Why you must reinvent your business–and why you must start by transforming operations.
In the 1970’s, Japanese automakers began surprising their North American counterparts by bringing new cars to market much more quickly, and at a better price/performance ratio. With that slap in the face, documented in Jim Womak’s book The Machine that Changed the World, those car manufacturers became aware of continuous improvement and the Toyota Production System.
As is often the case, many reacted first with denial. They said there was no way the data could be valid. But then they saw market share begin to slip away.
Half-hearted intentions to learn what Toyota and Honda were doing were slowly replaced by committed efforts to bring continuous improvement to their own operations. Other manufacturers observed that, and also began to build CI methodologies. Now most companies in the manufacturing sector, and many in others as seemingly unrelated as insurance, banking and healthcare, have implemented improvement processes. Better late than never.
But is your organization moving fast enough to thrive in the next 5, 10, or 20 years?
The Japanese approach to manufacturing was born of desperation, and turned out to be brilliant. Companies that are working to replicate those successes are frequently also doing so out of desperation.
But take a look around. Your cell phone has exponentially more power, memory and storage than what entire companies ran on a few short years ago. Amazon recognized and satisfies increasing demands for instant gratification. Many of you easily surpass the extensive number of countries I have visited in just the past three years. Landline phones are increasingly rare, cash and checks are involved in fewer and fewer transactions, and machines can tell us when they need attention before the crisis strikes. Change is accelerating in both speed and type.
While each of the advances I just mentioned may not have slapped you or your business in the face, the combination of revolutionary technologies and speed of acceptance will do just that.
Staying ahead of the curve requires much more than continuous improvement. Radical transformation, followed by continuous improvement, no doubt followed by a new radical transformation is in the cards for every business with aspirations of thriving long term. The tortoise only beats the hare if the finish line doesn’t move and the hare becomes easily distracted. Don’t bet the future of your business on that kind of unlikely serendipity.
Your organization may not need to make transformational changes today, just as the North American auto industry didn’t need to in the 70’s. Or as the music industry and radio business didn’t need to in the early 2000’s. Or as the taxi business didn’t need to a few short years ago. But it will. It’s a question of when, and why. Don’t wait to feel desperate.
The only effective way to successfully create a radically higher performing organization is to execute a well-directed metamorphosis of your operations. No business model change, no marketing redesign, no global expansion or retraction, and no technological advances can be achieved without capable operational support. And that means transforming operations if you want to transform your business.
Just as it took years to gain the skills and knowledge that improvement mentality and behaviors required, the competencies, behaviors, and vision that transformation requires are currently resident in few organizations. Assess your strengths and vulnerabilities as you prepare for the completely predictable parts of an uncertain future. Have you identified avatars for IoT, for advanced manufacturing, for immediate supply, for materials development, for extraordinary vision, for block chain and cryptology options, for any other components of your business transformation? Are you the avatar for your markets?
Quality was once a differentiator but long ago became a condition of entry. Continuous improvement success once distinguished suppliers but is now a fundamental requirement of partnering relationships. What are you providing that cannot be replicated by others? Should business transformation be in your future? For most of you, the answer is “yes.”
Get ready to crank it up a notch!
Manufacturing businesses ranging from $100 million to $1 billion in annual sales value the advice of operations strategist Becky Morgan and her Finish Strong thinking. With more than 25 years consulting with manufacturers, preceded by 14 years of hands-on executive responsibilities, Morgan has contributed to the success of aerospace, food, machining, assembly, electronics, tool and die, jewelry, and process industry businesses. This article was originally published in IndustryWeek and re-published with permission from Rebecca Morgan.
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