Modern technologies – email, texting, Skyping, etc – have made business communications more efficient, but maybe less personal. But sometimes the tech isn’t to blame, because the message itself just was never communicated. Not misunderstood, but actually not communicated. Make sure your employees know exactly what you want.
A Cleveland-based manufacturing company was enjoying one of the best years that current staff could remember. The company was running two production shifts and seriously considering a third. Its most popular products were being shipped as soon as they came out of assembly.
Orders were up. Bonuses were up. Employee morale was up.
The company’s officers were in constant demand for industry roundtable meetings and quotes in trade magazines. Job applications and resumes flooded HR – everyone wants to be with a winner, right?
There was talk of expanding into new markets, rolling-out new product lines, buying-out a couple competitors, and even a public stock offering.
The future looked especially bright.
Betting on the Future
The cash-rich company decided to upgrade key plant machinery to boost its capacity. More than $1 million was spent on state of the art equipment.
Part of the million bucks landed at Plant 1 / Floor 3, where a 20-year employee, “Todd,” had been turning out a critical component, “widget 1,” at the clip of 250 pieces an hour.
The VP of operations, knowing that “widget 1” was consistently in high demand (and almost always back-ordered) earmarked $200,000 for a machine tool engineered to pump out 600 “widget 1s” an hour, or about 4800 during an eight-hour shift.
Life was good. The additional capacity thrilled the sales department. New orders were expected to make a meaningful contribution to the bottom line as early as the next quarter.
So the machine was installed. Todd was trained. Production started….and Todd churned out …250 pieces an hour.
“He’s just getting used to the new equipment,” the plant manager assured the operations VP. “It will pick up.”
Except it didn’t. Output remained at 250 pieces an hour. Every hour. The trend line was absolutely flat.
A week later, the plant manager got the shop foreman involved. “Can you go ask him if he’s okay?,” he said.
The foreman did, and Todd replied that everything was fine.
So on it went. 250 pieces an hour. Not 600. 250.
Some Background Information
Todd was always a model employee, if a bit on the quiet side. He was popular on the plant floor, rarely missed work, and was considered a very skilled worker.
The plant’s labor contract was set to expire in about four months. It had been years since the company had experienced a strike. Preliminary talks had already started with the union and were going well, but no one was anxious to pick a fight or provoke even a mild confrontation.
While it would be an overstatement to say that people were tip-toeing around Todd, no one was eager to offend a good worker. It was tense.
Backlash and Panic
Corporate wasn’t thrilled with the 250 pieces. Three weeks after the installation there was no sign that the $200,000 investment would pay off.
Salespeople were warning good customers – and some new customers – that their orders would be delayed.
A service rep from the company that sold the machine was brought in (on a shift when Todd was off, interestingly) to examine the new equipment and could not find any problems.
Damaged employee relations and possible strike or not, it was time for action.
After another week the plant manager, along with the labor relations coordinator and shop foreman decided they had no other option but to speak bluntly to Todd. They grabbed cups of coffee and headed out to his work station.
After some small talk about Cleveland sports teams, the ice was broken.
“We’re a little concerned about the output here,” said the plant manager.
Todd looked genuinely confused and a little hurt. “What?,” he said. “I don’t get it.” He stared at the new machine.
“Well, Todd. Uh, the machine is rated for 600 an hour,” said the plant manager.
Finally, Todd looked up. “Oh. I can give you 600. Easily. Probably more. You never told me. I’ve been giving you 250 because I’ve always given you 250, and I thought that’s what you wanted.”
The Lesson: Make sure they know exactly what you want.
MP Star Financial’s invoice factoring programs can help you get paid on customer invoices faster. You can meet payroll and tax obligations on time and fund your company’s growth plans. Call MP Star Financial for more information. (800) 833-3765, extension 150.