Million Dollar Consultant® Hall of Fame Award

I'm proud to announce that yesterday, I was inducted into the Million Dollar Consultant® Hall of Fame, the only product development or lean consultant honored to date.

Here is my citation:

Katherine Radeka: An outstanding professional in lean management and business processes, who has created significant intellectual property and become the “go to person” in her field through her highly effective promotion of her value in her marketplace.

The Million Dollar Consultant® Hall of Fame is bestowed by Alan Weiss, the original Million Dollar Consultant® with over thirty years of experience working with top companies such as Merck, GE and Mercedes Benz, and author of more books on the consulting profession than any other person. The New York Post calls him "one of the most highly regarded independent consultants in America."

Alan says, "These consultants are regarded by peers as being among the world leaders in consulting, as evidenced by empirical accomplishments in client results, professional contributions, and intellectual property."

When Alan's webmaster adds the 2009 inductees to the online roster, I will join professionals like Ed Poll, the person who knows more about running law practices than anyone in the country, Alan Fortier, a strategic planning consultant to the Fortune 50 for over twenty years, and Libby Wagner, whose Influencing Options® is one of the most practical and effective leadership workshop experiences around.

On a personal level, Alan is my mentor in this profession and a trusted friend. My clients and I have benefited from his wisdom in more ways than I can count, and I am deeply honored by this recognition.

Do Labor Laws Foster or Inhibit Innovation?

The latest MIT Sloan Management Review reports on a new study that surprised me.

Researchers Viral Acharya, Ramin Baghai-Wadji, and Krishnamurthy V. Subramanian correlated labor laws with patent and economic data to show that labor policies that make it harder to let people go seem to correlate with more innovation and greater economic growth:

Why would laws that make it more complicated for employers to let workers go have a positive effect on innovation? One reason, the authors suggest, is that such laws may make employees more willing to take the greater risks associated with attempting innovation.

I have to admit that I'm skeptical about the authors' reasoning. For one thing, the quantity of patents is not a good measure for innovation or risk-taking, although I see it used frequently. Perhaps the engineers are producing a lot of "incremental improvement" patents because they have to keep themselves busy during slow times.

You also have to look at the economic utilization of the patented ideas, and how many of the patents represented true breakthroughs vs. incremental improvements.

Personally, I'll take flexibility any day.

To Thrive, Invest More Now - Not Less

In today's workshop, the topic of the recession came up, and I learned about a research project that demonstrated that companies that advertise more heavily in a recession come out ahead afterwords - sometimes dramatically so.

McGraw-Hill Research did the study about the 1981-82 recession - the most severe we had had after the Great Depression. This study is widely available online - I chose this quote from a commentary in Arkansas Business because the author nicely summarized the findings:

McGraw-Hill Research studied the marketing spending of 600 U.S. companies during 1980-85. After the 1987 numbers were available, McGraw-Hill concluded that the companies that maintained or increased their advertising during the 1981-82 recession showed an average sales gain of 275 percent during the subsequent five-year period. Those companies that cut advertising during 1981-82 grew sales by an average of only 19 percent during the same period.

This study only looked at advertising dollars - the most short-term component of marketing. But it makes sense that if this is true for advertising, it would be true in spades for long term investments in marketing and product development.

As far as I know, no one's researched the impact of R & D investment, but I"m going to do some poking around to see if I can find one.

"Let's Choose To Be Among The Winners"

Adam Zak over at Lean Connections has a wonderful post talking about the links between lean thinking and opportunity thinking. Here's a choice snippet:

“A recession creates winners and losers just like a boom,” observed Mauro F. Guillen, a professor of international management at the University of Pennsylvania’s Wharton School in BusinessWeek. Let’s choose to be among the winners.

We get enough people thinking like this and we could all emerge from this recession much stronger than before!!

Follow Me on Twitter for New Developments at Whittier Consulting Group

I joined Twitter a couple of weeks ago, at the urging of some coaching clients, who use Twitter themselves. It helps us stay better connected.

You can follow me here: @kradeka

I go to some interesting places in the next six months: three countries, over two dozen states, six conferences and more airport club lounges than I'll care to admit (thank you, Priority Pass.) In general, I update only once or twice a day.

This week, I have some major announcements coming up about new products and services to help your company benefit from my experience and expertise to improve product development performance.

Some of these offerings will have limited capacity, and my Twitter friends will be the first to know.

Jim Womack: Lean's Origins in an Economic Crisis

From Jim Womack of the Lean Enterprise Institute in his latest email letter about lean's roots in the Japanese financial crisis of 1950:

A few [Toyota] line managers had some very simple ideas and an extreme sense of urgency: Minimize lead time from order to delivery (to free up scarce cash.) Remove waste from every step in every process (to reduce costs and enhance quality.) Take action now (because there wasn’t much time.) But what they also had – and this was critical – was a tight scientific discipline. While they did act quickly, they also took the necessary time to document the current state, to state their hypothesis very clearly, to conduct a rigorous experiment, to measure the results, and to reflect on what they had actually achieved, sharing their findings widely....Toyota's remarkable act of creation – based on a scientific process of systematic discovery – was conducted by line managers as the most important part of their daily work. And – here’s the really inspiring part – they did most of their research in midst of a fierce battle for survival.

President Obama's Chief of Staff, Rahm Emanuel, recently said, "A crisis should never go to waste."

What he meant - and what Toyota learned - is that crises have the potential to drive momentum for change. It's easy to stay with the status quo when business is booming. It's admittedly easier to freeze expenses, cut budgets and lay off staff when profit margins erode than it is to develop innovative ways to preserve and even grow the firm's human capital and stay true to the rigors of the scientific method.

Yet Toyota's example shows that is the path to sustainable competitive advantage and even greatness.