The End of an Era

James P. Womack

When General Motors filed for bankruptcy yesterday it marked the end of an era. The first truly modern, manage-by-the-numbers corporation, created by Alfred Sloan in the 1920s, was laid to rest as a viable concept. But what comes next?

This is not just a question for GM or large enterprises more generally. Yesterday also marked an end of the lean narrative that has been unfolding for thirty years, ever since GM first began to decline in the recession of 1979. David (in fact a team of Davids) finally felled Goliath just as Goliath was finally paying attention to the lean message. So we need to consider what happens next for the Lean Community as well.

What's Next For GM?

At the beginning of 2009, GM had three major weaknesses. It had too much legacy debt – bondholders and retirees. It had compensation costs for current employees that were too high to compete with transplant operations in North America. And the money it received for its products in most segments of the market was far below average, partly as a legacy of decades of defective products and partly due to losing the pulse of the public on what the company and its products should mean for customers.

Ironically, GM also had considerable strengths. It had competitive factories in terms of productivity and quality and a competitive product development process when it could focus its energies. (E.g., the new Chevy Malibu.) After failing for 15 years to learn lessons from NUMMI (its California joint venture with Toyota), GM had in recent years developed a competitive and consistent global manufacturing system and rationalized its global product development organization. It had even taken impressive steps to lean its internal business processes. But -- as in the case of its cast-off parts supplier Delphi -- lean came too late.

The bankruptcy re-sets the trip odometer. The legacy debt has been written down to a manageable level and compensation costs for current employees will now be much more competitive. In addition, the company is dramatically retrenching toward a reasonable portfolio of brands with production capacity appropriate to its realistic share of likely market volumes.

So what is the problem? Simply that GM has now explained what it is not. It is not Saturn or Saab or Pontiac or Hummer. (Or Opel or Vauxhall either, although surely the new Opel will be a supplier of fully-engineered cars for GM for a long time to come.) And GM is not a significant manufacturer in the U.S. outside of the Midwest. And GM is not, from a profitability standpoint, mainly a finance company. And GM will not have a dealer net blanketing every area of every city across the continent.

But what a company is not is of no interest to consumers. If General Motors is no longer "your father's GM" (to paraphrase its advertising line in the last years of Oldsmobile) or "the company that let you down" (as CEO Fritz Henderson phrased it at yesterday's news conference), then what is it? Why should any new customers care to shop GM products, much less pay the top-of-the-segment prices GM needs to flourish? And who can define what the new, appealing GM is?

Sloan's great genius in re-creating General Motors in the 1920s (after its second trip through reorganization – yesterday marked the third in 100 years) was to provide a compelling explanation of how GM fit into every American's life. He presented a complete range of vehicles from a used Chevrolet as a first car for the low income buyer to a fully-equipped Cadillac for those who had succeeded financially. And GM products were carefully arrayed in a status hierarchy with brilliant attention to the look and feel of each product in relation to American tastes. Indeed, as it gained massive size, GM was often the arbiter of American tastes.

So far the only message about what GM is is the Volt, its extended-range hybrid. Perhaps this is a start, although with enormous risks given the flux in technologies and in political and public perceptions about climate change and energy dependency. But even if it is a start, it is a very small start. Who can comprehensively define "your son's GM", "the GM that never lets you down"? And what freedom will they have to do so?

It is easy to blame GM's recent management for its troubles. But the senior GM managers I have known – almost all of whom had strong finance backgrounds --were remarkably competent at running the company in the financially oriented, manage-by-results way that had produced success for generations. So the problem is not the individual competence of mangers but GM's irrelevant conception of what management needs to do. In simplest terms, where is the new Sloan, the leader able to rethink GM's management and purpose and make it relevant to Americans again?

And supposing the new Sloan (or Sloans) can be found. What freedom will this person or team have to run the company in a way that restores its former glory? This is truly a central question because the U.S. government, as the new owner, is sure to be enormously conflicted:

Should the company be immediately and completely "right-sized" for its new place in the world? (This would be the best way to boost share prices so the government can sell the stock to recoup its massive investment. And it would be the best way to help Ford and Chrysler as well, by eliminating excess capacity.) Or should GM stimulate employment in a deep recession and placate the union by minimizing cutbacks? It can't do both.

Should GM focus in the next few years on the big pick-ups and SUVs that account for all of its profits? (This would be another excellent way to boost share prices so the government can recoup its investment.) Or should GM take a dramatic turn toward highly fuel-efficient products, which won't sell and certainly not at high margins unless energy pricing is also dramatically adjusted upward toward world levels? (e.g., $5 versus $2 per gallon.) It can't do both.

Clearly the hard part comes now, after bankruptcy, and we will all watch what happens. But let me make an exception for those readers – and there are many – who work at GM and who can take an active role in making it happen. I truly wish you the best.

What's Next for Lean?

For 30 years now the Lean Community has benefited from a strong trailing wind. GM steadily declined as Toyota steadily advanced. All we needed to do was standby and cheer! But this narrative is over.

GM and almost all large manufacturers have now accepted lean as a management theory, although the actual practice is always a struggle. As I noted above, GM was becoming a vastly leaner enterprise just as it collapsed and I have confidence that it will continue to embrace lean principles and methods in the years immediately ahead.

At the same time Toyota has turned out to have flaws of its own in the current financial crisis. It barged ahead with capacity expansion across the world that outran its ability to create lean managers and defied reasonable expectations for long-term market demand. (As I have mentioned in previous e-letters, in the mid-1990s Toyota redefined its purpose from being the best organization at solving customer problems to being the largest, an objective of no interest to any customer.) This has been a real setback for the lean movement.

We in the Lean Community therefore find ourselves in the odd position of winning a battle of ideas without actually getting most believers to fully practice their new convictions. And we have as our ideal organization a company that is experiencing significant management and revenue challenges despite "winning" the great contest between modern management and lean management.

Even as this drama plays out within manufacturing, lean ideas are spreading rapidly to new fields, from the beleaguered financial industry to healthcare to government services. Yet we have not fully defined what lean means in these areas, much less how to implement and sustain it. So the dramatic events of recent weeks are not a time for self-congratulation. Instead, they are a time for modesty and self-reflection – hansei, if you will – as we all struggle with the economic crisis while trying to re-define our own purpose as a Lean Community for the new era ahead.

Strategic planning: Three tips for 2009

Strategic planning: Three tips for 2009
Even in these tumultuous times, strategic planning doesn’t have to be an exercise in anxiety—or futility.
APRIL 2009 • Renée Dye, Olivier Sibony, and S. Patrick Viguerie
Source: Strategy Practice


Strategic-planning season has arrived for many companies, and it couldn’t be more different than it has been in years past. Gone are the days of linear trend-extrapolation exercises that produce base, upside, and downside cases. Strategists, now facing the most profoundly uncertain times in their careers, are creating disaster scenarios that would have been unthinkable until recently and making the preservation of cash integral to their strategies.
Most strategists we know are avoiding the obvious mistakes, such as planning as usual or, conversely, eliminating essential strategy-development activities or even strategic planning itself. Nonetheless, strategists remain deeply—and understandably—concerned that the priorities emerging from the annual planning rituals won’t address the demands of today’s tumultuous environment.
These are uncharted waters, and no one has a clear map for sailing through them. It’s clear that scenario planning, a well-established technique for coping with uncertainty, should play a critical role this year, but executing successfully has never been as challenging as it is now. Most companies will have to consider more variables and involve more decision makers than they have in the past. Strategists will also need to place a greater emphasis on measurement—the only way to recognize when changing conditions merit quick strategic adjustments. Finally, the focus on new or surprising scenarios shouldn’t obscure relevant long-term trends or devalue important existing strategies.
Be realistic about scenario planning

In a highly uncertain environment, the advantages of scenario planning are clear: since no one base case can be regarded as probable, it’s necessary to develop plans on the assumption that several different futures are possible and to focus attention on the underlying drivers of uncertainty.
Today’s pervasive uncertainty complicates scenario-planning efforts: the number of variables at play—and the range of plausible outcomes—have exploded in the past year. Consider, for example, the predicament of an industrial supplier that is not only heavily exposed to commercial and residential real estate but also has many government customers. For this company, the critical uncertainties include the direction of the commercial-credit and mortgage markets, housing prices, tax revenues, and government stimulus spending. Different outcomes for each of these uncertainties produce vastly different paths for the business. Since the heart of scenario planning—crafting a number of strategies for different outcomes—has become significantly more complex,1 strategists should prepare for a more demanding process of gathering information, exploring possibilities, and plain old hard thinking.
Senior executives outside the strategic-planning group—even those accustomed to developing scenarios—may find the diversity and complexity of this year’s scenarios bewildering. It’s critical to bring such executives into the process early: for example, by kicking off the planning process with a scenario-development exercise involving the full senior team. Similarly, as the process of reviewing business units gets under way, a company can inculcate an appreciation of the threats it faces and of its collective strategic response by inviting executives from a number of divisions to participate in the proceedings—rather than hold one-off events between the senior team and the leader of each individual unit.
Intensify monitoring

Depending on how events unfold, the industrial supplier mentioned above could make radically different moves. If the commercial and residential real-estate markets stabilized, it could expect reduced sales within those channels until the economy rebounded, but its business model would remain fundamentally the same. If those markets softened further, the bulk of the company’s market opportunity, for the foreseeable future, would lie in infrastructure investments underwritten by government stimulus spending. In that case, the company would need to redeploy its sales resources to government-oriented business and focus on maximizing sales there.
The company’s strategy, in short, must account for many more contingencies than it has until recently. Since the effectiveness of such a strategy depends on an organization’s ability to adjust rapidly as the fog starts to lift, managers must identify and intensively monitor key indicators suggesting which scenario might unfold. For the industrial supplier, some of the most important indicators are sales of new and existing homes, foreclosure rates, mortgage interest rates, new building starts, and announcements of “shovel ready” government projects. Of course, the company’s managers always followed such indicators, but the strategic-planning process typically collapsed their potential variations into average market growth forecasts. Given the present heightened uncertainty, however, the strategy group decomposed the average forecast into its individual elements to make the possible outcome for each of the indicators more transparent and to monitor them in greater detail.
There’s no occasion like the strategic-planning process to get a fix on such indicators—a fix that should also help companies make ongoing budget decisions in real time. That’s critical, because it makes no sense to set each operating unit’s budget allocation at the start of the fiscal year if cash is tight and corporate executives expect to dole it out carefully as plans become less uncertain. What companies need now is a dynamic “pay as you go” resource allocation process that conserves cash and encourages adherence to the strategic road map laid out in scenario planning.
This year’s planning process should also generate unusually specific plans to monitor the performance of suppliers, customers, and competitors. As we’ve seen in the past six months, the most entrenched incumbents can plunge into financial distress with dizzying speed. Early intelligence helps companies to recognize when they should negotiate more favorable supply terms, line up alternatives to risky suppliers, offer kinder credit terms to critical customers, accelerate collections from faltering ones, or scoop up all or part of vulnerable competitors. Leading indicators of distress include such familiar signals as delinquent accounts payable, downgraded debt ratings, large share price declines, late inventory deliveries, or lower-quality goods or materials. These signs, though all too familiar to operating managers, are typically addressed in an ad hoc way, not in the strategic-planning process. This year is different.
Look beyond the crisis

Given the vastness of the economic change now under way, the temptation for many planners will be to gaze, mesmerized, at the unfolding crisis. That’s a mistake, for at least two reasons.
First, devastating as the current downturn may be, it cannot roll back fundamental market trends—such as the aging of consumers in Europe and North America or the continued economic development of Brazil, China, India, and Russia—which will continue to create strategic opportunities and threats. Managers must focus their eyes—and resources—on these trends no matter what happens.
Second, planners who become fixated on current economic events run the risk of overlooking a core responsibility: evaluating the effectiveness of current strategies. Although the crisis may force companies to suspend or redirect some of them, others will remain relevant even in the changed environment. This year’s strategic-planning process is a time to encourage managers to sort out which current strategies the crisis has helped, hurt, or failed to affect and to ensure that a system and metrics are in place to track their performance. While all this may sound like common sense, extreme uncertainty makes it easy to overlook.
One company that’s staying the course is McDonald’s, which has profited in the downturn from its low-cost menu items and is enjoying its most robust same-store sales growth in years. Meanwhile, senior management has remained focused on longer-term strategies involving expensive store renovations, operational overhauls, high-end coffee products, and healthful menu options. Managers elsewhere can learn valuable lessons from the company’s efforts to benefit from the current circumstances while sticking to longer-term strategies and the underlying trends (such as healthier lifestyles) that they reflect.
Despite the challenging times, this year’s strategic-planning process need not be an exercise in anxiety or futility. Developing scenarios in greater depth, monitoring strategies more rigorously, and remaining focused on the long term will all help strategists boost the odds of creating plans that can lead their companies through the turbulence.

About the Authors
Renée Dye is a consultant in McKinsey’s Atlanta office, where Patrick Viguerie is a director; Olivier Sibony is a director in the Paris office.


Notes
1See Lowell Bryan and Diana Farrell, “Leading through uncertainty,” mckinseyquarterly.com, December 2008.

安排工作3祕訣，做事俐落、效率高

取材自《工作一次就做對──成為可靠的職場紅人超簡單53招》，小田切展子著，春光出版。



即使是同樣的工作內容，每個人所花費的時間與完成工作的品質，顯然還是有相當大的差異。


其實只要掌握以下這3大訣竅，任何人都能在不出錯的情況下，乾淨俐落地完成工作。


1.整頓辦公環境：
丟滿凌亂文件的辦公桌，以及堆積如山的未處理案件，會讓人有一種「不知該從哪裡著手才好」的緊張感覺。要是把已處理的文件與尚未處理的文件混在一起，則會造成更大的問題。


所幸，只要先確實做好分類，就能順利地進行工作。


你可以先準備一個專門放文件的盒子，能讓送來的文件（例如上司交代的工作、郵件、傳真等等）整齊地收納在盒子裡，以免送件人隨意放置，導致文件散亂、甚至丟失。


碰到要出差或放假時，可在最後上班日的下班前，先在辦公桌上放一個盒子，請大家「把文件放在這裡」；當然，像公司內部公報之類的分發刊物或傳閱的資料等等，也可以放進盒子裡。


這樣的話，就能避免桌面陷入整個被文件埋起來的「混亂狀態」。


此外，建議使用網狀或是透明壓克力製成的盒子，這樣即使將盒子疊在一起，也可以一眼就判斷出裡面是不是有文件。


2.依緊急程度決定優先順序：
分類與處理文件的要訣，就是判斷文件的「緊急度」；至於處理的優先順序，便是按照緊急度來決定。


一般而言，必須趕快處理的文件，大多會蓋著「緊急」（urgent）的印章，所以在著手處理之前，請先檢視所有文件，挑出緊急度高的文件優先處理。


不過，當看到緊急度高的文件時，雖然想立刻開始著手處理，但是，最好先將所有文件檢查一遍。


因為，在還沒確認的文件中，可能會有進一步的消息，或更新／訂正的內容，所以必須先行確認，以免在還沒完全弄清楚狀況時就開始處理。同時也要檢查電子郵件信箱，因為有可能會透過電子郵件收到後續聯絡的相關內容。


在工作場合中，除了例行事務之外，通常也會出現各式各樣不同的工作，而且大部分都設有期限，所以如果同時處理好幾件案子，就要考量每個案子的完成期限及所需時間，來判斷優先順序。這裡舉一個簡單的例子來做具體說明：


工作①和工作②的期限差了1小時，所以先做完①再做②也沒問題。順序就是①→②→③。
但是，因為工作②有人正等著收文件，考慮到這個工作只要30秒就能完成，所以就可以按照②→①→③的順序處理。


其實，工作的方法或順序並沒有正確答案，重點在於「用頭腦思考如何提升工作效率」，如此就能從每次工作時獲得的教訓中抓住要領，來確立自己「安排工作的方法」。


3.事先排定每日「工作紀錄表」：
「工作紀錄表」是為了管理日程而製作、像日曆一樣的東西。不管是使用有日期的記事本，或是自己做都可以（自製工作紀錄表，只要用影印紙裁切之後再裝訂即可）。


「工作紀錄表」的內容其實就是按照工作類型，寫上當天必須完成的工作。每天按表操課，就能省下不少時間，更不怕工作有所遺漏。


一旦工作告一段落，就可以確定「下次會有動作的日期」，並在確定時間點的當下，寫上預定的工作內容，藉以確實掌握某件工作是「處理完畢」或「尚未處理」。如果有尚未完成的工作，而且即使延期處理也沒有什麼影響，那就再謄寫到下一個上班日。

Always on the side of the egg

Always on the side of the egg

By Haruki Murakami


I have come to Jerusalem today as a novelist, which is to say as a professional spinner of lies.

Of course, novelists are not the only ones who tell lies. Politicians do it, too, as we all know. Diplomats and military men tell their own kinds of lies on occasion, as do used car salesmen, butchers and builders. The lies of novelists differ from others, however, in that no one criticizes the novelist as immoral for telling them. Indeed, the bigger and better his lies and the more ingeniously he creates them, the more he is likely to be praised by the public and the critics. Why should that be?

My answer would be this: Namely, that by telling skillful lies - which is to say, by making up fictions that appear to be true - the novelist can bring a truth out to a new location and shine a new light on it. In most cases, it is virtually impossible to grasp a truth in its original form and depict it accurately. This is why we try to grab its tail by luring the truth from its hiding place, transferring it to a fictional location, and replacing it with a fictional form. In order to accomplish this, however, we first have to clarify where the truth lies within us. This is an important qualification for making up good lies.
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Today, however, I have no intention of lying. I will try to be as honest as I can. There are a few days in the year when I do not engage in telling lies, and today happens to be one of them.

So let me tell you the truth. A fair number of people advised me not to come here to accept the Jerusalem Prize. Some even warned me they would instigate a boycott of my books if I came.

The reason for this, of course, was the fierce battle that was raging in Gaza. The UN reported that more than a thousand people had lost their lives in the blockaded Gaza City, many of them unarmed citizens - children and old people.

Any number of times after receiving notice of the award, I asked myself whether traveling to Israel at a time like this and accepting a literary prize was the proper thing to do, whether this would create the impression that I supported one side in the conflict, that I endorsed the policies of a nation that chose to unleash its overwhelming military power. This is an impression, of course, that I would not wish to give. I do not approve of any war, and I do not support any nation. Neither, of course, do I wish to see my books subjected to a boycott.

Finally, however, after careful consideration, I made up my mind to come here. One reason for my decision was that all too many people advised me not to do it. Perhaps, like many other novelists, I tend to do the exact opposite of what I am told. If people are telling me - and especially if they are warning me - "don't go there," "don't do that," I tend to want to "go there" and "do that." It's in my nature, you might say, as a novelist. Novelists are a special breed. They cannot genuinely trust anything they have not seen with their own eyes or touched with their own hands.

And that is why I am here. I chose to come here rather than stay away. I chose to see for myself rather than not to see. I chose to speak to you rather than to say nothing.

This is not to say that I am here to deliver a political message. To make judgments about right and wrong is one of the novelist's most important duties, of course.

It is left to each writer, however, to decide upon the form in which he or she will convey those judgments to others. I myself prefer to transform them into stories - stories that tend toward the surreal. Which is why I do not intend to stand before you today delivering a direct political message.

Please do, however, allow me to deliver one very personal message. It is something that I always keep in mind while I am writing fiction. I have never gone so far as to write it on a piece of paper and paste it to the wall: Rather, it is carved into the wall of my mind, and it goes something like this:

"Between a high, solid wall and an egg that breaks against it, I will always stand on the side of the egg."

Yes, no matter how right the wall may be and how wrong the egg, I will stand with the egg. Someone else will have to decide what is right and what is wrong; perhaps time or history will decide. If there were a novelist who, for whatever reason, wrote works standing with the wall, of what value would such works be?

What is the meaning of this metaphor? In some cases, it is all too simple and clear. Bombers and tanks and rockets and white phosphorus shells are that high, solid wall. The eggs are the unarmed civilians who are crushed and burned and shot by them. This is one meaning of the metaphor.

This is not all, though. It carries a deeper meaning. Think of it this way. Each of us is, more or less, an egg. Each of us is a unique, irreplaceable soul enclosed in a fragile shell. This is true of me, and it is true of each of you. And each of us, to a greater or lesser degree, is confronting a high, solid wall. The wall has a name: It is The System. The System is supposed to protect us, but sometimes it takes on a life of its own, and then it begins to kill us and cause us to kill others - coldly, efficiently, systematically.

I have only one reason to write novels, and that is to bring the dignity of the individual soul to the surface and shine a light upon it. The purpose of a story is to sound an alarm, to keep a light trained on The System in order to prevent it from tangling our souls in its web and demeaning them. I fully believe it is the novelist's job to keep trying to clarify the uniqueness of each individual soul by writing stories - stories of life and death, stories of love, stories that make people cry and quake with fear and shake with laughter. This is why we go on, day after day, concocting fictions with utter seriousness.

My father died last year at the age of 90. He was a retired teacher and a part-time Buddhist priest. When he was in graduate school, he was drafted into the army and sent to fight in China. As a child born after the war, I used to see him every morning before breakfast offering up long, deeply-felt prayers at the Buddhist altar in our house. One time I asked him why he did this, and he told me he was praying for the people who had died in the war.

He was praying for all the people who died, he said, both ally and enemy alike. Staring at his back as he knelt at the altar, I seemed to feel the shadow of death hovering around him.

My father died, and with him he took his memories, memories that I can never know. But the presence of death that lurked about him remains in my own memory. It is one of the few things I carry on from him, and one of the most important.

I have only one thing I hope to convey to you today. We are all human beings, individuals transcending nationality and race and religion, fragile eggs faced with a solid wall called The System. To all appearances, we have no hope of winning. The wall is too high, too strong - and too cold. If we have any hope of victory at all, it will have to come from our believing in the utter uniqueness and irreplaceability of our own and others' souls and from the warmth we gain by joining souls together.

Take a moment to think about this. Each of us possesses a tangible, living soul. The System has no such thing. We must not allow The System to exploit us. We must not allow The System to take on a life of its own. The System did not make us: We made The System.

That is all I have to say to you.

I am grateful to have been awarded the Jerusalem Prize. I am grateful that my books are being read by people in many parts of the world. And I am glad to have had the opportunity to speak to you here today.