Brandt On Leadership -- Old-Fashioned Leadership Still Matters Most Of All

Dec. 21, 2004
IW/MPI Census presents magic bullets for better plant performance.

If I could sell you three magic bullets -- guaranteed to improve your company's performance immediately and for as long as you continue using them -- would you buy them? You'd say, "Of course." If I could prove that you already owned these bullets -- but were too busy putting out fires and looking for shiny new strategies to notice them -- would you let me? You'd say, "Show me." OK. The 2003 IndustryWeek/ Manufacturing Performance Institute Census looks at a lot of strategies -- whether lean manufacturing works better than Six Sigma, whether the Toyota Production System offers more promise than Total Quality Management, et cetera. Yet, for all the interesting particulars, the clearest message is that old-fashioned leadership still matters most of all -- not only in terms of strategy, but also in terms of how leaders specifically interact with their employees and managers. According to the Census, three broad categories of human resource and leadership practices correlate strongly with the achievement of world-class manufacturing status. Even better, these practices are available -- at little or no cost -- to any CEO, vice president or plant manager willing to pay attention. What are these magic bullets? Find the right workers: The frustrating days of the late 1990s -- when manufacturers couldn't find warm bodies, much less qualified workers -- may be over, but the challenge of finding the right employees remains. Nothing boosts performance faster than hiring talented, motivated workers. Yet despite its importance, more than 26% of all plants don't have a formal recruiting and hiring program. Even more striking are the differences between plants that have made no progress toward world-class status (44.5% have no recruiting or hiring program at all) and world-class facilities, defined as those that have either achieved or made significant progress toward world-class status (83.9% have a formal program, with 31.7% rating it as highly effective). The message is clear: Plants that establish formal recruiting and hiring programs perform better than their peers. Train, train, train: Having the right workers won't help if they don't understand what you want them to do and how to do it. World-class facilities not only invest more dollars in training (68.1% spend 2% or more of their annual labor budget on training vs. just 35.5% of no-progress plants), they also expect more of employees (46.7% require at least 21 hours of formal training per employee per year vs. just 18.8% of no-progress plants). Many companies cut training programs at the first sign of a downturn, believing, evidently, that it's best to face troubled times with untrained, ignorant workers. The 2003 Census offers powerful rebuttal: To be world-class means to train. Get out of the way: Thomas Jefferson wrote: That government is best which governs the least, because its people discipline themselves. According to the Census, the same holds true for management. World-class facilities emphatically place the power for decision-making and customer satisfaction in the hands of frontline workers (40.8% have at least 50% of their workers in empowered or self-directed work teams vs. just 16.6% of no-progress plants). How do they do this? By using effective teaming schemes (74.1% of world-class plants vs. 41.2% of no-progress plants) and performance management systems (89.8% of world-class firms vs. 56% of no-progress firms). Anybody want to buy a magic bullet? Editor's Note: On Dec. 17 John R. Brandt discussed the results of the 2003 Census of Manufacturers during a Webcast hosted by IndustryWeek. Click here to view the archived event. John R. Brandt, formerly editor-in-chief of IndustryWeek, is CEO of the Manufacturing Performance Institute, a research and consulting firm based in Shaker Heights, Ohio.

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