Restless Knights

Dec. 21, 2004
What causes CEOs to count sheep?

Three years ago globalization and growth were the two management issues that CEOs said would cause them to lose the most sleep in the coming year, according to Industry Week's CEO survey. No longer. As manufacturing heads into the next millennium, the CEOs who responded to this year's IndustryWeek survey say they will lose the most sleep in 2000 over achieving operational excellence and finding the people their companies need to be successful. The survey was sponsored by Dallas-based global management-consulting firm Thomas Group Inc. "My biggest management issue is operational excellence," says Fred Keller, chairman and CEO of Cascade Engineering, Grand Rapids, Mich. "That is the long-term key to survivability and growth. And you need to find and retain great talent to continue the push forward." Thomas L. Reece, CEO of Dover Corp., New York, a $3.8 billion manufacturer of industrial equipment, loses sleep over the same issues. He worries about "the overall crispness of operations, the effective use of technology" -- both for information systems and for manufacturing -- and about "having the people capable of putting it all together." That's a message repeated by CEOs from Scandinavia to New Zealand. In addition to people and operational excellence, CEOs lose sleep over industry-specific issues. For example, Axel Cedercreutz, vice chairman of Tamfelt Oy AB, a Tampere, Finland-based supplier of chemicals to the paper industry, frets over his firm's small size. So he thinks about "how to merge and form a new bloc against the three biggest competitors. We have a 4% worldwide market share and the three biggest have 70% of the market." Global automotive-parts suppliers are concerned about becoming lean manufacturers. There is "a constant squeeze from OEMs on piece-pricing, requiring continuous improvement," says Robert Kaminski, CEO of Continental/Midland Inc., Park Forest, Ill. So he worries about being able "to continue to overcome [through improvements in operations] the price concessions [automakers demand]." Bernard Vonderschmitt, chairman of Xilinx Inc., a San Jose-based manufacturer of high-tech equipment, fears that the companies it supplies will switch to suppliers in Japan or Taiwan. On the other hand, R. Dean Stickler, CEO of QC Laboratories Inc., Hollywood, Fla., wrestles with the process of "selecting suppliers that will continue to provide quality and [deliver] pro-ducts when they said they would."

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