Jeffrey J Davis Photography

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  3. Looking forward to following your ruminations here so I can better understand what goes on in the mind (and lives) of the C-level folks for whom I work.

  4. Thanks Jackie for engaging, looking forward to hopefully sharing ruminations of value to you. Not sure my mind/live are typical “C Level”, but they're the only ones I've got!!

  6. Looking forward to following your ruminations here so I can better understand what goes on in the mind (and lives) of the C-level folks for whom I work.

  7. Thanks Jackie for engaging, looking forward to hopefully sharing ruminations of value to you. Not sure my mind/life are typical “C Level” material, but they're the only ones I've got!!

  8. Interesting take.

    On questions 3 and 6, the key element is the subordinate's trust that their candor won't be abused / misused. If you are in the first 6 months of a role, the trust level of subordinates is likely a function of how they were treated before your arrival.

    In practice, have you seen improvements in the process the longer you've been in a role?

  9. Thanks Aaron, great question. Probably I would not advise starting the Six Questions process within your first 30 or 60 days in a job. I would maybe give folks a heads up that you would like to engage them in this manner, but I would wait until you had a quarter under your belt as the team leader before you started the formal process.

    Maybe it's just my leadership style, but I have not sensed any reluctance for folks to open up in the discussions of question 3) and 6). They know it's no retribution, and I back that up. I do find that sometimes I may have to lead them a little to pull out meaty feedback for question 6).

    As with any new rhythm, it's likely to be a little rough / awkward the first go around, but invariably at the end of the first session, your folks will realize it's a value add interaction. It definitely gets better and crisper over time, in fact most of my folks are bringing pre-prepared discussion bullets to lunch (even though I didn't ask them to) to make sure they hit all the topics we need to.

    Best of luck and let me know if I can help!

  10. Simple-Yes!; Valuable-Yes! All we need to do is commit to the time to do it! For many leaders, that is the obstacle. Yet, as you point out, it makes the annnual performance review process more effective. It also takes away any surprises that some leaders experience when the participate infrequently in 360 surveys. By working this process as CEO, you set an effective model for your team to replicate with their respective direct reports. Thanks for sharing your experience with this approach.

  11. Thanks Don for your valuable insights. You are correct that this will require a time commitment. For each staff report, I probably devote four to five hours per direct report per quarter. (2.5 for the actual dialog, 2 to summarize the notes). So six direct reports would be 120 hours / year. I don't think it's too much of an investment, considering that a leader's biggest job is helping his people achieve as much as possible. I'm sure you agree.

    An additional benefit is that via shortening the frequency between targeted feedback sessions, you can drive improvement and redirection more quickly, as opposed to a standard annual performance review cycle (which of course we still do).

    Thanks as always for your inputs.

  12. Simple-Yes!; Valuable-Yes! All we need to do is commit to the time to do it! For many leaders, that is the obstacle. Yet, as you point out, it makes the annnual performance review process more effective. It also takes away any surprises that some leaders experience when the participate infrequently in 360 surveys. By working this process as CEO, you set an effective model for your team to replicate with their respective direct reports. Thanks for sharing your experience with this approach.

  13. Thanks Don for your valuable insights. You are correct that this will require a time commitment. For each staff report, I probably devote four to five hours per direct report per quarter. (2.5 for the actual dialog, 2 to summarize the notes). So six direct reports would be 120 hours / year. I don't think it's too much of an investment, considering that a leader's biggest job is helping his people achieve as much as possible. I'm sure you agree.

    An additional benefit is that via shortening the frequency between targeted feedback sessions, you can drive improvement and redirection more quickly, as opposed to a standard annual performance review cycle (which of course we still do).

    Thanks as always for your inputs.

  14. Jeff, your website is amazing, I was updating linked in as an old work friend looked me up so I thought I would see what webmaster jeff was up to. Great job

  15. Drew –

    Thanks for stopping by. Hope you can find some value and keep me honest here. Feel free to chime in with a comment from the other side of the table on the “6 Questions” post if you feel so inclined.

  18. I completely agree with this – face-to-face is always preferred. It has been said that less than 50% of “meaning” is communicated through the actual words. The majority is communicated through tone, body language, and other non-verbal mediums.

  19. Thanks Ken for your input – The communication is clearer and the chance for misunderstanding lower, if you can be face to face and fully appreciate the non-verbal cues.

  20. Thanks Ken for your input – The communication is clearer and the chance for misunderstanding lower, if you can be face to face and fully appreciate the non-verbal cues.

  21. Interesting article, provided me with my daily shot of “learn something new everyday”!

    I'm a bit worried on what this means for my personal mentality when one of the first things I noticed in the pictures was the birds standing next to the hard working dolphins on the beach and free loading! I guess you have free loaders in humans too but they might create friction for the hard working team when they see a bunch of people on the sidelines taking rewards the worked hard as a team for (in the dolphin's case I'm sure they won't mind chomping down on a few seagulls as well haha)!

  22. Thanks Usoff for stopping by, and glad you could learn something today!! It's natural for the egrets and seagulls to be circling around any kind of a major feeding, it's just the natural food chain. Usually several fish get left behind, stranded on the bank, and in the scheme of things, it's better for a bird to also get a meal than for the fish to just die in the sun.

    As far as I could tell, I didn't observe any negative motivational impact on the dolphins!! In fact frequently, dolphin will use birds circling above water as a good indicator of where to fish. So it's a symbiotic relationship.

  23. Enjoyed the read and natural link to leadership and team. I'll have to get back to Seabrook Island to check this out! -Rick

  28. Thanks Greg –

    What I worry about is that many of those folks who have real manufacturing competency which can get/keep the United States competitive might be unwilling to leave their locale, even though the job market is tough.

    Likely result is that they exodus core manufacturing, further eroding our technical base and thus perpetuating the problem.

  29. Interesting…. there's huge potential for any manufacturing company to make use of the existing skilled work forces in Detroit (something related to automotive). Either that or offer relocation packages to different parts of the country or even overseas to those high potential candidates there.
    hmmm… might be a good time to hire a continuous improvement professional there to drive a project in a Chinese plant.

  30. About your first point, I too would be interested in knowing and finding first hand from the IT professionals in the middle east (Dubai was hardest hit I remember) that dealt with the earthquake a few years ago off Japan and severed them off the grid including their financial systems for 2 full days. Be interesting to learn the lessons from that incident and see what new contingency plans they came up with; might be potential for a business catered to those needs?
    Thanks for the post, it brings to mind some concerns for an investment idea of my family in data center constructions.

  31. Thanks Usoff, probably difficult to do a mass relocation, but I am a big proponent of setting up “Industrial Commons” for new industries which could use the same skillsets (i.e. Wind Energy, Hi-Capacity Batteries). In demand individuals will make their own choices about whether they want to relocate and hopefully their skills will not go untapped.

  32. There probably is a good market (or already products and services of which I am unaware of) for monitoring weak links and ensuring networks have sufficient redundancy. I hope your family idea works out.

  33. Thanks Usoff, probably difficult to do a mass relocation, but I am a big proponent of setting up “Industrial Commons” for new industries which could use the same skillsets (i.e. Wind Energy, Hi-Capacity Batteries). In demand individuals will make their own choices about whether they want to relocate and hopefully their skills will not go untapped.

  34. There probably is a good market (or already products and services of which I am unaware of) for monitoring weak links and ensuring networks have sufficient redundancy. I hope your family idea works out.

  39. Jeff, Congrats! I know how things can take time and as you know no deal is done until it is done and sometimes it is still not done! Best of luck to you and your team and as you also know now the work really begins!

  40. I guess I got a flavor of the deal process by catching up with you once a while in Shanghai. As a guy we look up to, you felt the frustration, relief and pride pretty much the same way as we do, that's somehow encouraging. Even I haven't figured out how to get around in twitter, but still follow your footprint looking for answers.

  41. Thanks Les for stopping by and for your comment. Yes this deal seemed several times as if it never would get done, so I was happy for it to finally get consummated. You are right, now we get to see how all those carefully structured contract language clauses actually play out in real life!! We are working hard now to transfer technology and upgrade business processes, but that's the fun kind of work.

  42. Thanks Frankie. Yes, it's easy to get frustrated when things seem like they are not going well, and i'm sorry if you could feel that sometimes. As leaders, it is important for us to always realize that our energy can be contagious on others, either positively or negatively. If I learned one thing from this transaction, it was to never give up even when it seems like there is no way to succeed!

  43. Thanks Les for stopping by and for your comment. Yes this deal seemed several times as if it never would get done, so I was happy for it to finally get consummated. You are right, now we get to see how all those carefully structured contract language clauses actually play out in real life!! We are working hard now to transfer technology and upgrade business processes, but that's the fun kind of work.

  44. Thanks Frankie. Yes, it's easy to get frustrated when things seem like they are not going well, and i'm sorry if you could feel that sometimes. As leaders, it is important for us to always realize that our energy can be contagious on others, either positively or negatively. If I learned one thing from this transaction, it was to never give up even when it seems like there is no way to succeed!

  47. Great article, Jeff. I enjoyed your creative visual tricks for staying focused, especially the 3×5 card. I definitely also felt convicted about my wasted “Green” time that flitters away… thanks for tugging at my conscience! 🙂

  48. Thanks Ryan, glad you found it useful. I find that a good mix of “high-tech” (eProductivity) and “low-tech” (3×5 index cards) works well for me.

  49. Great article, Jeff. I enjoyed your creative visual tricks for staying focused, especially the 3×5 card. I definitely also felt convicted about my wasted “Green” time that flitters away… thanks for tugging at my conscience! 🙂

  51. грамотный подход к делу, спасибо админу, все четко и по полочкам
    Не могу промолчать, спасибо автору, реально спасибо! Развивайте ресурс у Вас это получается

  52. Hotyuewr –

    Thanks for your comment. My basic translation via Google gives me something like:

    “sound approach to business, thanks to admin, all clear and on shelves I can not keep silent, thanks to the author, really thank you! Develop a resource you have is obtained”

    If that’s roughly correct, I’m glad you could find some value!!!

  57. This blog got me curious about the book, and I finished reading it about a week ago. Thanks for the post, the book is spot on to what could be our nations trajectory. Hope we don't stamp out the producers in the world!

  58. Wow Brian !!

    Thanks for sharing that. If I somehow helped one blog visitor to read “Atlas Shrugged”, I guess I've had an impact. Glad you enjoyed it and can see the eerie parallels with today's US situation.

    Create value, and trust your SELF. you WILL be recognized!

  59. This is a well-written discussion of the outlook for private equity investments of various “flavors”, and I think you hit the key points spot-on.

    I have been involved in three private equity-owned companies (and still am in the third), and have seen a range of approaches from hands-on to hands-off, short-term focused to no specific exit horizon. The current company I work with has the private equity investors as CEO and president and they are looking to build a successful company for the long term – probably the model that will be more successful over the next economic cycle.

    My previous employer was owned by a PEG that was clearly managing for the short term, making decisions that were financially unsound but that they perceived would boost the multiple of the company. Unfortunately, they were not able to execute an exit strategy before the current downturn, and the outlook is very uncertain. I would far rather work where I do today, with owners engaged and committed to the business (and additionally continuing to invest their own funding, with minimal leverage ) than in a “traditional” PE arrangement.

  60. Greg –

    You have a unique perspective having worked for 3 different sponsors and you can see the pros and cons of the various approaches. You are correct that it can be dangerous to start “docking maneuvers” for the exit if the exit does not in fact happen. Glad you have a good backer today and that it is working out well for you. I'm sure others in the company feel the same way.

  61. Greg –

    You have a unique perspective having worked for 3 different sponsors and you can see the pros and cons of the various approaches. You are correct that it can be dangerous to start “docking maneuvers” for the exit if the exit does not in fact happen. Glad you have a good backer today and that it is working out well for you. I'm sure others in the company feel the same way.

  62. If you simply read The Economist occasionally and look at the economic data in the back, these figures are not too surprising. This is a very effective way to display the data. And those who are calling for China to devalue the yuan don't realize the implications it would have on China's ability and willingness to continue lending to feed our spending habits, especially at the government level.

  63. Greg – I think you are right that the economic data is out there that illustrates the continual trends which have been underway. I think what's staggering is seeing the delta between Point A and Point B and how much the balance of power has shifted in 9 years. Although the Yuan is clearly undervalued, you are right that sttrengthening it (at least now) would have devastating results.

  64. The number of global companies and billionaires out from free competions is more important than IPO and trade researves.

  65. Ho hum…

    Allowing the Yuan to float forces a lot of things to self correct. Yes Greg, it would be very painful and probably fatal at this point were it to happen in one fell swoop, but I disagree with the characterization that people want China “to strengthen the Yuan.” I don't want them to strengthen it, I think they need to stop artificially weakening it (or weaken it less).

    Had it floated years ago, the multinational stampede there in the first half of this decade would have been muted. Whether that would have helped the US worker, or those in other LCCs more, I don't know.

    That being said, as far as the stats go…

    Are IPOs a measure of strength, or merely an indication of increasing surface tension in an emerging bubble? Even if you concede the stat's usefulness, an NYSE or LSE IPO is way more credible than an SSE or SZSE listing.

    I also question the validity of the “large market cap” stat as well…another sign of a Chinese stock bubble? Revenue is more meaningful to me, and the results are much less damning.

    Of the Global Fortune Top 100 in 2009…Sinopec (Oil), CNPC (Oil), State Grid (Domestic Power), ICBC (Banking), China Mobile (Domestic Telco).

    I'm not worried about that list, but when combined with the FC reserves it makes me fear a bidding war for commodities and want to push alt sources harder.

    The real issue that's not on the list is our national debt, as it makes unwinding the imbalance a wicked problem.

    As for what to do to ride it out…buy hard assets…I like multifamily residential. Unless tent cities are en vogue, hard times will force people to trade down at the margins supporting demand for modest accommodations. Fixed rate debt will become less burdensome as interest rates / inflation rise. Value of the structures should float with inflation, providing a buffer for principal.

    -Aaron

    PS – One of the best economist covers ever showed container ships going from china to US loaded with goods, then making the return trip with IOUs.

  66. Frank – I agree that IPO volume is relatively unimportant. But unless you or I are one of them (last time I checked neither of us were), the number of billionaires is also somewhat unimportant. But the trade reserves has serious implications for the global economic balance.

  67. Great points, Aaron — on many levels. Thanks. I agree that competition for hard commodity resources (Cu, Al, Pt, Lithium) will definitely have an impact of wealth creation of nations over the next 10 years. Countries naturally rich in resources like the BRAC countries (Brazil, Russia, Australia, Canada) stand to do well when financial assets become of questionable value.

  68. Jeff, yes the number of Millionaires makes much more sense. Here people talk about boosting domestic spending, but only talk. High flying property price and tax makes middle class more cautious with spending.

  69. I love this idea. Any tool that can bring rigor in identifying and ranking potential risks to a process that is, at best, chaotic and driven by an outspoken few is useful. I look forward to the next two parts of this series and will certainly point them out on my blog for my, like, 3 readers when the set is complete.

    I think the idea of thinking of risks to a competitor is a great way of getting around the issue of being wed to your strategies. I think that many would still be vulnerable to blind spots, however: I wonder how many banks would have identified “home prices falling 20% or more” and “access to credit markets frozen” as risks even using such a process?

  70. Thanks Greg. You are correct that the biggest blind spot of any risk assessment exercise is thinking through accurately and honestly the range of things which COULD happen. It will probably always be human nature to be optimistic rather than fatalistic, but hopefully the realities of recent economic events will help decision makers thing more broadly about potentially devastating developments.

  71. I love this idea. Any tool that can bring rigor in identifying and ranking potential risks to a process that is, at best, chaotic and driven by an outspoken few is useful. I look forward to the next two parts of this series and will certainly point them out on my blog for my, like, 3 readers when the set is complete.

    I think the idea of thinking of risks to a competitor is a great way of getting around the issue of being wed to your strategies. I think that many would still be vulnerable to blind spots, however: I wonder how many banks would have identified “home prices falling 20% or more” and “access to credit markets frozen” as risks even using such a process?

  72. And now I'll be chuckling at that picture every time I rummage through my hard drive to delete pics, thanks. Oh, and great post.

  76. And now I'll be chuckling at that picture every time I rummage through my hard drive to delete pics, thanks. Oh, and great post.

  80. I am just now seeing your comment Aaron. I agree that over time the Yuan needs to be allowed to float more freely (as all currencies should). I just believe that the benefits to the US of such a shift would be far smaller than most, especially politicians, proclaim. Currency manipulation has become an excuse for what is really an exaggerated view that US manufacturing cannot be competitive (our workforce training, education, and regulatory and tax environment should be far bigger concerns).

  81. I am just now seeing your comment Aaron. I agree that over time the Yuan needs to be allowed to float more freely (as all currencies should). I just believe that the benefits to the US of such a shift would be far smaller than most, especially politicians, proclaim. Currency manipulation has become an excuse for what is really an exaggerated view that US manufacturing cannot be competitive (our workforce training, education, and regulatory and tax environment should be far bigger concerns).

  82. So sad… but true. Having spent early half of my life in the old continent and now living in US, the picture absolutely describes the attitudes I encounter. I am convinced US public school system is to blame for such uneducated thinking.

  83. Thanks Apollo – I think the viewsare driven by school, parents and by the fact the the vast majority of Americans never leave the country so must rely on the attitudes fed them by the media and their surroundings.

  84. So sad… but true. Having spent early half of my life in the old continent and now living in US, the picture absolutely describes the attitudes I encounter. I am convinced US public school system is to blame for such uneducated thinking.

  85. Ha! I love your one track that goes way out. Did you zone out while you were riding? 😉 Hope you had a Merry Christmas! We haven't been out riding for about a week now.

  86. Ha! I love your one track that goes way out. Did you zone out while you were riding? 😉 Hope you had a Merry Christmas! We haven't been out riding for about a week now.

  87. Hey Meagan –

    Actually, due to about a 2kt East current in the intercoastal waterway, I was only really decently powered on a Port tack. I consciously went way past the shipping channel to try to make some ground upwind. But the wind was so up and down that I struggled on a 14 and a Nobile 666 132cm to hold ground (I’m all of 210lbs)

  88. Good advice Jeff, whether applied at a project level or a company-wide level. I've never been involved in a company-wide approach to a fishbone or FMEA exercise and, like with most tools, the process would be just as interesting as the results. The number of biases and blind spots that could be uncovered if the exercise were done properly would probably astound most “honest” participants.

    How frequently do you recommend updating the FMEA (and rethinking whether all major potential issues have been captured via the fishbone)? Obviously, you will want to track progress on actions to make sure that RPNs are being brought down through contingency plan development, etc.

  89. Thanks Greg. The FMEA should probably be dusted off and refreshed probably annually, whenever there has been a major change in the external or internal environment, or whenever a new risk pops up that you hadn't adequately planned for prior.

  90. Good stuff, Jeff. My struggle with the tools is that if I can use them continually to make it worth the efforts. I tend to think about issues without putting them on the paper. Surely these tools can help with thinking systematically and locating the missing parts. Fishbone can be an easy form to start with.

  91. Frank –

    You are right, the tools are just that, only tools. When you think of an issue or an opportunity, write it down. Get it out of your mind. If it's in your head, it's not getting done.

    Once you get the issues down on paper and keep them in front of you, eventually you will be forced to develop a plan of action, and you can choose the best tools to help you in your battle.

  92. Frank –

    You are right, the tools are just that, only tools. When you think of an issue or an opportunity, write it down. Get it out of your mind. If it's in your head, it's not getting done.

    Once you get the issues down on paper and keep them in front of you, eventually you will be forced to develop a plan of action, and you can choose the best tools to help you in your battle.

  93. You point out one of the major issues facing businesses over the next two decades, and that's the looming exit from the workforce of an unprecedented amount of built-up knowledge and experience. I have heard many stories, especially while I was at GE, about employees at all levels of the organization leaving and an operation falling apart without their built-up intrinsic knowledge.

    Here are a couple of humble thoughts that may help in mitigating the risk of employees departing suddenly. We are facing this challenge daily in my current company, as a highly cyclical business with an aging workforce.

    No process should have a person's name on a process step (use a position or role description instead). It makes it too easy to become reliant on that person, with no one else learning the tools or secrets to executing the task.

    Make cross training of employees in “like” roles an annual performance goal. You may have a subject expert in estimating or engineering certain types of systems, for example, but you need to have at least a minimum competence in that type of system in other estimators or engineers. One other challenge of an aging workforce is the 6 weeks of vacation that many have, so this activity can have pretty rapid payback.

    As you suggest, automating (or at least documenting) a workflow can get around the reliance on an individual. An employee may feel threatened when asked to document their work processes, what with all the talk of outsourcing. To address this, emphasize that automating or documenting rote tasks will allow them to focus on more valuable, stimulating activities (or, alternatively, take their 6 weeks of vacation in a stress-free manner).

    This is an important post, probably the most important one in this series, so I hope your readers take heed to the advice you offer. I look forward to seeing other suggestions as well.

  94. Wow, Greg –

    Talk about a value added comment. I really appreciate your elaborations and you bring up some great points. I forgot all about the 6 weeks of vacation!!

  95. Maybe I was just not paying enough attention. People submitted their resignation often at unexpected time. Those who occasionally hinted outside opportunities eventually stay much longer. As a reflection, people making some noise because they want change or something better. Once giving up that hope, they'll just do their job and start to look outside. It's pretty easy to pretend for a few months.

  96. I stumbled across this blog and I must say that I find your thoughts about risk pretty interesting. I enjoy seeing things from other people's perspectives. I like the idea of stress testing, planning for a wide range of “what if” scenarios, how to prevent them, and how to recover should the unexpected happen. I've got to say, this is some mentally stimulating stuff. Here's a scenario that you have a lot of experience with: It's about a manufacturing company that has a few factories in different locations. Each factory has it's own issues, weaknesses and strengths. Like all companies today, it's been hit hard with the economic downturn, but it's still surviving. I'm interested in your opinion on how to move forward – what's best for the company, it's employees, and most importantly: it's customers.

    *Plant A is the pride and joy of the company. Out of the two plants in the country, it's the newest and the biggest. It has room to grow. There is a lot of potential manufacturing capacity here. There is so much unused space in this plant, that it would actually make sense to close down the other plant and relocate it's machines to this one. This would make life a whole lot easier since there would only be one factory to maintain instead of two. The company knows this, and will spare no expense in making sure this happens. There's only one problem – it's workforce. Plant A has a high turnover rate in terms of employees. They don't stay very long compared to the other plant. They also don't take pride in their work. Plant A has a problem with poor quality and customer returns. As a result, the customers prefer to buy from the older plant due to the fact that it consistently makes a quality product that they have come to depend on.

    *Plant H is the oldest plant in the company. The overwhelming majority of it's workforce consists of people that started there right out of high school . They take pride in their work, they make sure the job is done right, no corners are cut. A lot of people in this plant compare very closely to your “Johnny” character in part 3 of your risk series. As a result, if the customer gets product from this plant, it will happily come back for more. This plant is notorious for it's unmatched quality and customer satisfaction. It's a “proven, innovative leader” in it's business, and has been for decades. Unfortunately due to mismanagement, this plant has been neglected over the years and is in dire need of repair. It's infrastructure needs attention, and it's machines and equipment are beyond outdated. Despite all this, the workforce and local management have been able to overcome the obstacles and still produce a superior product to this day.

    *Plant S is the company's newest baby. Little is known about this plant's workforce or product quality, but it can't be any worse than that of Plant A. The company is particularly excited about acquiring this plant because labor can be had here for pennies on the dollar since it's located in the People's Republic of China. It also has an advantage over the other two because of it's location. Approximately half of the company's customers are located in Asia. Why ship product across the Atlantic ocean when you can just buy a manufacturing facility in the region you're customers are based in? Demand is expected to grow in China particularly because of it's exploding economy. Who can blame the company for wanting a piece of that action? I can see Plant S as the future of the company depending on how it performs in the future. If it can match Plant A in terms of quality (which shouldn't be hard to do), then it would make sense to close Plant A and make Plant S the sole manufacturing facility for the company. The only weakness I can see with Plant S is it's public image to Americans. It symbolizes more jobs outsourced to a third world country.

    The company prides itself by saying that it's product quality is superior to the competition. And, thanks to Plant H, it is. But, many feel that Plant H is on borrowed time. They feel that the company really doesn't care about quality because if it did, it would show Plant H some love. Since this is all about risk, isn't it risky business to let the one manufacturing facility that produces the highest quality products, and has the best reputation with customers go to waste? Or, maybe saying we're “a world leader in high performance materials used in a broad range of markets” is nothing more than a sales gimmick. I'd like to get some insight from you on this matter. Obviously, you think about risk often. Is it “risky business” to force a substandard product on a customer when they request a higher quality product from a plant that is threatened to being downsized or shut down?

  97. Frank –

    As you well know, people are always interested in achieving as much as possible in their career and in accelerating their climb up the ladder. In an opportunity-rich market such as China, this translates into frequent unplanned defections, even in the best managed companies. It also means you probably need to spend even more of your leadership attention on this phenomenon than a Western leader. If people on your team are “making noise” you need to “listen to the noise”. If you can do something to better satisfy their desires, chase it down, if not, you better get your “Plan B” in motion, because they will probably leave soon. And trust me, when they leave, it will be at the absolute worst time.

  98. mcorbin –

    Thanks for stopping by and I genuinely appreciate your investment of quality time to pose such a well written and thought-provoking post. It’s always difficult to diagnose a complex business issue from afar (;->), but some questions I would want to dig into first might be:

  99. You mention that customers prefer to buy from Plant H: Is that due solely to the turnover and lack of pride of workmanship issues that you suggest? Are both plants historically making the same products, selling to the same customers, using the same physical process and equipment? If it’s really a labor pride issue, management has it’s work cut out for it to build somehow the same attention to detail that the older plant’s reputation has been built on. Sometimes as facilities change their mission to serving customers or markets with higher expectations, it may take some time and training to recalibrate the receiving workers to their new reality. If process technology plays a component in real or perceived product quality differences, management should do whatever it can to practice “Copy Exact” mentality for any transferred production.
  100. I wonder what the annual cost to keep each facility open is? Is the company running at a high ( i.e. >80%) effective capacity utilization? If not, does the company have enough revenue and profit to support the annual fixed cost burden of the two distinct facilities? If not, unfortunately, a rationalization / combination may be the only viable option.
  101. When you look at the history of the three plants, are there any “soft issues” that could have introduced any management desire to favor one site over the other? In some situations (very common in the auto industry), plants which have not had cooperative working relationships or (in the spirit of risk) have had a history of labor upsets or work stoppages might have seen activity moved to plants with more stable labor environments.

    102. From your description, I would also make a few observations which may or may not be relevant:

  102. Plant H sounds like they have a lot to be proud of if they have really built such a long history of customer satisfaction despite working with old and outdated equipment.
  103. In many cases, the “right answer” when viewed from the customers’, employees’ and company’s perspectives are different answers. Ultimately, it is management’s job to manage these tradeoffs.
  104. In keeping with the theme of risk, I would suggest that it probably would not make sense to put 100% of the company’s eggs in Plant S’s basket. Every plant, regardless of how well it’s run, will have hiccups occasionally. China’s economy and regulatory environment has many uncertainties which would increase the company’s risk profile if all operations were concentrated there.
  105. Each “big decision” made by a management team has an element of risk. But if companies don’t react to their changing environment, they run the even bigger risk of succumbing to “boiling frog syndrome“.

    106. I sincerely hope that management in your example is making the right calls. Only time will tell. I also hope that all constituencies in your example: management, employees, customers, company shareholders can be sensitive to and understand the concerns of all the other stakeholders and accept the outcomes, even if they don’t always like the outcomes.

  106. mcorbin –

    Thanks for stopping by and I genuinely appreciate your investment of quality time to pose such a well written and thought-provoking post. It’s always difficult to diagnose a complex business issue from afar (;->), but some questions I would want to dig into first might be:
    # You mention that customers prefer to buy from Plant H: Is that due solely to the turnover and lack of pride of workmanship issues that you suggest? Are both plants historically making the same products, selling to the same customers, using the same physical process and equipment? If it’s really a labor pride issue, management has it’s work cut out for it to build somehow the same attention to detail that the older plant’s reputation has been built on. Sometimes as facilities change their mission to serving customers or markets with higher expectations, it may take some time and training to recalibrate the receiving workers to their new reality. If process technology plays a component in real or perceived product quality differences, management should do whatever it can to practice “Copy Exact” mentality for any transferred production.
    # I wonder what the annual cost to keep each facility open is? Is the company running at a high ( i.e. >80%) effective capacity utilization? If not, does the company have enough revenue and profit to support the annual fixed cost burden of the two distinct facilities? If not, unfortunately, a rationalization / combination may be the only viable option.
    # When you look at the history of the three plants, are there any “soft issues” that could have introduced any management desire to favor one site over the other? In some situations (very common in the auto industry), plants which have not had cooperative working relationships or (in the spirit of risk) have had a history of labor upsets or work stoppages might have seen activity moved to plants with more stable labor environments.

    From your description, I would also make a few observations which may or may not be relevant:
    # Plant H sounds like they have a lot to be proud of if they have really built such a long history of customer satisfaction despite working with old and outdated equipment.
    # In many cases, the “right answer” when viewed from the customers’, employees’ and company’s perspectives are different answers. Ultimately, it is management’s job to manage these tradeoffs.
    # In keeping with the theme of risk, I would suggest that it probably would not make sense to put 100% of the company’s eggs in Plant S’s basket. Every plant, regardless of how well it’s run, will have hiccups occasionally. China’s economy and regulatory environment has many uncertainties which would increase the company’s risk profile if all operations were concentrated there.
    # Each “big decision” made by a management team has an element of risk. But if companies don’t react to their changing environment, they run the even bigger risk of succumbing to “boiling frog syndrome“.

    I sincerely hope that management in your example is making the right calls. Only time will tell. I also hope that all constituencies in your example: management, employees, customers, company shareholders can be sensitive to and understand the concerns of all the other stakeholders and accept the outcomes, even if they don’t always like the outcomes.

  107. Thank you for responding to my post so quickly. I will try my best to answer your questions in order.

    *Workmanship Issue – I can't explain why there is such a night and day difference in mentality with employees between these two plants. I think the employees at Plant A are “laid back” by nature and prefer to take it easy. They seem to have a careless attitude towards work. Employees at Plant H feel the need to work harder because there aren't many other jobs in the area for them to go to. Plant H is located in an industry deprived town. Both plants make similar products. Plant A has been trying to make the same products as Plant H, but has had limited success. Their intentions are to sell to Plant H's customers. They've resorted to moving machinery and QC personnel from Plant H to Plant A and has still had problems replicating the quality of Plant H. What senior leadership doesn't understand is – You can move machinery from one place to another, you can tell middle management to go to Plant A and teach the workforce there how it's done, but if they refuse to listen, the company makes no progress. And the expense of all these failed attempts becomes unjustifiable.

    *Annual Cost – “Ridiculously High”. I have no idea what the cost is to maintain operations in these plants. Neither are running at high effective capacity utilization. I can say this about Plant A because there is a bunch of empty space, that without machines running – making product in them, is a waste of space. I assume the company pays to heat this space when it's cold, so that's money lost. Rooms that have machines running in them don't have to worry about heat because it's generated by the machines. Plant H also isn't running at full capacity. I struggle to think of any organization that is running at full capacity in this economy. (Except for the US mint printing money) I can't fault senior leadership for not running these plants at full capacity. It's not their fault. If customers aren't buying, they aren't buying… As far as annual fixed cost burden goes, millions of dollars have been invested/waisted on Plant A over the years and the company hasn't seen the return they expected from the investments, and nobody wants to admit it. Unless success can be made at Plant A, it will be a business nightmare. The opposite can be said about Plant H. Only the bare minimum is invested in Plant H and it continues to produce. In my opinion, it's a little gem. But, you know what they say about opinions, everybody has one…

    *Soft Issues – Plant A is favored because it's at the same location as the company headquarters. Maybe they think it would be foolish to close it down instead of Plant H. It would also be hard to close Plant A because of all the past attempts at success there. As I mentioned earlier, the company has thrown an ungodly amount of money at it for this reason with little success. I guess they aren't ready to throw in the towel just yet. Plant H has been on a rocky road with the company over union contracts. That would be a valid reason for the company to want to put an end to Plant H. From what I understand, 2003 was a concession year for the union, 2006 was a concession year for the company, 2009 was a stalemate. The idea that the union and company need to do battle with each other is ridiculous. Both need to meet in the middle and not be greedy towards one another. However, I don't feel that this is reason enough to close Plant H. Plant A has a union as well and there is always the risk of them acting out. Even if they didn't, what good is a workforce that can't meet job efficiency goals and produce a product that's on par with Plant H's?

    *Plant H – The workforce there is proud. They have faith in the product they produce. The customers have faith in the product that is produced there as well. Why ruin a good thing?

    *The Right Answer – There is no right answer. Senior leadership is looking down from on top. Labor is looking up from the bottom. It's no surprise they don't see eye to eye. Management will want the most work for the least amount of money. Labor will want the highest pay possible while trying to get away with doing the least amount of work. As for the customers, they're always going to want the highest quality for the lowest price. I would look at the plant that has cost the company the least amount of money over the years, and focus on it.

    *Plant S and Risk – You're right. Placing all bets on Plant S would be extremely risky. What the heck was I thinking? I guess I was thinking about China like it was some utopia for factories or something. Cheap labor, lax laws on pollution, etc…

    *Big Decisions – I think the decision to close Plant H was made long before the company's current president joined the team. So, it would be absurd to blame him. However, the company has to live with these tough and risky decisions. And you're right – only time will tell. The company doesn't know what it's like without Plant H. It's always been there. Plant A has yet to “have the training wheels removed”. It will either support itself, or it won't. It would be smart to see if it can operate on less than what it makes before doing anything drastic. My feeling is, if the company kills Plant H, the rest of the company will die shortly after.

    *Another Idea – is if the company doesn't feel that it needs Plant H, why not sell it to a company that would care about it? If it isn't feasible to operate Plant H, the company should cut their losses, sell the operation to someone, walk away from the deal with some money… I think I can answer that question myself. Because then it would have to compete against it sometime down the road. I don't think the company feels comfortable with that idea.

    Thanks again for the quick response to my first post.

  108. Thanks again for a thoughtful post. Not sure exactly where in this situation you are coming from but it sounds like you've thought through many of the angles and you “get it.”.

    Only time will tell how this story plays out. I sincerely hope it works out as well as possible for all involved. Environments change around companies and around individuals all the time, and the ones that can adapt to their new realities quickly are usually the ones that survive.

    Regarding your final idea, if there are valuable assets there that could be useful to others in the industry, I would be surprised if management were not thoughtfully evaluating that option as well.

    Thanks again for your comments.

  109. I was a former employee at Plant H. I had 5 years in. I worked there with the intention of leaving and continuing my education since I'm 24. In a way, I'm glad things worked out for me the way they did. If the bottom hadn't dropped out of the economy, I would still be there. I was proud to work for a great company, with great people, making a great product. They treat everyone like family there. Even though I will probably never work there again, I guess I'm still a little sad to see it go. That factory has been there for as long as anyone can remember. It's been resilient through past recessions. Customers always managed to want product from this old, beat up factory.

    I reached out to you in an attempt to see if you could set me straight on this whole issue. I was hoping there were many angles that I hadn't thought through. I was hoping that I didn't “get it”. My overall goal here is to understand why this plant needs to be downsized or closed down. Is it too costly to operate? Does it not make enough money for the company? Is the building so old and dilapidated, that it will soon be unsafe to work in?

    As far as my final idea goes, is it possible to leave the place intact instead of parting it out? Could it still be a manufacturing facility, or will it just be an empty shell waiting to cave in on itself?

    I hope my comments here weren't too crude, as I don't want to offend anybody. It's difficult to understand how any of this makes sense from my perspective. So, I thought it would be a good idea to talk to you. One thing I have learned for sure from checking out your personal website is, you're a savvy businessman. You eat, breathe, and sleep business. Your company has a pretty good President and COO, which is something to be proud of. You are not to blame for what's about to happen to this plant. As I said before, I think the decision was made quite a while ago. There has been a lack of interest in it long before I worked there. I think they were just waiting for an important piece of infrastructure to break down, so it could be used as an excuse to close the plant. Maybe this decision was made by the board of directors. Maybe it was the CEO. A lot of people like to blame him. I guess it doesn't really matter. Like they say, “all good things must come to an end”. I guess this time, it's Huntingdon's turn.

    Anyway, I wish you luck on all of your endeavors.

    Thank you for your insight and speedy responses to my posts.

  110. Jeff,
    Your post got me thinking, and while you talk about the first derivative, I'm wondering if it isn't even more important to consider the second derivative when trying to assess the mid- to long-term outlook for an organization (or individual).

    The first derivative (slope) is going to largely be set by past decisions; maybe they are set by decisions in the recent past, but in a way it is telling you the impact of what you have “done”.

    The second derivative (rate of change of the slope) may be a better indicator of the impact you are making now – are you accelerating change, or are you losing momentum? I would argue, for example, that it may be better in some situations to be in decelerating decline (positive 2nd derivative, negative 1st derivative) than decelerating growth (negative 2nd derivative, positive 1st derivative). In the former you may be starting a turnaround, where in the latter you may be reaching your peak.

    This gets a bit abstract, and there are certainly circumstances where an increasing 2nd derivative is just a case of things bottoming out (sales can only go so low, for example). But I think there is value in looking at the impact of “acceleration” versus “velocity”, and to over-focus on the latter may risk missing longer-term trends.

  111. Jeff,
    Your post got me thinking, and while you talk about the first derivative, I'm wondering if it isn't even more important to consider the second derivative when trying to assess the mid- to long-term outlook for an organization (or individual).

    The first derivative (slope) is going to largely be set by past decisions; maybe they are set by decisions in the recent past, but in a way it is telling you the impact of what you have “done”.

    The second derivative (rate of change of the slope) may be a better indicator of the impact you are making now – are you accelerating change, or are you losing momentum? I would argue, for example, that it may be better in some situations to be in decelerating decline (positive 2nd derivative, negative 1st derivative) than decelerating growth (negative 2nd derivative, positive 1st derivative). In the former you may be starting a turnaround, where in the latter you may be reaching your peak.

    This gets a bit abstract, and there are certainly circumstances where an increasing 2nd derivative is just a case of things bottoming out (sales can only go so low, for example). But I think there is value in looking at the impact of “acceleration” versus “velocity”, and to over-focus on the latter may risk missing longer-term trends.

  112. Thanks Greg –

    I got your meaning / engineer’s abstraction and probably tend to agree. Everyone wants to accelerate change, and I guess implied in my point is the understanding that if your velocity is negative and you want to get it positive, that there is a positive second derivative required as well, eh?

  115. My immediet action after reading your post: How to Make Your Network Work for You…… hey, the new role is challenging but i enjoy it so far… even with a strike this week.

  116. My immediet action after reading your post: How to Make Your Network Work for You…… hey, the new role is challenging but i enjoy it so far… even with a strike this week.

  117. Congratulations to you and your daughters on reaching this important milestone, and the best of luck to them in their college pursuits. It does indeed sound like you have a lot to be proud of, and that they have also taken full advantage of the opportunities that your own career path has offered to become true citizens of the world. We need more young adults in the US with a global perspective.

  118. Thanks Greg for your kind words. My girls have had the benefit of a little global exposure, but they took advantage of the chance as a learning and cultural expansion opportunity, rather than just passing through. That’s what I’m proud of.

  124. I just moved to Seabrook 2 months ago. I live and work at St Christopher so see the dolphins daily and just today, saw strand feeding. It was awesome! A short while later, I was rinsing a shell in the water,(at the point on the creek), and I guess a dolphin thought I was a fish. He came at me with super speed, but once he surfaced and saw I wasn’t a mullet, just hung out for a minute before going off in search of more suitable food.
    I bought a camera this afternoon so hope to get my own great shots soon. Thanks for sharing yours and your experience!

  125. Very Cool – glad you also get to witness it on a regular basis. Would love to see your photos if you ever take some!!

  127. Dan – yes I did, I saw it on I95 on the way down to a Florida on a trip, and on the way back home, pulled over, hopped the interstate and snapped it. I have full resolution on my flickr if you would like it.

  129. Greg – Every Lawson’s or Family Mart I have ever seen in Shanghai proper is legit. These were in Nanhui , about 30km out of town S on the Pudong side.

  130. It’s nice to see on the graphics how an average consumer spends his paycheck on housing. There are many expenditures for a household aside from personal spending. Perhaps, that’s one of the many reasons why some still need to borrow cash for emergencies and other unexpected bills.

  131. Thanks Kaiser, yes, you will never go out of business granting payday loans. We will usually spend 105% of our income and there will always be a need for emergency liquidity!!

  132. Excellent contrast to Tom Friedman’s column in this week’s NYT. It certainly does appear that the US is now assigning the most worth to services and products which actually have the least concrete, tangible long-term value overall- hedge funds and IT startups are two that instantly come to mind. We *could* be the green technology leader of the world and I actually think- if we positioned ourselves as such and invested accordingly- we’d have a fair chance of digging ourselves out of this mess. Instead, we’re just going to let China do it- while our bright new debt-saddled graduates place their hopes on creating the next Groupon clone… or scoring the spare bedroom in Mom’s house. Ponziconomy indeed, I’m afraid. Great post!

  134. Nice post Jeff, no doubt that manufacturing by far creates the most value in an economy, and we have forgotten exactly how to be competitive in such a sector.  I do enjoy working for a company that exports a significant amount of goods from the US, and somehow feel that, despite what environmentalists might say, the company does more “social good” than those based in a virtual world.

  135. Nice article and photos that provides a fascinating insight into this phenomenon.  But please do not encourage folks to go observe.  The increase in visitors wanting to catch this phenomenon, as well as increased development, is taking its toll. Capt. Hayes, a local captain who has conducted strand feeding tours for years, comments how people are venturing out into the area of the strand feeds to check it out.   These are WILD dolphins!  They check out the area before making themselves vulnerable for a strand feeding.  Thus, this natural behavior of dolphins is threatened.  Please all who read this,  remember not to feed the dolphins, touch them, etc.  Thank you!

  136. Mak – thanks for your insights. Key risks disturbing their natural behaviour which I have seen are people (not professional local captains) who try to drive their boats right up into the pod’s hunting pattern or idiots who let their dogs chase, bark at and harrass the dolphins while they are stranding.

  137. The video is brilliant , is the book as good? Certainly my best and most complex ideas have taken a lots of a time maturing in my subconscious. Collisions have usually been from reading a book or an article. Possibly rather than collecting the ideas from inside the organization one should prioritize the best ideas from the much larger group outside the organization. I am not saying that the internal ideas are not good but rather than trying to grow your own from scratch you can simply pick ripe ones off the vine. Or at least an idea that is developed enough that someone has put the time in to publish / blog about it. In short, I think if you want to collide you need to get you brain out one the net and consume . If you want you organization to have more collisions you would get them to do the same.

  138. Thank you for the wonderful video of dolphins strand feeding! I have been searching for a video to show my homeschooled son for our dolphin unit study.

  139. Great collection of information, love it!!!.  I would add:
    just remember it is not SeaWorld, it is way better!!!  it is nature in course, so having that in mind:
    Do not stand at the age of the beach, sit or squat, you will be more lucky that they strand feed in front of you and for sure you would take a better picture (all ways take a picture at eye level of the subject)… they would use you!!!, if you are low, like they use pelicans to corral even more the fish… but if you are stand, or in the water… and even worse… more and more people standing… well we know what it is going to happen.

    These actions, be seeded or squat, are avery simple and easy thing to do, and because when you know better you do better.  So people from Kiawah and Seebrook Islands it is time to be proud of “your dolphins” and educated your people… I am pretty sure the wile life police of the area can give you and excellent lecture, you can give a pamphlet/ Brochure to the guess and permanent residents and of course for the people that goes true the Kiawah Island: Beachwalker Park… and the dolphins can stay feeding and people can continue enjoying nature in course 😀

  140. I read Atlas Shrugged in the Summer of 1964 between mt Sophmore and Junior years at the University of Southern California. It was the beginning of the Hippie movement and the Anti-war protests. This book helped chart the course for the remainder of my working and entrepreneural career. My four children were required to read it and to this day we discuss elements of the philosophy today when we can find time to get together.

    Great book and its understanding makes for a satisfying and well grounded lif. When the truths start to become obvious, a much better understanding of exactly what is happening emerges.

    Ron

  142. Thanks Leon for your insights. From my experience, getting exposed to outside influences and signals is a very important part of the process.

    I once took my entire R&D department on a field trip to the Science Museum and we generated a ton of ideas after that trip!!