NC State of Business

Recently, we purchased a new set of patio furniture from a big box retailer. While I was unpacking the chairs, I noticed a small scratch on one of the metal surfaces. In the packaging, was a card with manufacturer’s name, phone number etc. so I figured I’ll call the manufacturer direct and ask them for some touch up paint. For me, that would be a better solution than hauling the chair back to the store. When I called the company I was routed to a customer service representative at their plant headquarters in Indiana. I explained I had a scratch on my new chair, provided her the model number and asked if she could send me some touch up paint. She asked me a few questions about when and where it was purchased, and my contact information. She then told me a replacement chair would be sent out tomorrow via UPS. I said, WOW that is great. You don’t want my receipt, pictures, or for me to ship back the old chair? She said no, we trust that you did nothing wrong and want to make this very easy for you. Well I received the chair in a couple of days and yes I was very pleased.

Here is a company that really gets it. Their management has obviously empowered employees to make decisions on the spot that are in the best interests of the customer and the company. And I’m sure that is reinforced with training and full support of management. Based on this experience, I would expect the company has very good quality processes in place that would follow 3 basic principles when certain types of defects are discovered:

1) Containment - protect the customer by avoiding any additional defects. This typically involves inspection, sorting, repair, notifying the customer, expediting replacement product or recalling product (depending on the severity)

2) Root Cause Analysis – using data, evaluating all the process steps, working through the supply chain and asking questions to really drill down to the true cause of the problem.

3) Corrective Action - this step is only effective when the true root cause is attacked. And it must be more than just addressing the past situation. Corrective action looks forward at what can still go wrong and how is it prevented.

Think of how your customers would feel if they were treated the way I was treated with my scratched chair situation. And if your customer informs you of a quality problem, run it through these 3 steps and send the results to your customer even if they didn’t ask you for it.

We've been at this blogging thing almost a year now, and I think it's starting to catch on. We appreciate you spending time with us, and if there's something specific you think we should write about, please let us know!

This month we're adding three new bloggers to our line-up, which reminds me that I haven't introduced you to our regular bloggers. I'm very happy with the variety of specialists who regularly add their inputs to the blog. Our current bloggers are:

Annah Poteat and Dr. Lukasz Mazur share a spot on the blog, and concentrate primarily on health care issues. Both Annah and Lukasz are leading the way in North Carolina in adapting "lean" principles to health care.

Bill Iacovelli is one of our "lean" specialists, and works out of the Charlotte area. I particularly liked his recent post about what he learned from his garage door about Total Productive Maintenance.

Charlie Parrish, PE, is a professional engineer and master of all things environmental. He's our lead specialist in the ISO 14001 environmental management standard, and a big player in our new sustainability services.

Dr. Dave Boulay is the Deputy Director of IES and the Director of the North Carolina Manufacturing Extension Partnership. I appreciate his insights on leadership and management.

David Yates is new to the IES blog, but he's one of our most experienced specialists in "lean" management and manufacturing techniques. He's based out of the Gateway Technology Center in Rocky Mount, but serves clients all over the state.

Gene Beneduce is one of our most productive account managers. Based in Charlotte, Gene takes the IES message throughout the southern Piedmont region of Anson, Cabarrus, Rowan, Stanly and Union counties.

Gene Fornaro, PE, and Joe Sauve anchor our Growth Strategies product line. In particular, they champion the "Eureka! Winning Ways" scientific approach to generating and evaluating new ideas for businesses.

Holli Singleton is another new blogger from the environmental, health, safety and sustainability world. Holli conducts work site assessments at North Carolina companies to ensure their compliance with regulations; she's also a certified Six Sigma Green Belt with experience applying quality improvement principles in health care.

Nora Milley also joins the blog this month. She is one of our most versatile service providers: she specializes in quality management systems but also supports lean, Six Sigma and project management programs. In July, Nora will take over the North Carolina Awards for Excellence program. And if you need some physical exertion added to your technical assistance, Nora is also a terrific Zumba instructor!

Phil Mintz leads a team of specialists in quality management and environmental, health, safety and sustainability. Phil is also the IES focal point for energy management, and is working on the effort to develop an ISO standard for energy management.

Sonja Hughes is based in our Greensboro office, and stays involved in many different IES product areas. She's a Six Sigma Black Belt, one of the primary developers of our project management training courses, and has implemented several ISO 9000 certification projects.

Steve Laton is the IES product line leader for all of our "lean" management services. Steve is based in Albemarle, but works with clients across the state. He also developed a Senior Management Coaching program based on his years of industry experience.

Wendy Laing is our environmental, health, safety and sustainability product line leader. Wendy directs the Southeastern OSHA Training Institute Education Center at NC State, and coordinates our MESH (Manager of Environmental Safety and Health) Certificate Program.

Our blogging team represents about 15% of IES, which I consider to be good participation for such a new endeavor. And just like IES as a whole, our team represents many different parts of North Carolina and many different specialties. As we say here, we operate "from Waynesville to Williamston" -- that is, from the mountains in the west to the east coast, across every part of the state.

I hope, now that you know a little more about our bloggers, that you'll stop in even more often.

This past week, I saw some of the famous “green collar jobs” so often talked about as the key to America’s future prosperity. Charlie Parrish spoke of them extensively in his post on 4/18/09 – What are the Green Jobs? The interesting part is that these jobs I saw did not stand out, and I would not have known the difference between these jobs and the traditional “blue collar jobs” had I not been told.

I was visiting a local cable and wire assembly plant to discuss their need for coaching in some advanced quality tools such as FMEA and Control Plans. This place was loaded with good news. They had new customers, increased orders and quantities, and INCREASED EMPLOYMENT LEVELS. There were only a few workers called back for now, but some optimism exists.

Ok, back to the green jobs. During a tour of the plant, I was told that the company had orders to produce wind turbine wiring assemblies now and were discussing assemblies that would support new solar energy applications. Since no special training for the workers was required to follow the fabrication and assembly requirements for these orders, the “green collar” jobs are simply “blue collar” jobs in disguise. A point to make here is that many NC manufacturers are already participating in the new green economy and plenty of others are ready based on well proven capabilities. So bring on the technology…

It would be nice to hear of other jobs like these in North Carolina. So let me know about what you are seeing.

On a similar note, next week I will attend a venture capitalist function in Durham called the SJF Summit on the New Green Economy. Ahh…now this is the place where I could hear of the new green inventions that would use those wiring assemblies I saw last week. Maybe I will see you there.

Remember how much work it took to map out a road trip, back before you could buy a GPS receiver or before Google Maps and Mapquest and other computer-based tools became available? (I imagine some young readers might stumble across this blog and ask, "Road trip? Why should I go on a road trip if I can download all I ever want to know about a place from the Internet?" If you even thought about a question like that, please don't tell me. But you don't know what you're missing.)

Anyway ... consider the humble road trip. You are where you are, and you intend to get to where you want to be. And unless you are a complete free spirit, you probably have some idea of how you want to get there: so you plan your trip, at least in general terms. In general, you have two main choices: take the freeway, or take the scenic route. There was a time when the scenic route was the only route, before the Interstate Highway System (which was established in the 1950s, and only seems as if it's been around forever).

What route have you picked for your business? Are you on the freeway, or the scenic route? Were you on the freeway, but in the current economy have you decided to slow down and try to go around the construction zones? How far can I stretch this metaphor before it breaks?

In business, you usually want to take the freeway because it's more expedient. But sometimes the scenic route offers something better than simple expedience. Sometimes we take the scenic route because it gives us an experience we can't get on the highway, whether we really want to see the scenery (like driving through the mountains in the Fall), or crave the quiet, or want to stop at the little out-of-the-way restaurant that serves the best apple pie in the world. It's like the difference between watching a movie trailer and getting just an idea of what the movie is about, and watching the whole movie. It's the difference between reading a book review and reading the book.

It's important that we reach our destination, but sometimes the way we get there is more important. In business, for example, expedience can hurt more than it helps, if we reach our destination by being brutal to our employees as well as our competition, by cheating our customers or our taxes. We may decide that the scenic route allows us to reach the same destination -- success -- by doing the things we know are right, even if it costs us a little bit more to do them.

How are you getting to your destination?

When I say "declining" I don't mean, are you making less money now than you were last week or last month or last year. That's not unusual these days. I mean, have you reached that dangerous point in the life of your company where your inability to adapt to new circumstances is about to doom your business to second-rate status, irrelevancy, or even outright failure?

In Business Week, Jim Collins presented the five stages of decline from his book, How the Mighty Fall (and Why Some Companies Never Give In). He derived the stages by examining "a substantial amount of data collected from prior research studies, consisting of more than 6,000 years of combined corporate history," and listed them as

1. Hubris Born of Success
2. Undisciplined Pursuit of More
3. Denial of Risk And Peril
4. Grasping For Salvation
5. Capitulation to Irrelevance or Death

I saw one of the warning signs of Stage 1 during my Air Force career: the attitude among top leaders that their ideas and decisions must be good because the system had so far recognized and rewarded them for previous ideas and decisions. If you've ever been confronted by a new idea and downplayed its importance because it's different from what has worked in the past, you may be in that first stage of decline.

Collins writes that "Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence -- or both." In other words, your track record of success convinces you that you are going to succeed no matter what you do or how you do it, which can lead you either to do something foolish or to do something in a foolish manner that would otherwise be productive.

Stage 3 reminds me of what I used to teach in CPR classes: that if your first thought upon having chest pain that radiates down the left arm, accompanied by difficult breathing and the feeling that an elephant is sitting on your chest, is, "I can't be having a heart attack," then you probably are. Denial of a heart attack is (or was -- my CPR-instructing days were a few years ago) considered a symptom of a heart attack. So if you've been denying that your company has problems or may be in decline, start looking for the problems that you don't recognize.

The same way drowning people will grab frantically at whatever they think will keep them afloat, Collins says companies in Stage 4 -- having finally recognized their peril -- will latch onto the first thing they think will save them. He writes,

Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game-changing" acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.

It's the idea that you have to do something, not because it's time for action and you're about to miss an opportunity, but because you're afraid of the criticism you'll face for doing nothing. Are you in this stage?

Is Stage 5 inevitable? I don't think so, and neither does Collins:

The signature of the truly great vs. the merely successful is not the absence of difficulty. It's the ability to come back from setbacks, even cataclysmic catastrophes, stronger than before. Great nations can decline and recover. Great companies can fall and recover. Great social institutions can fall and recover. And great individuals can fall and recover. As long as you never get entirely knocked out of the game, there remains hope.

So, honest assessment: is your business declining? If so, are you going to let it "go gentle into that good night," or are you going to fight for its survival?

I hope you decide to fight. Let us know if we can help.

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You can read Mr. Collins' full article at this link.

Image "Main Street #6 (Superior Appliances) by kevindooley, from Flickr, under Creative Commons license.