I don't want to be critical all the time – really I am not an inherently negative person. But in order to write the blog, as well as to keep up with the state of manufacturing in the world, I comb through dozens of news sources daily and I can't help but be overwhelmed by the huge volume of utter nonsense that is being written, spoken and practiced in the misapplication of lean. So when I come across a story like the one that is unfolding at De Beers – the diamond folks – it is like a welcome hurricane of sweet, fresh air. They really get it.
At a meeting in London the other day between De Beers senior managers and their sales and marketing partners, De Beers Group Managing Director Gareth Penny preached about what he called the "new normal" – a world in which cash is king, lean manufacturing is critical, and the key to the whole thing is customer value creation. There are very, very few senior executives in the world who understand those points, making Mr Gareth Penny a very extraordinary individual.
1. Be passionate and confident
2. Think outside the box – you can't do the same things and expect different results
3. Keep a long term (20 year) perspective and begin with the end in mind
4. Focus on competitive advantage – no distractions
5. Ensure rapid and sustained cost management
6. Remember that cash is king
7. Pursue operational excellence (lean)
8. Look for unprecedented acquisition opportunities (take advantage of the fact that a lot of companies don't get it)
9. Take customer value creation to new levels
10. Build leadership and organizational capabilities
I don't care what business you are in – that is great advice. Just as important is what Penny did not say: No blathering gibberish about shareholder value, nothing about headcount or labor costs and no concern for this quarter or even this year.
The other day I wrote that "it is impossible to achieve excellence – for some impossible to achieve mediocrity – until the leadership of the company decides what it is trying to accomplish and communicates that objective to the entire company." The folks running De Beers have done that very effectively. Penny made it about as clear as can be that they have a long term customer focus, and spelled out how they are going to operate over those twenty years.
We'll see how it turns out, but Mr. Gareth Penny is demonstrating some first class leadership at a first class company, and I think we can all learn quite a bit from his example.