Thriving Through Joint Actions


Cyclic or Systemic?




The depth and duration of the current economic condition tells me that there is more than a normal business cycle involved. At least part of the problem is systemic, rather than merely cyclic. By “systemic” I mean that fundamental changes in the basis of the global economic system are occurring. Recognizing these changes and anticipating their effects on your business requires a much broader scope of attention on the part of management — demanding more attention to working on the business, even at the expense of attention to working in the business.




One way to manage these demands is through joint actions with other organizations. On Joint Actions, a post to this blog from last July, presents some thoughts on how this might be done. On Joint Actions is one of my personal favorites. Even if you have seen it before, the situation is such that it may well be worth reading again — C.H.




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On Joint Actions


From 26 July 2012




Small Ships – Big Sea




“Being a sustainable business means thriving in perpetuity.[1] Of course, everybody is in favor of thriving in perpetuity. But thriving in perpetuity entails navigating the future. Dreamstime - CompassAnd nobody knows a whole lot about what the future holds. Navigating the future is a tall order for a smaller manufacturer operating, like it or not, in a global economy — a global economy replete with risks visible and hidden, and with aggressive competitors from every quarter. Some of those competitors may be, directly or indirectly, organs of national governments.




At the same time, the Triple Bottom Line view of Sustainability tells us that a manufacturer needs hold the effects of its actions on the natural world and the effects of its actions on humanity as coequal with the effects of its actions on the profitability of the business. It seems to me that abiding success in all three dimensions — the financial viability of the firm, respect for the natural world and the welfare of the seven billion of us — requires a significantly higher level of joint action among manufacturers than in the past.




I find it useful to think of individual manufacturer as a component of an industry (for example, the plastics industry), which is part of an increasing integrated industrial sector, which is part of a national economy, which exists within that matrix of national economies that comprises the global economy. The trick is to examine relationships at each level, to recognize interdependences, [2] and to act accordingly.




Recognizing Interdependences




A recent comment by Alan Mulally, CEO of Ford Motor Company, makes that point. Mulally was asked his views on the appropriateness of the bail-outs his competitors (GM and Chrysler) received. Mulally’s response was that Ford supported the bail-outs when they occurred, and that Ford supports them now. Reason: Ford was concerned that collapse of GM and Chrysler would result in the collapse of the infrastructure of suppliers and specialists upon which the entire domestic automobile industry relies. Ford needs its competitors to help assure the existence of enough trade schools, independent testing laboratories, specialized component suppliers, design firms, and on and on.




So, manufacturers as big as Ford need to act jointly in appropriate situations. Even more so do smaller manufacturers. Here are some thoughts on how that can happen:




  • It is my view that the scope of industrial trade associations should become broader. An industrial trade association should be a primary vehicle by which an industry seeks to become Sustainable: that is, to thrive in perpetuity, in all three dimensions. Industries need joint action Sustainability plans, just as individual manufacturing firms need their individual plans.



  • Many localities have economic development organizations. The primary role of these organizations has been to attract new industries into their municipality, county, state or whatever. It may be useful to increase the extent to which these organizations promote, through joint action, the prosperity of those manufacturers already located within their bailiwick. There is much that a geographic community of manufacturers can do, through joint actions, in all three of Sustainability’s dimensions.



  • Smaller manufacturers should reality – check their views of government. Yes, government has a regulatory and enforcement function. Government also has a responsibility to promote trade, especially in this global economy. Manufacturing support programs like the Manufacturing Extension Partnership [3], the Small Business Administration [4] and the 3E: Economy, Energy and Environment initiative [5] are worth consideration. The 3E initiative is a joint action among five government agencies designed at promoting Sustainability among industries within a given geographic area. Perhaps joint action works both ways.


The cold fact is that over American 42,000 factories have closed their doors since this century began. Times have changed. To beg the obvious, those who intend to thrive in perpetuity need to think and act in ways that differ significantly from past practices.




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There are many, many more possibilities for innovation by integrating joint actions into your Business Model, on the Value Proposition side or on the Operating Model side [6] . For navigating the future, consider the advantages of fleet and convoy tactics. You may find useful ideas in how organizations outside of industry operate — organizations such as franchise groups, credit unions and Japanese keiretsu, for example.




What are your views on how to get manufacturing out of survival mode and on toward thriving?



Chuck - Vannes 2012
…  Chuck Harrington
(Chuck@JeraSustainableDevelopment.com)




P.S
: Contact me when your organization is serious about pursuing Sustainability … CH




This blog and associated website (
www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.




Photo: Dreamstime, www.dreamstime.com








 


[1] Werbach, Adam, Strategy for Sustainability, Harvard Business Press, Boston (2009), page 9.


 



[2] Here, I use the term “interdependent” as Stephen Covey explains that term in his Seven Habits of Highly Effective People, Simon & Schuster, New York (2004), especially pp. 185 – 203.


 





[5] A .pdf on the 3E initiative is available at: http://ita.doc.gov/td/energy/NIST-MEP%20E3%20Program.pdf.


 



[6] For more on Business Models, see Business Model Innovation, this blog:
http://blog.jerasustainabledevelopment.com/2013/03/27/business-model-innovation.aspx