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Monday, September 17, 2012

Lecture 2 B What is Effective Leadership?

Why so much training as defined in Lecture 2A?
 • In my experience it takes 40 to 60 hours of training in the materials covered in this course before managers experience an “aha” moment; i.e. sees that they need to change their management methods and/or their behavior.
 • Until this “paradigm shift” happens the manager is not able to fully motive employees and therefore cannot get the potential best productivity for the manager’s organization.
 • Additional self-study is necessary to expand the managers understanding of these method
 – It is assumed the student knows basic Management by Objective (MBO) or Value Based Management (VBM) techniques, if not then additional self-study is needed
 – This course is only an introduction to process improvement techniques. Self-study or additional courses are needed to understand and apply these techniques properly
 • Finally, it is necessary for each member of your organization to learn new problem solving and process improvement skills if such skills are not part of your organization’s current capabilities.

You might think that there is no way you can justify providing 40 hours or more training to every worker in your organization. I know the feeling. I was faced with the same problem when I embarked on the journey I am recommending for you. I didn’t see how my organization could spend the money required to train everyone. It took some hard arguing by key members of my staff to convince me there was no other way to achieve the objectives my boss and I expected. It turned out they were right and not only could we afford it but, in hindsight, we couldn’t afford not to do the training. It took the entire available training budget for two years and stopped all other training but the results were an estimated return of $5 to $8 for each dollar of training money spent and the return was realized within 3 to 18 months. No other investment we could have made would have been as effective.

If at this point you are still skeptical please take the time to read the following description of what happened in an organization I managed when we followed the methods of this course. If you are ready to start studying you can skip this story and go to Lecture 3.

 My Experience with These Methods
 I became a general manager of a manufacturing company with a mandate to improve profitability. The company had a good record with its customers for delivering high quality products on time. However, this was achieved at considerable cost. The company was barely cost competitive with its competitor and was not making the return on investment the parent company desired. The managers were a mix of good and not so good. The workers had excellent work ethics but there had been labor union problems and unrest remained a significant undercurrent. I had two things in my favor. First, my predecessor had instilled a culture of being winners. Whether it was quality, health and safety or some community activity the employees had a strong desire to be the best and most were willing to work to achieve that goal. Second, my boss was supportive and gave me the freedom to do what was necessary to improve the profitability of the company.

My staff and I followed the methods taught in this course and achieved spectacular results. It took several years but we gained a 20 percent cost advantage on our competitor and it was eventually forced out of the business segment we addressed. We were able to consolidate two manufacturing plants into one of the original plants and drop leased properties while maintaining the same sales level. Our labor problems disappeared and workers that had desired to become union managers instead asked to become company managers. Empowered worker teams made major cost savings by improving their processes and they were excited to have the opportunity. It was easy to see that once they were trained and empowered they became self-motivated. Instead of thinking about what they didn’t like about their jobs they thought about how they could make their jobs easier and how they could save the company money. It may seem strange but the workers actually were energized when they could make changes that saved money. When I walked through the plant they would come to me to tell me about savings they had achieved. There were smiles on their faces and enthusiasm in their voices. When my boss made his quarterly visits I had one or two teams make a presentation to him on their cost saving projects. They and my boss loved these sessions.

I left the company at that point but visited my successor several years later to ask him if our methods had proven effective over the long term or were just a short term response to our management attention. His answer was that the methods were effective over the long term. Effectiveness had improved to the point that he was no longer involved in day to day operations. He said the workers took care of normal work and any problems that came up. They only came to him for his signature for new capital equipment. This enabled him up to spend his time addressing the long term objectives of the company.

 Few of the things we did were specific to manufacturing businesses. Most apply to any organization. We applied quality improvement techniques and empowerment of workers across the company. We also added theory of constraints and just-in-time methods to manufacturing and Taguchi design of experiment methods to both engineering and manufacturing. We not only trained managers to empower their employees we removed any managers that were unable to adjust to what they perceived as loss of control of their workers. A couple of these managers were considered essential to the business due to their long experience and knowledge. However, when they were replaced with managers more amenable to empowering workers the productivity in their departments improved substantially. Many of our successes came in the finance and human resources departments and had no relation to the specifics of manufacturing.

 There were four lessons that we learned; some the hard way of doing things wrong at first, failing and having to make changes in our approach before we achieved the desired results. The four are:
1. The methods we used were so effective that there was no other way we could have received as large a return on the investment of our time and money. We concluded early on that our competitor would become uncompetitive with us and be forced out of our business segment if he did not adopt similar methods. He did not as far as I know and later did drop out.
 2. An organization can only achieve dramatic improvements if the top manager is personally and deeply involved in every new activity.
 3. Training must be doubled or even quadrupled at every level from top manager to lowest level pay grade.
 4. It is cost effective to hire outside expert consultants to guide process improvement methods until internal experts are developed.

  If you find that the pace of blog posts isn’t compatible with the pace you would like to maintain in studying this material you can buy the book “The Manager’s Guide for Effective Leadership” at: or hard copy or for nook at: or hard copy or E-book at:

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