May 6 2016
Here is the full translation of his article, followed by my comments:
“Do we not pay our managers so that they manage, solve problems and troubleshoot? Typically, managers are mostly promoted for being troubleshooters, in the limelight for having successfully solved problems in their departments. But is it the really good managers who let problems fester in their department and then solve them with great fanfare? Are those the managers who should be given greater challenges and promoted?
Aren’t the better managers the ones who master their processes and have a handle on their problems, so that trouble doesn’t happen? Aren’t those the ones who should be promoted? So what is it that actually sets a good manager apart?
Now let’s take a look at different managers and management cultures. When I visit companies managed by American corporations or private equity firms, one quickly realizes that numbers, data and facts are the top priority. Problems are there to be solved and, as long as the objectives are reached, the manager is a good guy.
Alas, if the problems are not solved, he is a bad guy and his ouster seems pre-programmed. In these companies quick problem solving and goal achievement are paramount. Everything is focused on this. The leaders, just like their subordinates, are only there to execute and reach goals set by others, whatever the costs.
Under no circumstances can you say that this approach is unsuccessful: the sponge is squeezed, the water comes out and all the achievable short-term potential is tapped. But, once the sponge is squeezed, it goes no further. The manager is replaced and the next victim paraded through the village. Then you acquire new companies, squeeze the sponge and it goes on and on. But are these the managers we need to lead us into a future of self-learning organizations?
Let’s take a look at the highly successful corporations and medium-sized companies in Germany and examine how they manage to keep improving, even when the sponge is already squeezed. Their most visible success factors are:
- A value system they live by
- Good leaders
- Motivated employees
- Sustainable problem solving
- Stable processes
- Medium to long-term thinking
These companies live by a value system and are shaped by their management culture. The top and middle management act on their own authority, are independent and integrate the employees at all levels. The managers live according to their role models and act with authenticity, meaning that they do not act one way and then the other way and back again. Instead, their statements and decisions are predictable and consistent. They challenge and encourage their employees and succeed in thus motivating them.
These managers encourage their employees to think and to use their intelligence and skills to continually improve, so that they become part of the whole. The basis is the value system given by the owner or the board, in which principles for production, organization and management are enshrined. This value system provides the foundation and the guidelines for leaders and employees to move and act. To improve and remain competitive worldwide, we therefore need a changed management picture.
We don’t need troubleshooters or managers who decide everything by themselves, focused on short-term goal achievement and activism, but leaders who have learned to perform on the basis of the value system, and challenge and encourage employees. Of course, we also need stable processes and sustainable strategies for solving problems, because these form the basis for continuous improvement and to master the complexity of today. And of course we also need the Lean management philosophy of creating value without waste.
But without jointly developed leadership skills, we will not, in the long term, be as successful as the best.”
Michel Baudin‘s comments:
The statement about “American corporations and private equity firms” as focused exclusively on short-term goals may be too broad. I see a more nuanced picture. Opel, for example, is a German car company that has survived as subsidiary of an American corporation named General Motors for 87 years.
Conversely, Germany’s iconic DaimlerBenz was not quite as successful managing the American Chrysler corporation between 1997 and 2007.
This being said, I have heard of American pension funds taking over and wrecking mid-size European auto-parts companies, by stopping R&D, new product development, and capital investment, before taking the intellectual property and moving production to cheap labor countries.
Overall, Wiegand is not saying that troubleshooters are not needed, only that troubleshooting is not the only skill that should be valued, and that the troubleshooters’s immediate countermeasures need to be complemented by long-term solutions, which I believe is what he means by “sustainable problem-solving.”
The sponge squeezing metaphor also reminds me of the saying in Japan about Toyota, that they can squeeze water out of a dry rag (乾いた雑巾を絞ると水がでる).