Lean Business France – The International Edition

Back at the end of last year, I commented on the initial findings of the report into the goins-on at France Telecom, where there had been a high level of suicides over the previous 24 months.

The second part of the report came out this week, a summary of the 102000 questionnaires which had been sent out to the employees of France Telecom. The report includes 107 – yes, that is a lot – recommendations as to how to improve the current situation.

You see, the independant auditor recognises that, despite the media attention, promises from the executive, and even a change in leadership as of the beginning of this month, things are still a long way from being perfect. In just the first two months of this year, there have been nine further suicides of FT employees, all away from the immediate vicinity of the workplace. And the major obstacle to progress is the lack of confidence the employees have in Human Resources, and in the works medical staff (an obligation in French companies).

Only 39% of employees are ‘proud’ to be a part of France Telecom, and report outlines the need to reinforce the identification with the company. The Human Resource function, the management system and the reporting system all have to be radically overhauled – simplified, in fact, to give back a minimum of autonomie to the workers.

Now, doesn’t this now start to look to be an excellent opportunity for Lean Management?

The matrix organisation in place is revealed to be far too complex, leading to a series of reorganisations which only serve to destabilise the employees – many end up simply doing nothing, as the priorities change all of the time. And the information systems are also seen as a barrier to efficient communications and relations – too many and inadapted to the actual requirements. Finally, objectives and measures are deemed to be “too numerous, too difficult to achieve and disconnected from reality”.

Now, this does seem to me maybe to be something to do with the management style that has developed over the past few years. The report states that management has not been sufficiently open to dialogue, to constructive criticism and to collective reasoning. Rules for promotion are seen to be ‘unclear’. Any meeting with Human Resources was seen as a sign that you were on your way out. And mobility was something that could be imposed upon the employee with little regard for his or her personal situation.

The new General Director of France Telecom, in place since March 1st, will be presenting his plan to the workforce in June. It sounds like that if he could bring it forward a few weeks, he may save another life or two in view of the current climate in the company.

And I wouldn’t think that any of the conditions for a successful Lean adventure exist today.

Back in January I wrote about the nationwide consultation ongoing to relaunch French industry. Well, as promised, President Sarkozy presented his plan (or maybe that of his advisors?) on Thursday of last week.

It was all good stuff. There are four overriding objectives :

- increase industrial production by more than 25% between now and 2015

- develop durable long-term perspectives for industrial jobs (no measurable indicators on this one),

- return to a positive commercial balance between now and 2015.

- increase the French share of European industrial output by 2% by 2015 (which I suppose could be achieved either by France improving or the others receding).

To deliver this, there are 23 measures split into five main areas:

- placing industry at the heart of a major project of common interest – this involves setting up a national conference and an ‘industry week’, developing better relationships with the rest of Europe, between industry and higher education.. and between the government and industry,

- developing employment and competencies, through providing incentives to set up in or bring back their activities to France, using experienced workers to help junior ones, and better anticipating industrial requirements in terms of skills,

- reinforcing the regional structures already in place to support industry – part of this includes setting up better regulation of the relationships between larger customers and smaller suppliers,

- reinforcing innovation and competitivity through simplifying regulations (it would be about time) and helping financially companies with promising new products,

- setting up new means for industry to obtain financial support.

Not a lot of surprises, therefore, a major part of the initiatives revolving around the financial difficulties of industry today.

And just in case you were wondering, no mention of Lean in the sections on competitivity. In fact, one could have the impression that the only way French industry is going to become competitive again is if the government gives them lots of money!

Still, there is a whole lot of work to be completed if these are the measures to deliver the 2015 objectives (by the way, the next Presidential election is in 2012). If I was a little cynical (which I probably am), I would finish by saying that these measures are guaranteed to generate new jobs… if only in the local government agencies who are going to have the responsibility of coordinating all of this.

The full report (in French) can be accessed here.

There have been worst periods of industrial strife, but the current social climate in France at the moment is not encouraging. What, with Dutch employers closing factories over the weekend and informing their employees by registered post on the Saturday, or Swedish furniture giants refusing to budge despite striking workers closing down distribution centres and hypermarkets alike, one would have thought that those with a little more comfortable ways of earning a living would be crossing the road and keeping quiet when faced with the hooligans of industrial action.

However, as usual in times of unrest, the air traffic controlers, have insisted on having their voices heard, with the result being that numerous flights have been cancelled and passengers stranded over the past few days… certain categories of airline employees themselves seeing fit to add the ‘passenger experience’.

Now, we have to accept that the level of stress has increased over the past few months. Small business owners wondering how on earth they are going to pay their employees, agricultural workers destroying crops as they lose less money doing so than if they were to sell at the market price, and only this weekend, oyster farmers having their livelihoods ruined by devastating sea floods which cost more than 50 lives.

Therefore, jumping on t he bandwagon, we have the air traffic gang who, under the pretence that they are suffering ‘unvearable stress’ and ‘crushing responsibilities’, decided that they were not going to work anymore (at least for the time being).

Now, to be fair, it has to be agreed that these people do have a responsibility which is maybe more important than that of you and I. However, it also must be said that, on average, they are earning almost five times the minimum wage… for working  – now, hang onto this – just 99 days a year.

266 days of holiday!! Not taking account of leap years. Now, that certainly seems to me to be sufficient time to calm down after a stressful 1.9 day working week. And getting three times the average wage of a small business leader into the bargain. And there are also reports of informal arrangements between individuals – obviously not up to the 1.9 consecutive days – who cover for each other, often leading to security risks for passengers.

So what are the employers doing about it all? Hiding their heads in the sand, it seems.Oh, did I forget to mention that these are public sector workers, and that the boss is the government?

We’re a long, long way from a culture of ‘respect for people’ in this area.

The number of industrial jobs in France has fallen by 40% over the past 30 years. A report has come out published by the government which attempts to understand some of the main reasons (albeit analysing only the period from 1980 to 2007, during which 2m jobs were ‘lost’).

The first conclusion is a reflection on the way statistics are collected. Using temporary labour from agencies on the shop floor does not count as an industrial job. It is categorised as ’services’, so that any company which resorts to using agencies to absorb peaks in activity (or even just uncertainty over the future) is in fact suppressing industrial jobs. This effect is estimated as accounting for 25% of the total (half a million jobs over the period) – and this was before the current economic crisis hit in.

Technologicial progress has obviously been a big factor, accounting for 30% of the total. This has led to a decrease in demand for labour but also, through increasing household revenues, has increased the demand for services, thus creating jobs and attracting workers away from industry.

The remaining 45% would come from the effects of globalisation – the commercial deficit of France has grown from 15 billion euros (they didn’t even exist in those days, what would it have been in francs!) in 1980, to 54m in 2007. What the study tried to do was distinguish between foreign competition and French companies which decide to delocalise. And surprisingly, the conclusion is that it is the delocalisations that have slightly the greater share of the 45%, even though it seems to have been difficult to come up with precise figures.

In summary, not taking into consideration the statistical glitches, technology, foreign competition and French businesses themselves each account for around a third of industrial job losses over the past 25 years. Food for thought for the French President and his advisors as they prepare to announce a ‘national industrial policy’ probably next week following the consultation exercise that took place at the end of last year.

There’s been a fair deal of questions in France over the past few months – basically a request for root cause analyses of why Germany seems to be handling the economic crisis a little better (the least that can  be said) than in this country.

I have a one word answer to that one : ‘teamwork’. Whereas all over France industrial actions seems to be breaking out at the moment, the trade unions defending the interests of the German automotive and metal workers agreed yesterday to an agreement which will, in reality, hold salaries steady over the next year in return for guarantees on the level of employment over the next two.

Call it what you want – ‘win-win’ or ‘give-give’ – but the truth is that, in the current climate, such compromises are inevitable.

And while in France and other European countries, factories are closing down and hypermarkets are on strike, Germany is holding on to its skilled workers.

Just guess who my money is on for being the first out of the recession?

Back at the end of last year, following a spate of suicides in the workplace, notably at France Telecom which I commented on in December, the French Prime Minister ordered a study from three emanant ‘practiciens’ to include propositions which would “improve the conditions for psychological health at work“. The report was published yesterday, and makes interesting reading.

In their conclusions, they come up with some points which, if they’d read ‘Lean Thinking’ and related literature back in the nineties, might have saved them twenty years or so.

As soon as the introduction, we are told that “the real challenge is the well-being of the workforce and them being valued as the most important resource that the company has“.

A number of factors were listed as being at the origin of stress in companies today. Amongst these, we can find:

- “management is too often judged on purely financial performance, with insufficient importance given to social performance”,

- “the poor use of new technologies, which dehumanises relationships at work whilst encouraging virtual exchanges. In just one generation, we have moved from a work collectivity physically close to a community of individuals, connected but isolated from each other”,

-”difficulties in work relationships within a team or with the supervisor when isolation reduce the opportunities of interaction“,

Other factors quoted include the frequency of reorganisations, the fear of unemployment, centralisations which discredit local management, matrix organisations and incessant reporting, time spent in transport, the impersonalisation of the customer interface, and the increasing social role of the workplace.

And the best one for last :

- ” the development of new forms of taylorisme in services. Characterised by standardisation and the isolation of tasks and relations, they can lead to work losing its meaning. When management methods encourage both standardisation and taking initiatives, workers are faced with a paradox. The processes must remain only the means and not the end – they do not resolve the human aspects which depend on the proximity of management“.

I’m not sure whether Lean Management comes out well or not from this, but it certainly shows that for many companies, the continuous improvement aspects have been well understood, but maybe not the ‘respect for people’.

The ten propositions read like an advetisement for ‘Real Lean’, as Bob Emilani would term it :

1) Executive management and the Board need to be implicated in ensuring that performance evaluation includes social and health factors,

2) Reinforce the presence of management in the workplace – the managers have to have authority to make decisions to support his team,

3) Ensure that the workers have the space and time to find their footing and develop as individuals,

4) Implicate the workers representatives in reducing stress in the workplace,

5) Implement measures to evaluate health and safety – we all know that measures influence behaviours

6) Prepare and train managers to actually be managers

7) Promote the value of teams and teamwork, rather than treating organisations as a collection of individuals

Anticipate and take account of the human factor in reorganisations and restructurings,

9) Understand that as a customer, your company also has an impact on the health of the employers of your suppliers

10) Don’t leave workers alone – always accompany those in difficulty.

All of a sudden I feel that Real Lean Management has a very healthy future.

… the tough get going. And deserve to succeed.

The big boys don’t want to help the kids anymore. Two of the large aircraft manufacturers in France (you’re probably surprised that there is more than one!), probably through a well-intentioned value-stream-mapping (or cost-cutting) exercise, have decided that they will not longer play a part in supplying materials to their own suppliers. It seems that they were buying in bulk, getting a preferentiel price and therefore offering cost advantages to themselves, to their component suppliers, and also probably to the suppliers of the materials. Win-win-win, what a great arrangement, you would think.

Well, all that’s going to stop, and little Mr.Cable Supplier is now faced with negociating individually, and the material supplier now has tens of orders to take, prepare and ship. And we can very well imagine that the large manufacturers are in no way ready to accept this new state of affairs as a reason to increase costs!

Down here in the south-west, the smaller suppliers have taken it on the chin, and rebounded. 10 of them have created a platform to purchase materials in the same way as before. They’ve created a company called SAS Aero Trade, of which each has 10% of the capital. OK, it has taken two years of discussions, and there were 18 companies at the outset, so 8 have fallen off the wagon somewhere along the way, but it is still a very creditable achievement.The local authorities have been closely involved. As outlined by the President of the new platform, Serge Assorin, “we will continue to benefit from the reduced prices, and we have arranged loans from local governement agencies to finance the initial purchases”. This will even stimulate employment, with two logisticiens planned to be recruited. And if this works, there are potentially other areas of collaboration.

Congratulations SAS Aero Trade and may this example inspire many others.

The title is a tongue-in-cheek reference to Bill Waddell’s excellent book which he could have called something like ‘Industrial Common Sense’, but it’s a good thing he didn’t as I wouldn’t have been able to adapt the title of my blog.

Where Bill is performing solo heroics to try and get the U.S. up and running, it is the French government over here that have realised that industry has been slumbering into the doldrums for a number of years now, and needs a wake-up call before it is too late.

A nationwide consultation programme was launched back in October.  Each of the 20 or French regions was asked to bring in its captains (and also deckhands) of industry and come up with recommendations on how to revive French industry. The regional analyses have to be fed back up the line by the end of January, and at the end of February, the government will take ‘la crème de la crème’ and outline what it is going to do to make the country more competitive.

However, as always, those in the know already know probably 80% of what is going to be announced (in this country, ‘rumours’ are ‘leaked’ before any important announcement just to test public reaction in order to make any necessary last-minute adjustments). Two of the major measures to be announced will be in the areas of,  firstly, sustainable development (helping drive competitivity through making industrial processes and products more ‘green’ and secondly, relocalisations.

Now, Bill Waddell and others have been very vociferous in highlighting the plight of a number of companies who have decided to take the low-cost route only to find that the disadvantages far outweigh the cost of labour. Obviously, this school of thought has not yet reached the ears of the French government, who intend to encourage relocalisations by providing loans to get companies back here. It has to said that this has already been tried back in 2004, and fell like a stone as companies were simply not interested. It remains to be seen whether the response to the ‘leaked rumours’ on this one will see it withdrawn or not in a month’s time.

Another area rumoured for measures to be taken is the relationship between the bigger customers and the smaller contractors, which has swayed much too far in favour of the former. Again, any actions taken will be financial.

Relocalisation and the extended Lean Supply Chain. Two areas where Lean thinking could be far less expensive can the policies currently being decided by the government.

There’s been a fabulous study reported on today, carried out by an independant consultancy and which classifies 200 leading firms in France on the quality of their customer service (based on the switchboard, the hotline, emails and the internet site).

For those of you who just love measures, this is your lucky day. Just read on.

1) 11% of companies tested simply hang up when an English-speaker rings in. Can you imagine that? You’re already limited to doing business potentially of 89% of French firms.

2) 24% of people who man the switchboard… don’t speak English. Now, these are big firms we are talking about, not the local mom and pop shop. Down to 76% left (on the basis that there was overlap in the first two categories).

3) 21% of companies have no switchboard operator or even an answering machine outside of normal office hours. So basically if you’re ringing in from Asia or the States, get up very early or go to bed very late to do so (and hope that the switchboard operator speaks English).

4) It gets better. 47% (no, that’s not a typing mistake) do not reply to complaints. So there’s no point writing that the non-speaking sleeping switchboard operator hung up on you.

5) 43% of companies when called refused to communicate the number of their companies help line.

Now, putting all of that together is possibly a little too much for my fading maths memories, but I reckon that somewhere along the line, we’re probably at between 1 in 3 and 1 in 5 who actually deal with customers properly.

The interesting thing is that there is a league table. Bottom of the list  i.e. they must be hundreds of times worse as  the averages listed above. Poweo, an electricity generating company. And just before them in 199th position out of 200?

Starbucks!! How can they not speak English!!

The 1-2-3-4 goes to the luxury and fashion houses. Moet and Chandon (champagne), Fauchon (fine foods), Chanel and Louis Vuitton in that order. All good companies making a lot of money.

Can you see any link between customer service and profitability in these figures?

Now we can all theorize about how best to manage change – although I wonder just how many change theories are applicable in Haiti just now – but there is nothing like going through a real change experience yourself to pull out the lessons for the future.

Now, I hold my head in shame in regards to what is going on elsewhere in the world. However, there was a fairly momentous occasion in my insignificant and relatively meaningless life which took place on January 1st.

In one sentence, I changed my heart rate monitor. Early readers may have caught onto the fact that I run marathons (not every week like, but enough to make it my most time-consuming pastime) and, having a psychological dependance on owning the best material (it can only make you run faster, can’t it) I chose the beginning of the year to change from.. and just read this – the Forerunner 305 to the Forerunner 405. One character difference, and my whole world has changed.

Initially, for the worse.

You see, when you become a techno freak such as myself, having the latest stuff is one priority, but ensuring that it works is another. And, at least in my own naive and initiated opinion, it didn’t. It took me until the 3rd to go out for the first time to try and melt down some of the 4kg of chocolate (at least, that’s what it felt like) ingurged over the festive period.

The marathon runners fanatics of the 305 amongst you (!!) obviously appreciate it for its large screen, touch button controls and flexible screen parameters. In no way would you change it for a child’s watch with a friction-based menu system which has no chance of working when you’ve sweaty fingers. And that’s just what the 405 seemed like at the beginning. Impossible to smoothly glide my fingers around the silver dial to bring up the various menu options. And it only started recording intermediate time every kilometer when for the past seven years I’d been pressing a red button to do so.

And worse was to come. In land not renowned for its dependable Internet connections, with the 405 you need one to transfer data from the monitor to a Pc-based analysis tool. With the 305 it was direct, monitor to PC.  And you can no longer charge the monitor through the USB port of the PC – can you imagine, you actually have to plug it in to the mains.

By the evening of the 3rd, I was therefore panicking. And putting the day’s very slow pace down to the faulty equipment!

Two weeks later, I’m a changed man. My 405 is my new best friend (we’re not sleeping together just yet however), I look forward to every outing, after which I get a mass of information I wouldn’t have any idea on how to use properly. And I’m even starting to run a little quicker. Thanks to my 405, of course.

What happened? Three things :

1) Training : As a first step, I read the instructions. Then I practiced, wrote things down. And revised.

2) Secondly, I got help. There are hundreds of forums out there with people who seem to have nothing else to do with their lives than help you out.

3) Finally I took on a positive attitude. There was no going back, this had to work, and I was going to make it do so.

Training, Teamwork and Trying. The 3 Ts of change management, at least as far as Forerunners are concerned.

So now that I have the most recent technology and am sure to be running faster, the marathon dates for 2010 have been added in red highlighter to the diary : 9th May in Mont St Michel, and 10th October (10/10/10!!) in Chicago!!

I’ll be keeping you informed of how things go!!