“Winning” – that’s the title of Jack and Suzy Welch’s latest book. For years, the pair has worked as management consultants. Depending on the situation, their philosophy can make affected parties feel good or bad, back up decisions already made or gnaw at self-confidence. Some disagree with the Welch approach entirely, countering that many companies and organizations – if they were managed “Jack’s way” – would fall into ruin.
The circumstances in which companies find themselves are as varied as the businesses themselves. To lend this landscape some clarity, Helmut Bayer, managing director of the Steinbeis Enterprise TQU Business GmbH, has compiled five tenets on how to approach management as a whole.
1 | Expertise has its own life cycle
Being an expert means that when challenged, you have the right skills to deliver the best performance. If you’re a manager, this means knowing what skills your business needs to make the right decisions and act on them. If you’re an employee, being an expert means knowing what’s in store for you, what’s expected of you – plus plenty of opportunities to learn and build on skills. For years, Microsoft led the world in leveraging expertise against the competition. But now that empire shows signs of toppling. Nowadays, we can clearly see that expertise moves through a life cycle – just as products do.
2 | Lean management interrupts evolution
Every company evolves. The dynamic, pioneering enterprise in someone’s garage grows into a successful company, one which knows the business inside and out and sets standards – as befits the “top dog”. That successful company swells into a sluggish giant, forced to keep a lock on its original customer base through further acquisitions or price fixing. Ultimately, this defensive play falls apart under the pressure of competition – and the end draws near. And can drag on and on. Take AEG – that process lasted 113 years. Yet Toyota – the “hungry giant” – seems to have followed a different path. The Japanese company is worth emulating, but what’s their secret? Having the mind of a successful company and the heart of a pioneer. Clearly, lean management is an effective antidote to the natural aging process.
3 | Six Sigma cultivates a healthy core business
Miele is synonymous with expertise in premium household appliances. If you want to be successful in the long term, you can never stop improving. Company founders Carl Miele and Reinhard Zinkann came to that realization in 1899. Their motto, “always better”, has remained the company’s guiding principle. The Miele core business is healthy, and buyers can rely on Miele products and services. But how do you recognize healthy core business? Look at where it touches the customer. Deviations in quality (also called variations in Taguchi’s system) don’t belong at any of those points. Six Sigma keeps variation to a minimum. “Realize with Six Sigma” means: define, measure, analyze, improve and control. This paves the way to moving innovation in the right direction and successfully creating products and services. With a clean bill of health, the core business can finance visionary pioneers.
4 | Most work within their system, few work on their system
The lion’s share of employees work within set systems. Only a few are given the task – and even fewer the authority – to work on the systems themselves. In other words, designing and improving systems that govern work and operations. We equate employee devel- opment with making a distinction between tasks. Employees working within the system must be able to develop their expertise in operations; this is what safeguards quality and added values. Employees working on the system must be able to hone their organizational and methodical expertise; this is what helps companies to more closely align their systems with their customers.
5 | Self-imposed benchmarks need regular checkups
The desire for “operating excellence” at every stage of a company’s development is palpable. Losses, mistakes and underperformance are tolerated less and less. But where is the limit? Real life demonstrates that the limit is reached when a company believes it leads the market in terms of price while offering a reasonable customer benefit. Yet the downward spiral continues. What, exactly, is reasonable? Who sets the standards? Companies are faced with a choice: sit on the sidelines, act, or react – whether driven by others or taking control of their own situation. A company’s own benchmarks need to be examined at appropriate intervals.