Category Archives: Culture

Communication & CI Part 2: Hidden Costs?

As noted in our previous post, communication is an important, yet often over-looked tool for bringing about a culture of continuous improvement and engagement within a workforce.

But the effect of communication depends on its quality, and poor communication can be costly.   Even worse, these costs frequently go unnoticed!

For example, as reported in a recent Society for Human Resource Management (SHRM) article, a survey of 400 companies with 100,000 employees each cited an average loss per company of $62.4 million per year because of inadequate communication to and between employees. The article also referenced another study showing that miscommunication in smaller companies of 100 employees cost an average of $420,000 per year.

To determine or impact the quality of internal business communication, it is important to recognize that some communication forums are better than others.

For example, many organizations use suggestion boxes as forums. But the results are often disappointing. While a suggestion box requires little time or effort to initiate, its success relies on the ideas being completely and clearly expressed in writing.  Unfortunately, many people with good ideas simply cannot express them well.

Furthermore, if a suggestion requires more  explanation  or  development before it can be turned into a really great idea, the suggestion box does not offer an opportunity for clarification, debate, or refinement. Even worse, when the initial ideas are not fully formed or expressed, and management doesn’t have an opportunity for clarification, the ideas are harder to act upon, and often management loses interest.  When people notice nothing comes of the suggestion box, they stop offering ideas.

Here are some additional examples of costly miscommunication in business environments identified by Helen Wilkie, a consultant and author specializing in profitable, applied communication:

  • Long, boring, poorly-planned unproductive meetings that reach no conclusion and serve no purpose
  • Sales presentations that show no concern for, or understanding of, the client’s needs
  • Wasted time due to miscommunication about time or scheduling
  • Badly written e-mail messages that cause misunderstandings, ill will and wasted time
  • Employee alienation caused by managers who don’t listen
  • Lack of understanding between people of different age groups
  • Lack of understanding between male and female employees

Ultimately, the best forums are regularly-scheduled gatherings in which people can surface and discuss problems, waste, and opportunities for improvement.

When well-crafted, these forums allow for discussion to make sure each idea or observation is fully understood; any problems with an idea should be raised freely and discussed with the goal of improving the idea. In the end, the most effective improvements and innovations are often quite different from both the initial ideas and even the counter proposals. They emerge from listening to and incorporating different perspectives about barriers and unintended consequences to raise concepts to new levels.

5 Steps for Developing a Creative Culture of Continuous Improvement

In a previous post we shared some thoughts on how creativity can be a desirable trait of a good CI Leader, and how it can also be a tool for helping people to accept and adapt to change.

Although not often associated with a leadership goal, establishing a creative culture of continuous improvement can help managers at all levels to achieve higher-levels of performance.

Here are 5 specific steps managers can take to develop and sustain a creative culture, based on findings published by New Horizons Learning Centers:

    1. Encourage new ideas. Management must make it clear that they will embrace new ways of doing things. Managers whose default is to turn against new ideas will quickly stop creative ideas. This simple habit alone is a critical first step toward developing a culture of creativity and change.
    2. Allow more interaction. A creative climate thrives when team members are allowed to interact with their own team mates as well as team members from other departments. Useful information is exchanged, new ideas flow both ways and new views on old challenges are heard for the first time.
    3. Tolerate failure. We have often noted that a culture of CI is one in which people must be given amnesty… a culture in which people are not afraid to fail. This holds true in a culture of creativity as well. While new ideas can sometimes prove too costly or might simply turn out to not be feasible, management needs to accept that time and resources will be provided knowing that the idea(s) might or might not come to fruition.
    4. Provide clear objectives and freedom to achieve them. People or teams who are provided with clear goals will be motivated to meet them. The goals provide a purpose for their creativity. Set guidelines with minimal constraints gives managers a degree of control with regards to the cost and time invested the creative behavior.
    5. Offer recognition. Create individuals prefer to work on tasks that actual motivate them. This also means they, like all other staff, like to be rewarded for a task well done. Management must offer tangible rewards that send a clear message that creative behavior is encouraged, supported and recognized in their organisation.

 

The Most Effectively Managed U.S. Companies

On Wednesday December 6, 2017, the Wall Street Journal published an article about the country’s most effectively-managed companies as ranked by the Drucker Institute.

Interestingly, the selections were based on a “holistic approach, examining how well a business does in five areas that reflect Mr. Drucker’s core principles.” These areas are:

  1. Customer satisfaction
  2. Employee engagement and development
  3. Innovation
  4. Social responsibility
  5. Financial strength

In case you’re curious, the top 5 on Drucker’s “250 most effectively-managed” list are:

  1. Amazon.com Inc.
  2. Apple Inc.
  3. Alphabet Inc.
  4. Johnson & Johnson
  5. I.B.M. Corp.

It’s encouraging to see customer satisfaction and employee engagement/development atop the criteria list, as these emerging measures have proved to be common threads among the most successful organizations we’ve encountered — these organizations tend to enjoy a safer, more productive workplace, with low team turnover, high safety ratings, and high customer retention rates; they operate with a culture of continuous improvement, and they are consistently able to achieve goals through people in a measurable way.

Motivating for Performance

Our previous post referenced how high-achieving organizations are able to develop and sustain high performance cultures in which team members are engaged and highly-motivated.

During a recent discussion with Continuous Improvement leaders, various approaches to the motivational component of performance management were shared. Some organizations focused on the individual quantitative measurements to motivate individuals and to encourage them to achieve important goals. For example, tying individual goals to the organization’s KPIs was cited as an effective way to align behaviors with goals and make sure everyone knows exactly what they are expected to do.

However, others said that group rewards and recognition were more effective than individual metrics. For example, one participant described how teamwork deteriorated to the detriment of the organization as a whole after his organization switched to individual metrics and rewards instead of rewarding everyone based on achievement of the company’s key strategic metrics.

We also discussed experience with financial rewards as opposed to intrinsic rewards, such as recognition. Financial rewards did not necessarily produce the best results.

One participant explicitly pays people for participating on improvement teams in some of their plants, while one of their Midwestern plants is prohibited from paying for participation. The Midwestern plant relies on intangible rewards such as recognition and “thank yous.” Surprising to many, the Midwestern plant had a much higher rate of participation than the others, seeming to demonstrate that intangible or ‘intrinsic’ rewards can be more effective than monetary rewards.

Another organization found recognition, sometimes coupled with small gift cards, was an effective method for their organization.

Generally, it was agreed that the keys to effective use of recognition as a motivational method are timeliness and making the recognition public.

One successful example involved a peer-recognition program, in which people were empowered to recognize one another by giving-out stars for helping an internal or external customer. When someone receives a certain number of stars, they get a gift card and the ‘star of the month’ gets a party, recognition, and a preferred parking space. It was noted that guidelines for the awarding of stars were set in advance.

Another perspective relative to timeliness involved making motivational and performance management activities an “everyday job,” and basing strategies on more than just past data.

Over-reliance on past data when crafting improvement or motivational plans was referenced as working through the “rear-view-mirror.” A better approach not only enables managers to identify opportunities for team improvement based on analyzing past activities and results, but to also identify preemptive action steps and strategies that can impact outcomes and future results.

Conclusions

  • Performance Management and motivation must be about much more than individual performance measurement. As Deming said, over 90% of problems are caused by the system not the person. To manage performance, we must manage the system by which people, plant, process interact to produce results.
  • Frequent observation and feedback is more helpful to people than more formal annual reviews. Motivation and engagement levels were consistently rated as “much higher” when team members received frequent, consistent feedback on their work, and also when they felt they had input to improvement plans.
  • Frequent communication about what an organization needs and wants greatly increases the odds that the organization will get what they need and want.
  • 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.
  • Tying money directly to performance appraisal can be a two-edged sword – raising stress and reducing the intrinsic rewards and personal satisfaction from doing a good job for the team.
  • Intrinsic rewards tend to increase motivation over time as opposed to financial rewards. Recognition is among the most effective. The keys to effective use of recognition as a motivational method are timeliness and making the recognition public.
  • Avoid performance management in the “rear-view mirror.”

Leading a Culture of Innovation & Continuous Improvement

Tying recent posts together, and spring-boarding off a good comment shared about “the biggest waste lying in the ranks of poor leadership,” this post focuses on the critically-important role leadership plays in developing and sustaining a culture of innovation and continuous improvement.

Simply stated, given the challenges of creating a consistently effective innovative organization, nothing is more important
than leadership.

It requires powerful leadership skills to empower and unleash an organization’s creative talents and energy. In an organization without strong leadership, inspiring and empowering people to contribute their ideas innovations will be scarce. An innovative culture is not the default position — it must be carefully created.

But empowerment, important as that is, is nowhere near enough.

Leadership must also create a challenging vision around which to rally the organization’s creative energies. This vision must be grounded in a deep understanding of the market and of the daily struggles of the people who make up that market.

Understanding the market is much easier for a small company where everyone deals with real customer needs every day. But as organizations grow, they expand like a balloon — more mass and less surface area. The surface area has the chance to get close to the external customer’s needs.

So, as a company grows, leadership must maintain or create a mechanism that will ensure that an  understanding of the customer’s needs can penetrate beyond the surface area into the heart of the organization. The same is true of internal functions that work together like a chain of customers. As organizations grow, departments grow and they too develop ‘more mass and less surface area’ — creating the familiar silo phenomenon.

In addition, leadership of innovative organizations must, without stifling creativity, challenge the organization’s efforts with the necessary, market-driven constraints. Without the right constraints,
empowerment cannot succeed. It is too easy to become satisfied with a creative idea before it has been developed into something really workable. An organization that tries to empower innovation without creating the right market-driven constraints, can easily suffocate in an avalanche of incomplete or impractical ideas.
Because they are not fully developed to address the real, but perhaps unspecified, constraints, the ideas cannot be implemented and quite soon people cease to feel empowered.

This is a tall order, and it becomes easy to see why innovation isn’t easier to come by despite all the human talent and energy brought to bear. But creating an innovative culture is, in itself, a creative challenge. By increasing our understanding of the challenges and constraints, we increase our ability to focus our own leadership talents on the right things to make it happen.

Work Matters Day-to-Day

Continuing with the theme of why “work matters,” the goal is to implement improvement initiatives in work at all levels every day.

Continuous Improvement in daily work helps organizations make improvement a way of life — a workplace culture rather than just a program or one-time event.

A few additional considerations for achieving this mind-set include:

  • Clear accountability for each person in each department or group
  • There must be agreed upon ways to measure performance
  • There must be consequences (good and bad) to reinforce accountability
  • Established and understood performance measures and targets
  • Confirm the purpose of each person’ work and each department’s work. As noted in our previous post, people perform best and maintain higher-levels of engagement when they know that their work matters. It is important that everyone understands the purpose
  • There must be clear priorities and goals, which creates alignment
  • People must be trained so that they have the skills to analyze and improve the work; leaders should be involved in these educational programs — in both a participatory and supportive role

Fear of Failure?

Waste within an organization often hides, and people are frequently surprised when the realize how much of it actually exists. The waste falls into four categories: time, capital, material, and lost opportunities.

During recent discussions with our Partners in Improvement, it was unanimously agreed that, in order to develop a culture of Continuous Improvement, people throughout an organization must feel free to try new things, challenge current methods, and express new ideas without fear.  Otherwise, the organization will likely miss out on many opportunities for improvement or growth, thus increasing what is typically the biggest form of waste — lost opportunities.

In order to develop and sustain a culture of Continuous Improvement, leaders must drive-out fear so that the people closest to the work will approach their jobs with the above-mentioned curiosity… with a mindset of continuously finding new ways to improve, and with a mindset that it’s okay to challenge the status-quo and to make mistakes.

In a recent article,  Career Coach Jan Johnston Osburn outlined several indicators that an organization is being ruled by fear and, consequently, missing out on opportunities. This list included:

  1. New ideas don’t pop-up very often
  2. The office is silent when the boss is around
  3. Meetings take place before the “real meetings” so people can make sure they don’t say the wrong things in front of the boss
  4. Too much consensus
  5. People hide mistakes and play the “blame game”

The article goes on to suggest that fear within an organization  slows down progress, causes hesitation, reduces productivity, and leads to stress.

“Fear-trodden employees hold your business back,” Johnson Osburn says. “If you have any fear in your organization, employee potential is drastically reduced.”

To further support this perspective, a quote from Thomas J. Watson of I.B.M. fame: “If you want to increase your success rate, double your failure rate.”

 

Improvement is Everyone’s Responsibility in a High-Performance Culture

In our previous post we referenced the cultural change that takes place within highly-successful organizations, so that continuous improvement becomes the new way of working rather than “just a program.”

Not surprisingly, some of the highest achieving organizations with which we’ve worked are those that have successfully planned and developed high performance cultures.

Within this type of culture, people at all levels are encouraged to continually look for better ways of doing their jobs.  They are continually educated about, and coached to use, the tools of improvement; and to understand the link between individual or team performance and organizational goals.

Leaders within such a culture make available the necessary resources for helping people at all levels to understand the core competencies, values and beliefs which drive the culture.  These leaders also devote the necessary time and attention toward encouraging an environment that supports high quality and productivity, and toward effective performance management.

This perspective was nicely summarized in a recent article in which Tony Burns, author and CEO, noted his concerns about an organization in which only designated “experts” took on the responsibility for making improvements.

Burns wrote, “Dr Deming recognized this problem when he advocated breaking down the barriers. We need to get all employees working together on quality, rather than building divisiveness. Quality is everyone’s responsibility, not just a few… Everyone should be trained in quality.”

6 Reasons Why Improvement Efforts Fail to be Continuous

As noted in our previous post, the biggest challenge to continuous improvement is not making the improvements, but rather making the effort continuous.

For an organization to go through a cultural change so that continuous improvement becomes the new way of working (not “just a program”), we need to pay close attention to the soft part of the improvement model.

This will enable us to smooth the path, remove the obstacles, and continue to lead, communicate, and motivate both emotionally and intellectually.

Following are six common causes of discontinuous improvement:

  1. Neglecting aligning individual or team goals with those of the organization
  2. Insufficient communication between management, the workforce, teams and CI leaders
  3. Delegating leadership, which is a responsibility that should stay with senior management
  4. Manager’s or Sponsor’s failure to remove obstacles
  5. Lack of quick success
  6. Letting-up on the “gas” when initial results are made

Read the full article…

Leadership, Engagement & Continuous Improvement

Leadership is getting people to want to do what needs to be done, and it provides the energy for change as well as the commitment to sustain it.

This aspect of leadership is critically-important if an organization hopes build and sustain culture of continuous improvement in which employees are truly engaged, and in which measurable improvement goals are achieved through people.

In a recent article published by Engagement Strategies Media, the connection between leadership and engagement was discussed.

“They’re connected because we can’t create the levels of engagement we would want and get all of the benefits we know can come from that without people leading…. we have to have someone leading us in the direction of this desirable goal of higher levels of engagement. They’re completely one hundred percent connected.”

The article goes on to explain that improving engagement scores requires intentional effort, and “most leaders, most organizations, aren’t placing a high enough priority on it to make that intentional.”

Thus a formalized, goal-oriented plan is a must… a concept that is presented in our “Engagement Around the Work” white paper.

Consider that people are much more likely to become engaged when they feel productive… when they feel like they are achieving success and that they are an important part of the organization’s success; when they feel that they have a voice in creating a better, more productive workplace.

By following proven Continuous Improvement methodology leaders and people at all levels can achieve measurable goals and higher levels of productivity; and this productivity leads to engagement.

Once leaders recognize that productivity leads to engagement, not the other way around, it becomes easier to allocate the necessary resources to sustain the Continuous Improvement effort. This means we must create a culture that is based on improving all that we do and which enables and empowers every employee at every level to make improvements through involvement and commitment — through being engaged!