Can We Be World Class?
Updated: Jun 22, 2020
For more than three decades, Intent’s Managing Director, Ian Walsh, has been driving improvements in organisations around the globe. Ian understands deeply what is required to deliver and sustain improvement.
Team New Zealand are enduring a pandemic like no other in living memory, and many of us have been reflecting on how we can help the country recover. It has been said, and it certainly feels like, we are fighting a war against COVID-19.
When I started my career after completing an engineering degree at Auckland University, it was more than 40 years since WWII. I was employed into production management in Australia and ran packaging and batching plants making many household products. We had a good team of people, all doing their best. But every day the lines and processes would break down for some problem or other, and the team would busy themselves with other tasks and whatever could be done. Stan, the fitter, would come over and diagnose the problem, disappear for a while, and return with the tools and equipment he needed to fix the problem. For longer stoppages, the team would head out onto the lawn for some fresh air and, for many of them, a smoke. Eventually Stan would give us the nod and we would pile back to work again until the next event sometime later. This was normal. For many companies, bar the smoking, this is still the norm.
After several years of this experience, I was asked to co-lead a technology transfer project to Japan, living and working there. It was one of the most profound experiences of my life. The Japanese post-war recovery was complete, nothing short of miraculous, with their GDP now the second highest in the world, making everything from cars to electronics. I was in a factory making paper nappies and sanitary items. Initially, I was put on a shift to observe, then taught how to run the line.
On my first hands-on day, the line ran with no downtime and an efficiency of over 99%. The process just seemed to run and run and had a feeling of urgency to it. The machinery was humming and noisy and product just kept coming off the end. We hastened around the machines checking gauges and materials, quality testing product in process as we ran. The operators would make adjustments based on this data and charts. Everyone just seemed to know what they needed to do, when and how to do it, and to communicate important information as needed.
After four weeks of this, the line had averaged over 98% and the entire factory was operating over 97% across 13 lines for the same period and had been at this level for years. This was a revelation to me. At the beginning and end of every shift we reviewed performance, identified opportunities, ensuring the handover to the next shift would then go into some problem solving. I recall working on one problem that caused only ten seconds of downtime!
It felt like I had landed on another planet. I was unable to reconcile my previous ‘normal’ with this new way of doing. How had they managed to achieve this performance? ‘It’s culture! It’s just the Japanese way! I hear. ´Impossible to replicate because it is just the way they do things there.’ ‘They just put up and comply, because to let down the team is dishonourable, right?’ Wrong! ‘Surely if they are forced to follow standard processes and comply with these repetitive practices it dehumanises them. Turns them into robots, disrespects them’… and so on. There are many similar arguments that I have heard over the years from innumerable people who have never been or worked in these environments. These are, of course, false generalisations to explain why most plants don’t perform, bypassing the real issues.
In reality, when I worked in Japan, I never felt so respected, rewarded, engaged or appreciated, and of course I would never let my team down; we were on a mission to achieve perfection. Determined to get the best possible use out of resources to delight consumers. We were relentlessly solving problems and sharing knowledge to eliminate and reduce all waste and maximise the use of paper, glue, felt, elastic, energy, dust, movements and knowledge.
Over the ten years the plant had been in operation, they had raised the efficiency from 50% to 97%. The 3% downtime was for maintenance that could only be done while the machine was stopped, and yes, they were still trying to reduce this time. They increased, by 50%, the machine manufacturer’s speed rating by innovating, problem solving and debottlenecking. Imagine buying an asset and being delivered a free one for every two purchased - Buy two, get one for free. Not only that, they improved the product design to make it easier to manufacture, use less resource and improve customer satisfaction, all at the same time. This released members of the production team to be part of the product development teams, commissioning teams and customer teams. An integrated workforce free of functions, aligned with delivering what the customer wanted, and at the lowest total cost. The workforce deeply understood the need to put the organisation first to enable good things to happen.
The unenlightened alternative might work out well for one or two at the top of a company hierarchy, but not the whole.
I have since travelled the world, working in manufacturing and supply chain environments throughout Asia, Europe and the USA, returning to New Zealand 20 years ago. Over this time, I experienced over 1,000 organisations world-wide, only three of which were truly outstanding. Perhaps fifty were very good, but the majority were mediocre and downright disappointing. The interesting conclusion for me, is that the exceptional and good companies were all over the world. It was always about team culture, but clearly not an exclusive capability given only to the Japanese. These organisations were created by leaders who were committed to a vision, surrounded by allies with a common purpose, and relentlessly pursuing it, removing roadblocks and inspiring and instilling this new future into their workforce. As behaviours changed, so too did attitudes and ultimately, it became a sustaining culture.
When I returned to New Zealand I was astounded and disappointed by how little had changed. Our quality of life was diminishing, while social inequality grew. We were still working and training New Zealanders in the same ways, working harder and longer, but not smarter. Our OECD rankings for productivity were in free-fall, from being 5th in the 1960’s, to 22nd last year. Meanwhile politicians and bureaucrats have pontificated over what to do, with innovation initiatives, thinktanks, various commissions and taskforces. None have changed the trajectory.
New Zealanders are too connected to the idea of ‘not invented here’, number 8 wire thinking, and ‘she’ll be right’. We excuse our poor performance, stating too many of our businesses are small and privately owned, therefore the allure of the bach, boat and BMW are too great to commit to a different pathway. Of course, this is rubbish. I have never seen and met so many hard-working, committed, intelligent and inventive business owners who have attended presentations where I have spoken. Yet we are going backwards and even our larger organisations show little progress in creating a world class culture.
If we can all come together with strong leadership and commitment to beat a pandemic, why can’t we map a blueprint to be a world class country? Imagine a higher standard of living, carbon neutral, free health and dental, and education for all. Where equal opportunity is not a political idea but a reality, as we sustainably maximise our resources and potential for the betterment of all.
The answer is, we can. The next question is - are we willing and able, and do we know how to achieve it?
So, what do we need to do?
I would not want to start a nappy factory competing with my friends in Japan, as I know I would lose my shirt. But surely now is the time to protect and grow 'Brand NZ' industry by industry, by being the best in all we do, and ensuring that we and our children will have a great future. We need to adopt better practices and leadership in a consistent, rigorous manner before it is too late and we become a tourist destination beholden to the world, and at risk of the next pandemic.
Government must lead, create a vision, and align the various groups with this vision, to include business, unions, universities, local bodies, banks and capable mentors. They need to be held accountable. This is too important to allow factional agendas and personal goals to derail us.
This is an Everest-sized vision, and we need people who know how to climb it. After all, Sir Ed didn’t do it without a sherpa and the backing of a team, did he?
Government must fix its own house, sustainably, and not just for three years. The level of inefficiency and waste within central and local government is legendary. We need them to lead by example, helping the many sectors who provide services to government. As a customer, government can hold its suppliers to the same standard, sending clear signals to the populace that we are changing together.
Last year, while working in the UK, I saw a great example of government setting the direction with Highways England, which has the biggest infrastructure spend in a generation. The 2015-20 delivery plan for the initiative stated: ‘We will implement a Lean deployment strategy that will build a culture of continuous improvement throughout Highways England and its supply chain to deliver increased customer value and efficiency saving in support of the Strategic Business Plan.’ By 2019 they had delivered over 1.2 billion pounds in savings whilst improving delivery safety and sustainability.
We need industry groups setting hard and measurable targets with defined plans to achieve them. These need to be built around creating a world class culture where waste is eliminated and processes and systems are continuously improved.
The knowledge and support to deliver this vision should be available to all organisations and supported through mentoring. I’d like to see it beginning with school programs. Universities need to turn out more capable candidates willing to drive this implementation and aligning with business need, not focusing on numbers and bums-on-seats to support funding for their own research. We need to create knowledge-sharing communities, and mentoring support by people experienced and capable in practical implementation, not just folks wanting a change of career and vicarious pleasure because they didn’t perform in their own team.
Businesses should not incent new leaders with bonus schemes for short-term profit increases which lose sight of their vision and culture. Boards must not allow the sacrifice of good, long-term strategies in favour of unsustainable gains from flakey short-sighted plans. Most of our major corporations have already suffered. Have we had enough of our poor farmers underwriting this? True north to the new normal is to maximise our resources (both natural and people) for the betterment of the country, through committed leadership with a well-communicated, compelling vision.
We are a long way behind the starting grid. Toyota has been doing this for 70 years and most larger companies around the world are 30-40 years ahead, with varying levels of success. The evidence of companies applying a relentless approach to drive a performance culture and outperform all their competitors is overwhelming in every sector. It works.
How much longer will we wait? Until all our companies are foreign owned, our resources shipped offshore for other nations to add value and reap reward? Where access to our natural resources is given to the largest purchaser? Until we are serfs in our own country?
If nothing else, this pandemic has taught us the value of great leadership, direction and the power of a team response. Look at what New Zealanders have achieved. The answer to how we recover the economy after this war is staring us in the face. Yes, we need some short-term initiatives to stabilise the country, but there are some longer term actions which need visionaries, not only so we can return to where we were, but to create a new aspirational future for all New Zealanders. I am keen, are you?!
If you would like to learn more about what you can do to transform your business by commencing or continuing your continuous improvement journey, contact Ian Walsh on 027 5349 258 or firstname.lastname@example.org.