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Perhaps it is the powerful simplicity of its title. Or perhaps it is the level of effort and commitment that is required to accomplish this goal. But of all the 14 Points assembled by Dr. Deming, I find this one to be the most compelling, and the one which drew me into studying this man's work more closely.
Fear exists in many forms and levels within Corporate America and in our daily lives. It can be healthy, and it can be debilitating. It can never be eradicated completely, but it can be managed and mitigated. It steers some of us away from damaging, unethical and illegal choices. But it is also the disease that infects millions of workers across the world, standing in the way of continuous improvement, cost containment, total quality, sustainability, and - quite simply - happiness.
Most of us with over ten years of business experience have worked in businesses or micro-environments that are at some level governed by fear. Deming was concerned mostly about the kind of fear that prevents the average worker from finding out how to do the job correctly. He worried about the fear that prevents us from asking questions, from rocking the boat, from suggesting new ideas, from challenging the status quo.
Many supervisors feel threatened by those employees who ask too many questions. Managers can be vindictative, and can evoke punitive measures which impact employees' lives on the most personal of levels. Promotions are denied. Raises are vetoed. Negative stress is taken home at the end of the day. Family problems arise: addiction, depression, and even domestic violence can result. So, in spirit of self-preservation, the employees fall into the trap of keeping their collective heads down, lest they be shot off by the tyrant down the hall. Even when new, enlightened managers come on to the scene, the culture can be difficult or impossible to change. Fear becomes ingrained into the business. When asked about the purpose behind certain business processes, employees will answer in typical fashion: "it's always been done that way", or "that's the way the Boss told me to do it".
I was introduced to the management-by-fear school of thought very early in my career. I remember the boss screaming at me because an item was out of place on the shelf. It was not the End of the World, but he made me feel as if it was. I remember coming in to work with a sick feeling in my stomach every day, worried that soemthing would go wrong, and that I would suffer more humiliation. I promised myself that if I were ever promoted to a management position, that I would never treat my employees that way. I would respect them as intelligent human beings - as adults who had a contribution to make. I hope that I lived up to that promise as a manager. But I did continue to encounter tryants throughout my career - they tended to be the managers who were successful in the short term, and dismal failures in the long term who left behind them a trail of destruction and shattered lives.
Dr. Deming argued that people need, ultimately, to feel secure. The word secure comes from Latin roots meaning "without fear." Employees ought to feel "not afraid to express ideas, not afraid to ask questions."
"Fear takes a horrible toll. Fear is all around, robbing people of their pride, hurting them, robbing them of a chance to contribute to the company."
The enlightened manager will encourage participation and input. She will foster an environment of learning and interaction. She will be self-confident. She will put the welfare of the company ahead of her personal aspirations. She will be a team leader. She will solicit opinions from her employees, and treat those opinions with respect. She will entrench processes that allow suggestions for continuous improvement initiative. She will know how to answer questions about methods and procedures, or will know how to get the answers. She will take great joy in seeing her employees grow, get promoted, and get raises in pay. She will build enduring teams of people who love their work. She will succeed.
Do whatever it takes to drive fear out of your organization. It is a long and difficult path, but it can be done.
I am taking a little break from my theme about "Deming's 14 Points" to direct your attention to a fascinating little article in the Monday, July 19, 2010 edition of The Globe and Mail. Here is the link:
Auren Hoffman's (via Harvey Schachter) brief submission is particularly relevant to the Inventory Manager. He argues that in many facets of a growing business, there is a time when one must kill things off that are no longer helpful.
Accumulation of discontinued, out-of-season, out-of-fashion, and otherwise obsolete inventory is frequently one of the most pressing inventory problems faced by retailers, wholesalers and manufacturers today. And it has been that way for a long time. Sometimes it exists, lurking in the weeds, unidentified by the business for years. Sometimes it stares us in the face on a daily basis - we trip over it when we visit the warehouse, and it is on all of our slow-moving inventory reports. Sometimes the CFO says that it is too expensive to write down, or write off. And sometimes we simply fall in love with our product, and enter a period of denial while sales drop off and the goods are simply not as glamorous, attractive, and sexy as they used to be. Divorce, frequently, is a fact of life.
It is my observation that companies need to be far more brutal about killing off unproductive sku's than they have been over the past 30 or more years.
Products that are at risk of becoming out-of-season require special treatment. The project of managing seasonal product inventories is a little too complex to address in this blog. But it is possible with today's POS technology, some diligence, budgeting for reality, and some planning. The simple fact, and prime motivator is that one day after the seasonal event (for example, Valentine's Day, Christmas, Easter, or Halloween) seasonal products are worth a lot less than they were 24 hours before. Valentine-related products are worth a minimum of 50% less on February 15th than they were on February 13th. The trick is to follow each sku's sales (or depletions) closely relative to your pre-season sales profile, and take pricing or transfer action before it is too late. Re-project, re-project, and re-project, daily if you have to do so. Identify and kill off the non-producers - sell them before the end of the season, and do not relist them next year (or purchase more conservative quantities).
Non-seasonal products have a life cycle as well. The trick here is to avoid making that "one last big purchase" in anticipation of sales that will never transpire. Take the care to know where you are on each product's life cycle profile, and take clearance action when it won't break the bank. A 25% markdown taken now might clear up potential problems, that would cost a 75% markdown six months from now.
Above all, the Inventory Manager needs to be objective and cool-headed. Every Marketing Manager in the world will try to tell you that every product he has ever introduced has been a smash success. Marketeers are lovely people, but if you listen to them too frequently, you will soon be swamped with sku's, awash with inventory, and stumbling over dusty "product enhancement" materials (such as wrapping paper, bows, baskets, and signage) that have grown to take over your warehouse. On new assignments, I have walked into some of the biggest inventory messes known to mankind - and frequently I was there because the warehouse was bursting at the seams with old marketing collateral and obsolete items that Marketeers thought would sell to some idiot some day. That "some day" never came. Cull the herd of skus before they breed themsleves into an uncontrollable mess. Be vigilant. Kill the old geezers now.
Hoffman goes on to highlight problems with meetings, reports, processes, and people. We've all been in meetings where we wonder "why am I here?" and the only answer is "because we've always held this meeting." Kill it. Kill the reports that no one reads. Kill the processes that are no longer value-added. And, sadly, review the people who are not making a contribution. First, discover whether barriers are preventing performance. But Reed Hastings of Netflix is quoted as saying "Adequate performance deserves a nice severance package."
Here are profiles of two very different supervisors:
"Boss A": As an employee, you would describe this person as friendly, easily approachable, and helpful. Knowledgeable about the business and the company, "Boss A" freely shares her skills and knowledge with you and your peers. Her knowledge has been gained both by experience within the industry and your company, as well as solid training and education from outside the company. She is a fan of continuous improvement both on personal and business levels. She demonstartes enthusiasm about the strong points of your company, and a desire to change the weaknesses and gaps. She encourages learning, and sets education of her employees as a high departmental expense priority. She allows her own career to move more slowly than it otherwise might, due to the resources that she devotes to her team.
"Boss B": This gentleman is very well-educated, holding an MBA from an Ivy League University. He is incredibly driven, grasping business issues aggressively with his own hands. He is less experienced in your industry than Boss A, but makes up for it in terms of enthusiasm. He runs the business "by the numbers", valuing results very highly, His focus is on the current and next fiscal Quarter. Since joining the team 6 months ago, he has achieved all the results that were asked of him - increased sales, reduced costs, reduced inventories and increased speed of delivery. He is a skilled orator. The Executive Committee has put this chap on the "fast track" towards quickly increasing levels of responsibility, with a view to installing him as a Vice President within the next couple of years.
Which one of the two is the real leader?
I have been blessed to work with and for some people whom I consider to be real leaders. These were people who taught me the way business ought to work. People who were altruistic. They took great pride in the work of their subordinates, and valued employee development very highly. They commanded respect. They were approachable, and largely open-minded. They were visionaries. They wanted the Team, and the Firm to succeed. Most had learned the business from the ground, up. These people included my rowing coach, Mike E., who guided me and my crew to two Henley Championships, and who shaped many of my attitudes towards elite sports and life. There was Mr. Chapman, mentioned in this blog before, who was one of the great unsung visionaries in supply chain management in the 1970's and 1980's. There was Wendy J., my mentor for many years and a great team builder. My list includes Tahira H., who was probably the most naturally intelligent leader who I have ever met. There was Colin P., for whom I would have punched my way through a brick wall if he had asked me. And there was Doug P., who showed such respect and support towards his employees and was never truly recognized for his efforts.
These leaders had a number of things in common: they learned their business with a grass roots approach. They paid their dues. They put business and team efforts ahead of individual aspirations, even their own, They did what they knew was right, and achieved material success as a byproduct. They were approachable. They thought in holistic terms, understanding the interrelatioships in the organization and between people. They were thrilled when one of their employees stepped up another rung in the career ladder. And they truly cared.
I have worked for the other kind of supervisor as well. Some were friendly and approachable, and some had been put into impossible situations, and just did the best that they could. But often I could not help but get the feeling that the purpose of my work was to advance their careers, not for the betterment ot the company. And that is a very poor motivator. They taught me very little, and I felt my own level of fulfillment diminishing. And because of their lack of experience, they frequently lacked the skill set to resolve the really big problems. In fact, their interference in the solution tended to cause more harm than good. They tended to withold information, lest the workers interrupt their agenda. They liked to maintain the "status quo" in their staffing arrangements, especially if the team were somehow working fairly smoothly, abnd would occasionally block an employees career progress. The worst of these supervisors were bullies, relying on threats to get the job done.
Dr. Deming was no fan of hiring graduates out of college or university, and dropping them into management positions within a company. He believed that in order to be effective supervisors, individuals need to know the work of the people that they supervise.
It is, or should be management's responsibility to remove barriers that exist which inhibit workers' ability to do their job. Make it easy to do the job correctly. These barriers might include a focus on producing things quickly rather than properly. They might include emphasis on numbers rather than quality.They might inlude accepting sub-par input materials at cheap cost, use of poor tools, and turning a deaf ear to workers' suggestions.
Deming argued that the one thing that novice managers fresh out of school can do is count. Therefore the metrics became paramount: quantity of output, costs of products and cost variances, quotas and sales all became the Holy Grails of business.
One of the problems with the "promotion from within" approach, on the other hand, is that the best employees usually become the supervisors (nepotism and office politics aside) and this leaves a gap in the skills of the work force. But at least the kowledgeable supervisor can teach and mentor the new employee in methods and processes.
Many colleagues of mine have complained incessantly about the culture of their old, and previously successful employers. "It has been ruined" they cry. The company is no longer what it was. It has been taken over by MBA's fresh out of grad school, consultants, and bean-counters. It's sad that once proud organizations lose their way in this manner. Somewhere, buried in the basement with the old tax files, are the core competencies and spirit that made such companies great.
It is management's job to help others do their jobs better - in other words, to lead.
My true hope is that a few of my own employees look back at me as a leader, rather than merely a supervisor. That would be a nice legacy to have.
My career in inventory and supply chain management began more by accident than design. That's the way things worked in the early 1980's. Out of University, I was recruited into the Management Development Program at Sears, worked at the retail level learning the business "from the ground up" and then made a decision to pursue a position in Sears' Department of National Distribution at Head Office. It seemed to be a progressive department, led by innovators and a single true visionary, Mr. David Chapman.
I was lucky. In those days, Sears had a fantastic training program, that exposed me to Best Practices in retailing and distribution. I learned how different levers can be pulled in the business to exploit market opportunities, and how important it was for all areas within the business to work smoothly together - it was an ERP approach before the term was even imagined.
But many other firms viewed physical distribution and logistics as field into which people were dumped. It was forklifts and pallets, warehouses and trucks, diesel fuel and propane, union workers and invoice clerks. Inventory Management was not-so-fondly termed "The Sales Prevention Department" as the buyers and planners, while trying to impart some sanity on the procurement process, simply got in the way of the brainiacs in sales and marketing, deemed to be the life blood of many a company. So, people tended to stumble into the supply chain rather than design their careers towards that area.
Can anyone imagine a firm, even 40 years ago, hiring an accountant, and allowing him or her to learn "on the job"? No! Any sane business would hire an accountant with a professional designation (CA, CPA, CGA, or CMA). Would the firm hire a truck driver without a driver's lisence? A person to fly an airplane without a pilot's lisence? Ridiculous!
Much of the training for the supply chain staff, on the other hand, was "on-the-job". There were few position descriptions, and those firms who documented work processes assembled documents that were indecipherable. There were few organizations, apart from APICS, CITT, PMAC, and a few others, who trained and educated people about Best Practices in operations management. So, new staff tended to be educated by older staff. Work routines and habits passed from one gereation to the next, with no one understanding whether those practices were right or wrong. They were simply the practices that seemed to get the employee through the day without too much hassle from the boss. Workers had a very hard time understanding whether they were doing their jobs correctly or not. Moreover, practices that were right one day might be wrong the next due to changing priorities and objectives.
Thankfully, many forms are growing to realize that they must entrust their valuable supply chains to professionals - those who have accreditation from a recognized education provider, such as APICS. Operations can play too important a role in strategic planning, and in building market advantage. The assets in the supply chain are too valuable.
Dr. Deming argued that it is very difficult to erase improper training. It may require implementation of a totally different method, in effect starting from scratch.
Once new, and correct practices and procedures were implemented, the variability of workers' ouputs could be measured by control charts. If a worker's output was out of control (speaking statistically) training was required. Once the process was stable, training was no longer required. New training would be required upon introduction of new technology or processes, until stability was achieved.
Dr. Deming used the analogy of the student learning to play the piano from a teacher who has never taken a lesson. "He learned by himself how to play. If you take lessons from him, you will learn a lot that is wrong; you might learn some that is right. Neither pupil nor teacher will know what is right and what is wrong."
John Skelton is the Principal Consultant and founder of Strategic Inventory Management.