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Week of 15 Nov 11: Death by Incrementalism

Most of the time, it is a safe bet that we should change operating parameters in the powerhouse, pulp mill or paper machine slowly and with a great deal of study and thought.  Wildly changing set points without proper study is reckless (and why you don't want me to be an operator).

However, in the "thinking" parts of the business--say, vice president, senior vice president and so forth, such slow reaction can be death.  I have seen it many, many times.

The companies that get ahead are the ones that are constantly looking at their competitors, looking at overall economic conditions, looking at markets.  Then they make step changes in the operation of the business.  They may make three or four such step changes in a  period of a year or two.  All of these don't work, of course, but the ones that do propel them to higher planes quickly and the failures merely take them back to a position near their plodding competitors.

Companies that allow the prudent incrementalism of the production line permeate their upper ranks fail.  Sometimes they fail slowly, sometimes quickly, but they fail.

Recently,  I watched from afar as a newsprint producer plodded and failed to make the kind of change one of their mills needed in order to succeed in the long run.  This company merely tried to do what some of their competition had been trying, and it did not work.  They did, on one hand, make the correct move--they tried to move to a grade based on the material properties of cellulose--a packaging grade.  But that was a timid step that resulted in almost immediate failure.  What they missed was that they should have abandoned the actual paper machine on their site, made the plunge for a compact tissue machine, thereby being able to exploit other assets on site effectively and giving the facility a real future.  Based on their timidity, I expect the site will close within ten years as they fumble along with more incrementalism.  A waste of money, a loss of jobs.

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In other locations, we can see other failures of incrementalism.  Take a company that is not used to making large capital investments.  Finally, they know they have to do something and build up the courage to take the plunge--an investment larger than any they have made in years.  Yet, despite this, they scrimp on pieces of this investment--training, recruitment, spare parts, you name it, because they are just not used to make the raw dollar size expenditures that the large project requires.  They fail to look at these expenditures as a percentage of the project and benchmark them against similar projects.  They just can't get over the size of the raw expenditure.  Such projects are doomed to be less than stellar.

For our quiz this week, we are going to ask if you have seen incrementalism at work in your mill.  You may take the quiz here.

For safety this week, an accident is no time for incrementalism.  It is time to take charge and be bold.

Be safe and we will talk to you next week.

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