President's Column
Why We're Here:
Confessions of
a Recovering
Software Sales Executive
Let me just come clean and
confess- I was once an enterprise software sales
executive.
There, I said it. But after reading this
month's article, "The Sirens' Song", you may really
believe that I must be some sort of radical
technology nihilist who believes enterprise
software is the cause of all dysfunction. So how
did
a software peddler transform into a passionate
advocate of lean thinking principles?
Let me explain. I really don't fault
technology, but over the years I've observed a
tendency for executives to be technology
addicts. I once made a great living selling fixes
to these technology junkies by pushing the latest IT
infrastructure with a slick value proposition ("wanna
buy some software?"). And like most addictions,
once started it's hard to stop binging ("wanna
buy an upgrade?"). They become
hooked, and many spend a fortune attempting to
improve their business with an unbalanced
emphasis on technology.
But I have a conscience. I sincerely
care about clients and their people, and
sought to learn why so many ERP, CRM, PLM, and
supply chain initiatives were a disappointment. (Well
ok, a disaster; but if you ask SAP, Siebel and i2
about
this, they'll deny everything.) And I couldn't help
but wonder- what if this investment in capital,
time,
and intellect was spent on human infrastructure? You know, those people who work with you.
And what if this inspired your employees and created
a real cultural shift towards continuous
improvement? Would this help organizations better
leverage technology?
I spent a lot of time listening
to CEOs' excuses for not investing in their
people and
business processes. "Our people aren't ready for
change." "It requires too much time from
management." "We're too busy to improve". And
my favorite: "Maybe after
we're finished with our ERP implementation."
So, what advice does this reformed
software salesman have for you?
Before throwing a lot
of money into computer systems, invest in
empowering your people and improving your
business processes. If you can put your
employees through the agony of installing some ERP
system, you can certainly delight them by building a
culture that encourages their best and treats them
with respect and dignity. And guess what- a bonus:
my prior software clients now tell us that software implementation costs are significantly
reduced if you first eliminate waste from your
business processes!
Now you know why we're
here. Our
team really does want to make a difference for you
and your employees by improving the quality of your
job, the quality of your product, and the quality of
your lives. Our commitment to you is to always
make your best interest our top priority--
even if that means challenging any addictions that
we may encounter.
-- Mark Edmondson
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We hope you enjoy your complimentary issue of "The
LEAN Executive". As always, your comments and
suggestions are welcome- please follow the links at
the bottom to send a note to the editor, to forward
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future editions.
Yours in success,
The LEAN Affiliates
Team
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| Tales of Technology:
The Sirens' Song
of Enterprise Software
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"Get Lean With Oracle Flow
Manufacturing.
Oracle helps companies by eliminating waste
throughout the enterprise!"
"i2 Lean Supply
Management
is designed to efficiently manage the
execution
of inbound material replenishments."
"PeopleSoft EnterpriseOne
Manufacturing
enables a lean machine:
be a demand-driven
manufacturer."
In Greek mythology, Sirens were part woman
part bird. They lived on a rocky island in the middle
of the sea and sang melodies so beautiful that sailors
passing by couldn't resist them. Following the Sirens'
song, sailors would steer their ships towards them or
jump in the water to get closer. Either way, it always
ended in disaster on the rocks.
During the past couple of years, the Sirens of
enterprise software have been busy writing mythical
melodies to lure wayward companies astray during their lean odyssey. Not surprisingly, the
result is a chorus of claims about how they hasten
the lean transformation of many companies.
But just as Odysseus ordered his men to put
beeswax in their ears so they couldn't hear the music
as they sailed by, your role as your company's
steadfast captain is to navigate a safe and bountiful
course during the lean odyssey. A big rock to
avoid is myths about lean "features" from the Sirens
of
enterprise software.
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| Creating a Learning Organization:
An Interview with
Lean Thought Leader
Norman Bodek
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Last year, Toyota implemented 1.5 million ideas
that saved the company over $300 million annually. Inspired by this a decade ago, the Chairman
and CEO of Dana Corporation asked his 80,000
employees to submit two creative ideas per month
and implement 80% of them. A cultural
transformation began, and for over ten years Dana's employees implemented about 2 million
ideas per year, saving over $2 billion.
Beginning in 2001 by using the same process, Technicolor with 1,800 employees generated
20,000 ideas, implemented over 7,400 of them, and
saved the company over $10 million within a
year.
How did Toyota, Dana, and Technicolor achieve this
level of employee innovation? How did they avoid
the administrative burden of reviewing, approving,
and implementing all of these ideas? Can your
company also achieve this level of employee
innovation and create a culture of continuous
improvement?
Teaching American companies how to capture
employee
innovation is the passion of Norman Bodek. Norman
calls the process "Quick & Easy Kaizen", and LEAN
Affiliates recently interviewed him about Toyota's
secret, and his work to cultivate employee
innovation for American business.
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| CEO Survey Results:
Steady Economic Growth,
Improved Profits for 2005
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TEC's 3rd quarter 2004 survey of 1,450 CEOs
indicates a generally bullish outlook for the economy
and their own companies. According to Richard
Gurtin, TEC Confidence Index consultant, and
Director of surveys for the University of
Michigan, "During the past year, firms have gradually
lowered expectations about the pace of future
economic growth. Nonetheless, most firms expect
the economy to rebound from the second quarter
slowdown.
Survey highlights about the outlook for the next
12 months:
- Economy: 54% of CEOs expect the US
economy
will be better.
- Revenues: Over 80% of CEOs expect
their revenues to increase.
- Profits: Over 70% of CEOs expect their
profits to increase.
- Pricing: About half of CEOs plan to keep
their prices the same, while 46% plan to increase
prices.
- Hiring: 60% of CEO's plan to increase
their employee headcount.
- Biggest Impact to Profits: 40% said cost
of employee healthcare; 23% said the cost of raw
materials; 11% said energy costs.
TEC ("The Executive Committee") is
an international community of over 10,000
chief executives, mostly from companies with annual
revenues between $5 million and $1 billion. This
small to mid-sized business sector creates 75% of
all new jobs and generates 50% of all revenues.
This quarter more than 1,450 US TEC CEO members
responded to the survey.
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