Lean Management and Leadership

What does the future hold when it comes to the difference between average and world-class among Germany’s medium­-sized mechanical engineering companies?

Does this suppose (and if so, why?) learning to rethink our approach? Benno Löffler, consultant to V&S (Vollmer & Scheffczyk GmbH), has spoken to us on the subject, and gives an interesting insight into a line of thinking that we have come to know about in the course of a consultation project on lean management.

You describe mechanical engineering as your favourite sector. Could you briefly explain this declaration of your affection?

I feel that mechanical engineering contributes enormously to prosperity, and to making life on this planet less laborious. I also enjoy dealing with technology, software and the fact that mechanical engineering creates artefacts that involve thousands of people. It’s a coordination task of incredible proportions. I like the way people can employ their technical talents in mechanical engineering in a manner that would not be possible in other sectors.

You are now actively “flirting” with an exciting consultation project involving Kuhn Special Steel. Does it tick all the right boxes for you?

To begin with, Kuhn Special Steel is an entrepreneurial medium-sized organisation in the best sense of the term, with a need to make brave individual decisions. Andre Kuhn has furthermore grasped that the company’s main strength does not lie primarily in being well-positioned technologically, but rather in having the right people looking after the shop, which is what he encourages. It really is a joy to work with Kuhn Special Steel, as the firm allows individuals to tackle issues spontaneously, while members of the management team tend to take a back seat, unlike in other organisations. They just leave the team to get on with it, rather than telling them what to do. This creates a sense of energy.

»Separate thinking from doing in order to create an efficient organisation. However, we now know
this approach is no longer valid when it comes to more-volatile business sectors.«

You make frequent mention of “thinking tools”. What should be understand by this?

Let me explain it with an example. There are companies which have a simple, expanding market, relatively straightforward products and little aggressive competition. These organisations are generally managed by a small group of people who make decisions and ensure proper functioning, as might be the case nowadays in, say, a Chinese toy factory. The basic idea is to separate thinking from doing in order to create an efficient organisation. However, we now know this approach is no longer valid when it comes to more-volatile business sectors. This way of thinking nevertheless provides a basis for various management tools, such as ones involving a relationship between supervisors and team members, in which employees need to seek permission, or constantly ask for instructions, in a wide range of instances. This stems from an approach which holds that people are more efficient when thinking is separated from doing.

If we throw this way of thinking overboard, as there are being cases where it no longer applies, how are we then to consider the relationship between management and employees? How should we judge all the other issues involved? It has less to do with the application of management tools, and more to do with a sea-change in our thinking. Our experience is that if those in charge of management get wrongly side-tracked and fail to stop and take bearings, you can work on the problem as much as you like, but it will never be solved. It is for this reason that we deploy “thinking tools”.

But isn’t “new thinking” just another way of saying “rubbing someone up the wrong way”? How do you get your corporate critics onside?

We put our trust in two factors: game-based simulation and corresponding experiments. This involves us sitting down together on a given day and trying out certain approaches in an experimental environment. We have developed our own game-based simulations for mechanical engineering. They provide very interesting tools, but are by no means the best. The best of all is namely – and there is really no comparable alternative – to carry out experiments involving what we really have to do.

It has been shown that many day-to-day problems that occur at the setup stage in the field of mechanical engineering are dealt with like this: Each fitter is assigned a machine. Then, if any part is missing, he goes on to the next machine. This is such a classic example of why we say: It takes a team of eight to put together a machine like this, if you want to do it faster. This really works, but you then have to wait until all the parts are there. People naturally react with scepticism, and consider the proposal impracticable. Who can afford to spend months discussing with everyone about how to get the situation under control?

You might otherwise also say: Let’s take a machine, plus five volunteers to make things easy and give them a try. Afterwards we discuss the situation, along with what went well and what badly, and how things might have gone differently. An estimated one-third of these experiments actually fail, but the other two-thirds show how a bit of lateral thinking and elbow grease can win the day. Once people see that the approach works, they join in.
What role do sets of beliefs play in a business organisation?

They actually play an important part. You might say that everything is a question of individual belief. For example, one typical corporate belief is: we only make money while the machines are running. There is indeed something in this, because if all the machines are standing idle, you will definitely not earn anything. They have a nice way of putting it at Kuhn: “Our machines are no standing machines but lathe machines”.

This set of beliefs leads to a situation where all machines are kept running with the same priority for as long as possible. We might therefore say that part of the new mindset we try to place entails attempting to focus on the bottlenecks. The reason is: an hour’s missed operation on a point not regarded as bottleneck is almost indifferent, while the same hour on your bottleneck is an hour’s lost revenue. We have discussed this issue, followed by the inevitable question: all right, so what does all this mean in terms of our key figures, job-flow management and the way in which we deploy our employees, etc.? Things change at this point, with the need to adopt a new line of thinking.

Companies are sometimes reluctant to talk openly about calling in business consultants. Why is this?

There are two definite key reasons. The first of these is the fear that outsiders might suspect that the firm is restructuring or cutting costs as a result of not achieving its desired degree of success.

»Carry out experiments involving what we really have to do.«

Reason number two is the self-image of management and leadership prevalent in Germany and elsewhere in the world, which is pretty consistent: the boss must know where the firm is going. But what if he doesn’t? What if he is the brooding type, or thinks that when the field of play is so complex, only trial and error let you find out what is actually right? This is what we do now, as we call in a couple of people to help us with this trial-and-error approach. This is more or less the opposite of a dominant attitude of the management.

Members of management who do not want to bring an organisation’s current weaknesses to light, because they feel that such short­comings somehow reflect on them, are depriving the firm of learning potential. One symptom of their attitude in this respect is an inability to deal openly with the issue of consultation.

Kuhn does things differently. Why is it good to talk about these issues?

I think they approach a lot of things right. I was likewise astounded at the ability of Kuhn’s management staff to listen patiently for a while, in order to really understand what the other party actually wants, even if they realise relatively quickly that they do not agree. Many members of management immediately start off by arguing against a proposal, in a very aggressive way and using all the means at their disposal. This is something virtually unheard of at Kuhn, in my experience. Everyone listened patiently, before expressing their own opinion and summing up what they found thought-provoking. I was quite astonished by this, and this has contributed to my enjoyment of the project.

»Members of management who do not want to bring an organisation’s current weaknesses to light, because they feel that such short comings somehow reflect on them, are depriving the firm of learning potential.«

We started off by talking of your affection for the sector. Will this continue to be so likable in the future? Will its attraction increase? Where is the journey likely to lead?

There has been a clear tendency over the past five years to relocate to low-wage countries, such as those in Asia. Germany continues to retain, for the moment, all which marks it out individually; but which supposes considerably higher effort and expense in terms of coordination and technology.
You could say that the world divides work up with a view to delivering an economically reasonable outcome overall. I would say in this respect that mechanical engineering is currently going through a transformation phase that could be described as “the mechatronic revolution”.

The next 15 to 20 years will either see the world collapse under the weight of humanity, followed by the return of mechanical machines, or see humans collectively becoming more reasonable. Machines will then become more complicated, because they do not just use up resources; they are also balanced to meet the needs of such global development. This means that we need experts, talents and new enterprises capable of inventing entirely new things.

This can already be seen in SMEs that are well positioned to tackle mechatronics. They are quite successful in this. The big players meanwhile depend heavily on large industries like wind power, the automotive sector and shipbuilding. I believe that this setup is going to become unstable, and that there will be many more small businesses. After all, the sector’s diversity depends on the medium-sized Mittelstand; and not on a few major corporations. In short, it is going to be fun and interesting to work in this sector for some time to come.

Business consultancy, specialisation in medium-sized mechanical engineering

• Founded in 1999
• 18 employees
• Hannover, Stuttgart, Roseville (USA)
• TOP-Consultant award 2011, 2013, 2014

 

Photos: https://stock.adobe.com/de/images/teamwork-concept/60091191; © Sergey Nivens – stock.adobe.com