- THE MAGAZINE
Zero RiskThe business style in our manufacturing sector has become universally defensive. Instead of taking risks for potentially extraordinary gains, it seems our industry needs to be absolutely assured of the outcome before investing in new technology. In my previous column on apathy (see CI, September 2001, p. 18), I expressed concern about the level of indifference I saw in the U.S. ceramic industries compared to the rest of the world, based on the comparison between the ceramitec exhibition in Munich—dynamic, exciting and innovative—and the ACerS meeting in Indianapolis—poorly attended, small and generally uninteresting. Wow, what a response I got from that column! I found that technical people in ceramic manufacturing are not apathetic at all; they are only discouraged by the unwillingness of those who control the corporate purse strings to invest in their American operations.
An engineer who wrote to me had this to say:
“As an engineer, I agree with your assessment, but would broaden that to manufacturing or even business in general. My feeling is that in my business and others, folks are focusing on the bottom line, and those folks do not have the education, experience or background to envision some of the great technical things that could be done if someone just spent some money. It becomes a situation-based atmosphere. I attended a show last week, and I will attend one next week, and I see new technologies that could help—but no one wants to spend the resources to explore, unless it's a guaranteed success or an urgent situation. For someone like me, who plans ahead and believes in learning, I find that frustrating.”
While attending an entrepreneurial presentation at his chamber of commerce, this same writer reported that the speaker spoke of risk and reward: “The only way to create new things (products and processes) is by taking risks.” While risk taking is paid lip service by many managers, it is usually accompanied by the dreaded ROI declaration in the funding requests. Unless a high internal rate of return can be guaranteed, risk taking is typically declined by senior management.
Many others commented on the “accountant mentality” that permeates business today. Cutting costs doesn’t create revenue, yet accountants tend to trip over dollars of revenue while they scoop up pennies to be found by reducing head counts, counting paper clips and generally creating a workplace where requesting expenditures for the future is futile.
Conference AttendanceThe connection to poor domestic conference attendance that I complained about in my previous column should be obvious. When we as engineers struggle to obtain funding for highly innovative process equipment because it is too new or creative, we soon get tired of the struggle. Of course, it follows that those American companies that have the potential for producing cutting edge products can’t possibly survive in the no risk tolerance environment. The result is that domestic shows can’t possibly attract innovation, because both the buyers and sellers have such low expectations for attending the meeting and exhibition. It is no wonder that attendance is half of what it used to be.
Boy, something has happened to our business along the way. It used to be that Peter Drucker’s management books were the ones to read. Now the best seller is Who Moved My Cheese, a story about how mice deal with their personal food crises. No wonder things are the way they are!
Let me know what you think. I will get back on the kiln track in my next column, but if there is interest, I will continue the dialogue regarding the state of our business some time in the future.