It takes leadership to manage your biggest costs.
Love him or hate him, Ronald Reagan was a manager with vision. Even if you didn’t share his political vision, I think we could all agree on his depiction of Washington, D.C.: “An island surrounded on all sides by reality.”
Just as Reagan must have felt marooned on that island when he was president, all business managers are prone to self-imposed exile when life’s day-to-day realities surround them. But if you stay planted in your plant, you’ll deprive yourself of ideas that can help you chart a course for survival in the real world. The best way to do that is through regular participation in meetings of your industry’s trade associations.
As editor of this magazine, I attend several of these a year, across many industries. I always come back with fresh insights that any manager would find useful. That’s my reality check, and I’d like to share with you a reality surrounding managers in all industries: health care costs.
That was a hot topic at the spring meeting of the Conveyor Equipment Manufacturers Association (CEMA). I’m invited to CEMA’s fall and spring meetings to give its member manufacturers MHM’s assessment of their industry’s economic future.
After sharing some stats with them, these manufacturers shared some stats of their own with me. About half of them are at full employment now and many of them are facing dramatic increases in the cost of covering their employees’ healthcare. Some will pay as much as 25 percent more this year. In fact it’s their number-three line item expense, right behind labor and material.
These manufacturers discussed several strategies to combat inevitable cost increases:
• Motivate employees to be active health care consumers;
• Establish medical savings accounts;
• Shift cost and responsibility to the employee;
• Offer employees free programs promoting diet and exercise;
• Join healthcare coalitions for leverage with insurance providers.
Chances are, your company’s in the same boat as these suppliers at CEMA when it comes to cost management. It’s also a fair assumption that your company is still sitting on the money it was planning to spend on material handling systems from these suppliers. Part 3 in our Automation series (page 21) will give you some project management pointers to help you make the case for the release of those funds. After all, material handling productivity improvement might help offset those non-productive healthcare costs. Wait. Do you have the political savvy to make this argument?
Let me take you back to the CEMA conference to give you a little more inspiration. Fred Barnes, executive editor of The Weekly Standard and co-host of “The Beltway Boys” on Fox News Channel, was CEMA’s guest speaker. In fact it was from him that I got that pithy Reagan quote about “Washington Island.” During his talk on the current geopolitical situation, he presented six guidelines by which to judge presidents. If they apply to presidents, why not material handling managers? See how many of these qualities apply to you:
• Organizational ability;
• Effective communicator;
• Political skill (yes, you need that too);
• Cognitive style (how you gather/use information);
• Emotional intelligence.
Barnes graded President Bush on these parameters. Results: A, B, B-, B, C, and A. How do you rate? Could you be our next president? Don’t get cocky! Put your own little island of reality in order first. You may want to start with the “vision thing.” Get involved in your industry’s association meetings. They can be a great problem resolution resource — like MHM! Tom Andel, chief editor firstname.lastname@example.org