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Dear CEO – You Need Operations Help

Image result for image of hikingThe feeling is like climbing up a hill only to realize that the much bigger mountain is up ahead of the rise you just climbed.  You thought that all was well. The engineering team has working prototypes. Sure, they were made in the lab with machined parts and tape and glue, but they work. Customers are anxious to get their hands on units. Investors want to see the numbers. There is pressure to show revenue and to talk through the path to profitability. Reality hits. The questions start to pour in:

  • Who will build in volume? Do we start in China? Can we start locally and move later? Should we build in-house?
  • How much will it cost? Really? That much? Why didn’t I know about those adders?
  • How do they know what to build? Why isn’t our spreadsheet good enough?
  • How do we get our mechanical parts for much less? Tooling cycle times are how long?
  • What are the processes we should use to keep labor costs in check? Oh, we are not designed for automation?
  • How do we ship this product? Will our box withstand global shipment? How do we know?
  • Should we differentiate for different geographies? How many assemblies will that be? How do we structure? What about documentation?
  • Who will service our customers? Can we handle the volume of calls in-house?
  • Where do we hold our inventory? Who will fulfill? Who will export? What are the cost implications?

If these questions are coming up, you should have hired operations expertise already. If they haven’t yet come up, then act now. Ideally, the operations problems are solved in parallel with the design and both sides are influenced by the other. If done in serial there will be some rework. What are the options for a CEO?

  1. Hire a full time operations expert. In order to have the right breath of expertise the hire needs to be hands on and at a high enough level to have experienced all of the key elements of product launch. If this person is your first ops hire it will be a challenge to attract the right person who will remain the right person as you scale. This alternative might be the most expensive but the benefit is that you have a team player on board who is part of the company story and will provide continuity.
  2. Hire a consultant. Bring in someone(s) who has exactly what you need at exactly the right time. If you partner with the right consulting group you will be able to tap into a breadth of experiences and levels and can dial up and down the resources as needed. Ideally there should be a lead person who has the depth and breadth of experience. Bringing in experts will save you more money than you spend. Consider this an investment and an accelerator to volume.
  3. Hire a buyer and manufacturing engineer who have the experience and willingness to wear many hats. Supplement with your own operations leadership or with leadership from your VP of Finance or Engineering. The leadership can’t be taken lightly and you must honestly assess those skills. Don’t kid yourself. Launching a product into a supply chain is complicated and requires time and experience or costly mistakes can be made. You can delay hiring a VP or Director of Operations only if another senior leader has the time, experience and interest to lead. Or you can hire a consultant to act in this interim role.

Warning! Blatant promotion coming:  You should hire me as an operations consultant. I’ve worked in and with many start-up companies. I’ve seen costly mistakes made because the operations tasks were overlooked. I know what to look for and avoid. I would much rather help you avoid than help you fix and clean-up. I am a doer. I like owning things and delivering to the bottom line. I am a firm believer in understanding enough about the problem to ask the right questions. And I can smell discontinuities. I know how to proceed with gnarly tasks because I’ve had the experiences and possess the intuition to make this work instinctual. I know others in the field and can bring in the right person at the right time to solve the problem most effectively. Yes, you should hire me or someone like me if you have started to notice that there is a mountain of work ahead and you don’t have on good hiking shoes!

I don’t spend my time pontificating about high-concept things; I spend my time solving engineering and manufacturing problems.       Elon Musk

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OpsTrak Consulting      925-437-4125

 

I Know How it Feels

Council of the Baltic Sea States Summit 2012…when the handshake isn’t returned…when the answers to your questions are directed to the man in the room…when the good point you make is ignored until it is restated by your male peer…when eye contact is not made, invitations are not extended, emails are not returned, smiles are for the wrong reasons, hard work is not rewarded, …

As a woman executive in a technology field I’ve often been asked if it was harder for me to progress through my career as a woman. When I try to think of the big stories, I come up empty-handed. I was not blatantly discriminated against. No boss ever hit on me. I wasn’t asked to get the coffee or clean up the dishes in the break room. I have done well in my career. I started as an engineer and have been at the VP level at several exciting companies. Based on outward signs I’ve “made it”. But there is something not quite right about the journey that I only now am able to articulate and even now it is blurry and inconclusive.

The challenges faced by a woman in business are usually very subtle and thus are often dismissed or minimized. As a 30-year-old manager working with a Korean supplier I was surprised to find that the leaders would only talk with the men on my team. They would not shake hands with me. I had to convey my messages through the guys to get action. It was appalling and disheartening. But hey, this was another country with cultural hang-ups. It wouldn’t happen in the US…. But it did. As I rose through the ranks and engaged with other companies I realized that some men across the table did not make eye contact with me. Perhaps they answered my questions, but the answer was directed at the man in the room. At the end of the meeting there were awkward moments when I stuck my hand out with no response from the other. It was subtle. Maybe no one else saw. But I saw it and felt the impact.

The first reaction to a discriminatory snub is disbelief. That didn’t really happen, did it? I must be imagining. And then you try to write it off. It wasn’t personal. I don’t need to be bitchy about it. And then anger creeps in. What the heck. I was just dissed. Finally, you try to fix it. I’ll be more direct. I’ll call the guy on the phone.  A happy ending to this kind of cycle is when I pull the offender to my side. I show him my capabilities and he comes around. He listens and I’m given respect. Ah, but the energy expended takes a toll.

Next time I’m asked if it was harder for me as a woman I plan to say yes. But the stories aren’t grand and there is nothing obvious about the slightly steeper slope that I had to climb, but it was steeper for many subtle reasons.

I hope you will find some way to break the rules and make a little trouble out there. And I also hope that you will choose to make some of that trouble on behalf of women.”                              Nora Ephron, screenwriter

Made in USA: How We Do It Matters

house-of-strawHuff and Puff and Blow that Economy Down…

What is not to like about more US manufacturing? It is important to our economy, to national security and to the individuals needing jobs and purpose. A nation should be able to build the things that it needs. A hollowed out economy that is only exporting services is not a long term play.

But a revolution is not the solution. Shaming companies to come back is also not a simple anecdote. It took us over 20 years to dismantle our manufacturing prowess. We can’t bring it back overnight. Without some planning we will build a house of straw. We will alienate our trading partners. We will bring back jobs that we can’t fill because we don’t have trained workers. We will try to use the same processes and facilities we have always used and the result will be poor quality and expensive product. We will impact our economy because our goods will be more expensive. Finally, retaliation by other countries will slow down the exporting that we do today. The right way to bring back manufacturing is to consider all of the aspects of a strong foundation and to build a house out of brick. What will that entail?

  • Focus – What kind of manufacturing is right for this country? Given our higher standard of living we will not find enough workers for low skill tasks. The best products for re-shoring can be manufactured using automation, are high value or are heavy or bulky. Those kinds of products don’t rely on low wage workers and they cost a lot to move around. If the market is here you can eliminate shipping costs by building here. We also should consider where we can bring a competitive advantage. If we have access to materials and other natural resources, design expertise or automation capability we can do a better job than the competition and build product for the US market and also successfully export. Examples of good products for US manufacturing are appliances, vehicles, expensive electronic devices, machinery, robots and construction materials. It also makes sense to build close to home when a product is difficult to build and contains a lot of intellectual property. The interaction between manufacturing and design engineering is critical during a fast ramp and doing that close to home has time to market advantage. Time is money and fast to market protects IP.
  • Infrastructure – We need better roads and power and better access to human resource. State government officials in some locations are working on this. Kentucky, South Carolina, Tennessee  and Alabama are attracting more than their fair share of new manufacturing jobs because they have favorable policies, strengthening infrastructure and active government programs aimed at attracting companies. Each state needs to craft policies to attract the kind of industry that will be beneficial to the population.
  • Prepare the Workforce – In a 60 Minutes interview Tim Cook, the Apple CEO, said that one of the reasons that Apple needs to build phones in China is that the US doesn’t have a trained manufacturing labor force. The obstacle is not so great. If we package training with job opportunity at a living wage, the workforce will be available. Apple can not afford much labor content with this model but automation is a way around that roadblock. Increased automation will generate the need for other skills that we currently lack in the US. We need more manufacturing savvy engineers. We have the best higher education system in the world and there are many excellent programs that can meet this need. Those programs train engineers for the whole world. We can harness that momentum for our own workforce through part-time, online or even full time degree or certificate programs that are sponsored by companies in need of talent. This is an investment worth making and where some profit should be directed.
  • Government Support – Of course tax reduction is what comes to mind here and perhaps President Trump’s intention to increase the tax burden on companies importing goods will help fund education or infrastructure. But there are other ways our government can have a direct impact on a continuing manufacturing renaissance.
    • Training program sponsorship or tax credits
    • Increased community college support for practical apprenticeship type programs
    • Higher education support in the form of manufacturing and technology research grants
    • State or Federally sponsored manufacturing initiatives used to focus funds and research
    • Increased vigilance for fair trade 
    • Logical and sustainable regulations that solve for both competitiveness and the environment.
  • Leadership and Vision – When I worked with Canon, I was told that Canon just did not understand our actions. HP was making decisions for our stockholders. We were trying to minimize the tax burden and they felt that taxes were a patriotic duty. Losing jobs to China was a defeat and there was much debate prior to any movement of manufacturing. They believed that they could build the product with higher quality and with more process technology and therefore it would ultimately be less expensive. Perhaps we can’t turn public international companies into patriotic entities but with more visionary leadership and more action that drives innovation and competitiveness right here in the US,  companies can find a win for US manufacturing and for stockholders. The win is there. It will take leadership to invest in factories, commit to a plan that isn’t easy to pull off in the short term and then execute with determination.

There is a path to solid manufacturing growth in the US. It isn’t a move back to the 1970’s. We won’t go back to what manufacturing looked like then but neither will the rest of the world. The new era of manufacturing will be lean and automated. It will require an educated workforce and a supportive government. We will need the willpower and the leadership at high levels in government and industry to take a stand and to chart a path to a successful win-win future where the consumer gets a good “Made in the USA” product at a competitive price.

“All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse.”     Benjamin Franklin

Audacious Manufacturing

brave

Let’s be Audacious.

  • Smart Manufacturing takes advantage of data to drive processes, designs, build plans and quality checks.
  • Automation lowers costs and increases quality.
  • Additive Manufacturing helps us build product we couldn’t otherwise build and enables fast time to market.
  • Lean Manufacturing optimizes resources, removes waste and increases visibility.

All of this is great stuff. Let’s embrace all and become Audacious Manufacturing. If you are audacious you are bold and daring. Manufacturing is often just the opposite. Manufacturing executives tend to be cautious and careful. We don’t brag. We let the results speak for themselves. Manufacturing people get the job done but we let the marketing people advertise and the sales people sell. It is time for the manufacturing community to be bold and brave and to market and sell what we can bring to the economy and the country. We can compete globally and are doing it in many sectors already.

As a young intern engineer, I modeled transmissions, wrote papers on transportation alternatives and developed engine combustion simulations, but nothing beat the time I spent working in the Pontiac, Michigan plant where GM trucks are built. That drove my decision to take a job in manufacturing after graduation. I love walking through a manufacturing plant where parts are assembled and products are tested and readied for shipment. Cars, computers, storage systems, networking systems, printers, construction materials, medical equipment: I’ve been to these factories around the world and get the same kick each time. Seeing these plants in the USA brings me even more joy but for many more reasons.

Manufacturing strengthens our economy, creates jobs at a faster rate than other sectors and keeps our creative juices flowing for new idea generation. It brings communities together and keeps us ready as a nation to protect our country. Manufacturing uses a broad set of talents and welcomes a diverse population into its employment. It generates supportive industries that supply parts and provide logistics.

If we as a country embrace smart, lean, automated, additive manufacturing and add a dash of audacity, we can indeed strengthen our manufacturing base in the USA. The manufacturing in this audacious new world can be the best internationally. We have the technology, resourcefulness and the capability to do it. We need to come together across party lines, economic strata and geographical areas to drive policy, education and consumer willpower.

Opportunities multiply as they are seized.  

Sun Tzu;  Art of War

 

Startup Part Three: Forget Your Lessons

skiing in snowstormStarting a company is like skiing in a snow storm. Starting a company is like scraping gum off of your shoe. Starting a company is like riding a unicycle for the first time. Starting a company is the most fun and frustrating thing you can choose to do. If you thought that the process was straight forward and that you could simply use what you know to launch a company, then think again.  It will turn the lessons you’ve learned on their head.

I’ve been part of 3 company start-ups. Each one has reinforced the same hard lessons. The similarities are what I will talk about although truthfully, you can’t count on history or other people’s stories to predict your own start-up experience. Knowing that you can’t know how it will go is the surest wisdom I can share. What I’ve covered below are pieces of advice that ring true to those I’ve talked with in the start-up world.

  • Patience is a questionable virtue – Larry Page did not tolerate debate at Google when the company was young. When discussion came up his typical response was “just do it.”  When you are starting a company it is your baby. It is the most important thing you are doing and of course your product is the best there is. Why aren’t people returning email or answering your calls? Why don’t they see the value in what you have to offer? Whether you are selling a service or a product or an idea, it is important to keep in mind that you are one of many “interrupts” for your potential customer or investor. So patiently and politely waiting for a response is the only logical response. Or is it? Because you are competing with others for attention it isn’t good enough to be one of the crowd. Consider how you can stand out and be noticed. Connect personally with the right people. Use your network to make an introduction. Put a pitch together that “wows”. Go after it each and every day. When a targeted VC didn’t  answer emails or phone calls, we found a connection who made a call. A meeting was set-up. Persistence and impatience paid off.
  • Be a control freak – At Apple, Google, Ford and Amazon the founders were control freaks. They were in the piddly little details. Steve fanatically cared about color and finish. Larry eliminated all project managers to be closer to the engineers. Henry designed conveyor belt production lines and Jeff obsessively intervenes for the customer. While this doesn’t scale easily as a company grows it can be helpful as a company launches. Be a perfectionist and pay attention to the details. I’ve reviewed and rejected PO’s under $100. Enough of those make a dent and the message sent is that every penny counts.
  • Play the short game –  Brian Chesky and Joe Gebbia needed some cash and so rented out their loft during a busy conference week in San Francisco. Instead of using Craigslist they built a site, called it Airbnb and made $240. Then requests came in for more and the company launched. “One day at a time” should be the mantra. Dealing with today in the best way you are able is the key to success for a company just starting out. It is easy to feel discouraged by the daunting tasks in front of you. Step forward and beat those problems down to keep the progress going and you will look back over time and be amazed at what has been accomplished. Optimism is a characteristic that is very valuable when starting something new. There will be naysayers. They can even be family members, customers or investors. Don’t allow the negative inputs to weigh you down. Take the information on-board and look at the glass half full. At my last start-up company we launched a product and then stopped and pivoted to a new product. One day to the next my problems were flipped on their head.
  • Don’t be so analytical – Uber never should have worked. In 2008 Travis Kalanick and Garrett Camp were in Paris talking about how hard it is to get a cab in San Francisco. There were over 1000 taxi medallions issued in SF at the time. Too much competition. Too many obstacles. Nope.  As an engineer and operations executive I’ve always led with analysis and facts. It is good to have the data before plunging forward. It is also impossible to have all of the data when you are talking about a business that is not off the ground in a market that doesn’t yet exist. Sometimes you have to estimate, extrapolate or imagine the future state in order to put a financial plan, cash flow or P&L together. You will be wrong. Acknowledge that and stay light on your feet.  As Dwight D. Eisenhower said, “Plans are nothing; planning is everything.” I’ve modeled a monthly P&L out 5 years knowing that our ability to predict the next month was shaky. It calmed our investors and secured a Series B round.
  • Contradictions do not need resolution – Steve Jobs was himself a contradiction. He was both a hippy /Buddhist and a billionaire businessman. Many creative founders are a combination of genius and awkward. There is usually conflict in the beginning with people, ideas and styles.  What works in a start-up might not scale to a larger company but strong personalities with unreasonable obsessions are what launch companies. I’ve bitten my tongue many a time when my first response was a logical rebuttal to an illogical founder’s request. And then it turns out, the founder was right.

When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.    Henry Ford

Marcy Alstott is an Operations and Supply Chain Consultant with diverse product and technology expertise, multinational management credentials and extensive transformation know-how. She can be reached at malstott@opstrakconsulting.com. Her website is www.opstrakconsulting.com.

Hardware Is The New Killer App

lunarmodulediagramI built a model of the Lunar Module when I was 12. I still remember how building it made me want to climb inside the real one and land on the moon. I was channeling Neil Armstrong and was certain that being an astronaut was my calling. Years later I graduated from Neil’s University, Purdue. I was not bound for space but I was bound for a career in making things. Taking great ideas and transforming them into a real shipping product is a pleasure that, for me, far surpassed bits and bytes or blurbs and spiel.

I’m in love with making things. Even here in Silicon Valley, the home of “dot-com”, there are big and small companies designing and building hardware products to sell to other businesses and to consumers. HW start-ups are the new “killer apps”. Funding for HW start-up companies has taken off over the last five years. Granted the number was low to start with but with this enthusiasm for hardware product companies, we are putting the Silicon back in Silicon Valley.  HW accelerators like Hax Accelerator and Highway 1 give these start-ups a home and help with the challenges of funding, building, importing and distributing products.  Kickstarter campaigns and companies like Bolt have given life to companies that otherwise would have languished waiting for friends and family to help with funding. Companies like Box Clever and MindTribe help these companies with the design itself. Companies like Dragon Innovation and OpsTrak Consulting help companies productize and launch into the market.

Building a hardware company is more complex than a SW only company but shouldn’t be feared. In fact ramping up a HW product is a blast and I highly recommend the ride.  Below are some of the key aspects to consider when building a HW company:

  • Connected: While I’m focusing on HW companies, no HW is independent of firmware, software and/or user interface. As a matter of fact the reason for HW’s resurgence is all about the internet of things. Everything is connected these days. We have moved from connecting on our computers to being connected in our cars, our homes, our clothing and in almost every industrial device. Bring in expertise or contract with the experts to be sure your HW product connects.
  • Concurrent: Small company or large, there is value to designing for manufacturing and the supply chain. Often referred to as DFM, the idea is to think about the manufacturing processes while you are designing the product. Sometimes the best way to get that perspective is to bring people in with the expertise. An easy partnership is with a contract manufacturer (CM) who is lined up to build your product. It is in their best interest to help you design your product so that it can easily be molded, assembled, fabricated, tested, labeled and shipped. If you don’t have a CM in mind yet or if you can’t get their attention due to your volume or company size, you can get the expertise from consultants or companies who have decades of this very type of experience. Bring your expert in before the design is locked in. Hold a design review and take into account the time it will take to make modifications to the design to make it more build-able. Don’t wait until you are on a critical path to release and then consider the ease of building the product.
  • Cost: Cost consideration often goes hand in hand with DFM although they are slightly different ideas. When designing a product you likely have a cost target in mind at which you will make enough money when selling your product to propel your company to success. But if you are off in your estimate by a factor of two or even off 20%, that can be a company showstopper. It is possible to iterate a design to get to a targeted cost but each change in the product costs money and the installed base needs to be considered. Ideally you know what your design will cost and you have taken into consideration the material, processes, labor and OH required to build and ship. If you have some margin in your plan you can survive a decision to quick-turn a PCBA or expedite components as you begin your ramp. Consider your cost of goods sold (COGS) budget. Get real quotes. Estimate labor time and cost. Don’t forget SG&A, material mark-up and profit from the manufacturers. Finally, if there are internal resources assigned to ramping the product their costs should be assigned as well. It is best to have a margin of safety in your model as you start so that the first product out the door can cost more without breaking your business model. That gives you some wiggle room and those costs can be whittled down later as you ramp.
  • Cash: One of the challenges to building a company that ships a product is that you have to invest in inventory, labor, space and sometimes machines to build the product. If you choose to build in-house you will need use your cash to set up a manufacturing process complete with quality and inventory control. You will likely need an MRP system to manage material and control inventory and ship orders. If your demand has its ups and downs you will want to add temporary labor and will need to train prior to the up cycles. With today’s infrastructure both in the US and in Asia, there is no need to develop a manufacturing process in-house. It is possible to entirely outsource your product build, distribution and even return and service process. Outsourcing isn’t free from costs and challenges. A clearly worded Manufacturing Services Agreement (MSA) and a solid relationship with executive management is the first step in solidifying your success. Staying involved in the process is the second step. Be there during builds and participate in the development of the assembly and test processes. The CM partner might be the expert in manufacturing but the product knowledge is in the OEM’s court.
  • Collaboration: This last attribute is wise advice for any kind of company but especially if you are a hardware company. The strength of your company is rooted in the brilliance of your design of course but the other factors that add to longevity, resilience and profitability are the supply chain, distribution channels, customer service capabilities, first customer’s adoption and marketing of your successes. All of these require relationship management. Even larger companies need to partner. A smaller company can be made by its success in partnering. Sometimes the product you are shipping needs to play in an environment that isn’t in your control. System integrators, plant managers, final customers need to be trained to use your product successfully. In the consumer market you are dependent on distribution and visibility of your product to the end customer. Creating a network of partners is a key element to success.

As children, we enjoy making things. Watch a five-year old with clay or legos.  Many who are makers inherently like to cook or sew or build furniture or design products. We like to fix things and build things. This same joy can be found in a company that builds product. I highly recommend it.

We don’t value craftsmanship anymore! All we value is ruthless efficiency, and I say we deny our own humanity that way! Without appreciation for grace and beauty, there’s no pleasure in creating things and no pleasure in having them! Our lives are made drearier, rather than richer! How can a person take pride in his work when skill and care are considered luxuries! We’re not machines! We have a human need for craftsmanship!
― Bill Watterson, Calvin and Hobbes author

Start-up Part Two: Tipping Point

balancing_actIt is crowded. There isn’t enough wireless bandwidth. Spreadsheets aren’t up to date and are conflicting. Mistakes are harder to recover from. Hallway conversations aren’t inclusive enough. Plans can’t simply be shared over coffee. Two conference rooms just aren’t enough. Your start-up company is not a cute baby any more. You are approaching the terrible twos.

Growth in a start-up company is a tricky process. At some point you will reach a tipping point when things begin to tumble. Then it is all about falling forward gracefully into a new phase. Anticipating this point in your company’s path is the best case. Recognizing it quickly when it is upon you is the second best. Ignoring it or not even seeing this shift can be the beginning of the end.

Growth is surely good but at some point adding feels more like multiplication. Growing past a certain number of employees, products, or customers can feel like a loss of control. What drives this precipitous change in a small company and what should be done to prepare?

  1. From Entrepreneurial –>Expansion: When a company launches it is all about the product. Assuming that funding is in place the laser focus is on getting the product to work. The organization is flat and the decisions are made informally. Each individual wears many hats and individual effectiveness is the key. Assuming that the early stage is successful and the company has a working product, some initial customers and money to work with, there will be a shift to commercialization. Commercialization suggests volume, profitability, scale. It also suggests process which can be a dirty word to some and salvation to others.
  2. Everything Through the Founders –>Delegating Responsibility: When the company is less than 20 people it is possible to let everyone participate to some extent in the decisions. It is still possible to funnel everything through the founders for conversation and agreement. Most of the decisions being made are relevant to the product or to the strategy and of course the founders need to know and approve. When the company passes this tipping point there is just too much flowing through this bottleneck. This can create a leadership crisis if the founding team is not able to delegate to middle levels of management. The executive team should shift to roles of team building, coordinating and strategy. Shifting doesn’t imply full hands-off management. This is still a start-up company and there are many details to drive. But the shift needs to start here.
  3. One Product –>Multiple Products: As soon as the company branches to multiple product development efforts there is a serious shift in the dynamic of a company. There is no longer one agenda for the company. Even the simple act of adding a side project to the team leads to the need to prioritize. Without an understanding of priority the support personnel will not know what task should be done first. Clear priorities are the responsibility of the founding leadership team.
  4. Early Adopter Customers –>Early Majority: Geoffrey Moore made this shift famous in his book Crossing the ChasmGeoffrey’s point is that the greatest peril in developing a high-tech market is making the transition from early visionary adopters in a company to the open-minded yet pragmatic early majority. This new audience is looking for return on their investment and consistency in delivery. They know that there are bumps in the road for new technology but they have a business to run. They will be only so forgiving. A company’s focus on this transition across the chasm is more than a marketing idea, it is a cross-functional shift.
  5. Process slows us down –>Process speeds us up: As mentioned in the first point above, process can be a dirty word in some organizations. Most people will agree that there is a time and place for process but aren’t very happy when that time in now and that place is here. It does slow down a company to put financial, new product introduction, product life cycle management or forecasting processes in place. But it slows a company down even more dramatically if these processes are not in place as this tipping point is reached. The leadership of the company has to anticipate the need for these controls/procedures/ systems and invest before the heat is too high. An example is the need for a product life cycle management (PLM) system. Engineers like to design without being hindered by a system requiring a BOM, suppliers, drawings, etc. But as soon as something needs to be built by an outside company, it is much more efficient to have one source of truth for what is being made. Pain now delivers ease later.

The tipping point in a start-up company is a beautiful sight to behold. It implies that the company is growing and becoming more valuable. It implies a viable customer base and a product with market worth. But it also requires more than a passing awareness of the changes that will soon be required for success. These can be summarized at a high level as:

  • A leadership shift from controlling to enabling
  • An embracing of process to achieve scale and consistency
  • A push forward into cross-functional delivery
  • Inspiring leadership to describe the way through to the next phase

Change is inevitable. Progress is optional.      Tony Robbins

Let The Game Come To You

BBpicJust be patient. Let the game come to you. Don’t rush. Be quick, but don’t hurry.  “Earl the Pearl” Monroe

Earl Monroe played basketball for the New York Knicks in the 70’s. Monroe was not especially fast nor was he a high jumper, but he had spin moves, hesitation dribbles and fake shots that threw off his opponents. He played the game with finesse. He let the game come to him. The advice in his quote is the most helpful given to me over my career. I’m not a basketball player nor am I even a very well-informed spectator. But I understand the idea of timing and of patience when it comes to winning a game. And the applicability to business and perhaps to life in general is many fold.

  • White Space:  Be slow to speak. Allow others to move first and talk first when gathering information or making a decision. Take the information in before making a call. Most people have an issue with silence. Don’t be one of those people. Listen for the white space.
  • Fools Rush In:  Gather the facts and don’t be fast to judge. Expressing an opinion is fine but take care not to take a strong stand too early from which you can’t back down. I’ve often changed my mind about something after hearing all sides and letting the other point of view sink in.
  • Collect Puzzle Pieces:  Puzzle solving and basketball? I am mixing my metaphors, but there is one similarity. The game and the puzzle unfolds. At the beginning, it isn’t clear what the picture is, but soon the pieces fall into place. The right strategy becomes clear in time. Sometimes the strategy or technique used needs to change to react to incoming information. In business, be willing to change your plans with new information.
  • Be Quick But Don’t Hurry:  Fast action is better than no action. I’ve said that in previous posts. But thoughtful action trumps all. Move forward with a reasonable amount of knowledge, a willingness to adapt and an awareness of your surroundings.
  • Believe In Your Own Ability:  If you don’t understand it all to start with, believe that it will become clearer over time. Believe that you can learn what you need to learn. Don’t be afraid of ambiguity. Go forward trusting your ability to understand…eventually. You’ve done that before and you can do it again.
  • If You Don’t Like the Weather, Wait An Hour: That is what they say in the Sierras. The weather changes frequently so just wait if you don’t like the status quo. That is true with bosses, the economy, policies and most situations. Be patient with the current set of circumstances and it is likely that things will shift in your direction.
  • Don’t strive: Don’t struggle and fight. Don’t waste energy. This doesn’t imply that hard work isn’t important. Work diligently and keep progressing toward your goal but give yourself a break and stop the worrying and fussing. I have learned this the hard way too many times. Let the game come to you.

Earl Monroe was also a business man. After playing basketball he went on to manage entertainers, open a restaurant, license his name with an NBA candy company and start a venture capital fund. Apparently, “The Pearl” is still letting the game come to him.

Patience is the companion of wisdom.   Saint Augustine

The Logistics of Giving Back

2013-05-30_10-12-03_844“Bridging the gap between surplus and need”   This is a compelling value proposition for any supply chain professional. It happens every day at MedShare.

On a Thursday morning in May I arrived at the MedShare warehouse in San Leandro, California. This is one of two warehouses filled with medical supplies and equipment. The second one is in Decatur, Georgia. What I’m looking at is material that would otherwise be in landfills across the country.  As a manufacturing geek, I feel right at home in this warehouse with racking, forklifts, bar coding, computer entry, shipping docks and a container poised for loading. After the tour and instructions, I get to work sorting and re-boxing.

MedShare has been operating since 1999 and diverts on average 2000 pounds of medical surplus each week.  They have shipped over 900 containers to 93 medically underserved countries including Kenya, Haiti, Costa Rica and Ecuador. They also provision hundreds of medical teams who serve in these countries and provide free supplies to safety-net clinics in California and Georgia. This web of suppliers, volunteers, bio-medical experts and logistics professionals works to lessen the medical disparity around the world.

Our medical system in the US is, on its own, very wasteful. A surgical procedure will draw in pounds of material in kit form in the name of hospital efficiency, and then whatever is not used, will be tossed. The piles of waste include, masks, needles, surgical instruments, gowns, bottles, bandages, and gloves. MedShare is a non-profit that will accept that waste material, sort it, repackage it when necessary, label it accurately, store it and then ship it to order. Hospitals from developing countries are able to look online at MedShare’s database to determine what is available. They “shop” to fill up a container. Assuming that there are funds available to pay for the shipment, they get what they need. This is in contrast to other charities that ship what they have, when they have it. Often what is shipped does not meet the needs of the people and sits unused. Not so for MedShare shipments.

In addition to excess medical supplies, MedShare takes in, refurbishes and ships out medical equipment such as surgical tables, ultrasound machines, scales, lights. Again, in the US medical world these items are obsolete but for a developing country they are seldom seen luxuries. There are wonderful stories of medical intervention that would not have been possible without MedShare equipment and supplies.

But what does MedShare NOT have readily flowing?

  1. Cardboard boxes – Volunteers bring in boxes from home. MedShare has to buy boxes that they can’t get donated.
  2. Sponsored containers – It costs about $20,000 to ship a container to its destination. Companies can sponsor a shipment and can advertise this donation both in the US and in the receiving country. For a company expanding in the developing world or even partnering with suppliers in that region, it is a very inexpensive way to build positive brand awareness.
  3. Volunteers – They welcome volunteer groups from companies, churches and youth groups. You can show up as an interested individual and they will put you to work.
  4. Funding –  Money is very efficiently put to good use either to fund the very low administrative costs or to pay for the container shipments.
  5. Regional expansion – MedShare plans to expand this year by adding another warehouse location in the east. The numbers make it clear that this is a good strategy. Healthcare Without Harm claims that U.S. hospitals generate more than two million tons of medical waste each year, most of which is medical supplies and equipment. The World Health Organization estimates that more than 10 million children under the age of five die in the developing world due to inadequate medical care. MedShare is serving a critical need and is only scratching the surface with its fifty plus tons a year.

The efficiency of this charity has been celebrated with awards and recognition. MedShare is a four star charity in Charity Navigator. They have been featured on TV and in print. There are numerous testimonials online. However, for all of its success, it should be better known than it is. Maybe, for some, it is not so glamorous. After all, this is a process of matching supply and demand. It is a non-profit that deals with inventory management, transportation costs and material handling. The demand fluctuation has a lot to do with global forces such as economics, natural disaster and incoming funds. In short, the job done at MedShare is a job that many of us in supply chain management will recognize. The supply chain community should resonate with this charity and its work.

My morning was spent sorting, labeling and boxing and having a blast. The volunteers I worked alongside were smiling, chatting and one even burst into song. Halfway through, we took a break and watched a container load finish up. This one was funded by the MedShare’s own Western Regional Council. The stories told by Chuck Haupt, the Executive Director for the Western Region, were stirring and motivating. In fact, the volunteers themselves are raising money to ship a container, just going to show how compelling the work really is.

A sign up on the wall said it all for me: 2013-05-30_10-40-21_667

Transformation

yosemite-valley_1304_100x75There is a bucolic meadow over the next hill. It is filled with just the right amount of sun and shade. Crystal clear water flows over a little waterfall into a pond. A sumptuous picnic is set out for you. The temperature is a balmy 74 and there is a hammock with your name on it. Ahhh, but to get there you have to climb up the hill in front of you. You have to make this climb while tieing complicated knots. And…it is raining on this side of the hill. This hike could take hours… Would you go for it or would you hunker down under an overhanging rock to tie your knots?  You might chat with your fellow hikers and suggest:

  • What if there is just another hill after this one?
  • What if the picnic isn’t that good after all?
  • What if there are bears over there?

How do you motivate humans to climb a hill in search of a better state? In business-speak, how do you get your employees to embrace difficult change even when there is a promised bright outcome? This is a problem faced regularly in the fast paced world in which we live. It is no longer ok to slowly evolve. Companies, functions, teams and individuals need to adapt more quickly or they will lose to another.

I have been steeped in the art and science of transformation recently as I’ve tackled challenging change projects with my corporate clients. It is a fascinating subject and one that I long to master. Given the rate of change I’ve just discussed, I don’t think it is possible to master anything completely. As soon as you “get it” more information is available.  But I am going to climb the difficult hill to get to a better place of understanding.

Here are the truths I know to be the foundation of transformation:

  1. Pick a grand vision with some heart. Continuous improvement is another subject. It is a good thing but not the same thing. And if you plan to involve more than a few people, you need to tug at heartstrings.
  2. Get on the same page. The leadership team needs to have a shared view of the future state. How to get there can be up for debate but the vision needs to be clear.
  3. Debate and even disagree. Transparent concerns are much better than passive aggressive resistance. Get it all said out loud and then pick  a path and move forward.
  4. Stay nimble. There will be redirects. Adapt to them but keep the direction constant. Success isn’t a straight line but it should be measurable and should track in the right direction.
  5. Make room. Carve out the bandwidth to do the work. Stop doing some things to take on this new work. Come on. People were already busy.  If you really believe in the future state then you can justify either a redirect or an investment of resources.
  6. Anoint the right leaders. Pick change leaders who are both good managers and good leaders. Execution, details, driving for results are hallmarks of good management. Picking the right path, inspiring others and breaking through inevitable obstacles are outcomes of good leadership.
  7. Build a change engine. The skill to transform organizations is becoming a key differentiator. There are very few companies that can avoid this need and those that can are probably small and stagnant. If a company is growing, shrinking or evolving these skills are critical. Train, develop, practice, reward, repeat.

The truth is, we are good at changing. Think of where you were 20 years ago. Now, harness that energy and knowledge of how far you have come  to fuel your own change engine.