• You are here:
• Home
•  / 
• Gyan Gurus
•  / 
• Leadership
•  / 
• Story

Advertisement

Gyan Gurus - Leadership

Leadership – Preventing the silent killers of productivity and profitability  (View Comments)

Vibhuti Jha is the President for the Human Potential Project, specialists in establishing Performance Based Culture in work place by instituting practices of commitment based management. He is also a faculty member in McDaniel College, Baltimore , in their graduate program "Leadership in Global Enterprise".

Posted On Tuesday, December 22, 2009 at 02:01:11 PM

As we make our way out of the recent economic meltdown it is clear that there have been a series of tectonic shifts in the business world and there is no going back to things as they were.  We are facing a new world that is calling for new approaches to generate consistent competitive advantage.  Unfortunately, contemporary management theory and practices have ill-prepared us for this new world. The near universal rush to cut costs and headcount, while predictable, is more likely preventing instead of enabling the real work of re-tooling our enterprises to be competitive in the new world we are facing. We want to use this critical moment to introduce a new way of thinking about and seeing organisations and the forces and factors that are killing much needed productivity and profitability.

Historic inventions are frequently developed in times of historic difficulties, and they are always enabled by the articulation of powerful new distinctions – a new way of seeing the world. Here is an example. At the end of the Second World War, the people of Japan faced historically unprecedented difficulties. Their infrastructure, morale, productive capacity, and international relations were all demolished. An engineer named Taiichi Ohno, in the enterprise today known as Toyota, began the task of building a new capacity for Japanese production. 

Ohno built a production system that would optimise scarce capital and raw materials, allowing efficient operation with small production runs. The operational heart of Ford’s designs was the way the engineers designed the coordination of the work; Ohno’s design was centered in processes that built the capacity of each person on the production floor to take responsibility for the quality and coordination of their work. Ohno’s inventions became the foundation of the quality movement that swept the world starting in the 1970s and 80s and evolved into what is today known as the Toyota Production System.

To keep the workers thinking and engaged, Ohno invented a new set of distinctions about “waste” for them to observe and eliminate. To be clear, ‘waste’ is not a thing; it is an assessment, an interpretation. The word “waste” names a class of assessments that we make about events, phenomena, and features that diminish our capacity to take care of what matters to us. In the business world, waste kills productivity and profitability.

As an example of naming or distinguishing wastes and the power of a new distinction, Ohno said that time that workers’ spent waiting –for parts, or for others to complete work, and many other things – was waste. The value of this new distinction was immediately obvious to most observers, but not to the finance and accounting worlds as they initially had no way to measure it.  Even today, when business people speak of waste they tend to refer to those things they have been conditioned to see and measure: waste of money and waste of materials.  While it is now becoming common to speak of the waste of opportunities, and the waste of human time and capacities, we are considerably less competent at seeing these new wastes.

What was not immediately obvious to most observers was Ohno’s new distinction that inventories were waste. This example, the assessment that inventory was a “waste”, illustrates the way that a new distinction opens the door to a historic shift in management theory and practice. Before Ohno said ‘inventories are waste’, there was universal agreement that inventories were an asset. They appeared on the balance sheet, they could be re-sold; they gave confidence to people that production could be sustained and customers satisfied with products from the inventories, and so forth. By inventing the distinction that inventories are waste, and putting attention on many other previously underappreciated wastes such as workers waiting to work, Ohno was able to trigger important revisions in the way the people of Toyota thought and acted. What we in the West now call “just-in-time logistics,” and many other innovations of the last 30 years, were born out of these distinctions.

Wastes are particular to specific concerns and moments in time. As both change, the wastes that are important for particular moments in time change! What was wasteful yesterday may or may not be wasteful tomorrow. The wastes that the business world had been concerned with for the last 50 years – wasted movement, wasted time, and wasted resources, were invented in the traditions of the industrial revolution. We are no longer living in that world.

As a result of the work that was begun at Toyota many of these wastes have now been driven from manufacturing enterprises. Moreover, the backbone of the global economy has changed as well.  Today what we call work has little to do with manufacturing.  Instead work is now more about the coordination of diverse talents to generate powerful effective actions that satisfy customers.  As such we are convinced that these historical wastes will not be the most important wastes for businesses in the next 50 years. Instead it is time to distinguish a new set of silent killers of productivity and profitability.

Central to the challenge of building skills and capacity for working in this “new” world, is a fundamental re-orientation to work. The notions of agility, adaptability, flexibility, innovation, coordination, cooperation, and mobilisation, and trust are critical to this emerging new reality.

Most Searched Tags

Advertisement

Thought Pool

Here's your chance to be our 'Student Journalist of the Month', a contest for aspiring students to pool in their ideas and views on burning issues in the Human Resource space. It's simple! Post your article here and you could be the winner.

Topics of the month

• The need for CSR
• Role of EQ in a successful career

Terms & Conditions