Competing January 2005 Edition

A new year, a clean slate and a challenging economy…..what an opportunity!

At some level, we all think we are doing our best for our shareholders, customers, employees and vendors, but will the same old way still work? The world economy continues to change so fast it’s frightening.

• Do you expect change will slow down anytime soon?

• Do you believe you need to make changes to grow or maintain your business’ competitive position?

• Do you believe you can improve your company’s effectiveness and competitiveness?

• Can you lower your costs?

• Can you get faster and more responsive to ever changing demand?

• Can you gain market share?

• Can you increase sales?

• Can you improve profitability?

Late in 2004 I had the opportunity to see two wonderful presenters at TEC meetings ( http://www.teconline.com ). With apologies to the speakers, this is the primary message I heard:

Make a list of those who can withhold support and impede success, then include key members of that group in the development of the improvement plan. If it’s their plan they will make it work.

It’s becoming a Wal-Mart economy that means customers will begin to analyze your P&L and strike items such as Sales, General and Administrative from fixed overhead. They don’t need or wish to pay for your sales staff…….just cut the price.

Define the role of your strategic management team to assure focus on:

• Continually evaluating the present and future needs of your customers

• Satisfy those needs profitably

• Continually monitor your competition

• Keep your competitive advantage appropriate

Like the Godfather said, “Keep your friends close but keep your enemies closer.”

I am excited about the challenges 2005 will put in our path. Life is about challenges and how we deal with them. It is very possible 2005 will be a tremendous year for your company. Keep a careful eye out for the “Tipping Point” that may create rapid changes in your industry or the overall economy. Be ready to respond to those changes fast. Flexibility and the ability to turn on a dime are requirements for the new economy. Just ask U.S. Airlines, IBM or Polaroid.

Brilliance is a wonderful thing, but I’ll take courage and resilience. Brilliant ideas that cannot be implemented are a waste. Courage and resilience along with the practical, disciplined application of common sense will serve your company and our economy well.

The Lean Network of South Central Pennsylvania will be focusing on these and other challenges through 2005.

Happy New Year and my best wishes to each of you.

– Dwight Bowen

From Peter Schutz, ex-CEO of Porsche – the ability to effectively make changes comes from any of these three levels of empowerment:

• Authority – that means company ownership (often shared with investors or banks).

• Power – those people who can approve or deny actually implementing change

• Influence – the ability to persuade.

Peter’s contention is that Power is the key and suggests developing a list of all those “in power” or control of effecting change and developing a plan that includes them in it’s design.

Sam Bowers spoke of a “Wal-Mart economy” one that focuses on cost, one that has your customers analyzing your P&L’s requiring companies to move items like SG&A from fixed overhead to variable. Read that, as “Wal-Mart will not pay for your salesmen and sales staff”. Sam contends that your customers are becoming better buyers, less loyal and prepared to pay for value only.

“Beneath the Armor” by Ole Carlson