Thai Excellence


Thailand is probably not the first place anyone would look for examples of high-powered lean companies from which we can learn – but that may be a big mistake. Thailand has lots of problems – no doubt about that – and far be it from me to give the impression that all Thai companies are any good … but a couple of them certainly are; and one of them is downright over the top.

That over the top company is SCG – a big outfit that is into a lot of things – paper, cement, chemicals. In looking into these guys I found two very powerful lessons we can all learn from.

Over the last twenty some years they have plowed into Quality Circles, TQM, ISO, Six Sigma and lean. While most companies lurch from one to the other – the ‘flavor of the month’ syndrome – these guys were a whole lot smarter. “We did not throw away the old programme but added a new tool, which can brighten our existing system or fill in our gap, with the old one and not to replace it,” said one of their senior managers. In other words, they didn’t see these as either/or propositions, but complementary ones – even synergistic ones. The culture and management processes they drive by are still very much quality centered, but include elements of everything and drive them to be very, very profitable.

Even more powerful is their idea that all of this is driven not by Lean Coordinators or Continuous Improvement Directors, but by Organizational Development. Organizational Development at SCG is not just a training group, as one might normally see at a US company. It does a lot of training, to be sure, but it also leads most of the decision making, controlling all of the meetings to assure they are conducted in the right manner. They drape themselves over everybody (no matter how senior or junior they may be) and everything at a plant or a division, and focus on repetition. Their charge is to be sure people act the right way, think the right way, use the right tools; and to do it over and over and over and over again – until it grabs hold and becomes the culture. Then they are done – and the responsibility for maintaining the culture, continuous improvement and execution by the right methods is the responsibility of operations and business management without the need for Organizational Development folks to look over their shoulders all day.

This is powerful stuff, and a whole lot more effective than having a series of training events, and then a lean coordinator off to the side urging people to use the training and hoping for the best. They don’t measure events, activities and decisions by their financial results – at first – but by the degree to which they were made within the proper cultural context, following the right logic and using the right tools and methods. They are confident that, if these things happen and eventually become routine, the results will follow. So far they have been right.

The SCG story is fairly well known in Thailand and Japan – good news if you read Thai or Japanese – but not so well published in the west. A woman by the name of Natcha Thawesaengskulthai (say that one three times as fast as you can) wrote about them in a PhD thesis a few years back. You can read it here if you want – my advice is to scroll down to page 114 and ignore the rest.

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