Phil Hauck's TEC Blog

Saturday, October 28, 2017

On China's Potential ...

Worry all you want about China and its future economic and political impact, but consider this:
Already, China is …
      •  In Top 3 nations for investment in virtual reality, autonomous vehicles, 3-D printing, robotics, drones and artificial intelligence.
      •  The world’s largest e-commerce market, with 40% of value of transactions.
      •  In mobile payments, has 11 times the transaction value of the U.S.
      •  In 2016, the three huge internet giants in China accounted for 42% of all venture capital investment, compared to the 5% total of Amazon, Facebook, Google and Netflix.  They also made 35 overseas deals, compared with 20 by the US biggies.
Source:  McKinsey Global Institute

Contrast this performance with the newly-announced government desire to control more and more of what's happening.  Indeed, in case you missed it, the government intends to begin "rating" each individual on the level of patriotism he/she shows ... formally including everyone beginning in 2020 ... based on participation in various kinds of government-suggested activities.

Takeaways from Manufacturers First Conference ...

This past week, I attended the Manufacturing First Expo sponsored by the N.E.W. Manufacturers Alliance at the KI Center, which had about 100+ exhibitors … and attended several of their presentations/workshops.  Among my takeaways:

•  Lindquist Machine Co., a 110-employee equipment manufacturer.  CEO Mark Kaiser, with consultant Lee Bouche, is in a multi-year effort to create a truly integrated Intentional Culture.  The major elements are in, and 2017 is dedicated to getting every employee to understand how to conduct “Crucial Conversations,” using the Patterson/Grenny-authored book of the same name.  Many plant floor employees, and even some leaders, aren’t readers or communicators, so it’s sometimes a challenge, but they are persisting.  Think of the cultural/morale/performance impact when a entire workforce is being trained in practical communication techniques!

•  Some great quotes and points, cited by Lee Bouche:
Employees’ Basic Needs:  Respect, Learning, Challenge and Inclusion!
Gruenter/Whitaker:  “The culture of any organization is shaped by the worst behavior the leader is willing to tolerate.”
David Couper   “Employees work harder for Cause than for Cash!”  Pay and benefits don’t make it anymore; they’re threshold.
From the book, Never By Chance, Aligning People and Strategy thru Intentional Leadership:  “One of the most important obligations as a leader is to create a compelling vision for the company and then create a culture to achieve that vision.”

•  From Melinda Morella-Olson, Imaginasium, on how to reach out to employees:
Have a Careers Page on your website, as Plexus does.
Look at Manitowoc Co.’s “Employer Brand” approach on its website.

•  Final Takeaways proposed by the three panelists:
Melinda Morella-Olson:  Get a feeler your Employees’ Experience.  What’s driving them to come to work every day?
Steve Hirt, Optima:  De-Select from your choices.  Don’t keep trying to do more just because you can.
Fred Johnson, InitiativeOne:  YOU drive the conflict.  Have the conversation, but in a spirit of respect and kindness.  Don’t let the conflict drive you, creating discomfort.

•  NOVO:  Physician-Led HealthCare.  I’ve seen their signs, but wondered who they are and what they do.  Because sick care costs and delivery challenges are such a problem these days, I attended … and founder Kurt Kubiak explained what they’re doing.  They began in 2015, after he spent six years with Plexus’ world-class manufacturing (and 6 sigma mentality) and then at Fox Valley Orthopedics.  His mission:  To speed up the trend towards “price bundling” while providing a more satisfactory patient experience … primarily for self-insured companies.  Today, he has bundled price arrangements with specialists in Cardiology, Orthopedics, Hematology/Oncology, and some in primary care and rehab.  They develop deals at much lower total costs (30% lower he says) than state averages.
Of interest:  To invent employees to use their doctors, they provide cash payments (often $2,000) to the employees … and even pay travel from remoter areas.
It’s a great idea, and a struggle to get inroads … because the major health systems won’t use them and are much slower to embrace the bundled pricing ideas, though they’re making progress.
They also do Workers’ Comp work.
How to make inroads into fully-insured companies, hoping the insurance companies will recognize the cheaper cost structure and reward with lower premiums … or at least lower premium increases?  And how would you know?

Monday, May 22, 2017

Servant Leadership Insights

Ben Fauske, an O/D specialist here in Green Bay, provided these insights at a recent Servant Leadership workshop sponsored by Prophit Marketing and Festival Foods:
  • Problem with connecting grandiose mission to what I do:  “I save lives … one folded carton at a time!”
  • “They are CAVE people … C.A.V.E. … Citizens Against Virtually Everything!”
  • Example of a great culture:  My family and I were at Disneyland, on a shuttle bus, an the driver was getting exasperated at riders not sitting down, as safety required. Finally, he broke from his “role” and yelled at offenders.  When we got off the shuttle, he got off with us.  “I apologize.  I should not have done that.  It was wrong, and I should be held accountable for it.  Here is my card and my manager’s card.  I want you to know that whatever you write him about what I did, I will verify and I will accept his penalty.”
  • He asked attendees, “Why was the worst team you ever worked on the worst?”  Responses:  Boss had his favorites; too much ego (too much “I”); micromanaging; saying things that were patently untrue; promising things that were never delivered … and a power struggle between team members.
  • What got him into O/D work?  “After college, I worked for eight bad cultures in eight straight years.”  (Wonder where his ninth was?)

"Soul Leadership"

Fred Johnson, CEO of Initiative One in Green Bay, at one of his Last Friday seminars, entitled “Soul Leadership” ...
  • “Emotional Intelligence is the main thing these days for a leader … and I think there’s something just beyond that, 'Soul Leadership’.  It’s where you actually ‘love” the people you work with.  Seattle Seahawks coach Pete Carroll, when his teams were at their peak effectiveness, said it’s because they love each other.  You are creating an environment where people actually feel loved.”
Some supporting comments:
  • After the Great Recession, the percentage of people wanting to leave their companies was at an all-time high, not because of the layoffs … people expected that.  It was because during the aftermath, managers/leaders didn’t treat them as adults … not keeping them informed of what the situations were (miserable as they were), “coddling” them, being paternalistic.  They felt like “assets” used to protect the bottom-line, not treated as a responsible, reliable, trusted adult team member.
  • Millennials, we believe, want a “flow” between their personal and work lives … high inclusion, high relationships … which builds Trust and Commitment.  It’s bad when the work culture is such that it is separated from one’s personal life.
  • Leadership Development today starts with creating a positive self-awareness that ultimately yields Confidence … confidence that leading the search, asking the questions won’t diminish his/her influence and respect.  Getting out of the organization’s way so they can help solve the problems, deal with the challenges.
  • Every process can be derailed if people who use/manage it don’t feel valued as a person.  As the American Airlines CEO said recently after the United Airlines debacle, “Never let process trump people.”
  • Good leaders don’t get “burned out.”  They become comfortable with being uncomfortable … and solving the dilemmas that create that discomfort.
  • Perfection kills you as a leader.  It’s an addiction to order … which can never be made perfect.

What Makes CEOs Successful?

From last month’s Harvard Business Review:  The CEO Genome Project, starting by analyzing 2,000 CEOs, and in detail 930 of them, on:
       What does make CEOs successful? After analyzing all of their data, the researchers found that roughly half of the candidates earning an overall 'A' rating in their database, when evaluated for a CEO job, had distinguished themselves in more than one of four management traits. (Only five percent of the weakest performers, meanwhile, had done the same.) The four were: reaching out to stakeholders; being highly adaptable to change; being reliable and predictable rather than showing exceptional, and perhaps not repeatable, performance; and making fast decisions with conviction, if not necessarily perfect ones.
PS:  The study also found that more introverts than extroverts tended to run successful organizations, but barely more.

Then, the in this month’s HBR:  Four Characteristics of Successful Performance by CEOs
1.  Deciding with Speed and Conviction
2.  Engaging for Impact
3.  Adapting Proactively
4.  Delivering Reliably

It gets confusing.

Wisconsin in Top 10, finally, of Best States To Do Business, but ...

       Chief Executive Magazine just ranked Wisconsin in the Top Ten, after continual progress in recent years.  That means we have most of the right policies/programs/mechanisms in place … but doesn’t mean we will have great job growth.  That depends on individual entrepreneurs, and Wisconsin by-and-large isn’t a highly entrepreneurial state.
However, our state business tax rate of a flat 7.9% is still one of the highest.
Little known:  Our rate of workforce participation at 69% is one of the highest in the country; average is 62%.

A Little Political ...

On Business Taxation
       There is much ado about lowering the Federal business tax rate from 35% to either 15% or 20% … a give-away to the wealthy 1% or less or more.
So, what would businesses do with that extra 15% or 20% of profits?  Nothing?  No.  They invest it in further job creation … R&D, commercial development and testing, investing in new equipment and space, hiring and training, marketing, selling and producing.
Private businesses are the Golden Goose.  What they do is create the jobs with incomes that can be taxed and buy property that can be assessed.
So, why not a business tax rate of 0%!
It’s been proposed in some drafts.
We should consider it.
Then, the several trillions of dollars held in foreign countries can be repatriated for investment here … and the practice of producing in the U.S. but selling from countries with lower tax rates can be stymied.
Would not the additional individual incomes and property values create taxation that overwhelms the business tax loss … as well as drive further growth?
What’s so hard?

$15 Minimum Wage
       San Francisco, which adopted the $15 Minimum Wage in 2004, now has a documented 60 restaurants which have closed for reasons primarily attributable to their higher cost structure.  As one person said, “You can only charge so much for a tamale.”  More and more, government heads are realizing that maintaining a jobs base is more important from an economic development standpoint.
It has been argued, and I agree, that if society wants a family to have a minimum income, then do it through the regular tax base rather than through making an employer less competitive.  One vehicle:  The Earned Income Credit.