All posts by pdonehue

Manage the “Whirlwind” with Accountability

The Key to Execution

In past posts we’ve noted that many organizations develop improvement strategies but fail to execute and sustain those strategies. While there can be a number of reasons for this, the most common is that the “whirlwind of running day-to-day business” takes over… in other words, we ignore what might be “important” at the expense of what’s “urgent.”

In order to achieve maximum results from improvement efforts, people must implement and sustain a plan. Even when people excel at identifying major opportunities for improvement, if they don’t execute, they don’t make gains. In our work with hundreds of organizations, we have observed that the most successful are outstanding at execution.

In several past posts we have referenced the 4 Disciplines of Execution, a book written by Sean Covey, Chris McChesney, and Jim Huling, as an effective guide to execution.

The disciplines, as defined by the authors, are:

  1. Identify and focus on a Wildly Important Goal (a WIG)
  2. Monitor and act on LEAD measures
  3. Keep a compelling SCOREBOARD updated by the people doing the work
  4. Develop a rhythm of ACCOUNTABILITY

While each of the ‘disciplines’ is obviously important, we have found that it’s the fourth one ― accountability ― that ultimately enables success. Without a cadence of accountability, the team will have a much more difficult time. By ‘cadence’ the authors mean an inviolable regular schedule, commitments, and expectations. The commitments can be modest, such as ‘what is the one thing I can do by next week to move forward,’ but they must be met. The threat, of course, is the whirlwind of running the day-to-day business that will consume all the available time.

If you’d like to improve your organization’s ability to hold all stakeholders accountable for implementing strategic plans, here are five key areas of focus that can help:

  • Get senior leaders to become actively involved
  • Identify clear project plans for delivering results, including measures and milestones
  • Engage team members and stakeholders
  • Set expectations and consequences — both positive and negative
  • Develop an organized structure and activity / accomplishment reporting / recognition plans – communication matters!

Another Pitfall Akin to Confirmation Bias

Thinking outside-of-the box?

Our previous post shared some thoughts on the pitfall of “confirmation bias,” which is the tendency to pursue and embrace information that matches our existing beliefs.

A somewhat related concept that can, surprisingly, be equally as dangerous is “conventional wisdom,” which has been defined as “the body of ideas or explanations generally accepted as true by the public or by experts in a field.” It is frequently referenced as “inside-the-box” thinking, as opposed to taking an approach that challenges convention (i.e., “outside-the-box” thinking).

But contrary to popular belief (or, to ‘conventional wisdom’ – ha ha!), this seemingly safe practice can be both an asset and a liability!

On the plus-side, conventional wisdom speeds up consensus and increases our confidence in our decision making, leaving us to focus our attention on challenges for which there is no conventional wisdom to guide us. And conventional wisdom has much truth within it — having been developed over decades of observations.

For example, conventional wisdom holds that specialization is good. A person can get very fast and reliable doing the same thing the same way again and again, a-la Henry Ford’s production line.

However, while specialization can increase both efficiency and quality when demand is consistent at optimum levels, it can quickly become counterproductive, costly, and even wasteful if the demand for work is uncertain.

For example, a commercial bakery could purchase one large capacity mixer that could produce 100,000 loaves for far less cost per loaf than two smaller mixers. The large mixer produces large batch sizes; that’s how it gets its great efficiencies. But if the market is looking for variety, none of which is ordered in bulk, the large mixer results in the worst of both worlds: you either produce large batch sizes and have a lot of scrap if the demand does not materialize in time, or you waste the purchased capacity by preparing batch sizes more closely tied to current demand for the product variety. Either way, you can never really produce enough variety for the market, because the equipment produces only one variety at a time.

So like many things in life, when we find ourselves needing to research the marketplace, assess root causes, or study work processes, we must beware of both confirmation bias and its kin conventional wisdom, lest we make sub-optimum (or worse!) choices that feel good at the start but come back to bite us in the end.

Researching with Happy Ears

Confirmation Bias

It has often been said that people tend to “hear what they want to hear.”

In other words, it can be a little bit too easy to accept information or research that we already believe, and to filter-out information or research that we don’t already believe.

This tendency can also increase over time, as with experience comes wisdom… and confirmation bias, which is the tendency to pursue and embrace information that matches our existing beliefs. A simple pre-existing opinion can easily distort the way our minds absorb confirming and contradictory information.

We are making this point today as a follow-up to our previous post, which focused on devoting more resources to value-added work. Four suggestions were made:

  1. Work On Bottlenecks
  2. Increase Understanding of And Alignment With What Customers Truly Value
  3. Get At The Root Causes
  4. Eliminate The Non Value Adding Administrative Work

You might consider that each of these four approaches will require us to conduct research and to compile facts and data. However, each also involves studying areas of our organization with which we are already familiar. Thus the likelihood of “confirmation bias” creeping into our research is high.

So, as the saying goes, forewarned is forearmed! Beware of “happy ears.”

How to Devote More Resources to Value-Added Work

Our previous post defined the concept of “value-added work” as being work our customers would be willing to pay for if they knew what we were doing. That post also noted it is common for 50% – 80% of all work within an organization to be “non” value-added!

Here are four ways to devote more resources to increasing the amount of work that is value-added within an organization:

1 — Work On The Bottlenecks
When we work on many things that have a small effect, we will have a small impact. The way to increase value most substantially is to work on the bottleneck, or constraint. All improvement effort that is off the critical path will have a lower impact on increasing the value add. If the bottleneck can be widened even just a little, it provides a pure increase in value.

2 — Increase Understanding of And Alignment With What Customers Truly Value
One of the biggest wastes is when the products or services we offer do not align perfectly with the customers’ needs and values. Errors are possible in two directions:

  • Bundling a feature into the product or service that the customers do not really need or want
  • Overlooking ways we could leverage our capabilities to solve a problem that the customers may not even have articulated to themselves

3 — Get At The Root Causes
Replace the constant working on problems and symptoms with lasting solutions by drilling down to root causes. For example, the sales force of one company needed to better understand the value of additional services they could provide to customers. Rather than addressing the issue / opportunity in each proposal, they developed a calculator to make it quick and easy to help the customers (and themselves!) see the value provided by the additional services.

Another example is data accuracy issues in software that helps a company develop routes for drivers. Any error in the data input will create errors in the routes — inefficient or even impossible routes. The underlying cause is errors in the data input, but the root cause is somewhere in the process through which the correct data should be identified and entered. Studying the input process to identify where and how errors are made will help lead to and address the root causes and greatly reduce the amount of resources NOT creating value for the customers.

4 — Eliminate The Non Value Adding Administrative Work
A great deal of time in most organizations is spent on emails, meetings, and reports that do not produce additional value for the customers or the organization. Finding ways to reduce email clutter, improve meeting management, and streamline reports are just a few examples of how this non-value-added work can be reduced or eliminated.

Is Your Work Value-Added?

One of Bill Conway’s favorite sayings has always been, “The most important business decision people make every day, is deciding what to work on.”

It’s important for us all to continually self-evaluate in this area. What should we work on? What value will it add for our customers?

Once people know what to work on, they can then determine which tools and methods to use – i.e., How should we go about it? But deciding “what” to work on and “why” must be the first considerations.

Most of us would likely agree that we want our workforce to spend most if not all of their time on “value-added” work, which is often defined as the work our external customer would be willing to pay for, if they knew what we were doing.

Sometimes this is a product, sometimes a service, and sometimes a combination of product and value-adding service. For example, a value-adding distributor delivers the product to a work-site but can also prepare or pre-stage the material, so it is ready to be put into use, saving the construction company time and money. The value goes beyond the product they sell to the service of presenting it in the form that is ready for use.

Common Categories of Work

People are often surprised at the amount of “non-value-added” work that is part of the day-to-day reality in most organizations. Even in the best performing organizations, it is well under 50% of the work being done. In many organizations, over 80% of time and resources are not adding value.

Consider these common examples of non-value-added work:

  • Inspections to find errors
  • Rework to fix errors
  • Errors or defects that are never found and make their way into defective final product
  • Work that sits waiting in front of a bottleneck, or resources that are idled behind a bottleneck
  • Unnecessary work
  • Necessary work such as filling-out expense reports
  • Excess inventory
  • Work product that does not match customer needs or customer needs that go unmet because they have not been surfaced

So, the question is, what can, or should, we do to increase the amount of value-added work within our organization? Our next post will focus on some answers…

Improve Sales By Focusing On the Customer/Supplier Relationship

Satisfied and delighted customers are the lifeblood of any organization. Our professional lives are more rewarding when customers love what we do or provide for them.

Providing customers with the highest quality products and services at the best possible price starts with clearly understanding the customers’ needs and requirements and then designing and implementing processes that consistently deliver value. But there are two types of customers:
• external customers
• internal customers

It’s important to recognize that both types of customers are important and have needs that must be met. External customers are the people who pay for our products and services. As Dr. Deming said: “No customers, no orders, no jobs!”

Paying attention to the external customers’ requirements is essential and helps us keep the entire organization focused on doing value added work (i.e., “work the external customer would pay for if they know what we were doing”).

However, to effectively meet the external customers’ needs, we must also work with our internal customers. Understanding and meeting our internal customers’ needs and requirements helps the process of producing our product or service to flow smoothly, be problem-free and deliver the highest quality at the lowest total cost. When we work with our internal customers we are, in fact, “internal suppliers.”

Of course, this customer-supplier relationship extends to our external suppliers as well. From our external customer’s point of view, we are responsible for what they buy from us; and our suppliers are part of the system.

It is increasingly important to build strong customer/supplier partnerships that ensure that we get exactly what we need, in the right quantity, at the right price to be able to meet our external customers’ needs.

Studying Our Work to Improve…
If we’d like to increase sales by improving our “sales” process, we should begin by studying our work. As a first step, identify our top customers’ 3-5 “must-have” requirements. As requirements are identified, it helps to understand their relative importance. What requirements does the customer consider “musts” versus “wants?” The chart below might help with the analysis of identifying measures we must track to determine how well we are meeting customer requirements.

Studying Our Work

Keep in mind that customer requirements are constantly changing as well, and yesterday’s “wants” may become tomorrow’s “musts.” So, we must continually analyze (and improve!) our work – paying attention to both “internal” and “external” customers, as indicated by the “Deming Cycle.”

Why Systematic Performance Management?

In a previous post it was noted that a well-defined performance management process is a pre-requisite to achieving a high-performing culture.

But what does it take to develop and maintain such a process? As it turns out, it may take more than many of us would like to think.

“Performance management systems, which typically include performance appraisal and employee development, are the Achilles’ heel of human resources management,” said Elaine Pulakos, Executive Vice President and Director of the Washington, D.C. office of Personnel Decisions Research Institute (PDRI) in a Society of Human Resource Management (SHRM) white paper.

Pulakos went on to cite a survey by Watson Wyatt, which showed that only 30% of workers agree that their company’s performance management system helps improve performance, and less than 40 percent of employees said their systems established clear performance goals, generated honest feedback or used technology to streamline the process.

So, how might we ensure that our approach will not succumb to these pitfalls?

There are many different approaches and ways to answer this question, but today we will focus on only one: systematize it.

Among the failures observed in the above-referenced survey and others like it, there is a common thread that can quickly bring-about the demise of a performance management effort, which is taking an ad-hoc approach. Instead, the first step is to create and document a process, which might include the following basic components as outlined in the SHRM white paper:

Performance Management – a Never-Ending Process

We’ll take a closer look at the advantages of this systematic approach in our next post.

Culture & Performance Management

Our previous post focused on building a high performing culture, and it noted that doing so is nearly impossible without significant contributions of time and energy from senior leaders. It was noted that a well-defined performance management process is a pre-requisite as well.

Performance Management is all about how leaders orient their organizations around working on the right things in the right way.

When we asked our Partners In Improvement to define Performance Management and to discuss how it impacts an organization’s culture, we heard a range of perspectives. Generally, everyone agreed that performance management a key driver of organizational culture because a well-defined and executed performance management process promotes effective prioritization, accountability, and engagement. However, definitions were more varied, and included:

  • the strategic orientation of the organization
  • process performance management
  • setting of goals and objectives
  • individual performance appraisals
  • daily direction and feedback to reinforce desired behaviors
  • providing tools and coaching to help people be successful
  • rewards and recognition

From the strategic perspective, performance management begins with the identification of what’s vital to the organization, the Partners said. If these priorities are not clear and it is not clear what role everyone plays in the priorities, the rest is unlikely to mean much.

Several of the Partners pointed out that performance management refers to both process management as well as people management. While there are clearly a wide range of views about how to manage the performance of both people and processes, several excellent best practices were generated during our discussions:

For example, everyone agreed that frequent observation and feedback is more helpful to people than formal annual reviews. Frequent communication about what an organization needs and wants greatly increases the odds that the organization will get what they need and want.

In addition, most reported that group rewards encourage teamwork, while individual rewards encourage an individual to optimize his or her own goals even if it may sub-optimize the organization as a whole.

Everyone agreed that tying money directly to performance appraisals can be a two-edged sword – raising stress and reducing the intrinsic rewards and personal satisfaction from doing a good job for the team.

Everyone also agreed it was important to avoid what was described as “managing through rear view mirror.” In other words, avoid “Monday morning quarterbacking.” Instead, leaders should be involved in a systematic performance management process that is ongoing and timely so that outcomes can be influenced rather than discussed after-the-fact.

Here is a simple infographic that depicts one approach:

Building a High-Performance Culture

Building a High Performance Culture

Continuing with our culture-related theme, we’ve found that the highest achieving organizations are those that have successfully planned and developed high performance cultures.

When helping clients build such cultures, our approach begins by identifying the underlying assumptions, beliefs and values that cause people to behave the way they do (the practices).

Key steps in developing a high performing/high achieving culture include:

  • Identifying a clear link between individual/team/department performance and organizational goals.
  • Helping people develop a clear sense of purpose.
  • Management devotes the necessary time and attention to a proactive and consistent performance management regimen.
  • A work environment that supports high quality and productivity.
  • People at all levels understand the core values and beliefs which drive behavior.
  • Leaders promote practices that are in sync with organizational values and beliefs.
  • Roles, responsibilities, and accountabilities are clearly defined.
  • Managers are skilled to coach for improved performance.

While these steps might appear simple, they are not easy to implement; and nearly impossible to achieve without significant contributions of time and energy from senior leaders. A well-defined performance management process is also a pre-requisite, which will be the subject of our next post.

The Best-Run U.S. Companies

A key focus of Conway Management‘s Continuous Improvement (CI) work has always been to help clients improve the way their businesses run; and, as noted in numerous posts, senior level management must provide support, exemplify desired behaviors and proactively lead the way in order to achieve a culture of CI.

Conversations about this reality often lead to questions about what constitutes a well-run company. While there are different ways to evaluate an organization, last year we shared a post about the Drucker Institute’s definition and listing of the “Most Well-Managed Companies” in the United States.

A most interesting aspect of this list was the holistic approach taken to rate the contenders. Data came from numerous sources, including employee ratings on Glassdoor to five-year shareholder returns and trademark filings, and the five criteria for placement were:

  • Customer satisfaction
  • Employee engagement and development
  • Innovation
  • Social responsibility
  • Financial strength

According to articles in the Wall Street Journal, these benchmarks represent Drucker’s core, as has always believed companies should exist for purposes beyond profits, stressing that they should care for workers and benefit society.

These factors are well-aligned with our way of thinking, as a clear vision to external customers along with innovation, workforce engagement and workforce development have always been components of our programming.

It is, therefore, reassuring to see these items on a list such as Druckers’.

If you’re curious, below are the “top 10” finishers on this year’s list which, incidentally, includes all of last year’s “top 5.”

  1. Apple Inc.
  2. Amazon.com Inc.
  3. Microsoft Corp.
  4. Nvidia Corp.
  5. Intel Corp.
  6. Alphabet Inc.
  7. Accenture PLC
  8. Johnson & Johnson
  9. Procter & Gamble
  10. International Business Machines Co.