3 Essential Success Strategies for 2011

3 Essential Success Strategies for 2011

By Wil Cox, WMEP Senior Manufacturing Specialist

With the recovery poised to pick up steam in 2011, it’s critical that manufacturers are ready to seize new opportunities to drive growth and profitability.

Here are three essential strategies to improve business performance in 2011:

1. Engage Employees as Partners in Success

In my work with manufacturers across Wisconsin, a recurring theme is finding and developing skilled and committed employees. The pressure to fill vital positions will only increase as the economy improves, so putting a talent management strategy in place to meet this challenge is essential.

The first step is to engage your employees as partners in the success of your company.  As a consultant, I’ve seen how getting employees involved in small, focused continuous improvement projects can have a company-wide impact.  Employees who are motivated to improve their own job functions soon broaden their perspective and actively work to improve any process they are involved in.

I’ve seen the jump in productivity and employee morale that result from a single Kaizen event. Instead of just showing up for work and putting in the hours, employees that have input in improving the process and product develop a sense of ownership and pride in their part of the product production.  Check out this video about what one Wisconsin manufacturer did to create a lean culture, and in doing so, position the company to survive the recession and emerge as a healthy, formidable competitor.

Other Wisconsin companies are building collaborative relationships with local technical colleges to help build tomorrow's workforce - this article in "Insight on Business" describes how.

2. Find the Profit in Sustainability

Sustainability is quickly becoming a key driver of global competitiveness.  Manufacturers that embrace sustainability in products and processes are well-positioned to gain competitive advantage and capture new markets and customers.  Moreover, a growing number of OEMs are requiring sustainability practices and performance metrics throughout their supply chains.    

Getting started with a sustainability program can be as simple as grabbing the low-hanging fruit – such as installing energy efficient lighting or avoiding high peak demand electricity costs.  Securing buy-in from employees at all levels is essential for success.

Ray Tierney, principal of BT Squared, Inc. says the greatest number of opportunities for improvements in energy efficiency have been found in HVAC, waste heat recovery, exhaust/filtration, compressors, process heat and lighting, according to initial results from the Wisconsin Profitable Sustainability Initiative (PSI).  Forty-five state manufacturers are participating in the program administered by WMEP.

According to the U.S. Department of Energy, companies with comprehensive energy programs can achieve, on average, practical energy reductions of 20%. Of these savings, 20-30% can be achieved with little or no capital investment by using only procedural and behavioral changes (culture).

Participants in the Profitable Sustainability Initiative are reporting significant savings on utility bills, logistics and other improvements.  Initial results from 11 firms show $1.8 million in recurring annual logistics savings.  The PSI program uses an approach that identifies the best sustainability opportunities and then matches those to the companies’ priorities.

3. Know your company’s true financial picture and growth prospects.

Most executives know a lot about their company’s income statement and balance sheet, but often lack the resources to gain ‘big picture’ visibility into their company’s financial strengths and weaknesses and competitive position in the marketplace.  Ask yourself these questions:

• Can you avoid competitive threats and seize new opportunities as they appear?
• Have you benchmarked your strengths and weaknesses against other companies in your industry?
• What is the rate of growth you can profitably support today and tomorrow?

A powerful financial tool developed in Wisconsin, called FINTEL, offers a comprehensive picture of your company’s financial performance.  This web-based application uses data from 900,000 businesses to allow you to confidentially compare your business to others with the same NAICS code. You can create and test “what if?” scenarios, analyze your company’s long-term liquidity/financial health ranking vs. similarly sized companies in your industry, and discover your sustainable growth rate.

A number of manufacturers I’ve worked with have found this tool to be incredibly helpful in decision-making, valuation, and setting the strategic direction of their companies.

Depending on the company, a focus on other strategies may be important for 2011; for example, many companies are discovering huge opportunities in exporting. But I think everyone agrees, developing an innovative and competitive workforce, profitable sustainability, and strategic financial management are the emerging themes for the next decade. 

About Wil Cox, WMEP senior manufacturing specialist

Wil has extensive experience developing quality and performance-based initiatives in high-tech manufacturing companies, utilizing Lean and Six Sigma to create a culture of Continuous Improvement. Previously, he was Vice President of Operational Excellence & Business Development at Thermo Electron. Wil has also served in top positions in Operations, Engineering and Research and Development at Bell & Howell Co. and Philips Electronics.

He is a Senior Member of the American Society for Quality (ASQ), the Institute of Electrical and Electronics Engineers (IEEE), the American Institute of Physics (AIP), an examiner for the Wisconsin Forward Award and a judge for the Governor’s Business Plan Contest.