Fine-tuned management IV: Turning small companies into strong ones

Author: Tao Yongjin
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Publishing Date: Not available
Features: Well-known economist Wu Jinglian once said after observing private entrepreneurs in Ningbo, Zhejiang: Private enterprises should take the path of "refinement." 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, those who have always been serious about their work have been doing it since ancient times. However, as a management concept in the modern industrial era, 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 and studied it for three months. Ohno learned 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 eliminates all activities that do not bring value to the final 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 and drove Japan's economic growth, quickly surpassing Germany to become the world's second-largest economy. This forced American automakers, who had been "rolling on wheels," 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 global multinational corporations. Currently, the state of Chinese management academia is as follows: There are many economists, but few management scholars; there is a strong philosophy of management, but management as a science is shallow (the atmosphere of management at the philosophical level is strong, while management at the scientific level is difficult to put into practice). 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 its widespread adoption is even more challenging. 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 with inadequate management foundations. We cannot borrow a single management theory to comprehensively and substantially solve our management problems, nor can we simply copycat to reach the pinnacle of the industry. A rural path can directly jump to a highway, but the stages of management cannot be skipped. We must take it step by step, each step can be faster, 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 behavioral adjustment to gradually adjust their 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 to improve quality is the only way to improve and perfect management. Chinese businesses have already been trying to implement refined management. In my previous book, "The Details Determine Success," I proposed the concept of valuing details, which was widely welcomed and responded to by society. We have proposed refined management as a management system, trying to make it compatible with some known scientific management theories, working to counteract our past extensive management, and attempting to provide some basic rules and operational approaches. "Refinement" means removing the rough, continuously refining, and carefully selecting to find the best solution to problems; "Detail" means delving into the details, starting from the broad to the specific, 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 and governments with management attributes) must cross. Whether in any industry or any company (perhaps with the exception of highly monopolized industries and companies protected by government), without refinement, it is like climbing a tree to catch fish in the water to stand unshakable in the increasingly fierce international competition. Moving from valuing details to advocating refined management is a natural result of my commitment to improving Chinese management standards. I consider refined management to be a cause, and I hope to promote the development of refined management in China through my efforts. Of course, I also hope that many colleagues will participate in this cause, to study refined management, practice refined management, and perfect refined management, until refined management becomes a habit rather than just a goal mentioned now.