Chief executives are often frustrated by their organization's enthusiastic endorsement of improvement iniatives turning into half-hearted disinterest when reality sets in: the need for hard work, continued commitment, and unwavering focus despite the inevitable early set backs. Part of the problem can be that life, the day-to-day business, gets in the way as priorities pile up and compete for limited time and effort. The work force will often keep doing something the way they always have just because they know how to pace themselves, rather than because of a genuine belief that it is a better way. The reasoning being, I guess, that when you're up to your you-know-what in alligators, it doesn't matter which one you go after first. It is not unusual to find people in an organization with differing ideas about what is important when dealing with day-to-day issues.

To be fair, most management teams know better. What they don't know is how to help everyone be willing to handle the pressure of day-to-day issues and consciously work to make things better at the same time. So they turn to something laid out and straightforward to guide them such as Lean and/or Six Sigma programs. These programs help create a systematic and effective approach to incremental improvements that warm the hearts of training managers, black belts, and work teams galore. Everyone feels better, that is, except the CFO and ultimately, the stockholder. Why? Because these programs don't always produce measurable, bottom-line results nor do they protect the organization from the ravages of the tectonic shifts caused by really big changes in market focus.

A case in point is the impact Wal-Mart is having on domestic manufacturing. CNBC recently had a two-hour documentary that provided a reasonably even-handed look at Wal-Mart. It gave plenty of time to those who blame Wal-Mart for destroying small town businesses, changing the face of Middle America, and forcing American jobs overseas. PBS followed with a more critical "Frontline" program asking the question: Is Wal-Mart good for America? Those interviewed ranged from small town mayors and displaced machine operators to economists who, as one would expect, seemed evenly divided between those answering "yes" and those answering "no".

One of the arguments is that Wal-Mart uses many suppliers in places like China (who, it is claimed, are subsidized by the government or pay low wages, and thereby have an advantage over more costly domestic manufacturers) so that Wal-Mart can make greater profits.

Both documentaries provided a clear view of Wal-Mart's mantra, "The Customer is # 1", and demonstrated, perhaps unwittingly, who is to blame: Wal-Mart's satisfied customers. Satisfied customers have built Wal-Mart into the largest retailer in the world. Wal-Mart isn't the tectonic shift upsetting these folks; it's customers of Wal-Mart.

The customer has become increasingly vocal in their expectations and Wal-Mart, perhaps better than anyone else, listens. Their response is to give them what they ask for: good value at low prices. Wal-Mart carries that message to every supplier it has. When a supplier doesn't listen, Wal-Mart willing to go somewhere else, including China, to ensure their customers get what they want.

It is too easy for politicians and unprepared manufacturers to blame Wal-Mart instead of recognizing there has been a fundamental change in the way American manufacturers have to operate in order to thrive in the twenty-first century. Giving the customer what they want, when they want it, and at a price they are willing to pay has gotten tougher in the last five years and, I predict, will get even tougher in the next five. It won't be because of Wal-Mart and low cost Chinese labor as much as it will customers expecting even better products at better prices faster than ever.

For American manufacturers to be competitive they must (not should, must) leverage their one remaining differentiator: proximity to market. An example can be found in the domestic furniture industry where manufacturers are competing with low cost furniture from China by offering custom made furniture in two weeks or less. An article in the Nov. 18, 2004 issue of The Wall Street Journal highlighted several domestic manufacturers including Century, Berkline, Rowe, and Bassett who are dramatically lowering their speed-to-market times in an effort to successfully compete with Chinese competitors.

It is possible to give the customer what they want, at a price that reflects the value the customer places on it, faster than a competitor twelve thousand miles away. However, for many of you, it will require a fundamental change in how you build and distribute product. The most viable way is through a business model based on rapid, low cost build-to-order. Are you listening to your customers? Wal-Mart does and is very profitable as a result. Some in the furniture business are too. So can you.