Meet the team: Richard Payne
Meet the team is a new series by Seraph, where junior team members lead conversations with senior Seraph consultants to learn from their experiences.
Today we present a conversation with Richard Payne, an Engagement Manager at Seraph who has previously held senior operational leadership positions at Faurecia, North American Lighting, Continental and Siemens VDO Automotive.
Discipline first, tech second
Matt: Thanks for taking the time. First question: where do you see the most potential to improve operational performance through investing in tech? Specifically, I'm interested in how technology, such as purchasing new automation or a software talent management system could improve financial performance in the manufacturing supply chain.
Richard: I don't know that there's any piece of technology I would encourage suppliers to deploy without taking the time to understand their specific needs. I can say that typically, the best investment, whether at a customer or OEM, is reinforcing operational fundamentals. Companies can gain tremendous value though adherence to the systems that they already have. Strengthening the leadership discipline around those systems would be more impactful than any particular piece of technology.
Leaders need to be where the work is being done
M: On that note, what is a fundamental or essential concept that managers and companies claim to have down (as a part of their culture) that you often see misused or improperly defined in reality?
R: Basic shop floor management. Managers and leaders rarely spend the requisite time on the floor. Today, most managers spend more time in their offices, on their computers, and phones, than they do on the shop floor. It's critical to be where value is created (or destroyed). The priorities of many managers today are out of touch with the needs of the shop floor.
Leaders must be humble, communicative, and adaptive
M: Going off that, what would you say are the three most essential qualities of a leader? What does effective management or leadership look like to you?
R: The most effective leader is a humble leader. There's no room for arrogance or brazenness from a leadership perspective. A leader has to be a humble person first and foremost. Leaders need to be available, and they have to be present. Effective leaders are involved and engaged in all the elements of the operation. They understand their workforce by being tightly linked to the shop floor and that the operators are their “first” customer. It is the direct labor workforce that brings value to a company – the leader's responsibility is to fully support and serve his/her people and to ensure that they are successful in the execution of their jobs.
A good leader today has to be an effective communicator. Of course, being a dynamic speaker or communicator would certainly be a desirable trait. However, in the absence of being a charismatic speaker, you still have to be an effective communicator. I use an analogy that communication is like blood in the human body. It supports life by carrying oxygen and nutrients while carrying away waste. If this process stops, so does life. Similarly, without communication flowing throughout an organization, it will cease to effectively exist. However, by circulating robust and transparent information, a manufacturing plant thrives. It is energized, and anxieties and rumors are dispelled.
R: I'll add one more to that, even though it gets overused, a good leader is a situational leader. The most unfair treatment is equal treatment for all of a leader's staff. If I treat everyone on my staff the same way, then someone is losing out. The same leadership and guidance are not required unilaterally. It's contingent upon each individual's needs, and a good leader doesn't just apply the same style and 'peanut-butter-spread' it across the entire organization. The appropriate leadership style or technique depends upon the individual that he or she is working with. Career progression, particular skillsets, and motivation level all factor into what's right for that employee.
Management needs Standard Work too
M: From your own experience at Continental or wherever else, what is a principle or process you implemented in your daily routine and why was that important? What result do you think it achieved? How did it help you succeed, drive change, increase productivity, etc?
R: One of the tools I always advocate for and have found repeatedly successful (without fail when correctly deployed) is called 'Leader Standard Work'.
M: I got a chance to see Wade put this in action on a recent project - it had a surprisingly positive impact on reducing turn-times in a hectic logistics operation.
R: Actually, It's not surprising at all. We talk about standard work for our employees all the time. In other words, they have to know exactly what to do to execute the assembly or other processes. They have standard work that they must follow to ensure quality and consistency, and as leaders, we certainly want to ensure that they follow their standard work. However, it is equally important that as leaders, we also have standard work. Now, it's true that there's only going to be a small portion of our day to standardize, but that portion you standardize is significant -- it forces you to check on the things that are important to run your business day in and day out and do it correctly. It forces you to react to abnormal conditions as you see them. When the plant floor sees that, it creates a tremendous amount of energy and positive momentum. Employees get fired-up when they see that their leadership is on the floor, looking at abnormalities and taking action against those abnormalities to make the workplace better. Everybody likes to be successful. Nobody likes to lose.
Transparency around goals and responsibilities builds strong teams
M: In a team setting, what's something you value highly? Whether it is on your team or your client's team -- how do you create your dream team?
R: Interesting question, transparency is crucial, but the question becomes: how do you achieve that transparency?
R: To achieve transparency, you have to achieve a measure of trust with your team and within your staff, they have to trust in one another. One important component which enables this trust to be built within a team is by having aligned goals and expectations. Everyone has to understand precisely what our goals and our objectives are; each person has to know how they influence and affect those results as well as each of the other team members. This way, they know what they expect from themselves, and they know what they expect from one other. When you get that, when you have that level of transparency, then you're creating an environment for healthy accountability. People are held accountable for their actions and for delivering on their commitments. This isn't in a way that's abrasive, just in a way that is meant to be for the betterment of the team.
M: It makes sense that building the right team requires a solid foundation.
R: I will also say that you have to move quickly on the people that aren't going to get on board. When I say move quickly, that doesn't mean act with carelessness. You have to be very deliberate, sure and certain. You move quickly once you've deliberated, and you're sure the team member is not working in a positive direction with the team. Not only have I found that this is better for the company, but it also works better for the individual by allowing them to move on to a different situation that may be more aligned with their expectations.
With power comes responsibility
M: One more on the operations experience side. What is a common root cause of financial destruction resulting from operations? Is it inefficient management, poor data, outdated analysis tools, lack of talent, etc? What is a frequent underlying issue?
R: Poor Leadership.
M: Poor Leadership?
R: Poor leadership. Period. Exclamation point!
The best retention strategy is providing purpose and results
M: I like that, simple and memorable - moving on. In terms of retaining talent, what's a strategy you've deployed yourself or you've seen successful companies use to retain talent or operational leadership, especially in areas where unemployment is quite low?
R: Really all the things we've talked about so far are retention strategies. Everybody wants to be a part of something bigger than themselves. They want to understand: 'I've got clear goals and objectives. I know where we're going as a plant. I know how I contribute to that as a valued member. I'm properly supported, I have access to transparent information, I know what our current status is without hidden agendas.' Those things are what's rewarding to people. While keeping good people is financial to some degree, when you peel back the onion it's much, much, deeper than that. Retention is about being a part of a good, reliable, robust team that's moving the operation in a positive direction with a clear plan and strategy and showing positive results.
R: We talked about some of the leadership qualities in terms of communication- all that plays into retention. You want to be a part of an organization that communicates, and you want to know that your leader is humble. Most don't want to work at a location with a leader who beats the hell out of everybody as a matter of 'management technique.' Weak leaders cast blame. You want a leader that is going to own the mistakes, own the plant and own the results. That's the way you keep people. I don't know another way to do it.
It's not the tools, it's how you use them
M: On the subject of what not to do, what are bad recommendations that you see repeatedly in manufacturing? Said differently, speak to a common buzzword misapplication that is incorrect, inefficient, or just wrong.
R: You can pick all the buzz words you want. You can go as general as lean manufacturing, or you can get more specific with 5S, TPM, visual management, pull system, etc - you pick. The failure rarely comes from the tools, it's the discipline around the tools and the effective utilization of the tools themselves. All these tools intend to provide insight as to what the priorities should be and to identify abnormalities in the business which in the end must drive action.
M: Right, back to discipline again.
R: It's inadequate just to put a certain tool or process onto the shop floor and then walk away from it. Saying 'I told everybody how to use the tool, I told everybody what to do,' is not going to cut it. Without continual follow-up from leadership (Leader Standard Work) on the effective utilization of that tool, it's never going to work, you can fill in any buzzword you want.
M: Sounds like you've heard that excuse a time or two.
R: That's why I emphasized leadership when you asked me 'What's the single biggest detriment or issue to operational excellence?'
Invest in people and processes, even if they aren't 'yours'
M: Two more here, can you describe an effective or creative solution to a problem you faced, not necessarily Seraph but your time as an operational leader at a company like Faurecia or Siemens?
R: Sure, I'll tell you one thing that we did. You talked about retention issues -- there is always a challenge with retention or absenteeism.
M: Perfect timing, on the macro-side, we see labor issues cropping up across U.S. - what happened at your plant?
R: In this particular case, what we found was that our permanent employees had very low turnover. Once we got the plant heading in the right direction, the turnover was extremely low; absenteeism was phenomenal. But when you looked at the temporary workforce, it was unacceptable. Turnover was extremely high, absenteeism was even worse, and it was having an impact on the operation.
We made a very intentional effort to develop a strong partnership with our temporary service provider. We had 3 staffing companies when I started, but we got rid of three and went to one, making it clear to the sole provider that we expected to have a committed partnership. We worked with the temporary provider and started co-developing some of the same tools we used with our permanent workforce and sharing with the temp company for deployment to the temporary workforce. We even had a specific employee survey that we built for the temporary workforce. We used the survey to get feedback from the temps who were being brought into the plant: How was the onboarding process? What did they think of their team leaders? What did they think that the plant? How could we improve?
Of course, we didn't have perfect absenteeism or perfect turnover, but the executive leader for that organization told me that we had best in class of any plant he's ever seen in terms of the performance of the temp workforce. I don't know if that's creative, but it certainly was outside the normal Plant Manager playbook.
Supplier consolidation is coming
M: I love that, now a final question on broader trends. The transition towards Electric Vehicle (EV) mass production is underway. What do you see as the biggest hurdle for suppliers to overcome?
R: There's going to be significant consolidation of the supply base. There will be fewer suppliers, making fewer components. I think the challenge is going to be how are these supplies going to merge and acquire that will enable them to survive over the next decade. Many won't.
Companies will have to ask, what makes sense? What commodities coming together make sense? Are there synergies and economies of scale to take advantage of? Those are the challenges that we're going to see. This will require a hard look at the physical plants they own and operate.
We are going to see companies offering increasingly varied services and products. These bigger companies will start consuming smaller companies while adding new technology product lines. Large portfolios will continue to grow. Today, when you see mergers and acquisitions, most of the time the two companies are very similar in terms of what they provide from a product standpoint - at least highly complimentary. New products will come together under consolidating corporate portfolios. But these are predictions, I could be wrong, I don't know specific timing. Just ten years ago, if you were to listen to everybody in the auto industry, you would expect us to have made a more significant transition into the EV market in terms of vehicles sold. It's slowed down dramatically compared to what people originally expected it to be.
M: What is a key product you are thinking about?
R: Big technology challenges revolve around the battery. Whoever can capture a big portion of that market by improving the technology around the production capability as well as the performance of the battery will be in a very favorable position.
Read: "5 Dysfunctions of a Team"
M: I'll sneak an easy one in here, what is the book you've gifted the most on the subject of operations management? Perhaps one you've sent subordinates or recommended to friends.
R: One of my favorite books is called the "5 Dysfunctions of a Team" it's structured as a narrative based around a tech start-up company in California, but the operational and leadership principles in the book are very solid. They are certainly in line with the conversation that we've had today.
M: Thank you for taking the time to share with me today.
R: My pleasure.
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Seraph's team of operational managers and senior consultants intercede on our client's' behalf to fix crises putting businesses at immediate risk, turnaround situations damaging the bottom line, and restructure operations to improve the balance sheet. Seraph has successfully delivered projects in the Americas, Europe, China, and India. Seraph’s industry expertise includes Aerospace, Automotive, Energy Infrastructure, Healthcare, and Medical Devices. Through our other operating companies, we are continually looking for distressed situations where we can put our expertise and capital to work to create value.