Industry Watch
Nov. 24, 2014 - Up until the industrial revolution, the typical working man (forgive the political incorrectness for now) was able to easily measure the achievements of his efforts by, for example, how much wood was chopped; how many cows were milked; how many miles of fences mended or rows tilled; how much seed was sown and how much crops were harvested. The payoff for every day’s effort invested was not just the tactile results, but also the pride and satisfaction that went with it.
Oct. 24, 2014 - Many years ago, I read Steven Covey’s landmark book, The 7 Habits of Highly Effective People. I have read many other good books since that time, but this one still stands out as a foundational book for me, especially as I consider the roles in my life where my abilities as a leader matter.
Sept. 29, 2014 - My father-in-law is 81. It’s been over a quarter of a century since he retired from Goodyear, but every year he still attends the company golf tournament, and he keeps connected with many of his former colleagues. The bulk of his career was in the time where people spent their whole working life with a single company, and where there was a reciprocated loyalty between employer and employee. (I still don’t dare to buy a different brand of tires because I know he would notice it right away, and in a small way, it would offend him.)  
Many Canadian manufacturers are producing advancements and innovations that have the potential to help these companies — and the industry as a whole — grow and create jobs. Many governments are trying to do their part to fan any small sparks of growth, or to encourage employers to take leaps of faith to make fresh investments in their region. But for some of the traditional manufacturing regions that have been hardest hit in the recent decade, this will not be enough. Organized labour needs to participate in any potential manufacturing revival, and our governments may need to play a new role, too.
In recent decades, it seems to me that the manufacturing industry has been a slow — and often times reluctant — adopter of information technology. CAD/CAM and ERP systems have been a big part of the manufacturing world for a while now, but in the majority of plants I visit, this is about the extent of it. Meanwhile, there’s a new revolution happening — M2M (machine-to-machine) and the Internet of Things — that, so far, seems to be ignoring the plant floor.
There are many instances when our processes regularly lose production time — before shift end, before and after breaks, or as a result of extra setup or maintenance time, adjustment time and time waiting for parts. All of this is lost time that has to be made up or accounted for.
“Entrepreneur is just another word for unemployed.” This remark is doubly cutting — first, because my wife made it; and second, because more often than not, I realize it’s true.
Early in my entrepreneurial career, my father tried to impress upon me the importance of good accounting disciplines. His words of advice — “you can’t improve what you don’t measure” — fell on relatively deaf ears most of those early years. I was too busy trying to bring in new business or trying to get things working. I saw the accounting function as something that was useful mostly to the bank and the tax man. With all of the more important tasks on my own plate, I ascribed to the wisdom of the classic Kenny Roger’s song, “The Gambler”: “There’ll be time enough for counting, when the dealing is done.”
I recently visited my old neighbourhood for the first time in about 20 years; though it has been more than 40 years since I lived there.
My fridge is filled top to bottom with refrigerator art—drawings made by my granddaughter, depicting life as she sees it. The pictures usually include all the people important in her life—her parents, her siblings, my wife and I and, often, the family cat or the dog she hopes to one day have. Sometimes there’s a car in the picture, or a boat; sometimes trees and blue skies and a bright yellow sun.
Cars. If it weren’t for cars, our society wouldn’t be what it is. There is far more to that statement, however, than just the obvious. Cars have made a significant impact in our society, far more than we ever may have realized. Aside from transportation and the convenience we often take for granted, the existence of cars has positively affected our society’s economy in ways no other single device or industry ever has, or may ever do. Manufacturing creates more direct and indirect employment than any other sector.For every direct manufacturing job, there are said to be up to seven more indirect jobs. Every one of those jobs creates personal wealth and income. And automotive manufacturing is the largest sector within manufacturing, as well as being one of the best paying. But automobile manufacturing benefits our economy in far more ways than just the seven-times employment factor of the major factories. Steel companies produce the steel needed by the suppliers and assembly operations; mining companies mine and deliver the raw material for the steel industries; rail systems are operated and built to support the mining industries. From the mining of ore to its conveyance to the steel plant and its subsequent transport to the automobile factory, many hard working people receive a fair remuneration for their daily efforts. Beyond that, the economic contributions of the car continue. Dealerships and service centres abound, each one employing several dozen people to sell and service them. Fuel stations outnumber service centres, and each of them employs people and provides a convenient refilling service. Refineries work 24/7 turning crude into useable fuel to keep the gas stations supplied, and oil drilling operations offer many lucrative employment opportunities to keep the supply of crude flowing to the refineries. From the harvesting and conversion of natural resources, turning oil and ore into fuel and metals, the automobile industry creates an enormous amount of society’s wealth. Converting the raw materials into finished products then increases that value exponentially. Add to that the ongoing economic benefit of the automotive support industries, and it’s hard to imagine where we would be without the car. Our roads and highway systems would not be what they are if we didn’t have cars to use on them. Infrastructure projects include more than just roads and bridges, but it’s easy for me to believe that building and maintaining our car-related infrastructure employs more people than all the other public infrastructure projects combined. Our middle class is eroding, and so is our government’s ability to fund the social safety nets that our society enjoyed for what may soon seem like a historical anomaly. Public education and healthcare, transportation and public infrastructure, ample clean water and sanitation, pensions for the old and safety nets for those unable—all of those wonderful things may have been created by inspired leaders and put into place by motivated governments, but they were paid for by the wealth created in our society by industry. And the biggest among these is—or was—our automotive industry. As I sit in the driver’s seat of my car, comfortably traveling from point A to point B, I think about these things. We passively watched our once great industries leave our shores, and we educated our kids to believe many of these jobs were below them. Now we wonder why we can’t afford what it is we have come to expect. If there is another industry out there that can generate the kind of individual and collective wealth that the car did for the last hundred years, I say “bring it on!” But until one emerges, let’s hold on a little tighter to the industries we have. They are what brought us here, and it was the car, more than anything else. This article originally appeared in the June 2013 issue of Manufacturing AUTOMATION.
“Innovation” is one of my favourite “I” words, but it’s not my most favourite—it doesn’t even make the top three. It is one of what I consider as being in the middle three “I” words. It’s a group just behind the top three, but just ahead of the bottom three. So here are my favourite “I” words, starting with the bottom three: “Income,” “Incentive” and “Industry.” These are the desired outcomes from all of our working, business development and entrepreneurial efforts—it always comes down to one of these three words. It’s the fruit of our labour or the return on our investment. It’s what pays the bills and causes us to go to work each day, whether we enjoy our job or not. Individually, it’s the generation of income. Collectively, it’s the creation or propagation of industry. “Innovation,” “Ideas” and “Improvement” are the middle three. These are the words we credit for the success of our income-generating activities, and our industry’s too. We have come to learn that we can’t keep doing things the same way they used to be done, or the same way that other people do them, because if we did, we would eventually fail. In North America, we will never win the price game and good quality is already considered a given. Having a good product, with good quality and good service is often not enough these days. It’s only a matter of time before someone else recognizes your formula for success, and then they’ll aim to deliver a product or service slightly better than you are, or slightly cheaper, or with slightly better service. The only way to stay one step ahead is through new ideas, or innovation, or through a continuous improvement philosophy that encompasses more than just your production processes. Innovation and improvement require a constant supply of fresh ideas and a commitment to investigate and sift through all the new ideas that come into the new idea hopper. Sometimes it astounds me how many companies I encounter profess a commitment to “Innovation” and “Improvement” but in practice are at best reluctant or at worst averse to considering any new ideas that might change their current paradigms. In a world where manufacturing capacity exceeds demand (likely for the first time in history!), sustainability is not assured by continuous improvements or incremental innovation alone, because everyone else is doing those things too. Every now and then, we need a market-making or game-changing idea—and they come from the top three “I” words. “Inspiration,” “Insight” and “Imagination.” These are my favourite “I” words. It’s where ideas come from—they come from some place magical. You can’t learn it, or teach it; all you can do is foster a culture and attitude that is receptive to them, embraces them and has the courage and discipline to apply enough energy and resources to them to see what might happen with the wisps of ideas that come from them. Inspiration is often defined as a divine influence. Insight is thought of as self-awareness or having a clear perception. I think it’s both; it’s a matter of looking inside yourself and being honest with what you see. Imagination is the ability to form new images that are not perceived through your regular five senses (your sight, hearing, etc.). New ideas come from the top three “I” words. When you see something and it triggers a “that’s it!” sensation inside of you, that’s your insight alerting you and telling you to take notice. When something comes to mind that didn’t get to you through your five senses, it was formed in your imagination, or it was inspired into you. It’s safe to say that in manufacturing today, our primary focus is on the bottom three “I” words of income, incentive and industry. When we are facing some pressure to change, we adjust our sights just a little bit and challenge our organizations to also think about things like new ideas, improvement and innovation. But to differentiate yourself from all the other companies (remember, they also spend time on the middle three “I” words), you have to adjust your sights even higher, and start to tap into the power of the top three—my favourite “I” words. This article originally appeared in the May 2013 issue of Manufacturing AUTOMATION.
It’s 10 a.m. on a Friday morning, and I’m moving a little slower than I normally do. I landed in Detroit at midnight last night, and from there it was a two-and-a-half hour drive home. It was a long three-day trip just to visit two plants and have dinner with one customer, but it was worth it.My most recent column focused on the topic of “seeding” and the importance of seeding consistently and with intentionality. This column is about “cultivating” and “harvesting” the opportunities that result from the seeding efforts.Most entrepreneurs I know are natural cultivators; they cultivate products, or ideas, or customers, or relationships, or simply just opportunities. No matter which one of these it is, it gets their full attention, without any need for an enforced discipline or routine or any need to be encouraged. They are often so naturally oriented to cultivation activities that it sometimes is to their, and their companies’, detriment; the importance of the seeding activities are overlooked and harvesting opportunities are missed or mis-timed. When we are doing what we love doing, “work” is easy. Products, projects and specific business opportunities become our “babies” and we steadfastly cling to them, pouring in all our available time, energy and imagination. The completion of a project, the maturing of a product or the closing of the big deal brings the cultivation period to an end, and it’s often not easy for the cultivator to let go. This is more true for technically-oriented people than it is for relationship-oriented people, but I have also seen some sales- and marketing-focused people completely miss the “ask for the order” opportunity or, nearly as bad, cling to their baby and try to retain control of it even after the deal is made. Trying to close a deal too soon, before the opportunity or relationship has been properly cultivated, is another costly mistake. Good negotiations require a level of trust and respect, and these things are developed in the cultivation process. Negotiating without having established trust and respect reduces the process to simply having to win on price, which lowers your profit margin potential. It also increases the chance that a competitor will win the deal because he or she cultivated the relationship or opportunity better than you did. My own strategy for cultivation is simple: “escalate the connection.” Turn a webpage inquiry or tradeshow lead (or any lead from your seeding activity) into a personal email reply as promptly as you can. Sign off with your first name and a simple salutation. Escalate the email connection by following up with a phone call; leave a voice mail if there’s no answer. Escalate the phone call with an offer to meet. If the opportunity warrants, establish a face-to-face meeting with them, and make the effort to get to know them, allowing them to get to know you too. Escalate each connection as far as you can effectively and deepen the relationships that hold promise and opportunity. Face-to-face meetings may seem expensive and unnecessary, but if it’s the escalation step that your competitor won’t make, it can become the differentiating advantage.Cultivation is key to closing more deals and making a better margin on each deal, and it’s a process that most entrepreneurs do naturally. The difference between success and failure, though, is often a matter of knowing how and when to harvest the cultivated opportunities.   A few months ago, at a trade show, I made a connection that turned into an exchange of email messages, that set up a couple of telephone conversations, that in turn became a series of face-to-face meetings. The most recent meeting was 3,000 miles and two time zones away. Now I’m preparing for yet another face-to-face meeting, but this will be a simple meeting—to sign the deal. It’s harvest time!And, still, it’s seeding time, because it’s always seeding time. This article originally appeared in the March/April 2013 issue of Manufacturing AUTOMATION.
It’s Sunday afternoon, cold and rainy, and as I wait for the first football game to start, I look through my “seeding list,” a little list that I keep in a notebook that is always with me. My “seeding list” is comprised of names of people, companies, or opportunities that I encounter over the course of the working week that I think are worth further investigation. In my previous column, I mentioned that growing a business is a lot like farming; it requires seeding, cultivating and harvesting. This column is specifically on seeding. For many companies, “seeding” is a responsibility of the marketing department, and the activities of choice are tradeshows, websites, advertising and email campaigns. Some very motivated salespeople sometimes get involved by making cold calls, but this is increasingly rare. Relegating seeding activity to a select few people involved in marketing roles is one of the three most common mistakes I see in many companies. Believing that marketing has to be a “big budget” undertaking to be effective is the second.   Companies that wish to grow need to be strategic with their seeding activities – even those that already have their order books full. When business starts to slow down, big deals are lost, or expected deals fail to materialize, that’s the time when new opportunities will need to be cultivated and harvested. The best way to keep the hopper full of opportunities is to consistently and intentionally spend time seeding, and the best way to do it cost effectively is to make sure you measure the pertinent results. Failing to measure accurately is the third most common mistake. The default measurement for many companies is often the total sales figure, but it’s important to measure with greater granularity if you want to improve the return on your specific marketing and seeding efforts. For instance, a contract email marketer that I once employed found that “person to person” emails yielded far more replies than bulk email campaigns did, and that there were specific times of the day and days of the week that yielded the best results. She observed that she often got instant replies to direct emails that she sent out on Saturday or Sunday evenings between the hours of 8 and 11 p.m., but never got replies to bulk emails sent out during the business day. In her role as a “seeder,” she didn’t measure sales – she measured “replies,” “replies converted to phone conversations” and “phone conversations converted to appointments.” Converting opportunities to sales is a measurement for the cultivators and harvesters, not for the seeders.     The same is true for tradeshows. Many companies measure total sales attributed to the show, or total leads generated by the event, or perhaps only the cost of participating. But as any good accountant will tell you, to get better results requires better measurements. How many connections were made in advance of the show? How many connections were made at the show? How many opportunities were qualified from those connections? How many of the qualified opportunities were for what specific products?  How many of those opportunities were followed up promptly and personally? How many resulted in products being quoted? Many companies have concluded that they have to be in certain tradeshows, and that those events are very expensive. But by being more intentional with their pre-show, at-show and post-show activities, and by measuring those activities more granularly, they can derive far greater yields from this expensive seeding activity.   But as I said, not all seeding activity has to be expensive. Before the first kick off, I sent out a few specific emails following up on some items on my seeding list. By half time, I had received two interesting responses. By noon tomorrow, I’ll make two phone calls, and hopefully make at least one new appointment for the week. Every face-to-face appointment represents a new opportunity that can be cultivated—but that’s a topic for the next column.   This article originally appeared in the January/February 2013 issue of Manufacturing AUTOMATION.
Growing your business is a lot like farming. The three critical activities are seeding, cultivating and harvesting. Most of the remaining ingredients required for success are up to forces outside of your control. In the farmers’ case, it’s the market price for their crops, their input costs (seed, feed, fertilizer) and the biggest variable of them all, the weather. In the manufacturing industry, it’s raw material costs, labour costs, and the “economic climate,” which includes the market demand for your product and the availability of similar products from lower cost competitors. Just like farmers, entrepreneurs and business leaders like to talk about the factors outside of their control, hoping that a superior force hears their pleas and somehow takes care of all those things. But, that seldom happens, and after all the wishful talking and complaining, the actual work still has to be done - and that work is the seeding, cultivating, and harvesting.Seeding: To most, “seeding” is a responsibility delegated to “marketing.” Typical seeding activities include tradeshows, email campaigns, advertising, websites, etc. These are in fact “seeding” activities, but in most business cases I’ve observed, the seeds that are scattered fail to take root for one of the following reasons: the activities are not strategic, intentional, measured, or properly connected to the company’s cultivation activities. Seeding has to be intentional and ongoing, and it has to be measured to know what is working and what is not. When some seeds do take root, those seedlings need to be properly placed in the care of someone that knows how to take care of them, and the seeding activity has to continue.Cultivating: This is the area where most of the entrepreneurs I encounter dwell. Gravity seems to pull them here. They are either relational by nature (directing most of their attention towards culturing relationships), or technical by nature (directing most of their attention towards their technical or product passions). This results in a very common mistake - the seeding activity ceases as soon as something takes root. Technically oriented entrepreneurs often keep raising the bar on the technology they are developing, convincing themselves that they won’t release a product that is less than the best it can be. Relationally oriented entrepreneurs often miss the opportunity to close the deal or make the sale because they have focused entirely on their customers’ best interests, and forgotten about their own. Cultivating a product, a relationship or an opportunity, is perhaps the most valuable and effective activity for most entrepreneurs to focus on, but failing to connect those activities properly with the seeding and harvesting activities will limit the company’s growth.       Harvesting: A product cannot stay in development forever, and all the time invested in cultivating a relationship has to eventually bear fruit too. It’s the harvest that continues to put food on the table for the farmer every season, and the only way a company can stay in business year after year too. A company that doesn’t live from what it harvests is either living off of investment capital (which is a short term thing), or a company that will eventually starve. In the next few columns, I will be writing in more detail on all three of these activities, drawing from my own experiences (successes and failures), and from what I have learned working with other successful business leaders and entrepreneurs. This article originally appeared in the November/December issue of Manufacturing AUTOMATION.
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