Consider this real-life situation. The chief financial officer (CFO) of a major corporation, concerned about an unacceptable balance sheet, issued an edict through the chief operating officer (COO) to reduce all inventories by 7.5 percent. This, he had calculated, would restore the balance sheet to health. Had he understood the integrated nature of the supply chain, he would have predicted the consequences of his edict. Inventory of all types was reduced across the board by 7.5 percent as ordered. Shortly thereafter, customer service declined, as did market share and revenue. At the end of the quarter, the CFO was faced with a balance sheet that now looked even worse! He learned that you can’t steer a business from the balance sheet, as many businesses attempt. The balance sheet simply accumulates the results of hundreds of processes, thousands of decisions and hundreds of thousands of transactions.

In that regard, a business is like a race car. When finely tuned, its engine performs incredibly well. But it doesn’t take much change to reduce its performance. Push it too hard trying to overcome declining performance, and it will explode.

As with the engine, seemingly insignificant changes in one area of a business produce consequences of varying magnitude in almost all other areas. Federal, state and local governments, too, often overlook complex interdependencies and experience serious unintended decision-making consequences. The art of decision-making is to understand and avoid the unintended consequences through fully integrating processes and aligning plans. As Greg was reminded frequently in our story, everything is interdependent. Consider the traditional children’s game of “pick-up sticks.” Every executive team should have this game on its conference room table as a reminder of what happens when it attempts to tweak one part of the business in isolation.

In dysfunctional companies, those considered the better players are the ones who actually cause the most disruption to the supply chain, such as untamed expeditors, salespeople who over-sell, manufacturing people who give unrealistic promises and then force product through the supply chain. With excellent companies, the better players are those who understand the integrated nature of the supply chain, who leverage its capabilities, and who embrace and lead continuous improvement efforts.

Greg was a natural leader who was limited by his lack of understanding of the complex system of people, processes, and tools that surrounded him. But throughout the course of his Class A journey he actively learned and developed the required level of understanding. Greg made the effort required to understand integration and learned from his mistakes—those extremely dysfunctional decisions he made early in the story.

Greg’s success can be repeated by all leaders who follow his path, but less than 1 percent will. Those who don’t, often haven’t developed a customer-centric vision and mission and haven’t demonstrated that they value their people. Interestingly, we often ask the question, “Do you value your employees?” The usual response is “Yes.” We follow with the question, “How would they know that?” Too often, the response is silence.

In this book, we also explain that companies have a debt to all stakeholders, including society in general. Their debt to society begins to accrue when parents bring their children, your future employees, into the world and nurture them; it continues to accrue as a result of the contribution of local child support services including health care organizations and educators from kindergarten through college, and from all the infrastructure and utilities we take for granted. Without this enabling infrastructure, no company could survive. While the objective, and requirement, of all business is to make a profit, that profit cannot be at the expense of the company’s employees, the community, or society in general. If you break this unwritten contract, your debt will be called in soon, and your company will fail.

Sadly, most managers seem to have forgotten that their objective is to make a profit not just today, but also in the future. Too many managers don’t even have an effective mechanism in place for either predicting or managing the future. You observed Greg learning how to do both by implementing Integrated Business Management. From the very beginning, Greg was a champion of the customer; after all, for several years he had been a disgruntled Cosmetics Products customer himself. But Greg had neither the processes nor the profound knowledge required to translate into reality that desire for excellent customer service which was required to produce the profit he needed. Through the processes created under the tutelage of Effective Management, he learned to see his customers and his business in a new light. The adage, “The customer isn’t always right, but is always the customer, and don’t you forget it!” became his mantra.

When you put customers first, you would never put untrained people on production lines, in laboratories, or on customer contact phone lines. The best companies ensure that new people are fully “fit-for-purpose” before being permitted to influence service to customers. Yet many companies are quick to do just that with executives and managers. They believe they can parachute new people into these roles without making them fit-for-purpose. In this story, we included examples of how it should be done at both the operating and management levels. How closely does your company follow these practices?

Of course, there is no Effective Management company or Effective Management Class A Checklist. But there is The Oliver Wight Class A Checklist for Business Excellence and Proven Path that represent a continuously increasing benchmark standard of achievement and a proven methodology for attaining Oliver Wight Class A status. Don’t be discouraged when you read through the Checklist for the first time. It appears daunting and is, unless you approach it as Greg did, following a proven milestone path. Remember, too, that it took Cosmetics Products about eight years to achieve Class A status. For many companies, it will take even longer. The more committed the senior executive and senior management team, the faster will be the progress. Greg was hesitant at first, but his declining business results, his willingness to learn from others, and the strong support from Susan, gave him a foundation for success and the drive to succeed.

Our founder and inspiration was the late Oliver (Ollie) Wight. Ollie recognized the problems faced by manufacturing companies; understood the synergistic power of People, Processes, and Tools; and had a deep commitment to help business leaders “transform the face of industry.” He helped his clients simplify and solve seemingly intractable business issues and achieve results previously thought unachievable. He was often heard to say, “Computers are not the key to success, people are!” This deep-seated belief in people as the only competitive advantage remains a core belief of all Oliver Wight consultants and employees around the globe.

Whatever your industry, we recommend, at the very least, beginning a Business Excellence journey with the Capable Integrated Business Management and Capable Planning and Control Milestones. Completing these first milestones will make a remarkable difference in your organization and your bottom line. Then move ahead with milestones tailored to your most pressing competitive challenges. Almost certainly, when you begin to see the holistic transformation of your company, you’ll continue along the journey to Class A.

To achieve the benefits of Class A, you’ll need active commitment from the very top of the organization, the involvement of nearly everyone in the business, and persistence. Above all, as business leaders, you must lead with a passion for excellence and success. Will you?