For this months “View from the Q”, the people at the American Society for Quality recorded an after-talk chat with Dr. J.J. Irani of Tata Group, India’s single largest company.
Of course, there’s the typical stuff I disagree with in the talk, your typical appeals to standards like the Malcolm Baldridge award, and this idea that it’s the government’s business to reward companies that comply to some sort of standard for performance improvement.
Yet in this case, I think the things that we agree on are more interesting — or at least worth talking about.
Two points stood out for me, in the second and third video.
In the second video, J.J. claims that in order to have trust, organizations must have aligned values. He goes on to say that Tata will walk away from a bad deal.
In the third, he claims that companies have a sort of obligation to contribute to the communities in which they operate. To use his analogy, you can’t have a tree sprouting up in a desert — so Tata needs to go give back some financial capital periodically. According to J.J., every time they have done this, it has paid dividends. (For example, helping to fund a local school, thus making the pool of qualified applicants larger, making it easier to hire and, since you have the people faster, easier to get things done. That’s my words, not his.)
I happen to agree with both of these. Back home in West Michigan, we have a company named Bissel that makes vaccum cleaners. A few years ago, they decided that, in order to survive, they needed to sell the plants, lay off the line workers, and move manufacturing to Mexico. It is … sad.
It’s easy to be critical of Bissel, but let’s face it — Bissel lasted ten years longer than General Motors did in Flint, and twenty years longer than most of the American Textile Industry.
I can understand having to make tough decisions like that, and I don’t mean to minimize it.
But I keep thinking about that tree trying to grow in the desert.
Something’s happening in the American Economy. Something fundamental.
Have you noticed what the economists are saying about a recovery? That it will be twelve to eighteen months, that we’ll have growth, but that it will be slow?
Have you noticed that those are the same things they were saying in 2010?
And 2008, when we had the last “crisis?”
It’s pretty simple math. Companies keep growing through mergers and acquisitions.
Every time you have a merger, the acquiring company now has two IT department, two HR departments, two legal departments, two data centers, two finance departments …
When the company merges the departments, it will find duplication. Remove the duplication, have the sales folks share customer lists, cross-sell products, and, boom, mo’ money.
The only problem is all the laid off people.
This isn’t a cyclical problem. It is a systemic problem.
Getting executives to sit down and talk about trust and long-term consequences might not solve it, but hey, it’s a start.