What’s Going On In German Companies | Bodo Wiegand | Wiegand’s Watch

Bodo WiegandBodo Wiegand heads Germany’s Lean Management Institute. In his latest newsletter, on Wiegand’s Watch, he explains his concerns about the future competitiveness of German companies. Here is my full translation of his article, followed by my comments:

Bodo Wiegand: “A huge potential is not realized and simply left fallow – can we really afford that?

I think we cannot afford it.

In China and India, more engineers are trained each year than we have in Germany in total, and then we fail to exploit the huge potential of the engineers we have. Why? Because we do not want to give up our fiefdoms, our functional thinking and our single-minded concern for our turf.

Do you really believe that we will remain competitive with it in the long term ??? I don’t believe it!!! Especially when we already know how to realize this potential.

If you ask yourself why this potentials is not realized, there are a variety of reasons that we can summarize as follows:

  • The most common reason is that there are rivalries in employee bodies and ownership structures that prevent unity and perpetuate the status quo.
  • The owners do not want to give up the concepts that have made them successful and that they grew up with, and maintain the status quo in personnel or in factual issues, without recognizing, for example, that market conditions have changed.
  • In leadership circles, political intrigues and decisions based on selfish, contract stipulations promote not the well-being of the enterprise but instead fortify the positions of the incumbent leaders at the center of the activities, jealously preventing colleagues from distinguishing themselves.
  • The existing fiefdoms are defended by all means.
  • Each body of employee coddles members and suppresses rather than seeks confrontations.
  • The goals are set too low, so that you can reach them with existing resources, without really having to change.

Together they then agree on nebulous, universally accepted goals, such as implementing Lean or Six Sigma or Industry 4.0, or agree on one of these goals without setting a deadline for reaching it.

In addition, there is another excuse everyone always likes to agree on as to why they do not reach their goal: “We do not and did not have time for it. Our executives and employees are completely overloaded.” I, however, do not accept it under any circumstances.

Because exactly on this point we can work to provide a real relief to the managers. Summing this up, there are few factual reasons not to realize this potential but there are mostly personally motivated reasons that are due to persistence, enforcing selfish goals and political intrigues.

What about the owners and directors? Why do they tolerate stagnation? Stagnation today means retreat tomorrow with loss of competitiveness and market position. The potential is huge and certainly will soon be realized by others, one way or the other. The following can all be accomplished with proven methods:

  • 15% to 20% time freed up for managers in the offices.
  • 10% to 15% productivity improvement in the inner workings of such departments as Sales, Development, Accounting, Human Resources, etc.
  • 10% to 15% productivity improvement through value stream orientation and mindset change in Manufacturing and in the indirect areas of Order Processing, Logistics, Maintenance and Dispatch,
  • 15% to 25% additional productivity improvement through process orientation in the office areas of Sales, Development, Design, Control.

Freeing Up Managers’ Time

Everyone wants to do it but nobody does it correctly and consistently. Freeing up managers’ time should be a topic that all managers throughout the company are interested in and could benefit from. But it is precisely these potentials of 15% to 20% savings in senior management time that can only be achieved jointly, because the factors that can relieve the managers are the factors that demand discipline and leadership by example from all.

So far, in the many, many companies I’ve been in, no one has rigorously harvested these low-hanging fruits – except, of course, where we have helped. Sorry, that had to be now.

It all sounds so easy:

  • Meeting structure analysis.
  • Information Structure Analysis.
  • Business Structure Analysis.
  • Mental set-up time.
  • Filing system.
  • Etc.

but believe me, it’s hard work. It cannot be delegated and is one of the toughest projects you can take on. But it’s worth it.

The alternative: On the average, German managers today sit 1 day/week in meetings and spend another 1 day/week writing or answering emails  (Source: Thomas Jackson, Loughborough University). We are satisfied with a share of the share of value added work staying at 50%  in the office areas (Source: Investigation Lean Management Institute). This will not enable us to maintain German competitiveness.

We must tackle the issue of freeing up managers consistently. Although it is difficult and requires every individual to participate. The alternative — overburdening our managers, risking burnout, not using their potential — is no alternative.

Productivity improvement in individual departments

But what can I do if I want to change something in my area? It’s easy in production. There, I can introduce 5S, optimize, build Kanban loops, shorten set-up times and optimize value streams. But what can I do in the offices, like Sales or Accounting or Development or Human Resources?

Of course, you can also relieve the managers in your area. You may not be able to free up 15% to 20% of their time but 5% to 10% already helps. To increase productivity by 10% to 15% in the individual departments, we have developed a system for within the departmental boundaries that can make their work more customer-oriented.

The central element of this optimization is our newly developed departmental cockpit. If you have created order in your area and optimized your sub-processes, then you can ask the adjacent departments to do the same. But only then.

But believe me, the word will get around that there is less stress on managers in this department, and you will sense the relief.  Employees will now be more motivated, and work faster and better with their streamlined process.

Michel Baudin‘s comments: Claims about numbers of engineers trained in China and India are difficult to substantiate. WorldAtlas actually excludes these countries from statistics about engineering graduates because “no data is available.” According to the 2010 report from the VDI professional association of German engineers, Germany then had about 1 million engineers.

India and China would, therefore, have to train more than 1 million engineers every year to exceed the total number of German engineers. Besides the general lack of credibility of statistics about China, there is also the problem that what it takes to be called an engineer varies between countries and cultures. The bottom line is that what Wiegand presents as an established, scary fact is nothing of the kind.

After this opening, I expected Wiegand to discuss ways to make better use of the existing engineers. It might involve, for example, giving engineers opportunities to remain engaged in technical work longer instead of moving into management, as American companies like Intel and TI have made possible with their “technical ladders” as alternative career paths.

Wiegand’s main concern in the rest of the article, however, is the productivity of managers. It’s not immediately obvious that increasing it is the key to competing against upcoming hordes of engineers from China and India. On the one hand, talented engineers seem to be what Germany least lacks, and its engineering education system is studied and copied in other countries. On the other hand, contrary to their reputation, German trains are always late. Since it can’t be the engineers‘ fault, it has to be the managers‘, and I am guessing that this is what is behind Wiegand’s apparent non-sequitur.

About managers, Wiegand seems primarily concerned about the time they spend in meetings and email, and I have a hard time finding to be intrinsically problems. It all depends on what the managers do in their meetings and the content of their emails. Meetings are a large part of the way the work of management is done, well or poorly.

Email is just the standard medium for written one-to-one and one-to-many communication, like telexes and letters used to be. It can also be used well or poorly. For example, it is an inappropriate tool for many-to-many communication, as is needed in a project team. There are better software solutions for these cases but I doubt that it is what Wiegand had in mind.

In his discussion of office productivity, Wiegand conflates improvement with optimization, which I think is unfortunate, as I noted in my comments on the English translation ofThe Toyota Way 2001:

The optimization mindset is antithetical to continuous improvement. Once you have optimized something, then, by definition, no more improvement is possible. I have heard managers say “We’ve optimized this line…” as a way to say that they had moved on to other areas and would not address glaring problems that remained. With continuous improvement, on the other hand, the completion of an improvement step is not an occasion to declare “mission accomplished”; it just sets up the stage for the next step.

I also don’t see a departmental cockpit as the key to improving office operations. The starting point should be a reflection on the purpose of the department and answers to questions like:

  • What is the desired output?
  • How satisfied are users with the quality and promptness of delivery?
  • What inputs does it need from whom to produce this output?
  • How do you measure the volume of work?
  • What is the volume of work?
  • How does the volume vary over time?

In a manufacturing organization, the answers will be different for Technical Data Management, Quality Assurance, Production Control, Maintenance, Human Resources, etc., but, in each case, they drive the improvement effort.

One point that applies to every office today is that it works on data with a computer network and that much of the waste is due to improper use of IT. The systems they use should do the following:

  • Provide effective tools for each task. For lack of effective, task-specific tools, millions of employees apply PowerPoint and Excel to tasks they are not designed for and perform poorly. They resort to these workarounds because the modules provided as part of all-in-one corporate IT systems are mediocre at most specific tasks other than the ones they were originally designed for.
  • Never ask users for the same data more than once. It not only wastes their time but increases the risk of errors.
  • Use plain language, not cryptic codes, to refer to customers, products, processes, people, expenses, etc. These codes are legacies from the paper-and-pencil age and need to be retired.
  • Avoid circulating multiple, independently-edited copies of the same document. This causes inconsistencies that take time to resolve while unnecessarily frustrating users.
  • Let users choose their own usernames, passwords, workstation IDs, etc. It is a harmless way to give users a measure of control over their environment. The only technical requirement is for names to be unique within the work environment but it is also fair to require that they not offensive to colleagues.

None of the recommendations in the above list is easy to implement, particularly with a manager class that does not realize that the issues they address are quality and productivity sinks in their office work.

#Germany, #OfficeProductivity, #IT