UpFront: About First Principles
By Brian J. Hogan
Fashion is one of the more important influences on all of us. Fashion imposes itself on everyone, even the most stubborn, in one way or another. Fashion changes the way we dress, cut our hair, and — more consequentially — how we manage our businesses. It's really amazing to cast one's mind back, and consider how fashions have impacted every field — including manufacturing.
There was a time, for example, when management was often thought of as an exact science — rather like physics. So a top manager from a soft-drink company could be hired to manage a company that manufactured computers, despite his or her complete lack of industry knowledge. In fact, expertise won by years of experience spent working in an industry was deprecated.
My job has taken me into many engineering-driven companies where this type of thinking was in fashion in the executive suite. Typically the response of the technical workforce to management's decisions was one of anger, and a belief (delivered sotto voce to visiting technical editors) that the management team saw the company as a balance sheet, not an organization of skilled people working together to achieve success in the marketplace.
Fashion accounts for much of the enthusiasm surrounding the offshoring movement. Offshoring was just accepted by all hands as being a great idea. Simple questions weren't asked — such as how much of the offshored product's cost involved direct labor, such as the real cost of transportation, such as the likelihood of communication problems and reduced quality. Offshoring was in fashion, and it represented the safe decision that helped a certain kind of manager keep his or her job.
The principles that lead to success in manufacturing, or any other business, don't change. Managers need to make decisions based on the factors that impact the business they manage. And good management begins by finding out what those factors really are.
Managers must understand the business in which they are working. Industry knowledge is not something one can casually dismiss. Experience matters. Valuable, skilled employees need to be retained — even in a severe recession — because they are the most important element managers require to achieve success. Real costs must be known, and root causes of the problems encountered by managers must be determined.
Hubris is a challenge at every company. Managers should never assume that the customer will stick with the company. Past success does not guarantee future success. Constant innovation and achievement of the highest possible product quality are critical.
The ultimate boss of everyone in the company is the customer, and that truth should never be forgotten. Fashion be doggoned, manage by first principles and your company will remain sound.
This article was first published in the April 2010 edition of Manufacturing Engineering magazine.