Refined Management IV - Turning Small Companies into Strong Ones

Author: Tao Yongjin
Publisher:
Publish Date: 2006-08-01
Features: Renowned economist Wu Jinglian once said after visiting private entrepreneurs in Ningbo, Zhejiang: "Private enterprises should take the path of 'refinement' in their development." Wang Shiqi, chairman of Vanke Group, the leader in China's real estate industry, said: "Vanke will focus on 'refinement' in the next decade." Refinement is not something new. As an effort to pursue excellence, it has been practiced by diligent people since ancient times. However, as a modern management concept, it was first proposed by Japanese companies in the 1950s. In 1950, a Japanese engineer named Taichi Ohno visited the Roger plant of the Detroit Ford Company in the United States for three months. Ohno studied Ford's automotive production and management methods and worked to improve upon them. With a focus on avoiding waste, he sought to eliminate any unnecessary actions, efforts, or materials in the production process, striving to build a company that eliminated all activities that did not bring value to the end user of the product or service. At the same time, he aimed to continuously seek and implement improvement methods. Japanese companies, calling for "lean," made substantial improvements to product quality, driving Japan's economic growth and quickly surpassing Germany to become the world's second-largest economy. This forced American automakers, who had "wheels on the car," to lower their pride and go to Toyota and other Japanese automakers to learn from them. Afterward, lean enterprises and lean production methods spread worldwide along with the rise of the Japanese economy. In China, with the entry into the WTO, Chinese companies were forced to compete on the same stage as multinational giants. Currently, the state of Chinese management academia is as follows: there are many economists but few management scholars; management philosophy is profound, but management practice is shallow (there is a strong atmosphere of management philosophy, but scientific management is hard to implement). Management is both a science and an art; as a science, we draw heavily from the West; as an art, it is often implied rather than explicitly stated. "Enlightenment" is not easily teachable or replicable, and widespread popularization is even more difficult. Total Quality Management (TQM), ISO 9000, Business Process Reengineering, Zero Inventory Management, Boundaryless Management, SCM (Modern Logistics and Supply Chain Management), CRM (Customer Relationship Management), ERP (Enterprise Resource Planning): we have been imitating the popular trends of the time, sometimes completely failing, sometimes learning the surface without grasping the essence, and sometimes grasping the key principles but struggling due to inadequate management foundations. We cannot borrow a single management theory to comprehensively and substantially solve our management problems, nor can we simply copy others to reach the pinnacle of our industry. A rural road can directly jump to a highway, but the stages of management cannot be skipped. We must take steps one by one, and each step can be fast, but the steps cannot be skipped. It is difficult to change people's thinking, but we can use professional training to change their behavior, and through adjusting behavior to gradually adjust thinking. We cannot skip the stage of quantifying all aspects of management comprehensively. Management relies on rules, and rules need to be specific, standardized, and data-driven. Formatted rules can be trained, and training is the only way to improve and perfect management. Refinement management has already been tried by Chinese enterprises. In my previous book, "Details Determine Success," I proposed the concept of valuing details, which was widely welcomed and responded to by society. We are proposing refinement management as a management system, trying to integrate it with some known scientific management theories, striving to counteract our past extensive management, and attempting to provide some basic rules and operational ideas. "Refinement" means removing the rough, continuously refining, and carefully selecting to find the best solution to problems. "Detail" means going into the minutiae, investigating the root causes, and gradually refining to find the inherent connections and laws of things. It can also be said that "detail" is the necessary path to refinement, and "refinement" is the natural result of refinement. In my view, refinement is a hurdle that Chinese enterprises (including public institutions with management attributes and the government) must cross. Regardless of the industry or company, without refinement, it is like climbing a tree to catch fish in the water to stand unshakable in the increasingly fierce international competition. From valuing details to advocating refinement management is a natural result of my commitment to improving Chinese management levels. I regard refinement management as a cause, and I hope to promote the development of refinement management in China through my efforts. Of course, I also hope that many colleagues will join this cause to study, practice, and perfect refinement management until it becomes a habit rather than just a goal mentioned now.