Managing The Burning Platform

David Henry in the UK presented an interesting question on The Whiteboard. He said:

During this economic downturn, is the long term philosophy of lean put at risk by the short term focus on cost reduction? Is that necessarily a bad thing? Does this urgency give opportunity for greater engagement with line management and provide the catalyst for change?

My first thought was a quote cited by Steven Spear from an Emergency Medical Technician:

Air goes in and out. Blood goes round and round. Any variation on this is a bad thing.

Translating, keeping the patient at least marginally alive is always the first priority. And of course that makes sense. It buys time, and that is what is needed.

So back to David’s question.

It is really easy to say that, in these emergencies, long term thinking doesn’t matter. But I contend that it is even more important right now. This is a time for action. It is not a time for panic.

This means that as the company’s leaders look to how to navigate through this rough time, they need to take the time to reflect, develop multiple ideas, and bias execution toward short-term survival and sustainable solutions.

For example, some companies got caught short with a mountain of inventory, and need to convert it to cash. They can always just take the brute force approach and hammer it down by manual micro-management. The problem comes up when sales and production volumes return. They didn’t use the brute force approach at higher volumes because it was impossible to manually manage everything. But whatever they did do at that time (1) is what got them into the problem in the first place and (2) is what they will do next time unless they address the core problem(s).

So, yes, take the necessary short-term actions. But at the same time, look in the mirror and say, out loud, “We are responsible for this.” Embrace that statement, even if it is not completely true. That is what self-empowerment is all about.

Then go and understand the dynamics of your supply chain, what causes orders to actually be placed, why the excess stuff was there (because somebody thought it was necessary), and what changes you can make (mostly to your thinking) that will change the system.

By the way, it is very easy to say “implement kanban” at this point, and yes, that works. But I honestly think a prerequisite is firmly embracing, owning, the concept that what you did before DIDN’T work.

This is one situational example of how to turn these devastating times into opportunities to emerge ready to maneuver when opportunities present themselves. The barriers are mostly between our ears.

3 thoughts to “Managing The Burning Platform”

  1. I’ve seen a lot of people who are concerned for their jobs, who have lost their jobs or who know their jobs are going away.

    Recently I had a discussion regarding my team’s function in the organization, and that we are secure because of the climate. When things go south, that’s when you really need your Lean leaders to help right the ship and bring savings home to maintain profitability.

    I call shenanigans on that line of thought.

    We need our Lean leaders to be the most engaged when times are at their best! We need to be out front, leading the discussions when people are least interested in listening.

    No business I have encountered has ever said, “Nah, we don’t need that $50,000. Go ahead and throw it in the trash.” At least, not ones that stay around long.

    While we can use this opportunity to “reset” our perspective and drive Lean thinking, we need to do so just as hard in the good times. When we don’t, we end up in times, well, like these.

    What would your companies position be today if you increased OI 5% a year over the last 10 years? Or just reduced waste by 25%? Think you would be better positioned in the market?

    1. Dwane –
      Welcome and thanks for the comment.
      I am hearing the same discussions as you are.
      I completely agree that “the good times” are the best time to anchor for the future.
      What I see, in a lot of companies, during “the good times” is a belief that there will not be a future down-cycle to prepare for. Even when people say there will be, their behavior indicates otherwise. There are many more grasshoppers than ants out there.

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