There is a paradox that is especially pronounced when the growth of a company becomes its own obstacle to effectiveness. After all, when you’re young and slender, you run up and down the stairs like nobody’s business, but as you get older, the long climb becomes a challenge. No wonder they say that a company loses its entrepreneurial vein when it reaches a certain size.
Are you familiar with the Indian tale where blindfolded team members touch a large elephant, and everyone has a different perception of what it is? This image is often shown to companies starting Lean management. However, this story is not about blind team members, but about a blind and stupid manager sitting on a big elephant.
My WHY story is little known as I hesitated about sharing it for a long time. Over the years, increasingly more answers fell into place, and the answer to WHY I DO WHAT I DO TODAY has been given new meaning, so I want to write about it.
In 2003, a colleague and I, aged 24, co-founded a fashion manufacturing company and started to deliver service to Scandinavian designers.
Our value chain included marketing, sales, technology and prototype preparation, supply of materials, as well as manufacturing and logistics processes. We hired the best technologists, designers and tailors. Together with a competent team (as we were newbies in the fashion industry ourselves) we started a business from scratch. We set up layouts of sewing shops, created processes, did ironing, sewed buttons when we were short of hands, transported materials, wrote invoices, etc.
After a few years we had grown to a team of 50-60 employees that worked for one purpose and was extremely dedicated to its customers.
I remember very clearly that sunny autumn Tuesday when I allowed myself to leave the factory after lunch and listened to Modern Talking’s “You’re My Heart, You’re My Soul” on the drive home, because finally, after two years of working without weekends, I felt completely calm leaving the team to work independently. As time went by, as real leaders do, we stepped further away from reality, moving to the third floor and locking ourselves up in a world of illusions before even realising it.
The team involved us daily in the search for more serious solutions and for a while we were happy to be able to relax from the daily details and focus on strategic tactics.
I must admit, the fashion industry is ruthless, as a 300% profit margin prevails. Unfortunately, the producer is left with just a few per cent. Plus, there is seasonality, which means that there is no demand for capacity utilisation between seasons, which in turn means that there is no money to spare for salaries and maintenance of the team’s skills.
So, as fits serious managers, we sat on the third floor and came up with the idea of how we could affect seasonality: “LET’S CREATE OUR OWN CLOTHING BRAND AND OPEN A SHOP IN NORWAY”… After all, we had everything: materials, equipment, a competent workforce, and even a designer. Six months after the decision, we opened a 100 sq. m clothing store under the name of LAURA GERRITS. GERRITS herself was a wall painter, ironer and shop assistant. We were bursting with energy and did not doubt that we, Lithuanians, would surely succeed! On the third floor, the crowns began to rule.
Unfortunately, just three months after opening, we saw the Trondheim weather, its people wearing wellies and raincoats, and realised that it won’t be easy. And it wasn’t: we brought in new garments every two weeks to attract customers to the store, published ads, worked on weekends, had special offers, etc. However, after six months on the carousel of ambition we had to make a decision to go back home, as we were risking our entire business, not just the shop.
It wasn’t upsetting to lose almost €300,000 of our own investment. It wasn’t upsetting to spend a year behind the counter in Norway…
Later, one of the team members asked us: “Why in the world did you have to go to Norway, when men and women in Lithuania wear coats in autumn and spring? We can make them to size for the Lithuanian market…”
Then, we had a EUREKA moment. This incredible idea had come from team members, i.e. the ground floor rather than the top one!
I realised how self-absorbed I had been by shutting myself off from the team and not allowing them to get involved in solving a strategic problem. After all, I did a great job of engaging them when creating the company from scratch. I wanted to give unconditionally for the team to see sense in work and for the customers to pay for it. I took great pleasure from giving until a sensitive business problem arose.
The words of Yoda;
suddenly became so clear for me.
Today, when a CEO says, “I am tired of managing alone” or “I want the team to make decisions”, I know how they feel. I know how difficult it is to find space within to be a leader when you put your own money into the business, and you see imminent danger. I know how difficult it is to find the right direction, because any decision you make can subvert or elevate the company.
Why am I the Holistic Enterprise Mentor today? Because I find meaning in helping top executives to safely descend from their offices, study the company as an integral whole, and dare to initiate the bold changes that come with changing their traditional management beliefs. It is easier to take off the crown when you understand the consequences of your decisions yourself rather than when others try to prove them to you.
For example, after spending half a week in customer service or the call centre, you see that the existing “efficiency” indicators and motivational system are at odds with the customer’s expectations. Or being an observer in budgeting and planning processes, marketing, sales, supply, manufacturing, and other chains, you realise that the elephant is being touched by a blindfolded team that doesn’t talk to each other. The marketing department is focused on generating as many orders as possible and making sure to use the entire marketing budget to get the same amount of money next year, but no less. In the sales department, everyone is focused on selling as much as possible to keep the equipment and people working and to get a bonus at the end of the year. Only, the marketing department does not receive orders from customers and does not understand how effective their advertising is and what is important to the customer. The sales department receives orders and funnels them further, making false promises to the customer because there is no habit of matching demand and capacity infrastructure. Plus, it turns out that the IT system in which we invested our nerves and euros isn’t helping either.
If Lean is about creating value for the customer, how do we, the executives, create value for it?
It is not necessary to hold strategic sessions in a beautiful hotel withdrawn from reality, and there is no need to look for solutions closed in your office.
Let’s go out more often to study the company as a single system from the customer’s perspective.
Let’s ask our people, “What do we need to change for ourselves to add value to the customer?”, “What decisions can we make faster?”, “What will this bring to our customers?”, etc. Then, let’s return to the office to develop our bold experiments.