Most organizations have discovered that their future success hinges on reinventing themselves as a lowest-cost producer. These organizations must realize though, this transition must be made without compromising quality.
For some this means letting go of old assumptions and taking a different approach to their improvement initiatives in technology, but other behaviors as well. One of the keys is to focus on actions that can impact real costs every day.
The next two columns will briefly discuss tips for organizations and their quality professionals to bring results. These tips are not just for challenging times but would be effective in any environment and circumstance.
1) Focus on end goals. Studies suggest that in as many as 80% of all initiatives, managers focus too much on less important matters than their goals. Organizations need to focus on the issues that will allow the achievement of their primary goals. They need to find ways to deal with all the day-to-day problems without allowing distractions to interfere.
A good methodology that has proven helpful to many organizations is Hoshin planning which was developed in the 1950s by Dr. Yoji Akao. It uses the basics of total quality management and Dr. Walter Shewhart’s Plan-Do-Check-Act (PDCA) improvement concepts. The key objective is to emphasize the creation of the vital few to ensure that all employees comprehend and focus on the most important things.
2) Make crisis an ally. It seems we regularly operate in crisis mode so why not exploit the situation. If not already, craft action plans for specific cost improvements and initiatives. The current climate of economic uncertainty offers an ideal opportunity to drive change.
When organizational resistance is low, the workforce is more willing to change daily work practices. Workers have generally discovered quicker, easier methods to perform assignments. In normal times, they are not typically willing to volunteer these improvements that would translate into changing work standards. However…
When times are less chaotic, it is a great time to “rally the troops” to work toward shared goals of improved quality and reduced cost. Dr. W. Edwards Deming’s Chain Reaction theory was intended to create business stability and growth through improved quality and reduced costs. The key, though, is to involve as much of the workforce as possible. This also will help, as Dr. Deming stressed, to drive out fear among the workforce.
3) Solicit input. It may come as a surprise, but senior-level managers don’t always have the solution to problems. Certainly, management holds the keys to the success engine. The engine, however, is propelled by the energy supplied by the workers. Manufacturers that focus attention and technology at the worker level to improve individual performance will see results. Organizations need to create an environment that will encourage worker empowerment. This will provide the energy for the success engine that will propel the organization ahead.
4) Don’t trust non-statistical metrics. It is not unusual for middle managers to exaggerate, or misrepresent, their efficiency, often by as much as 10-20% per some studies. Metric calculations are often flawed, or too focused on the lower levels rather than on the operational causes of performance waste. Because of “blurred” results, management routinely sets the bar for improvement against incorrect baselines that obscures the potential for true improvements.
5) Focus on vital metrics. Most companies have far too many metrics that confuse their organizations and hinders improvement. With so many metrics a scant few people know what actions really drive the metrics; therefore, people can focus on the wrong things. Too many resources are spent collecting and reporting data that drives no improvement.
In some cases, this leads to something Dr. Deming called "analysis paralysis." Data is often complied at the lower level with a narrow focus. Organizations often fail to provide a framework of meaningful metrics to empower the workforce to properly identify issues and to resolve problems in real time. This tends to stifle some organizations and prohibits real and sustained improvement.
Managers who are routinely disappointed when they aren’t seeing more improvement at the bottom line should only have to look at themselves for many of the reasons. Leaders should recall Commodore Oliver Hazard Perry’s statement during the War of 1812. After the battle of Lake Erie, Perry reportedly said to William Henry Harrison, the future ninth president of the United States, “We have met the enemy and they are ours.”
Next month’s column will address more vital tips for organizations to focus on so you will want to “tune in” for the second part.