In order to succeed in today’s business world, it is imperative to become excellent at change management. After all, almost every new project or initiative requires change of some sort. Therefore, the better you become at managing change successfully, the better your bottom line impact.

According to Harvard Business Review, there are six problems that can slow your corporate transformation to a crawl. I’ve listed them below, along with a few hints on how to resolve:

1. Cautious management culture – need to confront reality and agree on ground rules for working together
2. Business-as-usual management process – run a no-slack launch on a parallel track with regular systems; make sure there are early, visible victories
3. Initiative gridlock – limit to 3-4 initiatives
4. Recalcitrant executives – compress launch to quickly engage key executives & to identify & confront those not on board
5. Disengaged employees – rapidly cascade the changes to all employees to boost engagement
6. Loss of focus during execution – anticipate and defuse postlaunch blues, midcourse overconfidence, and the presumption of perpetual motion

As this is an important subject, I’ve written several articles over the years on the topic. A few of my favorites are the following: Transform Crisis into Real Change and Secrets to Successful Change Management.

© Lisa Anderson 2010. All rights reserved.

As those of you know who follow my blog posts, articles and quotes, I believe the U.S. must innovate or die – the topic of my recent newsletter article (To read the entire article, click here).

Today I read about a recent study of patents. In 2009, U.S. firms received patents for slightly less than half (49%) of all U.S. utility patents issued. Of course it is important to consider the quality in addition to the number but these numbers are concerning, especially as innovation is at the crux of our history – and our future ability to succeed.

The good news is that IBM maintained its number one position (which has a 17 year streak) with 4,914 patents. Go IBM!

© Lisa Anderson 2010. All rights reserved.

There’s one word – leadership!

A recent Industry Week article showed several examples of innovation success – the key is that executives must be committed, patient and ready to lead by example. Doesn’t this sound like something we should do anyway? Absolutely! I think it is amazing how often the best client results come from the simple, straightforward projects – the difference is not in some sort of groundbreaking idea but in the FOCUS and COMMITMENT on achieving the result. Then, innovation naturally emerges.

Doesn’t this sound easy? Yep – but it’s not. When an R&D project begins to require more resources, time and/or money than expected, it is quite natural for the plug to be pulled. However, this is exactly why executive focus and commitment are vital. Then they’ll stay the course in order to achieve the end objective. Of course I’m not advocating staying the course in an obviously bad situation. Leadership is about not only knowing when to stay the course but it also about knowing when to stop, even if it was your idea.

I recently wrote a newsletter feature article on innovation. There are several ideas about how to build an innovation culture: click here.

I have NO doubt that those individuals and companies who pursue innovation will achieve significantly greater results than those who don’t.

© Lisa Anderson 2010. All rights reserved.

Most economists and media are concerned about inflation. For example, a new McKinsey & Co study offers up inflation as a fresh concern. And the media talks quite a lot about the printing of money in Washington - and how that could easily lead to inflation. In my opinion, although I can see inflation in certain commodity pricing (especially while China spends heavily on infrastructure etc), deflation is the bigger concern. In essence, I agree with Chris Varvares, President of Macroeconomic Advisors who said, “The consensus forecasts from both the National Association of Business Economists and the Blue Chip Economic Indicators expect inflation to be below 2% in both 2010 and 2011. At this point, there’s a greater risk of deflation than there is of 10% inflation.”

Why? There is massive debt and deleveraging that is still required to get back to a normal environment. Banks are not lending like they used to (please note that I do not support the old policies). Baby boomers are beginning to retire and spend less than when they were in full family mode. So, how will inflation occur (prices increase) without increased demand (and increased consumers)?
With that said, unfortunately, I wouldn’t doubt that there will be bouts of inflation mixed in with deflation, although deflation will have the upper hand.

So, why does it matter? Because it is vital to be prepared for what’s coming in the future. Those businesses who are prepared and ready to leverage opportunities will be those who succeed during this “new normal” timeframe. I wrote an article for Industry Week on how to thrive in the “new normal”. The keys are as follows: 1) Manage cash with vigor (which directly ties to the inflation/ deflation debate). 2) Stand out in the crowd with service. 3) Execute, execute, and execute. To read the full article: click here.

© Lisa Anderson 2010. All rights reserved.

Logistics and transportation companies were hit early and hard by the economic downturn. The American Association of Railroads estimates that the rail industry had assets worth $43 billion standing idle as of February 2010 – almost 30%. On the air freight side, about 15% of freighter capacity was removed from the market last year. The same situation is true for trucks and containerships. This excess capacity drove down profitability. Many companies went out of business but many of the ones that survive the recession will emerge leaner and wiser – in a “new normal” business environment.

In this new normal business environment, there are a few overriding themes: 1) leaner inventory management policies (to accelerate cash flow). 2) a renewed interest in SKU rationalization (to impact costs and efficiencies). 3) Increased flexibility and openness to new ideas. For example, it is becoming common to review the relative efficiency of different modes, the location of distribution centers and whether they are willing to wait a bit longer to pay less for deliveries.

I’ve seen these themes arising more and more freqeuntly with my clients. Undoubtedly, cash is king in today’s business environment. I’ve written several articles about these topics. For example, refer to my recent newsletter on inventory reduction/ accelerating cash flow: click here.

© Lisa Anderson 2010. All rights reserved.

According to the UCLA Anderson Forecast, it is predicted that California employers will shed another 90,000 jobs this year and job growth will remain slow. Overall, it’s expected to remain around 12%. California is far worse than the national average (which hovers just below 10%); however, there is much to improve with both.

Oddly, even though Southern California has huge unemployment rates and has lost some large companies in the last several years, L.A. County remains the largest manufacturing center in the U.S. with 380,000 factory jobs. On the other hand, it only holds the #1 slot because longtime #2, Chicago’s Cook County has also seen half of its manufacturing jobs vanish over the last 20 years.

The losses in manufacturing have accelerated over the last two years as manufacturers have reduced production in line with reduced consumer demand. However, interestingly, not every major metropolitan county has been losing manufacturing jobs. Harris County, Texas (which includes Houston) has added 20,000 manufacturing jobs since 1990 and is closing in on the #2 position. Houston is much more cost competitive.

Thus, what should we do? We have to turn towards INNOVATION, which happens to be America’s foundation. I recently wrote an article for M World, the American Management Association’s magazine, titled “Accelerating Cash Flow through Supply Chain Innovation”. The spring issue of M World focused exclusively on innovation. According to Commerce Secretary Gary Locke, we must spend our time more productively by rediscovering the traits that have long made America’s economy the envy of the world. Scientific research. Innovation. New technology. Entrepreneurship and the new modes of commerce.
As Gary Locke’s says, “Despite our current problems, America still employs 70% of the world’s Nobel Prize winners and is home to three-quarters of the world’s top 40 universities.” In my opinion, we need to emphasize innovation in businesses and throughout the educational system. There’s no time to waste!

© Lisa Anderson 2010. All rights reserved.

According to a study released in 2009 by Deloitte, the Manufacturing Institute and Oracle revealed that nearly a third of companies were experiencing a modest to severe shortage. Gaps in such skills as problem-solving and communication also were noted in the study.

This doesn’t seem to add up vs. the job market; however, it appears as though there is a shortage in the high-skilled jobs. As lower skilled jobs are outsourced to other countries, there is a greater supply of lower-skilled workers yet a higher need for the high-skilled jobs (which are typically the ones required to integrate with the outsourced suppliers etc). Thomas A. Kochan, professor of management at MIT says the basic problem is that U.S. manufacturing never has developed a close community of private industry and technical schools in any systematic way, although pockets of success exist.

Training is required to address the skills challenge – and keep U.S. manufacturing competitive. Nearly two-thirds of Industry Week’s Best Plants winners and finalists over the past five years have partnered with local educational institutions to obtain training.

I’m President of the APICS (Association of Operations Management) Inland Empire Chapter, and one of our core missions is to provide practical education on manufacturing and supply chain topics. We offer certifications which are highly respected – and downright inexpensive vs. the other options available. For more information about our courses, please visit our website: click here

With that said, I completely concur with University of Tennessee’s Parke’s statement in Industry Week – “Training that brings the most success to manufacturers is integrated into a company’s strategic plan,” not a bolt-on,” and has overt commitment from leadership.” I couldn’t have said it better myself, as I find that training often becomes a waste of money without this vision.

© Lisa Anderson 2010. All rights reserved.

As I said in a recent blog post, I was recently quoted in an article in World Trade Magazine about how manufacturing in the U.S.A. is gaining momentum. I know my parents search to buy items made in the U.S.A. and will pay more for them - and they are not alone!

Now I wanted to share an article from Industry Week about this topic. Harry Moser has been an advocate for U.S. manufacturing for a long time, and he says in the article that manufacturers decide to offshore manufacturing work because the freight-on-board costs are lower for work done overseas. However, he says that if those companies factor in the costs of regulatory compliance, potential intellectual property loss, visits to overseas vendors, potential product quality problems, high foreign wage inflation and carrying extra inventory as cushion against late or damaged shipments, now the gap is favorable or small enough that it makes sense to reshore that work.

He is spearheading what he hopes will be a series of reshoring fairs. The first will be the 2010 Contract Manufacturing Purchasing Fair, scheduled for May 12th in Irvine, CA. The goal is to match OEMs that are outsourcing machined components, stampings, special tooling and assemblies with US suppliers that can most competitively bid on doing the work on domestic soil. It should be interesting and worth pursuing.

© Lisa Anderson 2010. All rights reserved.

I was recently quoted in a World Trade Magazine article, “Made in the USA Gains Momentum”, and so I thought this would be an interesting topic to discuss on my blog. Read the full article here.

Actually, I am quite interested in this topic, as I believe we MUST find a way to be competitive for non-commodity products in the USA. There is NO way we can thrive based on consuming alone. After all, it makes zero sense. How can that logic make sense to anyone - the more we consume, the better the economy; however, if we consume goods produced in other countries, it doesn’t create jobs here (minimal ones at best). Instead of biting our nails over our consumtpion figues and hoping that our GNP increases (which just seems like a house of cards to me), we should focus on how to be entrepreneurial and be competitive with whatever product or service we are selling - not competitive within our state or country but globally competitive.

If everyone thinks a bit more about this topic, we are bound to be in better shape than we are by purchasing one more toy or piece of clothing manufactured overseas!

© Lisa Anderson 2010. All rights reserved.

I was recently interviewed by Counselor Magazine for an article titled, “The Recession is Over. Are You Ready for a Rebound?”. To read the full article, click here.

Actually, it is not as simple as it sounds - surprisingly, if you haven’t thought about the rebound and prepared for it, it can take you by surprise and you could miss an opportunity. Who wants to miss an opportunity after getting through the recession??? As I said in the article, “When the recovery gets underway, it’s amazing how you can go from boom to bust in a matter of days or weeks.” So, PREPARE.

I’ve also recently written a newsletter article focused on this topic. In the article, I discuss three keys to preparation success: 1) Flexibility. 2) Plan, plan, plan. 3) Remember liquidity. And, #3 (liquidity) is also a key point in the Counselor Magazine article. “There’s a fine line between preparing for a recovery and creating a path to disaster by overspending into a cash crisis.”

To read the full newsletter article on how to successfully prepare for the recovery, click here.

© Lisa Anderson 2010. All rights reserved.