The New Definition of Management

May 3, 2011

Who says that you can’t teach an old dog new tricks?

The past decade has been revolutionary for managers in every industry, the automotive aftermarket included. In a world that’s becoming more global, businesses now must blend management, economic and marketing decisions to keep pace with advancements in technology and engineering.

Conditioning within a new aftermarket business world is an ongoing process compared to yesteryear, when the advent of our automotive business culture was simply to be an enthusiast with a great idea, a great product and a great network.

Put on the brakes-its 2011-and know the business styles of 10, 15 or 20 years ago can’t keep pace with the necessities of today’s competitive business skill sets!

Management Tools for Success

The classic definition of management-plan, organize, lead and control-is undergoing massive change. In its place is a new brand of management, infused with fresh leadership methods and approaches that only a few years ago would have been considered heresy.

Although some leadership trends and management fads of the month have gone the way of the Dodo bird, others have flourished. The following management trends are built to last as we make our way into the second decade of the new millennium.

  • Create the financials
  • Develop incentive programming as a progress reward model
  • Develop a financial forecast results model
  • Learn and develop the drivers that move financial results
  • Communicate how the progress models are working with key team members
  • Share the rewards of good performance

Take a deep and serious look at these tools. Simple words, you say. I say the necessary beginning to a complete series of management opportunities.

But the sequence is critical to making the grade. Assemble the steps one at a time, write notes and take action steps to refine and then reaffirm your refinement. You’ll be pleased that you’ve taken the time to redefine your management mission.

Total Quality Management

An appropriate additional system to develop within your automotive aftermarket workplace is simple, direct and doable.

Total Quality Management (TQM) is a system of principles, tools and practices to provide customer satisfaction. And yes, customers are a vital part of your management profile.

TQM enables you to accomplish these goals by eliminating product and service defects, enhancing product design, speeding service, reducing costs and improving the quality of work life by changing or modifying the culture of your aftermarket business model-be it manufacturing, tier sales models, or even logistics.

This system first captured the imagination of legions of managers in the early 1980s, then almost died an untimely death. Why? Simple, because most companies applied the basic tenet of TQM inconsistently.

Company managers simply overlaid it onto the company’s current structure, instead of making the wholesale cultural changes needed to sustain it. Sound familiar? Consider that many automotive aftermarket businesses seed their structure of management the same way-by overlaying instead of restructuring.

Consequently, many managers and employees fail to support TQM. However, in recent years, total quality management has made a resurgence as companies learn how to make it work within their management framework.

The following six key elements mold a successful TQM initiative.

Total Commitment: Everyone in a company-from the lowest-paid hourly worker to the company president-must make a total commitment to TQM and make it a permanent part of the company’s culture. Managers especially have to prioritize TQM within their company-or kill it quickly. Without the active support and involvement of a company’s management team, TQM is likely to live a very short life.

Employee Empowerment: Frontline employees generally know much more about the needs of customers than their managers. When employees have the authority they need to get their jobs done, they often do a better job more quickly than if managers interfere. Within the aftermarket work environment this is especially true, as our industry tends to be a lifestyle job environment.

Fact-Based Decision Making: TQM requires you to make decisions based on quantitative data rather than hunches or feelings. Although this may seem as a math ‘n noodle program, the charting and diagrams can be simple and direct to your abilities and direction. Adherents of TQM are very familiar with terms such as SPC (statistical process control), flowcharts, Pareto charts, cause-and-effect diagrams, control charts, scatter diagrams and other qualitative methods of assessment.

Continuous Improvement: TQM encourages employees to always be on the lookout for improvements to company systems, processes and procedures, and to make suggestions and take the initiative to effect changes. Quality is designed into products rather than inspected for at the end of the production line. After all, the importance of production is at every step, starting with production being step one.

Customer Focus: Instead of the company deciding what standards its customers should live with in it products, TQM dictates that customers should be the ones who drive standards. TQM also focuses on the satisfaction of all customers-including the development of strong, long-term partnerships with vendors not based solely on lowest price.

Integrating Product and Process: When companies develop new products, they should also develop new work processes to go along with them. Not only does such an arrangement afford companies a distinct advantage over their competition, but these often proprietary processes create value for the company as well.

Consider the alternatives of management. The aspect of diluting management or in some aspects not doing anything at all are not options.

To sustain your business, create a new approach to management. Improve your knowledge by pushing a positive learning curve and enhancing your knowledge exchange with key business partners. Open up to ideas by implementing TQM and address the issues you’re currently experiencing by committing to paper the pros and cons of your management style.

Building a Self-Managed Work Team

Leadership is vital to business-sustaining management models. The key is keeping ahead of the curve by understanding leadership trends and seeing the fit within your company.

One of the strongest leadership trends today is the transfer of management responsibilities and authority to frontline employees. In the self-managing work team model, teams of workers manage themselves.

Workers within this model grow into the management role and gain respect among fellow employees. In this model, workers hire and fire team members, put together and execute plans and budgets, and independently run their operations. The result is improved efficiency and productivity and also increased worker morale.

Benefits exhibited by Consolidated Diesel Co. in Whitakers, N.C., indicate that self-managing teams set work schedules and hire and fire employees. Although this may seem radical to some, the plant’s turnover rate is an extremely low 2 percent, and the injury rate for employees is one-fifth the national average.

And while similar manufacturing plants require one supervisor for every 25 employees, Consolidated Diesel gets by with only one supervisor for every 100 employees, resulting in savings of more that $1 million a year. Just think of the ROI employee impact on your bottom line.

Although this example illustrates a larger employer, the metrics are similar for smaller companies of 10 or more employees. The concentrated efforts are of value and prevail in a communication-directed enterprise of any size.

Another example of self-managing work teams is visible at Rheaco, a supplier of aerospace parts located in Grand Prairie, Texas. Rheaco reduced the time for manufacturing a brake shoe for Lockheed’s C-130 aircraft from 3.5 hours to less than 1 hour by working together to plan and implement new efficiencies in the manufacturing process.

Yet another example, this one by 3M, is its development of the following five rules for team success. I profess that effective management systems can be simple and provide effective results without placing a strain on management.

The five rules of thought are:

1. Empower the team: Give the team the authority to make decisions and then act on them.

2. Let the teams manage risk: Give the team the ability to select the amount of risk that offers the highest likelihood of success.

3. Let the team control the budget: Teams must make all decisions on project matters, including financial. These decisions are subject to senior management review but cut time and are inclusive to team management solutions.

4. Realize the phases that the team progresses through: Be alert to signs that the team needs additional support or coaching from management.

5. Let the team be involved in the award process: Only team members know best what motivates them. Give them the necessary tools of approval.

Managing people today is harder than ever before. But if you take the time to listen to your employees, respond to their needs and set goals that bring out the best in them, your job is made much easier and your company is much more effective.

As we explore the trends in management, feel free to forward your questions to me via email, along with your name and phone number. I’ll follow up in confidence.

Information is also available on aftermarket management programs endorsed by SEMA and available online. Classes start monthly.