THERE is little question that Australian businesses are operating in uncertain times. Indeed particularly in the manufacturing, industrial, construction and industrial services sectors, businesses can speak of continuing soft performance and sector weakness.
High interest rates, escalating oil and petrol prices, as well as reduced access to capital as a result of the credit crunch have all led to a reduction in business and consumer confidence.
What the softening of the economy means for businesses generally, but particularly for companies operating in manufacturing and related sectors, is that they are having to look at innovative ways to grow revenues, protect margins, reduce costs, improve productivity and expand into new markets.
To do this effectively, many companies in these sectors are beginning to employ performance improvement methodologies and principles which have been successful in the industrial and manufacturing sector abroad.
As a result we are now seeing an increased demand in Australia for senior level executives with functional specialisation and experience in ‘lean manufacturing’ principles, including Six Sigma, TQM, 5S, Kaizen, Kanban, and Quality Circles.
Interestingly though, this increasing demand for senior-level executives with ‘lean’ functional specialisation is coming not only from companies within the industrial and manufacturing sector but more broadly from across the business spectrum.
Companies in general are increasingly realising the value of ‘lean’ process management principles and how they can provide efficiencies and improve profitability.
The challenge right now for companies looking to source ‘lean’ executive talent is the rarity of that talent. Until recently, many boards of Australian companies have failed to embrace ‘lean’ principles in comparison to overseas markets, in particular the US and UK markets.
The search for ‘lean’ executive talent is further exacerbated by the current shortage of executive talent generally in Australia.
However, CEOs and company boards from across business are so keen to recruit senior-level executives with ‘lean’ specialisation to their organisations, that they are looking outside their sectors and internationally to source this talent.
While companies in the US and Europe have embraced ‘lean’ principles far more readily than their Australian counterparts, the current economic downturn, which is in full force in those parts of the world, provides an ideal opportunity for Australian organisations hungry for talent to attract senior executives with those skills from those markets to Australia.
Australian expats living in those countries with functional specialisation in ‘lean’ principles might well be especially viable candidates.
Notwithstanding the potential for sourcing this talent from overseas, Australian companies should also place more emphasis on developing their existing executives in ‘lean’ skills so that Australian companies are less vulnerable to shortages in such specialisation in future.
However, an emphasis on developing these skills is not just about training and development but about embracing a completely different business philosophy.
This is essentially what happened when Six Sigma moved from being an operational or transactional based process improvement initiative at Motorola in the 1980s to become a group-wide transformational process improvement tool made famous by the likes of GE, Caterpillar and Bombardier.
In fact, in the third year of Six Sigma implementation, GE estimated its savings to be $750 million across all divisions. A huge contributing factor was the company’s leadership and top-down approach to its implementation.
While these are uncertain times for all, those organisations who move quickly to implement full operational excellence programs with board level and senior management buy-in could go some way to insulating themselves from further turbulence and will undoubtedly position themselves favourably when market conditions improve. The key of course is having the right talent to make it happen.
* Stuart Chandler specialises in executive search in the industrial and consumer sectors. He is a partner of independent Australian executive search firm, Johnson Executive Search.