MIND YOUR OWN BUSINESS!

As Director of Operations for a contract packaging and filling company, one of my assignments was to have the Director of Production, Geoff, spend more time on the production floor. Geoff’s primary responsibility was to oversee the production department and its 250 employees. He was also responsible for preparing quotes on all new jobs. The formula for quoting was complex, in that a correct price needed to satisfy a series of conditional contribution margins while still being competitive - in short each job needed to be right on the mark. Pricing a job correctly on a manual basis required an Einstein.

In addition to allowing for material costs, each job needed to be "crewed", meaning that the work effort done by each person in the filling and packaging of a product had to be described in detail. Depending upon the customer requirements, a line could call for as many as 40 people. The process required a lot of thought, and the time to generate each quote could take more than an hour. This wasn’t so bad when Geoff had one or two to do, but when there were twenty-five or thirty, he could spend an entire week in the office. In addition to Geoff’s absence from production, accounting complained about the calculation mistakes that never seemed to be in the company’s favor, and sales complained that quotes took too long to generate.

To create some immediate relief, I developed an Excel spreadsheet to simplify the math and address the calculation errors. While the implementation of this tool cut the preparation time in half and eliminated the calculation errors, it did not provide a history. To address this, I wrote a database program which shared information with another database program that managed our daily production history. Using this combination of information, we were able to take advantage of process similarities. This helped reduce the average quote time to 10 minutes. Of more importance, the process no longer needed to be managed by Geoff.

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On December 21st, my family and I attended the annual Christmas concert held at our church featuring the Orchestra of St. Peter by the Sea. The orchestra, which is well known in the NJ/NY metro area, consists of 40+ professional musicians, 3 vocalists and is conducted by a Catholic priest - Reverend Alphonse Stephenson. His bio goes like this:

Father Alphonse’s very first orchestra was formed in New York’s Theater District while he served at St. Malachy’s, the Actor’s Chapel. His conducting debut was with bass soloist Paul Plishka of the Metropolitan Opera. In 1980, the late Broadway director and choreographer Michael Bennett engaged him as conductor and music director of his smash hit, A Chorus Line.

A student of the late George Schick of the Metropolitan Opera and Dr. Robert Abramson of the Juilliard School, Father Alphonse has been guest conductor of the Fresno Philharmonic, Delaware Valley Philharmonic, Metro Lyric Opera, the Greater Palm Beach Symphony Orchestra and the Key West Pops Orchestra.

He is the founder and conductor of the Festival of the Atlantic in Point Pleasant Beach, New Jersey’s largest outdoor music festival. The Festival’s popularity has led to Father Alphonse receiving the Monmouth and Ocean Development Council’s Silver Gull Award for Tourism Development.

He is a Colonel and the Command Chaplain of the New Jersey Army and Air National Guard, Headquarters, Fort Dix, NJ.

Father Alphonse is the founder of the Cecelia Foundation, a non-profit organization funded solely through private contributions and the sale of his Christmas recordings.  This effort brings the full orchestra to Catholic schools throughout the state and awards professional quality instruments to deserving students.

In keeping with his passion to introduce young people to good music, Fr. Stephenson frequently invites a youngster to "guest conduct" the orchestra while he hides backstage. This year he selected my ten-year-old grandson, Michael, to take the baton for Leroy Anderson’s Sleigh Ride. While Michael admitted he was nervous, he finished the piece and took his bows with Fr. Stephenson to resounding cheers and applause. What a great confidence builder for a student drummer!

Guest Conductor Michael Contreras

As a student of leadership I have observed how Fr. Stephenson’s knowledge of music, his demand for excellence, his relationship with his talented musicians and the way he interacts with his audiences has produced music that has encouraged me to return for the last 20+ years.

Fr. Stephenson’s approach serves as a model for leadership in the business world. A boss can be defined as successful if he or she:

• Knows the product line
• Demands quality
• Provides value
• Engages and appreciates the workforce; and
• Treats the customers right

BRAVO FR. ALPHONSE!!!

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Early in my career when I was told that I was being moved from the position of plant manager to that of a customer service rep, I viewed the transfer as a demotion and I was devastated. On the other hand, the owners viewed this as a promotion and an opportunity for me to broaden my business skills. They considered customer service to be one of the most important positions in the company and, in fact, it was one that was held by Mike - one of the owners and founders.

Mike was legendary in the trade. He was exceptionally well organized and on top of every conceivable detail of every open order. When it came to commitments, his word was gold. He knew how to communicate the urgency of a customer requirement and was a master at motivating others in the company to recognize and respond. Mike was like a seasoned sea captain in the middle of a storm. If he ever lost his composure, he never showed it. I remember one customer telling me, "Although my world was coming to an end due to some crisis or impossible deadline, Mike always seemed to pull the rabbit out of the hat." This observation was typical of others I had heard. Lucky for me, Mike became my teacher and mentor.

Here’s what he taught me:

• Customers are the reason for the company’s existence and my paycheck.
• The company’s reputation in the trade is everything and is a direct reflection of me.
• Commitments and promises are to be met no matter the size of the job or the customer.
• Be calm, cool and collected.
• Maintain a sense of humor.
• Know your customers.
• Listen before responding.
• Be on top of details. Know order balances, inventories, schedules, raw material availability - anything that might have an impact on delivery. While this was before the era of computers, Mike had his own routines and ways of keeping fastidious notes and to-do lists that kept him on top of his game. For example, rather than delegate inventory and production recording transactions to clerks, Mike recorded them himself in his own log at the beginning of each day. This seemingly time-consuming task enabled him to answer most customer questions instantaneously and customers were always amazed. While this may not be practical in today’s business environments, it certainly points to the need for preparation before picking up a phone.
• Communicate customer requirements to others on your team in a detailed and timely manner.
• Get your team involved in the process and secure their commitment. Mike believed in a collaborative approach and never overplayed his position as an owner.
• Timely replies to a customer issue or request are essential.
• Be honest. If you made a mistake, admit to it and fix it. Never blame others.
• If for some reason a deadline can’t be met, advise the customer well in advance and provide options.
• Keep your account salesperson informed.
• Pass along customer accolades to the rest of your team and acknowledge individual effort and accomplishment.

As it turned out, the owners were right. My two years as a customer service rep did broaden my business skills and the lessons I learned became an important part of who I became as a leader.

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Nick spent most of his career at GM. He quickly rose through the ranks and became second in command at a Chevrolet plant in the NY/NJ metro area. Nick was one step from a high level position in Detroit when he declined a transfer and joined our firm. Owners of our tiny company had big hopes for him, but they continually questioned his prolonged approach to problem resolution and he was frustrated with what he considered to be limited company resources. Nick left the company after six years, finally accepting GM’s open invitation to transfer to Detroit.

Fred was an engineer by education and was well known. He progressed through the ranks of one the largest companies in our trade to the position of VP of Manufacturing before moving to another big firm. After serving as VP of Operations for 10 years at that company, Fred joined us replacing Nick. As a small but key supplier to Fred’s prior firms, our company was thrilled to have someone of his stature and notoriety on board. Unfortunately, the honeymoon ended quickly. With disillusion on both sides and after eighteen months, Fred joined another big manufacturing firm in Massachusetts.

When it came to leading people in a small business environment, these guys were fish out of water: The issues:

Poor people skills
In larger firms, where there are layers of supervision separating the big boss from the hands-on workers, people skills are less important. In smaller firms failing to acknowledge and engage your people can be "the kiss of death".

Inability to motivate
One of these leaders rarely acknowledged achievements, ideas or suggestions from subordinates and frequently took credit for the contribution himself. Another viewed new ideas and suggestions as dissention and would often respond with long and demeaning written dissertations on why the idea could never work. If you know anything about the dog-eat-dog environment in big companies, you can easily figure out why leaders feel they need to "protect" their own position.

Complicated and costly problem resolution
Larger companies can smother the problem with cash, equipment and people. In smaller companies there generally isn’t a fallback position; and to be successful, a leader needs to be creative, flexible and resourceful.

Slow reaction time
Change rarely happens quickly in large companies, nor does it need to. There are just too many levels of management and review for a plan to jump into action. In smaller companies, failing to respond quickly and accurately can mean disaster.

Ambivalence to the importance of the customer
In a big company, loss of a customer means little in the grand scheme of things. In a small firm hard-line or take-it-or-leave-it approaches become the talk of the trade, and when the competition is looking to survive - watch out!

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Marty and I met in freshman year at St. Peter’s Prep in Jersey City and became lifelong friends. His engaging personality and sense of humor have always had a way at putting people at ease. When Marty and I were in college, my father said "that buddy of yours would make a great salesman - he could sell ice to Eskimos."

Using his people skills along with his business acumen and financial savvy, Marty has successfully served as COO/CFO of some prestigious advertising and healthcare communication firms. Recently he asked for my help in marketing his business skills. While I was honored to pass along some of what I had learned, as an operations guy, what could I teach the professor? Sensing my unease, Marty said "ancaro imparo." When he saw the puzzled look on my face, he smiled and wrote the phrase on my yellow pad and said "look it up."

The next day, I googled the words and found numerous references. The one that summed it up the best went like this:

Ancora imparo, translated as "I am still learning" or "Still, I am learning," is attributed to Michelangelo in his eighty-seventh year. The man who painted the Sistine Chapel and sculpted the Pieta and David, whose very name evokes mastery of his craft, exemplifies a lifelong learning philosophy.

As I reflected on the meaning of these words, I realized that all of the truly good leaders I have met in life were ones who were willing to listen and learn from others.

DOUG CONTRERAS

Visit my profile on LinkedIn at http://www.linkedin.com/in/dougcontreras

I welcome your invite to connect!

doug@performancedatamanagement.com

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Bob was a good plant manager who had a solid set of business skills. He had a great way with his people and was the type of guy you could count on to "carry the ball".

While Bob and I "saw eye-to-eye" on most issues, we were 180 degrees apart when it came to dealing with a declining backlog. Bob believed in "stretching the work" and would accept lower productivity from his factory workers during these periods. His theory was that running at or above standard would deplete the backlog sooner leaving him to face deep layoffs. My approach was to continue to achieve or exceed standard and deplete the backlog; and if deep layoffs causing the permanent loss of talented people were a concern, I might consider using the people on "busy work" projects like organizing, cleaning and painting after the "billable" work was expended.

Although some would say that both approaches produce the same the bottom line cost to the company, I offer the following for consideration:

• Managers need to be consistent in what they ask of their people. Accepting less than best sends a mixed message encouraging workers to independently decide when and where standards apply.
• A manager who lowers the standard for line workers is like a coach who begins to train his players at a relaxed pace. Getting the team back into shape for the big game takes time.
• Cleaning, painting & organizing eventually need to be done. Waiting until you’re busy again often means that you’ll be too busy to get it done.

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Larry, the new Director of Operations, was convinced they could do better. However, as the new kid on the block, he was unwilling to suggest a big upfront cost. Similarly, he was concerned about a change that would require retraining an already overworked staff.

When he contacted us to address the situation, we saw a simple solution that involved three steps:

• First, we created a separate database program that imported the daily productivity input from the existing system.
• Next, we met with Larry and set up a series of reports to provide the specific type of analysis and measurement for which he was looking.
• Finally, we recommended and implemented two additional reports - one that evaluated equipment utilization and another that provided job profitability by customer.

Here’s what we accomplished:

• Data entry workload did not change. The staff continued to enter the information in the old software as they had in the past. To generate the reports from the new software, the data entry clerk simply opened the new program and pressed CTRL-F7. By executing this macro, the information was automatically imported into the new database and the new reports were printed. This step took less than 5 minutes.
• Acme continued to use the older program to manage their inventory.
• The new reports were instrumental in the company’s successful effort to assign accountability and improve productivity.

Larry was delighted with the results and referred to the information in his old software as his hidden treasure.

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When I’m asked to evaluate a company’s data collection and communication process, I frequently find that recurring reports in use are ineffective. For some reason, programmers forget that how the message is conveyed is as important as the analysis. In developing a database to manage or analyze a process, I almost always spend more time on the reports than I do on the programming. Here’s my approach:

• If a report is being used as a tool to manage a process, the information should be presented in the sequence it will be used. To understand the correct order, talk to the people involved.
• Reports need to be audience-specific and concise. If the audience is Spanish-speaking, provide the information in Spanish. Offer only the information that is needed. Providing too much information will overwhelm your readers and they will be less likely to focus on the points that are worthy of consideration. Senior management will generally require more information than line supervisors and line supervisors will require more information than line workers. Don’t be afraid to consider multiple versions.
• Present the information in a format that is pleasing to the eye. Aesthetics do make a difference!

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Allied provided machine shop services to a number of small automotive repair shops in Southern New Jersey. Sixty-five percent of their work comprised of limited production runs to replace or repair parts that were no longer available. Daily production reports were nothing more than a written chronicle of the previous day’s activity and included the following:

• Customer Name
• Product Description
• Product Code
• Work Order #
• Line #
• Production Operation Performed
• Operator
• Hours
• Amount Produced

Absent of any comparison or analysis, each person reading the report saw a different result. And while it was probably equivalent to adding apples to oranges, the production clerk totaled the hours and totaled the production with the hope that these nondescript sums would inspire some action on the part of supervision. Copies of the report were distributed to the owner and each of the key managers while one was placed on file and never seen again.

Since most of Allied’s jobs were custom, individual expertise and effort played a major role in daily productivity. Viewing this as an opportunity for significant improvement, the game plan went as follows:

• Define every single step in the production process;
• Through consensus of key managers, set up interim standards;
• Develop a database program to record and analyze the information;
• Input the data daily and generate audience-specific reports for all;
• Explain expectations with regard to interim standards;
• After six months revise the standards to reflect history and achievability;
• Insist on accountability and reward favorable results.

One year later Allied’s productivity increased by 22%. As an added benefit, the data collected afforded the company with reports and analysis on line utilization and equipment efficiency.

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