A Tale of Two Dealers, and Why One Far Surpasses the Other

Issue #10226 - May 2018 | Page #30

By Todd Drummond

Most think lack of time is their biggest barrier to achieving their goals, but they are mistaken. “Culture eats strategy for breakfast.” This quote by Peter Drucker is one of my favorites. While providing consulting services for over one hundred companies, I have witnessed and heard all the reasons for resistance to change within companies. If you truly want to improve, then it starts at the top and works its way down to the bottom.

Here are two examples based on actual well-known large, multi-location lumberyard companies within our industry. Both make a profit, but one seems to always grow in spurts with many contractions. The other has steady linear growth and has yet to contract. My descriptions are from my own experiences working with these companies. One would challenge, embrace and apply better ideas and practices while the other, if I’m completely honest, was a waste of my services because they would only give lip service to new ideas.

Company A	Company B
Decentralized structure and decision-making. General managers have autonomy to make key decisions, such as setting employee wages in their market.	Top-down structure and decision-making. All decisions have to be cleared by upper management prior to implementation from upper management. GMs lack autonomy to make key decisions, such as setting wages.
Goals are clear and realistic, and the data provides insights. All goals are shown with multiple examples of how others within the company achieved them. Data showed regional challenges and variations between markets, so local differences in results were allowed.	Goals are unclear and insightful data is weak or MIA. Most of the time no data was given, just opinions and directives. That lack of data on markets and regional challenges meant there were few variations allowed for hitting expected goals.
Lots of new, young, inexperienced as well as older, experienced people were hired. The abundance of growth potential resulted in abundant growth opportunities and low turnover.	Only new, young, inexperienced people were hired. And with growth and mentoring opportunities limited after a while, they leave. One result: high turnover.
There’s a well-developed process of adopting lean manufacturing principles that are shared openly and that spark new ideas. Current practices and ideas are regularly challenged in an open forum by both management and staff. Management gives structure and direction for goals, but how everyone achieves the stated goals is openly discussed and debated.	There’s a poorly-developed process of adopting lean manufacturing principles. The principles are discussed, but leaders pick and choose which principles fit their given mood. Upper management doesn’t let workers challenge established practices. Management gives lip service to appreciating workers, but ultimately they are viewed as a threat to leaders’ authority.

Given all that, it's probably no surprise that Company A has higher profit margins and lower operating costs. It’s a tragedy that Company B is older and better known, and could be so much more than what it has become. But it is blind to the causes of its shortcomings.

Many leaders I meet say they are open to making positive changes in their company, but the truth is that most are deceiving themselves. Few people understand the many barriers that prevent the actual implementation of positive changes. Here are the three biggest.

No matter the size or level of responsibility, the biggest barrier can be stated in one word: pride. We cannot see that change is needed, or if we do indeed recognize the need for change, our pride prevents us from admitting it, as if by admitting that a change is wanted or needed we are letting our pride perceive it as “we were wrong, and they were right.” This negative thinking is an absurd way of viewing life in general. What worked in the past was a good thing, but evolving to meet the challenges of today does, in fact, require us to make changes and see things from a new perspective. Some of the best ideas can come from people with no experience at all because they have no preconceived ideas of what the so-called right way is of doing things. No matter your level of responsibility, how willing are you to listen to others and heed their advice for implementing changes? To embrace better ideas, one needs to set aside pride and listen to others with a different perspective and experience.
All real changes come from the top down, so failure is inevitably a case of failed leadership. Anyone who is trying to make changes in an organization, if he or she does not have the authority, run the risk of being undermined by those who do have the authority.
Protecting one’s perceived power is a common barrier, because the changes needed may require responsibility shifts and realignment. Some people view such changes as a threat to their area of influence and will resist changes without regard for any other consideration.

A final word about making changes, even at maximum capacity: You will have to do it differently than you have done it in the past to get different results. Therefore, you have to set aside the time you may not think you have and embrace an idea that you are not familiar with, and at times it will be unnerving. No activity, especially when trying to make changes, has to be all-or-nothing. Create a plan, get professional advice that offers real solutions and better practices, and set drop-dead dates of implementation. Otherwise, nothing will change, and you will always get the same results. Of course, you can always just throw money at the growing problem and somehow expect it to resolve itself, but that’s not what I recommend.

Whether you are a new or a longtime existing operation, save your company a great deal of time and money by getting professional help with the training for and effective implementation of lean manufacturing and time standards from Todd Drummond Consulting. TDC is the number one expert in reducing costs and improving productivity in all departments of the wood truss and wall panel manufacturing industry, using proven and practical lean manufacturing practices combined with industrial engineering principles.