Silence and Gold

I have written nothing for months and part of the reason for that is that we have been busy.  And that, of course, is very good.  However, I have also been concerned about the risks to my business of recording my observations, especially those that might be interpreted as having a critical edge.  I will say no more online (except this) because anything can be used as damning evidence if and when the authorities decide to act against you.  If you cannot say what you think, then there is not much point in saying anything.  As a small business we have no choice.

New Year's Resolution

We have been operating here for five years now, and that should mean that things are getting better. In some ways they are, but there are also areas where things in our company are getting worse.  When we started the GFC had just begun to unfold with the collapse of Lehman Brothers and we had immediate cash-flow worries as well as all of the teething problems that might be expected for any small start-up company. On top of that was the China Factor, which meant that each day would bring some surprise and possibly a nasty shock.  But at least the factory was neat and tidy and there was time to keep things in order. After five years the more serious threats to our survival have receded and we generally feel more relaxed and comfortable here, but on the other hand the operation is untidy and dirty.  We are a wood business and it is very hard to be neat and clean all the time, but we are looking like every other Chinese factory and that is embarrassing.

The local government is now revamping our industrial park and there are new car parks, new gardens and even fully-grown trees appearing around us.  Our own factory now has a neat garden with a nice tree of its own.  It all looks pretty good, but that makes our shortcomings more pronounced and, as the authorities are keen to promote this as a high-tech park, we are a nasty little anomaly that they would rather see quietly disappear.  That is not an option for us and so the challenge for 2014 is to pull our operation into line and even to try to present ourselves as some sort of model factory that stands out within our industry. Our environmental credentials are okay, but we are certainly not high-tech.  So we need to clean up and at least look good and that is going to be very difficult.

The fact is that we should never have got into this state in the first place, but the cause of that problem is the same thing that is going to make change difficult.  It is a cultural problem.  As foreign managers we try to inculcate our values and standards into our workers, but instead we are overwhelmed by their inertia. A factory should be pretty much the same anywhere, but in reality it is just a microcosm of the society and culture that hosts it.  At the bottom of this problem is that Chinese work places are driven by a crude mix of incentives and punishments, which discourage initiative and breed resentment.  Generally incentives are paid for output (piece work) and punishments are meted out in the form of fines or reduced bonuses.  There is no trust between management and workers and very poor communication so that most workers find it easier to shut down their creative and critical faculties and behave like zombies.  The only change that they hope for in their lives is switching one lousy job for another with slightly higher pay.

In our case most of our workers have been with us for a long time and they know they are well treated so our relationship with them is quite good.  We do not pay more than other factories, but we give regular days off and we strictly adhere to the labour law even though we could get away with ignoring many aspects of it. Even so, Chinese work attitudes die hard and it is difficult to get them to be pro-active.  They tend to cut corners and will not readily or consistently follow established procedures.   

One area where this shows up is with their attitude to tidiness.  In China it is normal to drop your trash on the street and even where bins are available most people do not use them.  If binning rubbish does not enter people’s heads, then separating it is certainly considered a waste of time and effort, so although bins are provided in the factory for metal, plastic and paper waste they will not use them, or use them indiscriminately.  The management of tools is the same.  They dump them where they finish with them and then spend time searching for them when needed again.  This is a huge waste of time and contributes to damage and loss of valuable tools.  In another manifestation of slackness, maintenance schedules are not adhered to and QC procedures are left out or checked off in a cursory way.  In short there is a very low level of commitment on the part of many workers.

To change this is my resolution for 2014. I know that this has to be done through leadership and that it is not going to be easy. Having a clear vision of the end point is easy, but communicating that vision and motivating people is going to be hard. I think it can be done, but that it is going to require me to change first, or at least to change the way I do things.  It cannot be done from an office or through others who do not share the vision.  I am going to have to spend more time on the factory floor and I am going to have to become a full time motivator and teacher of lean production and continuous improvement.  It sounds a bit pretentious but unless we can unlock the wasted human potential of our workforce, that makes them willing partners in pursuing improvement, we will never build an outstanding business.