When I wrote about GE's very late discovery of lean yesterday, a few comments came in and a few emails hit my inbox defending them, but not very strongly. In fact I have know for a long time that when there is nothing else to blog about I can always haul GE out of the closet and slap them around for their dismal manufacturing execution, without worrying too much that someone might prove me wrong. There is no great trick to it, and it hardly requires much painstaking research. Consider this:
GE held their annual shareholder's meeting a couple weeks ago and I highly recommend the transcript of their Chairman and CEO Jeff Immelt and CFO Keith Sherin's remarks as a cure for insomnia. In this nine page tribute to management by buzzwords you will find the word 'manufacturing' exactly once. The words 'factory' and 'production' do not appear at all. On the other hand, they talked about innovation four times, earnings fifteen times, and they referred to their markets and marketing a whopping 21 times. 40 references to earnings, markets and innovation compared to 1 reference to manufacturing? It is pretty clear where their priorities are. And when the top guy doesn't care about manufacturing – spending his day with his head buried in finances and marketing, manufacturing excellence is a virtual impossibility.
Same story last week when I wrote about Johnson & Johnson having to close the plant in Pennsylvania. Their head guy has a paid Twitterer who kept the world informed while the big guy yammered for almost two and a half hours – 19 Tweets on earnings and marketing and nary a single reference to where the company actually makes things. The likelihood of manufacturing ever crossing his mind appears slim indeed, except of course, when the feds close down his factory, then we get press releases like the one following the Pennsylvania plant closing that say, "You can be confident that we will make whatever changes are needed at McNeil to fully restore the quality of its manufacturing." And "McNeil has also retained independent quality experts to assist in this regard and is re-evaluating quality systems and manufacturing processes across the organization."
We could be more confident if it weren't for the fact that the only other time the J&J blog of this guys thought's mentioned manufacturing hadn't said J&J, "has employed outside experts on TBA to inspect facilities and review procedures," at the same factory just three months before this event. Two references to manufacturing and both of them to announce the need for outside experts to come in and straighten out serious quality issues … and the rest of the time worrying about share values and marketing strategies. The notion that he would go to the factory and get his hands dirty on these issues apparently never crossed his mind.
When the people at the top clearly do not care about manufacturing I can blog with impunity, knowing that there is no chance the people fighting the good fight on their factory floors are getting the sort of leadership and support that is critical to achieve manufacturing excellence.
I have had a couple of requests recently from organizations asking me to bottle my formula for One Day Assessments, thinking there must be some deep secret to my ability to hit the nail on the head after a day in a company. Actually I usually have them pretty well pegged by lunch time, and it starts with the senior managers. When the CEO tells me that he will be the one to present all of the financial, sales and marketing information to me; then someone else will be joining us to go over manufacturing, supply chain and engineering, it is pretty clear to me where this is going.
When your buddy tells you his wife is fed up with him, and you learn that he works 60 hours a week, surfs the Internet for a couple of hours every night, plays golf every Saturday and watches a couple of football games every Sunday, it doesn't take a degreed marriage counselor to figure out what the root of the problem is.
Just as your buddy doesn't need an outside expert to figure that one out, the problems at the J&J factory included holes in the ceiling and busted pipes. The head guy doesn't need outside quality experts to fix those things. He just needs to decide that manufacturing is important and get to work on it.
This is true with manufacturing excellence everywhere. Despite the fact that some of the companies he cited as example turned out to not be so excellent, the principles in Tom Peters' In Search of Excellence were largely on the money. You want to know what your true priorities are? Or what someone else's priorities are? Just look at where the time is spent. When a manager spends ten times as many hours on finance as he does on manufacturing, it is pretty clear that accounting is ten times more important to him than the factories. Directly or indirectly, everyone in the company gets that message loud and clear sooner or later.
When you consistently spend twice as much time playing golf or surfing the Net as you do with your wife, it is pretty apparent that golf and the Internet are a higher priority than she is … and when the CEO spends half his week in financial discussions and has no time for the gemba, well, I guess the priorities are pretty obvious there too.