as "efficiency isn't always rewarded" and "not every resource can be applied the same way, to the same problem, every time."  I get it.  Scary.
• Finally last month I once again learned something new from this blog: a concept called ROWE - Results Only Work Environment.  As David points out, there are several similarities between ROWE and lean - and as Mark Graban points out in the comments, process and matter as much as results.

I've come to know Dan Markovitz quite well over the past few years and really enjoy the human work improvement focus of his TimeBack Management blog.  Actually his tips that helped me vastly improve my productivity, including achieving Inbox:0, let me enjoy life again.  His new book on these concepts, A Factory of One, was just published.

• In Mise-en-place, 5S, and why tape outlines on the desk are stupid Dan gets at something that I find critical: understand the "why" before launching into a tool - even a tool as fundamental as 5S.  What is the problem? Why?  Then and only then find the right tool to improve the situation.
• Once again the oft-forgotten second pillar of lean, respect for people, is the subject of Dan's post on Go See, Ask Why, Show Respect.  Managers typically have a problem leaving their offices to visit the gemba.  Even if they go for a visit, they feel the need to solve problems and provide solutions - instead of ensuring the right questions are being asked.  Challenging and teaching is one way to show respect.
• And one more time on respecting - and motivating - employees is a great analysis of responsibility and authority in Stop Demotivating Your Employees.  What type of leader are you?  What types of leaders are you creating in your organization?  Do you delegate authority as well as responsibility?

Finally we have Matthew May at his blog of the same name.  Several years ago, while juggling way too many projects and jobs and family challenges, I began exploring the connections between zen and lean - and how those concepts can be applied to both personal and professional leadership.  I developed some great habits but they didn't fit together - until I read Matt's The Shibumi Strategy in late 2010.  Incredible book, and one I've shared with many people - including my entire staff.  Matt focuses on leveraging simplicity - in design, work, and leadership.

• In Innovation's Most Important Question Matt gives us a few real-world examples to support the point that there's always the potential for "better."  That's the source of innovation, pure and simple.  What can be better?
• Solving Healthcare Through Subtraction and Simplicity is exactly what the title suggests - a different angle on the healthcare issue.  An intriguing question - why do sick people and healthy people go to the same place? Lessons for many organizations.
• The opportunity of 5S to simplify processes and work is the focus of 5 Ways to K.I.S.S., coincidentally with assistance from Dan Markovitz.  Great minds think alike.

So there you have it - four of my favorite blogs in 2011.  Take some time to poke around at them, and I bet you'll learn as much as I did.

by BILL WADDELL

Software Advice

A guy named Derek Singleton over at Software Advice interviewed me the other day for a piece he wrote about the state of manufacturing software, and what it takes to support lean. I don't agree with everything he wrote, but he put together a thought provoking piece. You might want to give it a read. YOU CAN FIND IT HERE

Once Upon A Car

I just finished reading "Once Upon A Car" by Bill Vlasic - a fascinating insight into the last years inside GM, Ford and Chrysler before the bankruptcies. The story of GM was one of an executive group in an insular culture of of self-importance, denial of reality, and an obsession with finance and labor negotiations. If the realities of how cars were made, how they create value, or why Toyota was beating them with a superior value proposition ever crossed the executive groups minds they never showed it. Management decisions made by bureaucratic committees, an irrelevant board and a complete lack of leadership prevailed at GM.

Chrysler was dead before it all began - Daimler knew it and unloaded it on investment bankers, clueless and uninterested in manufacturing, while the unloading was good. Fiat wanted it as a pipeline into the US market, and was smart enough to wait until they could get it in bankruptcy for a song ... and Bob Nardelli of GE and Home Depot fame was out of touch with both products and production and in way over his head from the start.

Only Ford had real leadership in the form of Alan Mullaly. He largely ignored the deal making and financial machinations, and radically changed the Ford culture with a tunnel vision on products, core principles and the architecture of the supply chain. In short, he was the only leader in Detroit who put the highest priority on how the company actually made cars and made money, while the rest fiddled with deals and finance. No wonder Ford came out the big winner.

I highly recommend the book. Vlasic is a great writer, the book is rich in details, and it is an easy, intriguing read.

The Miracle Unraveling

I haven't written much about China lately because its all been said. Two years ago I wrote, "Add it all up and China's days as a low labor country are rapidly winding down. This should come as no big surprise. As I have often written, no country can build a long range economy on the principle of low labor costs." One year ago I wrote, "The house of cards that is the 'Chinese miracle', so widely admired by American and European academics and financiers is collapsing all around." And earlier this year I wrote, "China is left with an economy built on an increasingly fed-up labor force that has been misused and abused, inflation that is on the verge of spinning out of control, rising costs (Chinese products are up 5-10% just in the last six months and will go up further and faster in the next six), and a customer base that is leaving in droves."

The week has been cluttered with news as the media has finally realized what has been obvious for years. Manufacturing is in a tailspin in China ... and is never coming back. More about it here. Strikes and labor unrest are rampant. A Chinese town is in outright revolt.

In an LA Times article, "Now one of China’s most senior leaders has acknowledged that the souring global economy has the government on edge. According to an official New China News Agency report published Saturday, China's top security chief warned provincial officials to brace for unrest if financial conditions continue to deteriorate. Zhou Yongkang, a member of China’s nine-person Politburo Standing Committee, said the country should focus on developing better social management -– a euphemism for control aimed at stamping out opposition and unrest."

Whether manufacturing comes back to the United States and Europe depends entirely on western manufacturers - if they learned their lessons and changed their ways they can have it all back; if they think all their problems are the fault of the government and unions and believe they can operate as they did before the China debacle then Mexico and southeast Asia will be the big winners from China's implosion.

Not Enough Skilled Workers?

The latest popular excuse from far too many manufacturers is a shortage of skilled workers (Never mind that many of those doing the complaining laid off machinists, welders, pipefitters and electricians by the busload over the last few years, and dismantled their apprentice programs). They might want to give some thought to how the United States almost instantly turned some 1.6 million housewives into the machinists, welders, pipefitters and electricians who cranked out ships, planes, tanks and weapons in quantities staggering enough to overwhelm Nazi Germany and Imperial Japan.

The TWI (Training Within Industry) Summit is coming up in the Spring. TWI was a vital element in Toyota's success and it represents the opportunity to make the skilled labor shortage disappear almost over night. The TWI Institute has its tentacles into just about every corner of the US. It should be on speed dial for every manufacturer.

Only eight shopping days until Christmas - have at it - the Chinese need all the help you can give them!