Book Summary Preview : How to Transform Your Company & Enjoy It

The Big Idea

"How to Transform your Company & Enjoy It" is the detailed narrative of how the Managing Director of a British corporation broke the established method, and transformed a minor engineering business into an exemplary company that has won a number of awards for excellent business practice. It relates how Ken Lewis accomplished this extraordinary development and shows how similar principles can be applied to any organization in search of dramatic change in its practices and operations.

This book will dare serious management the world over offering an innovative and unusual methodology which has brought unparalleled accomplishment to the company that pioneered it. The need to severe ties of complacency is the order of the day and a positive and necessary stage is called for however radical it may appear.

I. The Need for Change

The urgent need to make drastic changes in its business practices motivated the small company of 25 employees to challenge 200 years of tradition in the UK, that the role of management is to scrutinize data and exercise control in the minutest detail.

Survival is no longer compulsory in this rapidly changing world, with customers demanding quality goods delivered on time at continuing cost reductions. The hitherto commercial superiority of Western countries and its advantages have steadily been eroded by globalization, the development of technology and instant communications.
 
Business and manufacture can easily be conducted in any country by large international corporations to maintain a competitive edge. UK's role as a big player on the world stage is facing fierce competition much of it from the Pacific Rim countries like Japan.

For companies to remain commercially profitable while striving to attain world class performance, the solution lies in the ceaseless reduction of waste (time, resources and effort) while lifting quality and performance levels.

Even in the tough times of the early 80s, one of the few companies that not only survived but survived well and prospered was Dutton where Lewis as Managing Director presided over a whole programme of re-engineering within the company.

Dutton's early drive for excellence in quality was contextualized in the historical background of UK's business practices, from the British East India Company's horse raising manual to BS 5750 (now ISO 9000) quality standards. Although Dutton in 1984 obtained the BS 5750 Part 2 certification, but Lewis remained skeptical about the certificate's ability to survive the competition. Formed as a subcontract sheet metal working company in 1972, Dutton, along with the rest experienced the rollercoaster change of fortune that beset the UK economy.

In 1983, it successfully completed a buyout. And for six to ten years with Lewis at the helm and The Dutton Way (launched in 1989) as the guiding principle, a whole new way of organizational culture was developed. It is described as such:

The Dutton Way is how to eliminate waste and fire fighting by working smart, not hard, and having fun at work.

II. Re-engineering

Lewis relates that to affect change one decisive element was the re-engineering of himself as a manager and relinquishing some of traditional management's privileges. But what he lost was more than compensated for by the gains he and his colleagues earned. Further, the lessons they have learned towards business excellence are appropriate to all companies.

Lewis dispels the myth that the "journey to excellence" would be very expensive and costly. The process of change can be accomplished without any large financial investment, but in training everyone in one's organization to understand their own role in the company's success. Traditional attitudes and control systems held by management must change and the potential of each individual employee must be unleashed.

Today, customer satisfaction and perception define the kind of company you have. They demand greater choice while all the time seeking to reduce their own financial burden by holding minimum stocks. Great investments and technology, computerization and automation had been undertaken yet goals remain elusive.

Spending more money on the latest plant or equipment while neglecting the talents and potentials of the employees have made it difficult to meet customer requirements. Hierarchical management structure and outdated production processes prevail preventing fundamental progress. And it is this that the Dutton Way wishes to address: tap into the great energies and resourcefulness within one's organization.

Empower the workforce, make them feel that they are recognized, respected and appreciated as very valuable resources for the company. Talents are often wasted by obliging them to depend on instructions from their managers and supervisors.

Given the right motivation and guidance, it must be recognized that every employee is the expert in his or her own sphere of activity. Such issues are at the core of the drive for Total Quality and the imperative to undergo change. In all this the role of senior management to set out and promote a vision of cultural change, and the skills required by managers today are precisely those of being a leader, a coach and a facilitator.

III. Cultural Change

Personal experience with his television set made Lewis decide to visit Japan in 1985 to experience first-hand how that country is able to achieve remarkable progress whilst the UK is steadily losing out their car, motorcycle and appliances industry. The fundamental lesson he learned after a three-week visit is the culture of trust among the Japanese: the employees and the management actually trusted each other, they trusted their suppliers, and they trusted their customers.

This culture of trust is not prevalent in the UK at that time, but among the Japanese trust figured very highly in the relationship that existed between the management and the workforce. It was clear that quality was being built into the products rather than defects being inspected out.

Apparently, this culture is the heritage of quality guru Dr. W. Edwards Deming who was instrumental to Japan's post-war economic recovery. Without resorting to the Samurai sword, Dr. Deming spent long hours with top Japanese management who were willing and eager to learn things in a more radical way through Deming's 14 points for success.

Deming's criteria are very people-oriented and suited the Japanese personality. The demands for a manufacturing center for munitions needed in the Korean War then raging was met by Japan and the rest is history. Western management style is lagging behind in people issues. That it had been an American who was instrumental in getting the Japanese economy in its current level of power may come somewhat as a shock, but Deming's legacy need to be recognized.

“In the last few years, the west has at last recognized the importance of change. The UK has now adopted the UK Quality Model which devotes only 14 per cent to processes well covered by ISO 9000 and 86 per cent for other issues like work ethics.”

 

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