How to fail in a recession
•Download as KEY, PDF•
0 likes•193 views
What to do to ensure you don't survive the recession, if you aren't doing them already, and what not to do if you want to be sure you fail. Introduction to ongoing online dialogue and training on how to manage from managenaturally.com and the Deming Collaboration.
Recommended
More Related Content
Similar to How to fail in a recession
Similar to How to fail in a recession (20)
Recently uploaded
Recently uploaded (20)
How to fail in a recession
- 1. HOW TO FAIL IN A RECESSION Dan Strongin, ASQ-CMQ/OE Managenaturally.com and DemingCollaboration.com ©2006-2011 All Rights Reserved
- 2. ?
- 3. HOW TO FAIL
- 4. GET LOST IN SPREADSHEETS
- 5. NEVER SET FOOT WHERE THE WORK IS DONE
- 7. FORGET WHO YOU ARE
- 8. SEE INVENTORY AS ASSETS
- 9. BUY LOTS OF TOOLS
- 10. FIX THE WRONG THINGS
- 11. TREAT PEOPLE LIKE WIDGETS
- 12. GET BURIED IN DYSFUNCTION
- 13. BLOCK THE FLOW
- 14. NEVER TRAIN
- 16. HOW TO WIN
- 17. REPORT FLOW
- 19. LESS SUPPORT
- 20. UNDERSTAND VARIATION Everyday faults built into the system are called common variation, they are the noise. “Fixing” them makes things worse. Faults from fleeting events are “special.” They are the signals something must be done. They must be found, studied, understood, and dealt with.
- 21. COMMON CAUSES Poor work flow, ill-designed equipment, lack of training, built-in inefficiency anything out of the norm signals a Special Cause
- 22. SPECIAL CAUSES Illness of employees, new clients, weather, fads, change in federal regulations, loose fly wheel, new employee...
- 23. TAMPERING failure of banking system leading to massive bailout sucking available capital out of the system
- 24. Why When What HOW? Who Where DON’T TAMPER– UNDERSTAND
- 25. USE SIMPLE TOOLS
- 26. VISUALIZE
- 27. SIMPLE CHARTS, PEN AND PAPER
- 28. ALL FOR ONE • 6 operators - everyone gets their own supplies and takes finished goods to shipping • Actual example from The Toyota Way Field-book, Liker and Meier, McGraw Hill
- 29. ONE FOR ALL • less 1 assembler: for supplies & shipping only
- 30. IGNORE SNAPSHOTS
- 31. MAP WHAT HAPPENS OVER TIME
- 32. TIE OUTPUT TO DEMAND
- 34. COST CUTTING CAN KILL
- 35. CULTIVATE PRIDE AND JOY
- 36. DO SIMPLYLOOKING™, quiet your mind and just look.
- 37. THINK OUTSIDE IN
- 38. FOCUS ON SALES ONLY? AND KILL CUSTOMER LOYALTY AND PROFITS FOCUS ON COSTS? COSTS GO UP SALES AND INITIATIVE DOWN . FOCUS ON QUALITY? DRIVE SALES, LOWER COSTS, INCREASE PROFIT, BUILD TRUST.
- 39. YOUR BRAIN IS YOUR MOST POWERFUL TOOL Join the Conversation in Webinars, Training and Peer Groups managenaturally.com
Editor's Notes
- Welcome everyone and thanks for coming. My name is Dan Strongin. I own Managenaturally.com, a coaching service for organizations of all sizeds, and their leaders, and am a founding member of the Deming Collaboration. One of the great advantages of working the way I do, is you get exposed a wide variety of organizations, and learn at least as much from them as they learn from you. I have seen companies succeed, and companies fail, rise up, be reborn and fail again. \n\nUnder normal circumstances, 44% in the first 2 years, then about half that number again in the next two. That’s Across all industries (see graph) Ends up, in spite of all the books, webinars, executive MBA programs and consultants, like myself, you are just as likely to fail in the first 4 years as you are to succeed, like flipping a coin. And that’s a shame. So to address this failure gap, and help you find the 9 or 10 steps that could tip the scale, I decided to focus on how to fail, so you can take advantage of the recession, and the worse one to come. To quote the infamous Bob Dylan, there’s no success like failure. And that failure's no success at all\n\n
- Corporate America, and the consultants, schools, and media who serve them presents an image of prudence and stability, like they know what they are doing. But, as we have seen, given the chance whole industries like finance, act more like gamblers. Gambling has odds you can’t defeat, unless you cheat.\n
- So lets share some ways to tip the scales towards failure, and don’t worry, you are probably doing some, or all of them already!\n
- \n
- \n
- The first step is to keep your focus on what has already happened, a powerful way to ensure failure, like driving while looking only through the rear view mirror. And the best tools to use to ensure this are to operate your business from the results posted on your Profit and Loss Statement, and your Balance Sheet.\nUnlike reality, which is messy, and sometimes difficult to understand, spreadsheets are clean, logical and you can spend hours of your day away from where the money is really made, finding patterns, even where they don’t exist. Whether you get your P&L weekly, or monthly, or it is updated in real time, because it is backward looking, and follows financial and not operational models, it is usually to late to know what really happened, and you can spend hours coming up with creative explanations for the funny figures you find on the paper.\nTo manage well, you need forward thinking reports, and reliable prediction. What was is no longer. Wasting time “fixing” what was, is a surefire way to failure. I shudder to remember all the times I sat combing through results on spreadsheets to find an explanation for what turned out to be unknowable, or only happened once, or worse, an error on the spreadsheet. Hours which could have been spent observing what was really going on, in the moment, while a sale is happening, or when your customer actually interacts with you and your product.\n
- Most people, when faced with market challenges, abandon what little vision they started with and begin a kind of walk about, randomly seizing on things to change in order to confront phantom solutions to causes that are really beyond their control, like THERE’s A RECESSION, so people are buying less!\n\nEven better yet, have not vision of who you are, have no easily uttered common goal for everyone to rally around. If you aren’t going anywhere in particular, any path will get you there!\n
- Banks give lines of credit based on Assets, rarely on the quality of the idea, or the people in the company. What a great aid to ensuring failure, especially when revenues slow, and cash flow becomes a problem.\n\nLets take all the available cash we can get and sock it into inventory that will only lose value as it sits, due to deflation, damage, and theft, and ensure we have no money to purchase raw materials, or pay people to do the work. \n\nAnd if you secure your cash through it, like many people’s mortgages in this market, the value borrowed will quickly be more than the sellable value of the inventory. Time and again I have been asked to step in to help clients that were choking in their own inventory.\n
- You can also trap your money that could be WORKING into tools and support. I worked with one company that spent its last liquid dime on buying state of the art equipment to take on a larger competitor, only to find, in the end, their cost of production was still higher. They failed within a few years in an up market. \n\nSupport functions, while necessary, generate no sales… zippo! They track, move, inspect, order, threaten and sit in endless meetings, yes, but only those who add value directly to a product make the money for the company, so every excessive dollar invested in support functions, is a dollar that is choking sales. GM was the master of socking money into support rather than value adding functions. Their middle level management was many times more bloated than Toyota’s for instance, no small wonder Toyota was 10 times more profitable on the same level of sales.\n\nToyota is suriving a recession, a massive recall and a nuclear accident, GM had to be bailed out.\n
- What better way to fail than to waste precious resources on fixing things that make no difference at all to your overall performance. Like a chain, fixing anything but the weakest link is a glorious waste of time. Roll out your black and green belts and perfect those processes! All of em, but be sure not to work on the weakest link, because that will actually make a difference. (For those who don’t get the analogy, if you pull a chain, it will always break at the weakest link. Even if 5 other links are weak as well, strengthening them won’t help. Either pull the chain no harder than the weakest link can stand, or strengthen the weakest link. Anything else is a waste of time and money.\n\nSo to fail, focus on perfecting on the processes that don’t matter.\n
- When things get stressful, nothing works better for failure than to abuse the people who work for you. Push em to the limit so they break! Rob them of their dignity and they will give you less and less.\n\nWhatever you do, don’t allow them the chance to use their natural creative abilities, by creating as many barriers to their being able to take pride in the quality of their work as you can think of. People who enjoy their work are easy to work with. Make them unhappy!\n
- Perhaps the greatest game to play on the road to perdition is the blame game. In order to ensure that somehow the people you work with don’t spontaneously find ways to actually make things function better, keep them focused on politics and competition. Bury them in dysfunction using the Mushroom Management School: Keep em in the Dark, Bury them in BS, and scream at them to grow! (thank you Lee Iacocca)\n
- Since real profits come from the flow of, work and raw material through your system, be sure and watch this video closely, to learn how effective it is to put up roadblocks to the flow.\n
- Continuing to do the same things over and over while expecting different results is the definition of Insanity. Ben Franklin said that, first. But even better than Ben Franklin, leave all training to those who are doing it now, so all the bad habits and misunderstandings they have acquired can be passed on to those they train! \n\nWhatever you do, do not study your processes, do not improve your system, and never put a dime into real training, by those trained to train within your organization. Consistent practice and agreed upon definitions and methods makes things too easy to predict, and if you can predict you can manage, and that leads to success, not failure. \n\nAh, a toast to the Blind leading the Blind\n
- \n
- It is a bit unfair to provide you with the secrets of how to fail in a recession without also supplying the antedote, however, we have been practicing doing things wrong for a long time, and each of you, I am sure, found some things you recognize, some of you, unsure, or disagreeing, perhaps. The right things to do, the effective things to do are less well know, obviously, if you look at the state of our economy, and it would be folly to pretend we could cover them in any depth here. At the end of the presentation, what you will sign up for , or pass up on, is the chance to talk one on one, about your particular situation, for an hour and a half, for free, in which you will be given another one of my devilish choises, to walk away, or go into more depth on what to do to win. Either through an affordable online peer group of from 2 to 12 people, just like yourselves, from different industries and locales perhaps, but with similar challenges, having serious weekly discussion exploring the challenges of managing, facilitated by me, or one of the other founding members of the Deming Collaboration, or you can sign up for training, on specific topics or in an ongoing, programmed course on supervision, or you can work with me to develop a tailor made mix of training, online peer group, and one and one coaching, both in person with online to find the most effective way for you to transform yourself and your organization. \n
- \n
- Though a necessary evil\n
- \n
- Variation and Change are Everywhere and give rise to uncertainty. \n\n
- Can only be Improved by Improving the System\n
- out of your control.-\n minimize or Remove\n
- out of your control.-\n minimize or Remove\n
- Beware the Tyranny of the urgent!\n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- \n
- Don’t waste resources chasing prospects: focus on the ones you have. Understand what they want \n
- \n
- \n