Powering Performance

Making Decisions That Matter

Posted by MSAE on Nov 1, 2017 10:17:58 AM

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Continuing its 2017 article series on the key concepts from the book SPARK: How to Lead Yourself and Others to Greater Success, Association IMPACT connected with J. Scot Sharland, executive director of the Automotive Industry Action Group, and engaged in a frank discussion about associations that take important actions on behalf of the industries they serve.

Written by entrepreneurs, business consultants, and military veterans Angie Morgan, CourtneyLynch, and Sean Lynch, the book explores how anyone can become an extraordinary leader by embracing certain key behaviors.

AIAG is comprised of a diverse group of stakeholders — including retailers, suppliers, automakers, manufacturers, and service providers — who work collaboratively to streamline industry processes via global standards development and harmonized business practices. Established in 1982, the organization was founded by visionaries from the three largest North American automotive manufacturers — Chrysler, Ford, and General Motors. Today, membership has grown to include Japanese companies such as Toyota, Honda and Nissan, and many of their part suppliers and services providers.

At the heart of AIAG are more than 900 industry volunteers who provide subject matter expertise to AIAG initiatives. Member companies donate the time of volunteers to work at AIAG in a non-competitive, open forum that develops recommendations, guidelines, and best practices for the good of the industry.

As leader of an association known worldwide for its ability to take effective action, Sharland is perfect for this issue’s discussion on making decisions that matter and acting with intent. In 2005, he was selected to lead AIAG’s collaborative industry initiatives as its new executive director. The organization recently celebrated the joining of its 2,100th member company. Here, Sharland reflects on how AIAG identifies which activities and initiatives are right for the membership as well as the role of collaboration and selecting the right partners.

IMPACT: The authors of SPARK write about how the best leaders are “the thinkers and doers who envision what a better future looks like and take actions that lead themselves — and others — toward it.” How often do you go through the exercise of envisioning where the automotive industry needs to be heading?

Sharland: It’s not about waiting for a strategic epiphany…it’s about process.

At AIAG it started with engaging our board to answer three basic questions about the organization:

  1. Who are we?
  2. What do we do?
  3. How do we do it?

Once we defined our strategic true North, we began crafting some KPIs for both the board and the staff to measure the impact or value the organization should contribute to the membership.

IMPACT: How do you determine where the industry is heading, and what actions we should be taking to positively impact that outcome?

Sharland: As is the case with most successful businesses, the answer is simple: Get closer to your customers. Listen carefully to what they have to say, and deliver products and services that make their lives easier.

At AIAG, the identification of emerging industry risks and improvement opportunities are provided by senior leadership from our member companies annually. We have implemented what we refer to as our 3D process. Admittedly, it’s a gratuitous rip-off of the traditional human resource’s 360-degree employee evaluation.

 In each of our key business units — Corporate Responsibility, Quality, and Supply Chain Management — we engage our members’ senior leadership teams and ask them to identify the five or so pain points that keep them up at night. Their inputs are aggregated —without attribution — and then reviewed, force-ranked, and further discussed and verified by the teams.

We repeat this process independently for each of our three key stakeholder groups — automakers, Tier 1 suppliers, and sub-tier suppliers. Once complete, we overlay the force-ranked pain point lists, and where we find alignment with each of the stakeholder groups, we know we have identified a salient industry risk or improvement opportunity that requires action be taken.

IMPACT: How do you involve the staff in this process, and how important is that in your ability to serve the industry?

Sharland: The staff owns the process. It starts with a focused effort to maintain and nurture relationships with key decision makers at increasing levels of responsibility within our member companies. We refer to the practice as strategic verticality. The staff then manages and facilitates the 3D process. Once they extract the aligned industry-wide pain points from the process, they organize a membership call-to-action and recruit volunteers to begin working on the solution.

It’s important to note that if the pain points keep the C-suite leaders up at night, we’re pretty confident that they will be willing to provide the Spark-type leaders — aka subject-matter expert volunteers — to support the development. Lastly, we provide a suite of comprehensive program management tools and resources to effectively manage the development, and then globally socialize and distribute the output to the industry at large.

This ongoing commitment to customer intimacy and forward-focused emphasis on emerging risk is mission critical to AIAG’s ability to take our industry service to the next level, stay relevant to our current members, and attract new members.

IMPACT: How do you make sure that AIAG staff doesn’t fall into “routines” when serving your members and the industry, routines that may slow down your ability to take action?

Sharland: First and foremost, we subscribe to the fewer/better organizational development philosophy. We work very hard to recruit the brightest and the best. We then clearly define the roles and responsibilities of our leadership team and staffers, give them the tools they need to succeed, and try to stay out of their way.

The leadership team has three primary responsibilities:

1)        Set priorities aligned with the KPIs

2)        Allocate resources consistent with those priorities

3)        Challenge the logic

When we successfully hire the brightest and the best, we don’t have to tell them what to do or how to do it. They already know how — that’s why we hired them. 

Our staffers also have three primary responsibilities:

  • Work hard — which means do your best every day, even though we understand that some days are better than others
  • Work together — which means be part of the solution and not the problem
  • Challenge the logic

IMPACT: Challenge the logic shows up on both leaders’ and staffers’ priority lists. Why is that so important?

Sharland: In their 1981 book Critical Path, Buckminster Fuller and Kiyoshu Kuromiya introduced the concept of the Knowledge Doubling Curve. They argued that until 1900, human knowledge doubled approximately every century. By the end of World War II, they claimed that knowledge was doubling every 25 years. It is now widely held that global access and utility of the internet of things will lead to the doubling of knowledge every 12 hours in the not-so distant future. Folks, we’re talking an exponential rate of change in our lives and businesses.

As such, unless you make a relentless, organization-wide commitment to always challenging the logic in all aspects of your current business practice, you can’t possibly make the structural/cultural/strategic changes necessary to sustain any sort of competitive advantage. Challenging the logic is what catalyzes continuous improvement — which is change — and helps guard against complacency and the temptation of simply mailing in our individual and/or collective contributions to the organization.

IMPACT: “Action” is part of your organization’s name — and yet, the industry you serve is large, conservative, and sometimes slow-moving. How does AIAG encourage and support its members to move ahead on key initiatives?

Sharland: Great question — and always a challenge when your output is based on multi-stakeholder consensus and endorsement, and your SME is fueled by industry volunteers where you find yourself fighting for your unfair share of their very precious time and attention.

Given the accelerating rate of new technology deployment, the growing complexity of globalization, and the ferocity of industry competition, most of our members subscribe to the new commercial reality that the fast eat the slow. As such, if we identify the right emerging risks and/or performance improvement opportunities — validated by industry leadership — trust me, all of us at AIAG will be asked, tasked, and expected to have a sense of urgency to make it happen, and fast. I’m pretty sure we coined the phrase “The Fast and the Furious” long before our friends from Hollywood did.

IMPACT: How does AIAG find the courage to act with intention when the path may not be clear, versus charging ahead and hoping things work out?

 Sharland: At AIAG we do three things: First, we work very hard at strategic verticality every day, listening carefully and extracting as much input as possible from our members’ senior leaders who have an eye on their businesses’ horizons. Second, we hire the brightest and the best and trust their judgment. And third, we are not afraid to fail.

IMPACT: What role does collaboration play in your ability to take action for the industry? How do you determine which groups or organizations to collaborate with?

Sharland: There are number of associations you can join to get together with your peers and colleagues and commiserate. For 35 years now, OEMs, suppliers of all sizes, service providers, government, and academia have come together at AIAG to collaborate. Industry-wide collaboration is the very essence of the AIAG experience.

The mission-critical standards, guidelines, best practices, knowledge, and enterprise assessments developed at AIAG — by the industry and for the industry — help our member companies mitigate risk, manage uncertainty, and more effectively transfer institutional knowledge.

As long as partnering with other associations helps get us there faster — and we can collectively add value for our communal memberships — we’re open to working with any group or organization worldwide.

IMPACT: What qualities do you look for in a potential collaborative partner? What are the warning signs that a partner may be less than desirable?

Sharland: AIAG is a NAFTA-centric organization working to support our members’ global supply chain challenges and risk — no small task. As such, our first selection criterion tends to be geographic.

Secondly, we look at the organization’s portfolio of products and services and how they complement or align with ours. Lastly, we look for common members. Warning signs include contracting membership, financial hardship, endemic employee turnover, and poor reviews from our common members.

IMPACT: There is a great deal of propriety knowledge and activity in the auto industry, and yet, AIAG’s ability to act with intent often includes information- and idea-sharing. How do you facilitate the sharing of information among members working on behalf of the industry? What is the association’s role in creating a safe environment for sharing and collaboration?

Sharland: AIAG supports our 2,100-plus members by providing an open, neutral, professional, and legal collaborative infrastructure to support all industry stakeholders’ input and engagement experience. We provide our members and volunteers with meeting facilities and facilitation, program management services, access to e-community and other virtual engagement tools, and expense reimbursement for travel on behalf of the organization and industry. Most importantly, we ensure that while working together at AIAG, all our volunteers are cognizant of our anti-trust guidelines and are dutifully compliant with them.

As for intellectual property, AIAG members either donate their IP for the good and benefit of the entire industry or provide access to their subject-matter experts to provide multi-stakeholder input that is melded into a consensus industry standard, guideline, best practice, and/or allied training or performance assessments. AIAG drafts, edits, copyrights, or trademarks the output on behalf of our membership.

AIAG then works to provide suppliers worldwide with pervasive access and utilization of the content — in language, virtually, or via an authorized network of distributors and training providers.

IMPACT: How do you make sure that any actions taken by AIAG always have a clear intent?

Sharland: We have a very comprehensive business case development process that is reviewed and approved by our volunteer leadership teams and a cross-functional team of AIAG staffers. The industry need, project scope, resources required, vetting and approval requirements, target audiences, languages, project timing, and commercial output/input impact assessments are well documented in advance of any action taken.

IMPACT: AIAG relies heavily on industry volunteers. How do you deal with burnout or potential burnout among people who spend a significant amount of time working on AIAG initiatives?

Sharland: It’s all about family and enjoying what you do and the folks you do it with. We’re a service organization, so it starts with a staff that always has a positive, can-do attitude. We provide a professional work environment, making it easier for our volunteers to engage virtually or in person. Don’t laugh, but the quality of food and refreshments we provide allows us to schedule working lunches more than once. Most importantly, we make sure to provide ongoing recognition of the volunteers’ individual and collective contributions...it helps to keep everyone excited to stay involved.

Additionally, we organize and execute a growing number of appreciation events each year for our volunteers and their families. Ball games, theater outings, concerts, zoo events etc. are hosted on a quarterly basis. On May 5th, we had a great turnout for our 35th Anniversary Party and Cinco de Mayo Casino Night. Ole!

What made the evening truly memorable for all our attendees was our partnership with Kristyn Balog and her team from Camp Quality — Michigan. The event generated sufficient proceeds to send 10 pediatric cancer patients to a week-long camp this summer at no cost to their families.

In short, we genuinely enjoy each other’s company and view ourselves as an extended family with a singularity of purpose — working together to make our companies and industry better — and not just another trade association.

Carla Kalogeridis ([email protected]) is editor of Association IMPACTArticle originally published in the May/June Issue of MSAE IMPACT Magazine. 

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WHAT IS A SPARK?

In their book, SPARK: How to Lead Yourself and Others to Greater Success, authors Angie Morgan, Courtney Lynch, and Sean Lynch describe a Spark as leaders —found at an organizational level — who are the doers, the thinkers, innovators, and key influencers who are catalysts for personal and organizational change. Sparks are not defined by their place on the organizational chart; rather, they are defined by their actions, commitment, and will. When Sparks are ignited, the authors say, their actions directly share the future of an industry.

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