Situation: A CEO’s company has experienced margin erosion due to designs that did not transfer well to manufacturing, and inefficiencies in the transfer process between design and manufacturing engineering. He wants to transform the culture without losing technical performance while meeting cost targets and delivery timelines. How do you improve internal processes and procedures?
Advice from the CEOs:
Reinventing the culture of a workforce is an organizational design challenge.
The heart of the challenge is understanding the motivations and desires of the individuals involved – particularly the natural leaders within the groups.
Learn this is by speaking with them one-on-one, either as the CEO, or through individuals with whom they will be open and trusting.
Once their emotional drivers are understood, design accountability and incentive solutions that will align their personal reliability and accountability drivers with their emotional drivers.
Tailor the language of communication with the organization so that it responds to the emotional triggers discovered during the 1-on-1s. For example, if there is a negative reaction to sales within the engineering teams, use a different term like client development.
Expose the designers to the “hot seat” that gets created when their designs produce manufacturing challenges. The objective is for the designer to see the manufacturing group as their “customer.”
Involve manufacturing engineering in design architecture meetings. Do this early in the process so that they can communicate the framework and constraints under which manufacturing occurs and suggest options that will ease manufacturability.
Shift from individual to team recognition on projects. Instead of recognizing the contributions of the design component or the manufacturing component, recognize the contributions of the team of design and manufacturing engineers that produced a project on time, on budget, with good early reliability.
To kick off the new process:
Identify some of the waste targets.
Involve individuals who are known to be early adopters.
Have them look at the problem, develop and implement a solution.
Deliver ample recognition/rewards to these individuals.
Next use these people to mentor the next level of 2nd
Situation: A company buys several important components from a single US supplier. They are considering an offshore source for one of these components which makes up a large portion of what they purchase from the supplier. Does off-shoring make sense in this case, and how do they mitigate the risk? How do you change suppliers for a key product?
Advice from the CEOs:
The key consideration is the off-shore partner’s ability to reliably make the component at the price promised. If they can, why not outsource offshore?
The decision depends upon two additional factors: the amount that you stand to save by off-shoring your source, and the potential cost to you of inconsistent or unreliable components from the off-shore supplier.
If the cost of failure is high, a modest savings is less valuable. You may want to wait until you have higher volume and higher potential savings before looking at off-shore sources.
In the US, we assume – with some security – that a pilot run predicts a large run. Historically this has not been shown to consistently apply to offshore suppliers.
Can you afford to invest and potentially lose the amount that it would cost you to secure your first production order from the off-shore source?
If the answer is yes, invest the time and effort to visit the supplier, and secure resources to monitor their production – your own or a trusted partner’s. Your presence and interest are very important.
The principal challenge will be quality and consistency of raw materials, and varying age of production equipment used to produce your components.
Are you concerned that your current supplier might cut you off?
The CEO is not sure, but has identified this as a risk.
If this is the case, start now identifying second sources for other components made by this supplier – if only to keep them honest in price, quality and delivery.
Interview with Greg Hartwell, CEO and Managing Director, Homecare California, Inc.
Situation: Fast growing companies find it difficult to manage consistency and reliability of service as they scale to their next level of growth. They need to systematize what works and leverage technology to enjoy the benefits of scale. How do you build consistency and reliability as you scale up?
Advice from Greg Hartwell:
Invest time and effort to build an experienced management team. As a small company building a new service delivery model, it is helpful for the founders to know all roles so that you have a sense of what’s needed for each role.
Be open to hiring people from other industries. This brings a fresh perspective and broadens the pool of talent. There’s value in industry experience, but attitude and cultural fit are key.
The split between tactical and strategic skills is 80 / 20. Basic skills are necessary, but specialized knowledge can be learned.
Institutionalize how you recruit, screen, hire, train and retain. How do you do it like Disney – attracting and hiring the best of the best?
Know your market and the personality of those who will excel. This greatly simplifies the screening process.
Work hard on training. Our customer-focus starts with our employees. We complement natural talent with training that focuses on soft skills, and on consistency and reliability of service.
Find great advisors who can help build a training and retention system that works for you.
Minimize turnover by compensating people well, and treating them even better. Build a culture of recognition and shared experience that emphasizes the importance of the team and its members.
Embrace technology which enhances your ability to scale.
Don’t wait for something bad to happen and then rush to fix it. Anticipate and prevent mishaps.
Leverage communication technologies to tighten the bond between client and provider agency. Provide added services that are valuable and affordable.
Hand-held device technology is developing rapidly. Leverage this to increase consistency and reliability of service, enhance case reporting, reduce human error, reduce the ratio of supervisors to caregivers, and increase productivity. Be at the head of your industry class!