Laying people off after directing them through a policy and rules driven command and control structure flies right in the face of the Golden Rule – Do unto others as you would have them do unto you.

None of us want to be directed and controlled. We do not want to be ‘headcount’. And we especially don’t want to lose the means of support for our families.

No matter what our religious faith, some variation on the Rule is part of the fundamental ethic built into our way of life, yet doing all of those things we would dread having done to us was a fundamental part of being a business success.

• The Buddhists preach, “Putting oneself in the place of another“.
• Confucius said, “Never impose on others what you would not choose for yourself“.
• Muhammad said in his farewell sermon, “Hurt no one so that no one may hurt you.”
• The Jews might have said it best: “That which is hateful to you, do not do to your fellow. That is the whole Torah; the rest is the explanation; go and learn.”
• And as a Christian you learned early on in the Gospel of Luke, “as ye would that men should do to you, do ye also to them likewise“.

We rationalized treating people as ‘headcount’ to be minimized and controlled with a ‘good of the whole’ justification. We told ourselves the hard, but necessary and right thing to do was to throw 10% of the workforce out on the streets, even though they were good, had working people, in order to protect the security and the future of the 90% we kept.

And we even built a culture around it.

Macho men everywhere could relate to Michael Corleone in the Godfather when he said, “It’s not personal, Sonny. It’s strictly business.”

Real men – tough business men – have to check their compassion for people at the door and make hard decisions and do hard things to people. The alternative, we were taught, is to give away the company’s money which is not ours to give, erode profits, put the whole business at risk.

I found it increasingly difficult to convince myself that the Michael Corleone philosophy was right.

I’m not so sure the explanation that my business life is an allowable exception to morals and ethics is going to fly. I recall being struck by Meg Ryan’s line in You’ve Got Mail (as much as it pains me to admit that I watch the occasional chick flick). When confronted with the Michael Corleone line, she said “What is that supposed to mean? I am so sick of that. All that means is that it wasn’t personal to you. But it was personal to me. It’s *personal* to a lot of people. And what’s so wrong with being personal, anyway? … Whatever else anything is, it ought to begin by being personal.”

It was a little unsettling to hear that line uttered because she was so right.

The best part of lean is that it proves the rationalizations are wrong. We don’t have to separate ‘business’ from ‘personal’.

Treating people with respect and by the Golden Rule not only allows us to keep our moral code intact when we get to work, it proves that a strong moral code is the most important tool we have. The company will make more money and everyone’s job security is greater because we can – in fact we must – treat people with the respect with which we want to be treated.

That, for me, is the very best aspect of being a lean manufacturer.

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The organization operates over 300,000 sq. ft. of retail sales floor space in 29 locations, over 70 donation sites and 16 employment and training centers.

• Industry: Not-for-Profit
• Integration: Great Plains
• Departments: Human Resources, Payroll

Approximately 35% of Goodwill’s workforce is replaced annually as clients move into employment opportunities in their communities. This ever-shifting workforce and the documents associated with it generated a surplus of paper, resulting in rooms full of filing cabinets, lost paperwork and a constant scramble to find information. Their wage change approval process was inefficient and supervisors were under constant stress to meet deadlines.

Nearly every process associated with Human Resources and payroll was time-consuming and prone to error; all of this became their catalyst for change.

Challenges

• Inefficient Human Resource and payroll processes
• Lengthy, time-consuming approvals
• A growing amount of physical storage space was being required just for paper

Solution

• iSynergy Document Management for the capture, storage and quick retrieval of all their existing paper
• Progression Workflow Automation for the automatic routing and review of work items
• iForms Electronic Forms for the quick and seamless capture of information

Benefits

• Elimination of physical paper storage
• A 25% reduction in time spent on paperwork and 70% reduction in interdepartmental inquiries
• Over $100,000 in annual savings

“Our net income is up, we are able to do more with less, and Goodwill is growing.”

Ed O'Kelley, Senior Director of Information Technology
Goodwill Industries of Middle Tennessee

Discover how Goodwill Industries of Middle Tennessee was able to eliminate a room full of filing cabinets and ultimately save over $100,000 a year.

Download the full case study now:

“Is it a sincere honor to receive recognition as a best place to work among the hundreds of great companies in the Tampa Bay region,” said Steve Allen, CEO of iDatix. “It would not be possible without the team that we have in place here and the culture that we have built over the last thirteen years. I cannot express my gratitude enough for all of our amazing employees that have helped iDatix become a premiere provider of Enterprise Content Management and Workflow Automation.”

Partnered with city business journals across the nation, Quantum Workplace has performed employee surveys for thousands of companies in more than 40 US cities through Best Places to Work competitions. Quantum Workplace lends its proprietary employee survey methodology and survey software for the nominees in each competition.

Employees of nominated companies were asked to complete a 37-question, online survey. The employee survey measures 10 key engagement categories focusing on items including team effectiveness, trust in senior leaders, feeling valued, manager effectiveness, compensation and benefits.

Responses from each question of the completed surveys are compiled and evaluated. Companies are ranked and finalists are chosen in each size category according to their overall composite score. These initiatives are the only competition that is judged solely upon quantitative measurement of employee input.

The Value of Simplicity

There are those that are driven by simple ideas – value for customers, respect for people, common sense accounting, keeping things moving through straightforward processes without wasting time or money.

They operate by a simple model like the one to the right: create more value in the product and the customer will pay you higher prices; spend less money on things that do not contribute to that value and your costs will go down.

These are companies like Toyota, Danaher, Gardner Denver, my old cronies at Wahl Clipper, and the rest of the lean paragons.

Grand & Complex

Then there are those that picture business as some grand, complicated financial scheme propelled by increasingly sophisticated marketing theories. The exclusive business schools crank out masters at these pursuits.

Such companies reduce making things and servicing customers to tasks best performed in the cheapest parts of the world; and they believe that everything in business can be boiled down to very precise numbers and all of it can be controlled with a big enough computer.

They try to improve the top line with ideas like putting Chevrolet drive trains into sheet metal with a little different shape and Pontiac, Buick or Oldsmobile nameplate and charge more by creating the illusion of higher value.

They are companies like Spectrum Brands and Furniture Brands which have bought out companies with hard earned reputations for quality products and farmed them out to China, and are now trying to make money by deceiving people into thinking that the weak Chinese imitation is somehow worth the same as the original.

For all of their cleverness, they have oversimplified the heart of the business proposition. They seek to increase the price by any means, and to cut the cost by any means, without sufficient knowledge of the product or the customer to know how they are affecting value.

Those companies believe that growth is a vital necessity for a very good reason. They are steadily eroding the value of the original product, creating an ever -widening value gap between the prices they charge and the worth of the goods they deliver. Everything they touch is eventually destroyed, so they must keep acquiring more and more to stave off death.

There is no law of economics, physics or nature that dictates this grow or die principle – that is purely the survival mechanism of businesses with internal value gaps. They don’t know the product or the customer well enough to identify and solve the problem.

The lean, value driven companies will not only survive the economic downturn, they will flourish. With common sense, cash based accounting, they are more self-sufficient and not dependent on the credit and capital markets which are in such disarray. In tougher times, when customers are more value conscience than ever, they are well placed to give people their money’s worth. The cost escalation going on in China and erratic currency exchange rates wreaking havoc elsewhere are of little consequence to them.

For those companies led by men and women who worked to understand the inherent logic of lean, who came to see it as a comprehensive, tough, but right way to run the company, your reward is at hand.

For those led by people who saw lean as a factory gimmick to tout in the annual report in order to dupe Wall Street into funding your next growth strategy, but no more than a distraction to the real work of financial manipulation and ‘globalization’ in pursuit of cheap labor, your day of reckoning is at hand.

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All of these historical charts don’t just magically convert to EMR data with the snap of a finger. They either have to be converted into electronic data and migrated into an EMR or be managed by a separate system. A data migration initiative can be too expensive for a physicians practice, yet continuing to manage patient charts in paper form can be an expensive, time-consuming, and error-prone administrative burden.

Morton Plant Mease Primary Care (MPMPC), a non-profit group of more than 100 primary care physicians, found the cure to its paper chart management woes with an electronic document management repository.

Challenges:

• Paper storage and record archival
• Costly, inefficient and inconvenient information retrieval

Solution:

• Scanned all of their paper into iSynergy Document Management

Benefits:

• Elimination of warehouse requirements
• Instant access to all patient information
• $140,000 in annual savings

“It used to take 48 hours to a week for a physician to receive a paper record from the warehouse,” says Nancy Cothern, Director of Physician Management Service.“With our new electronic document archive, physicians now receive the records they request within the hour. In addition, the solution enabled us to terminate our relationships with the storage warehouses – saving us approximately $140,000 last year in warehousing costs alone. We expect our savings to be even more substantial this year.”
 

Download the full Case Study

An out of the way publication called Bicycle Retailer ran a story about a company called Chariot Carriers from up in Calgary.  According to the Bicycle Retailer folks, Chariot has “embarked on a Lean Manufacturing journey to improve the performance of its Calgary production facility.”

The boss at Chariot, Frank McCurry, says that “Lean Manufacturing focuses on the removal of non-value added activities and the improvements of material flow“.  So far so good, but then he goes on to say, “This initiative, combined with the addition of more automation in our fabrication department, has lead to an increase of more than 15 percent in labor efficiencies in less than two years.

As a portion of our staff’s compensation comes from the company’s productivity, this progress is clearly a win-win.” 

I don’t want to pick on Chariot – they are probably new to the lean game (but I will pick on them because they chose to share their lean thinking with the world); but labor productivity is a lousy metric in any case, and a particularly bad metric to base staff compensation upon.  You can’t take productivity to the bank – my bank, anyway, will only let me deposit cash.

Contrast that with Scott Rupprecht, the CEO at a machining and sheet metal outfit called Star Precision in Colorado.  He has tapped into some grant money and the Colorado MEP to take advantage of the slow economy and train his people in lean concepts to take them to a level beyond wherever they currently are.

“The more you can upgrade your staffing at this time, it’s beneficial to the company down the road,” he says.  I don’t know what Star Precision’s performance metrics package looks like, but I doubt the “staff’s compensation comes from the company’s productivity” like they do up at the Chariot factory.

The best way to understand metrics is to view the business as a black box.

Anything happening inside the black box is important and worth measuring only to the extent that it impacts what is coming out of the box, but at the end of the day, all that matters are quality, delivery and lead times to customers, and the profit and cash flow to the owners.  Doing well according to some metric like productivity is cold comfort to owners of an unprofitable business, or to customers whose shipments are late.

Compensation and performance should be based on the outputs, only, and subordinate metrics of what is happening internally are not really metrics – they are management tools that provide limited insight into what might be affecting the real, relevant metrics.

Everyone in manufacturing knows there are plenty of ways to drive a productivity measurement up – and many of them are not particularly good for the organization.  Looking the other way at borderline defects helps productivity, as does keeping people busy building an inventory of stuff no one has ordered.  They trash the customer’s quality and the owner’s cash flow, but if the company wants high productivity, production managers can certainly give them high productivity.

To become lean, a company has to keep focused on the big picture, output metrics, and keep all of the other subordinate stuff in perspective. It is metrics like ‘productivity’ or anything that singles out people, machine utilization, or the busy-ness of any single resource that leads to dumb decisions.

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