Today’s WSJ article doesn’t focus on the Dell layoffs (although it does mention them, as did the Evolving Excellence blog post on the layoffs), but rather the competitive dynamics between Dell and HP.
First, on Kevin’s post — as I’ve stated here before, “Dell is not TPS.” I would agree with the comments on Kevin’s blog that Dell’s layoffs aren’t “because of Lean” because Dell doesn’t really subscribe to the TPS approach. Dell’s layoffs are typical business moves to “increase profits” (something maybe only Wall St. is impressed with). As John Hunter recently put it, layoffs are a sign of management failure, and I think that would apply here. Dell grew the number of employees much faster than revenue in the past few years (sounds like throwing people at problems).
Back to the WSJ article… it focuses on the head of the HP PC unit, Todd Bradley (which plays into the “hero myth” of executive leadership) and their efforts competing against Dell. HP realized that they couldn’t “out-Dell Dell” and focused on their strengths in the retail channels (smart move).
The article also illustrates the cycle of layoffs that plagues the industry:
On Thursday, Dell announced its first layoffs since 2001 in its effort to increase profits.
For years, H-P tried to copy Dell’s approach. Under former CEO Carly Fiorina, H-P slashed its PC prices, but that landed it with deep losses. Then it hacked at its own costs by laying off thousands of workers in order to compete with Dell’s low-cost structure.
What a nasty cycle to be in, each company chasing each other’s layoffs in an attempt to become “low cost.”
Here’s another example of non-TPS thinking:
At H-P, as at palmOne, Mr. Bradley instituted weekly progress reports to track operations and find fixes. For instance, he demanded weekly rundowns of notebook-computer deliveries to U.S. stores down to the hour they arrived. The reports allowed Mr. Bradley to see where bottlenecks were — and whom to blame.
If you’re looking for “whom to blame,” instead of thinking about the process, how the process broke down, and how that problem could be prevented, you’re not a TPS leader or a “Lean company.”
Compare the HP approach to a quote I love from Toyota’s Gary Convis:
“You respect people,” he said. “You listen to them, you work together. You don’t blame them. Maybe the process was not set up well, so it was easy to make a mistake.”
So, before you go anointing Dell or HP as “lean,” look beyond the numbers (such as low inventory for Dell) and look at how the company manages and leads its people.
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