What’s in the bookstores these days? Row after row of shelves, some bending under the burden of books revealing the secrets of self-help swamis, and others weighted down with turgid tomes of successful executives explaining how their management miracles spurred success, increased their market share, and occasionally worked miracles.
Those of us with masochistic minds torture ourselves further reading similar tales in trade magazines, where we learn that some executive has received an award and hear all the “secrets” of his or her success revealed in uncritical detail.
But, we rarely read about gray-iron casters whose managers and executives struggle with today’s typical problems: stingy customers straining their working capital; de-motivated workers producing at a snail’s pace; or new patterns, whose introductions on the pour floor are inexplicably delayed. These executives are frustrated by their companies’ “systems,” which force them to work long hours with little to show for their effort. Few books or articles discuss these executives, their problems, why they occur, or what they can do to overcome them.
Foundries, of course, are not usually Wall Street favorites, and a few notable companies have been working their way through Chapter 11 bankruptcy proceedings, due to raw-material and energy costs, labor disputes, and various other serious problems. Only a few foundries qualify for Dun & Bradstreet’s “top quartile” financial ranking in the industry.
Almost three years ago, Foundry Management & Technology published “Improve Your Profitability Pattern,” (see Sept. 2002) a review of my study of 427 mid-sized manufacturers — some successful, some not so successful — in a wide variety of Midwestern industries. Of these 427, 32 were foundries serving a varying mix of customers (automotive, general industrial, valve, pipe fittings and flanges, etc.) Only six were in the top quartile of the metalcasting industry, as measured by inventory turns, scrap/rework, employee turnover, on-time shipment rates, and return on sales. The study provoked widespread interest, and resulted in questions from many readers. In one fashion or another, they asked: What are the industry leaders doing that we aren’t?
Their interest led me to conduct follow-up interviews and management surveys in a cross-section of the 32 companies I originally studied. Eschewing the usual double-domed jargon that fogs the academic world of management theory, I found four common traits leading to four problems among these executives that seemed to account for the lackluster results of their companies.
Talking rather than doing
Of all those foundries mired in the middle of the financial pack, the most common managerial trait was their managements’ tendency to talk instead of act. This was almost universal.
Managers and executives face decisions daily. Most are minor, but occasionally a major decision has to be made. Not surprisingly, it is usually finalized after discussions with other executives. “Should we continue making cores, or subcontract that work to a custom coremaker?” “Is our sales volume solid enough to pay for the new 750-kW power melt system (with three new 6,000-lb furnaces) needed to lower our per-unit costs to get closer to the China price?” “What should we do to cut employee turnover?” “How can we extend the life of the bags in our dust-collection system?” “Should we expand our line of valve housings, or pare it to just the most profitable ones? ... And, just which are the most profitable, anyhow?”
In the previous research, I found the executives of struggling gray-iron foundries were reluctant to reach a firm decision, even after all the facts were in. Caught between their entrepreneurial instincts to try new methods and their managerial desire for stability by working within the existing system, these executives continued reviewing the problems at hand, talking rather than doing. Because of their dilemma, talk came to be regarded as a form of action. Talking about a problem was less threatening than actually doing something about it.
Why does this occur? It seems that despite whatever entrepreneurial streaks they might have, some executives do not differentiate between talking about a problem and taking action, even if it means new approaches. Talking requires no change in behavior, no adjustment of routine, no alteration in standard procedure, no risk to anyone or their status. Since change is perilous and may lead to unforeseen consequences, talking rather than doing seems to be a pattern among executives in the less successful companies.
Missing the “big picture”
The second trait exhibited by executives in the less successful companies was a failure to see the Big Picture, and to understand how their activities contribute towards reaching it.
Many able supervisors have been promoted to managerial rank because of their successful attention to detail. And, a good number of managers have also risen to executive status because of similar diligence. Unfortunately after rising to executive status, many managers do not grasp the notion of what they should be doing, and never let go of the details with which they are familiar.
These executives never surrender their interest in the minutia they previously handled, and fear delegating details that now should be left to subordinates. As a result, they spend long hours dealing with the myriad details that fall under their expanded areas of authority. Faced with a mass of busywork, they do not have time to make prompt decisions on major issues. They cannot realistically assess how their day-to-day activities contribute to the overall goals they need to reach.
Consider the newly promoted general manager of a Midwestern foundry serving the general industrial and valve industries. The company was highly rated by its customers because of its delivery reliability.
When the foundry was smaller and he was the plant manager, it made sense for him to spend most of his time on the floor checking production schedules, hunting for lost patterns, and worrying about faster change-overs on the Hunters, because frequent “switcheroos” were needed for the wide variety of cores used in the many short runs of the different valve housings the foundry makes.
But, as the company grew and he was promoted, the rookie G.M. needed to oversee and coordinate the activities of others, rather than worry about employees “hot-wiring” the core machines to beat the piece-rate system. The need for proper Brinell readings for specific pump housings paled before the requirements of coordinating the different functions that made for manufacturing efficiency. This meant overseeing sales to make sure new customer patterns made sense (six-on, rather than ten-on); coordinating salesmen’s delivery promises with production scheduling to ensure that customers’ orders could be fulfilled when needed; overseeing purchasing to guarantee that enough manganese and other “seasonings” were in inventory; and checking that first-line supervisors were undertaking the proper training efforts, so new hires on the pouring floor could learn their jobs without injuring themselves — or others.
The general manager was still spending six long days a week in the plant, worrying about excess core mudding, the proper refractories for ladles, and the grit of grinding wheels in finishing, while subordinate “managers” ran around trying to expedite one hot job or another. Meanwhile, delivery reliability dropped from over 90% to about 75%, and shop-floor efficiency was less than 60% — with no end in sight!
Executives like these have not learned to differentiate between the Big Picture goals they need to achieve with the activities they should delegate to subordinates, in order to accomplish the goals.
This trait can be identified easily. And, with some effort, this trait can be corrected — once it has been acknowledged — in management-development sessions geared to overcome it. Most managers can be taught how to list activities, prioritize goals, and rate the contribution of the former to the latter. This process allows them to use their time as effectively as possible in those activities only they can do, in order to reach the Big Picture achievements needed for the company to meet its goals.
The third trait exhibited by executives in less successful companies was the inability to listen to subordinates. “The most effective military leaders lead their forces from the front. The most effective executives do the same,” I observed in another, later report, “obtaining information from the battle-lines before making their command decisions.”
In that report (see “What’s Your ROI on Human Assets?,” FM&T, April 2003), I pointed out that an active “listening” program of upward communications from employees to managers, and from managers to executive enables everyone to make better decisions, because they had better information on which to base them.
The more successful executives developed communication systems for listening to subordinates to discover what was actually occurring on the “battle lines” in the plant and office. This allowed them to coordinate the efforts in the different areas for which they were responsible, thus achieving a smoothly running operation. Does coremaking have enough strippers, to feed cores to the pour floor fast enough to produce castings on schedule? Does finishing know how to use the productivity data generated daily by the latest enterprise software instituted by accounting, so that the causes of poor output can be identified and corrected? Why does purchasing have so much difficulty obtaining the right grades of scrap for melt? Who is responsible for new employee training, and what are they actually doing?
One manager of a Wisconsin gray-iron foundry was troubled by faulty and cracked cores made in the core shop and then trucked to the melt and pour facility. Customer deliveries fell further and further behind, despite the rigid production schedule he instituted. A management audit of plant supervisors and production planners revealed that despite the schedule, plant employees spent hours sorting cores to find usable ones. Only questioning the frustrated supervisors highlighted the fact that trucks carrying the cores to the melt shop bounced down a rough, rutted, gravel road, cracking many of the brittle sand shapes. As a result, many of the cores were too cracked to use, slowing production and subsequent customer deliveries.
Had the executive questioned supervisors about the cores earlier, he would have realized the problems the melt shop was having and the cause of so many tardy customer shipments. This is just another example of executives not bothering to check to see that what they assume is occurring on the plant floor is actually taking place.
Many executives in struggling foundries often dismissed as “gripes” subordinates’ suggestions for ways to improve operations. When employees point out shortcomings in equipment, materials, policies, etc., they are trying to be constructive. Their comments often suggest ways to improve productivity and quality, with resulting cost savings. Bottom-line profits are hurt when executives are out of touch with the realities their workers face every day.
Failure to communicate
The fourth widespread executive trait I noted in struggling companies was a failure to communicate effectively to subordinates the need to achieve high goals. These executives ordered things done, rather than reiterating tirelessly to subordinates why the goals needed to be accomplished, and asking for their cooperation in meeting the required objectives.
One West Coast nonferrous foundry specialized in castings used in marine engines. It had 120 employees, many busy making the aluminum rotors used in four-cycle outboard marine motors. These outboards will be required in 2006 by the government, because they cause less pollution than the older two-cycle engines that every fisherman has cussed. A finance manager, eager for promotion, wrangled a transfer to be plant manager when the former one retired. He figured some P&L responsibility would help him reach the executive suite.
Upon taking his new job, the ex-finance manager tried to impress the president with his managerial skill. He concentrated on cutting labor expense in the face of the growing competition from the Pacific Rim. He tackled the problem of making all employees “work bell-to-bell,” to increase output and cut per-unit labor costs.
Not bothering to explain to the union leadership or his employee/members why the job-saving, bell-to-bell work was needed, without discussion the new plant manager posted a notice that all finishing room employees must continue to swing their grinders smoothing castings until 15 minutes before the shift was over. Since the union contract gave workers a 15-minute clean-up period at shift end, many employees complained, saying they had to sweep around their stations before washing and changing from uniforms to street clothes. All this was impossible in 15 minutes, they claimed.
Soon, five senior grinders were disciplined for shutting down early. The union filed a grievance for them. In the meantime, productivity dropped. This led to a fiery query from “upstairs.”
Had the new plant manager realized that the union leaders were just as afraid as he was of losing their jobs to foreign competition, a meeting among them to discuss the lost-time situation, to outline the need for higher output, and to make a minor investment in enough dustpans and brooms would have ensured cooperation rather than expensive conflict.
What’s the bottom line?
While no single executive in any of these foundries exhibited all four traits, many seemed to be caught in one of four traps:
Executives with any of the four traits can be identified by their performance in management development courses developed to address their individual company’s specific needs. While the investment in such efforts is greater than buying a “canned” program off the Internet, the pay-off is greater, too. Paradoxically, innovation breeds stability and the ability to avoid these four traps.
Investing in a no-nonsense effort to determine and remedy the causes of sub-optimal performance is a serious decision. But, given the competitive pressures now faced by America’s foundries — ferrous and nonferrous alike — executives everywhere ought to be asking themselves: Are you going to keep talking about boosting your bottom line, or actually do it?