Rocketing Your Company From Making Ends Meet to Wildly Successful
THE LAND OF STATUS QUO
The Land of Status Quo is comfortable, pleasurable, and easy to inhabit. Following World War II, U.S. industry entered this land, and was able to abide there for almost 30 years. Orders poured in, new products were introduced, almost any amount of staff could be hired, compensation and benefits expanded, it was a nice time for American companies.
Because things were going so well, companies didn't investigate to see the cause of this comfortable, easy business. In fact, executives were convinced that it was by their own efforts and because of their own management systems that things were going so well.
But what was really the cause?
In fact, at the end of the war every major manufacturing nation, with the exception of the United States, had been bombed flat - literally. Germany, Japan, England, all woke up to plants that were rubble, skilled engineers and artisans who had been killed, and economies that were in shambles. As rebuilding started, where could they go for equipment and technology? Where else but the United States! So they came to us for these things, and sales went through the roof, and behold, the U.S. companies rejoiced, and there was plenty of money, and all assumed that this land would remain forever. Because of this prosperity, a number of interesting sidelights came about: new management systems were introduced, and almost all of them worked - even those diametrically opposed to one another! And companies considered how they might increase sales even more, and so they looked at product quality, and decided that if they "optimized" the construction of products (instead of overbuilding them to last a long time), we would be able to sell even more sooner, and so planned obsolescence came into being, and lo, even more product was sold, and things continued on. And gradually direction became muddled, but no one minded, because the money was pouring in.
And then a terrible thing started to happen. As the European and Asian nations put their economies and industries back together, the adversity they were facing drew each toward a common national direction, and moved them to consider new approaches to industry. Japanese officials brought in Edwards Deming, who showed them how to systematically build quality into their factories and produce high quality products. And these nations began to export their products to the United States, and the people of the U.S. recognized the higher value for their dollar and began to purchase them instead of the lower quality domestic products. American companies saw their sales begin to fall, slowly at first, and then precipitously, and flew whole planeloads of staff to Japan to see what was going on. And there was panic here, but sales continued to slump.
LEAVING THE LSQ
You know the rest of the story. The American public is concerned with value, and will continue to be concerned with value. In the thirty years since the introduction of high quality, non-domestic products into this country, U.S. industry has struggled to regain confidence and sales in its own land, and it's still very iffy whether this can be done.
So how does this apply to us, as universities and schools? Are we in the Land of Status Quo - and if we are, how do we leave? The overriding question is: "Are we, as institutions, providing the value that Americans want?" This needs to be more than a philosophical discussion, it should be a systematic evaluation, resulting in a definite direction, supported by related action plans.
How do we start? With aligned Vision and Mission.
VISION AND MISSION: WHAT'S THE DIFFERENCE?
Establishing a company vision or mission has become very commonplace nowadays, and is often done just as an exercise - with no real meaning behind it. Now that's a rough thing to say, until you look at the purpose of both vision and mission statements: they are to drive activity. If the Vision Statement or Mission Statement is in a frame on the wall, and does nothing but make people feel good, it has lost its purpose.
The primary purpose of a Vision is to set an end goal: where we want the organization to be in three to five years. It has to address that goal in terms of the organization itself, what we expect the organization to look like and be doing. But it also needs to address the goal in terms of the industry, the competition, and the clients. And it better be measurable!
On the other hand, Missions are the shorter term plans that have to be set up to reach the vision. There will usually be a number of them that unfold one after the other, and each is important, or the company won't fulfill its vision. The best way to consider mission purpose is to think of a military campaign. The long term plan (Vision) is to win the war, the shorter term plan (missions) might be to capture a bridge, or a building, or a city. When an organization considers missions it might include marketing to a specific segment, or meeting a customer service goal, or maintaining a high percentage of retained employees - all sequenced in order of importance.
Lincoln Electric
Lincoln was founded in 1895 and today is the world leader in the design, development and manufacture of arc welding products, robotic welding systems, plasma and oxyfuel cutting equipment. Headquartered in Cleveland, the Company has manufacturing operations, joint ventures and alliances in 19 countries and a worldwide network of distributors and sales offices covering more than 160 countries. Lincoln employees global workforce totals approximately 7,000.
The Company is famous for its productive and highly-skilled work force, as well as its unique compensation system, Incentive Management.
Incentive Management is widely studied in business schools and industrial management circles. The system compensates and encourages individual and team initiative and responsibility at all levels of employment within the U.S. subsidiary. Lincoln's other global operations have their own systems, where appropriate and practical. Lincoln has never experienced a work stoppage in its 100-plus year history.
Lincoln Electric Vision
Lincoln Electric will be the undisputed world leader in the arc welding industry as measured by global sales volume, while simultaneously aiming to maximize shareholder value.
We will be the leader in supplying the finest quality welding and cutting products. In order to accomplish this, we will continue our emphasis on being the industry's lowest cost producer, on providing applications expertise and solutions for our customers, and on developing new and innovative technology that responds to customer needs with value-added products and services.
Does it state what the organization will 'look like'?
Does this statement set an end goal?
Is the goal measurable?
What are the measures?
There is enough laid out in the second part of the Vision to set up a number of supporting missions. A) We will be the leader in supplying first quality welding and cutting products... B) We will continue our emphasis on being the industries lowest cost producer... This really is a high level mission. What supporting missions could be written from...
- a human resources standpoint?
- a manufacturing line standpoint?
- a supply chain standpoint?
- an executive team standpoint?
C) We will continue our emphasis... on providing applications expertise and solutions for our customers Again, this is really a high level corporate mission. What supporting missions could be written from...
- a management standpoint?
- a staff viewpoint?
- the rewards and recognition standpoint?
D) We will continue our emphasis... on developing new and innovative technology that responds to customer needs with value-added products and services
Finally, we still have a high level corporate mission stated here. What could be supporting missions from...
- a management viewpoint?
- a staff viewpoint?
- staff rewards and recognition standpoint?
So, think about it. If Lincoln does: B - be the industry low cost producer, and does C - provide applications expertise and solutions for customers, and also does D - developing new and innovative technology AND responding to customer needs, will they support A - be the leader in supplying first quality products?
If they are the leader in supplying first quality products, will they meet their high level Vision, stated first above?
WRAP IT UP - APPLYING THIS TO MY COMPANY
Let's cheat a little and use the Lincoln statement as a base: By ____________, 20___, __________________ Company will be the undisputed world leader in ___________________ as measured by _______________________, while simultaneously aiming to maximize _____________________.
Now, what missions could you write to support that? Would you be willing to take thirty minutes - right now - to do two things: complete the above statement, and write three missions to support it?
Would you? What difference would it make in how your company operated? Would you be willing to do it if it would increase your sales by 10%? 20%? 50%? Is it worth it? Do it!