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.
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:
Employee engagement and development
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.”
Since our inception we have stressed the fact that an organization’s leadership must champion a Continuous Improvement (CI) effort if it is to become cultural and if it is to succeed in a sustainable fashion.
Along similar lines, the Enterprise Engagement Alliance has shared data as well as experiences indicating the same holds true for engaging employees and customers; and just like a culture of CI, a culture of engagement generates a measurable return on investment.
“A CEO-led strategic and systematic approach to human capital management can enhance performance and create a better experience for all,” an article on the Enterprise Engagement Media website states.
“Without the leadership of the CEO, it is impossible for an organization to fully engage all its stakeholders in its brand, mission and goals—customers, employees, distribution partners, vendors, communities, shareholders, etc.—or to achieve measurable ROI.”
The Enterprise Engagement Alliance was the first to give a name to this strategic and systematic process to connect and align all stakeholders toward a common brand, mission, values, and goals, naming it “Enterprise Engagement.”
You might call it a “secret weapon” but, to be honest, it is the exact opposite. Because unlike a weapon, it is constructive rather than destructive; the only harm it could do a competitor is to leave them behind.
And it is anything but secret!
In his recent book, WorkInspired, How to Build an Organization Where Everyone Loves to Work, Aron Ain openly shares the pivotal role it has played in Kronos’s amazing growth story.
This “secret weapon” is trust — the soft concept producing results that are hard to beat.
The role that trust plays in an organization’s success has been written about before by keen observers of human and organizational dynamics.
Patrick Lencioni in The Five Disfunctions of a Team identifies the lack of trust among a management team as the root cause of most poor performance.
Stephen M. R. Covey in The Speed of Trust: The One Thing That Changes Everything passionately echoes this view, citing research indicating high-trust organizations out-perform their low-trust competitors by 300%, because a lack of trust increases costs while simultaneously reducing an organization’s speed and agility.
What’s different about Ain, CEO of Kronos, a leading global provider of workforce management cloud solutions, is that he can tell us how trust is working in action today and about the tools and methods in place to support the practice and enhance the effectiveness of trust.
At Kronos, everyone is expected to give trust both within and outside their functional areas and to practice behaviors that earn the trust of their employees, teammates, and managers. According to Ain, the culture of trust contributes to much more than high engagement and retention, as important as those are, but to amazing business results.
And the results Kronos has achieved are great! Revenue has tripled; Kronos has surpassed 35,000 customers worldwide, innovations are rolling out faster than ever, and employee engagement scores are through the roof. Kronos once again occupies the #1 spot in the Boston Globe’s Top Places to Work list in Massachusetts. It received an award from Fortune Magazine for Best Workplace for Millennials – 2018. It is on both Glassdoor’s and Fortune Magazine’s lists of top 100 places to work and has received numerous other awards for workplace engagement.
Based on a recent newsletter by our associate Sheila Julien, our next post will share four specific reasons why “trust” works and why it is essential to creating an agile, highly competitive organization.
The point has been made, in prior posts, that “change” is not always perceived as being good, and instead tends to promote fear, uncertainty, doubt; and even resentment!
Consider that, in organizations of all types people tend to look with skepticism at new policies and procedures, and look with deep concern at new compensation plans or updated benefits programs. Similarly, in their daily quest for new customers, sales people constantly struggle to overcome buyers’ comfort with the status-quo; and people at all levels regularly cringe at the suggestion that there might be a different or better way to do their jobs!
Yet without change comes stagnation… and potentially worse things too. Current-day examples include Polaroid in instant photography, Blockbuster in video, Xerox in copiers, or the Yellow Pages! Each of these household name enterprises experienced significant declines, or worse, as competitors introduced new and better alternatives.
The cassette tape replaced the eight-track, but was then outdone by the compact disc, which was undercut by MP3 players… and the list can go on.
A Selling Mission… If we’re to learn from these examples, then we must accept the fact that change — either in the form of innovation, continuous improvement or both — is a critical component of growth and ongoing success. Without innovation and change we run the risk of losing our competitive position or potential obsolescence.
“Whatever made you successful in the past won’t in the future,” said the late Hewlett Packard CEO Lew Platt.
But if people tend to resist change as previously noted, how might managers or business owners best go about getting the team to accept it — to buy in? How can we help people more readily embrace improvement programs, try new protocols, accept new pricing models or generally believe in the up-side of change?
Simply stated, we must sell it.
Just like the sales and marketing experts who create the “new and improved” ad copy, slogans and selling presentations, we must sell the concept of change to our staff members before trying to present or roll-out new policies, procedures, campaigns, programs or plans.
And just like any sales mission, this will require forethought and planning.
We might start by identifying how the team will benefit from a proposed change. What’s in it for them? What are the consequences of not changing? What will it cost? What opportunities might we lose?
What’s the competition doing?
The next step is to determine how to properly position a proposed change. Since we know there is a tendency toward defensiveness, it’s important to make people understand that they are not the problem. In other words, a change in policy or approach need not mean that the team has been doing things the wrong way. Rather, it means the world is changing and we must change too, lest we fall behind.
Finally, once the presentation is made and the new whatever is launched, there must be follow-up reinforcement and assessment. Has everything worked as we’d hoped? Should we modify the new plan? Are there unforeseen consequences? While we don’t want to send a message indicating we’re not resolved to the new program or approach, it is also a good idea to let everyone know we’re fair and open-minded — that at the end of the day we’re all on the same side.
Change may be unsettling, but without it our futures are at risk; and there are clearly ways to minimize the negative effects. It will require effort, planning and, like any selling mission, persistence, as behaviors and attitudes are not easily influenced.
Margaret Thatcher may have summed it up best when saying, “You may have to fight a battle more than once to win it!”
As you are most likely aware, “utilization” is a measure of the actual number of units produced divided by the number possible when machines and people work at full capacity.
Conventional wisdom says that the best way to maximize profits is to encourage every department within an organization to achieve 100% utilization. Like so much of conventional wisdom, this has a ring of truth to it; and it has the added beauty of simplicity. We can evaluate and reward each department independently of one another, and if everyone is given incentives to get as close as possible to 100% utilization, then the company will surely be maximally profitable.
But this premise will fail us in the real world… a world riddled with variation.
For example, let’s say a company has three operations: • Glass Blowing • Filament Insertion • Cap & Wrap
Utilization of the 3 departments is 50% in Glass Blowing, 100% in Filament Insertion, and 80% in Cap & Wrap. So where do you focus your improvement efforts? The natural conclusion is that you would focus on increasing utilization in Glass Blowing: either by increasing production (which would simply increase the inventory of bulbs waiting for insertion) or by decreasing capacity.
But if you look at the throughput of the process as a whole, you see that Filament Insertion is the bottleneck. At 100% utilization, they are unable to produce enough to keep the next operation, Cap & Wrap, fully utilized. Furthermore, Glass Blowing, despite the lousy utilization numbers, is already piling up inventories of bulbs waiting for filaments. The utilization numbers suggest that Filament Insertion is the last area needing improvement, but to improve the process flow, it must be the first area to improve.
If the world were perfectly predictable, we could reduce the capacity in Glass Blowing and Cap & Wrap to exactly match Filament Insertion to achieve 100% utilization. But if we did so in ‘Murphy’s world,’ any variation in glass blowing production — such as machine downtime, absenteeism, yield deterioration, material availability or quality issues — will not only impact Glass Blowing utilization numbers, but the bottleneck — Filament Insertion —will also be idle! Production opportunity lost at the bottleneck is lost forever. Instead of trying to optimize individual operations, identify the bottleneck and make sure there is enough capacity in the feeder operations to ensure that any disruptions do not impact the utilization of the bottleneck capacity. Instead of aiming to maximize utilization at each operation, as conventional wisdom would have us do, we must find and eliminate waste at the ‘bottleneck’ or ‘rate-limiting’ step in order to increase profitability.
The path leading to a culture of engagement is linked with productivity, performance and job satisfaction. It follows a clear objective of engaging people around the one thing they all have in common—and the one thing that can bring about increased profitability and a sustainable competitive edge—the work.
As we all know, traditional employee engagement efforts have primarily failed to yield tangible results. They have also failed the sustainability test. As is the case with any improvement or change initiative, an ad-hoc approach involving little or no planning or structure, and lacking defined, measurable objectives, is prone to failure. This approach might be called “engagement for engagement’s sake.”
In contrast, a more focused approach of improving both the work and the workplace in a measurable way can result in high-levels of productivity, profitability and engagement!
As explained by Robin Gee, Coca-Cola’s Director of Employee Engagement, “We engage employees in aggressive efforts to eliminate waste and reinvest those savings in ways that are visible and meaningful to the employees.”
This perspective differs from traditional attempts at employee engagement in two critically-important ways:
A strong focus on productivity and continuous improvement as catalysts to engagement
A strong focus on measurement and return on investment
Of course this perspective is not necessarily new. For example, in 2012 ISO 10018 was introduced, which provides guidance on engaging people in an organization’s quality management system, and on enhancing their involvement and competence within it. The standard is applicable to any organization, regardless of size, type, or activity.
You might also note that ISO 10018 standards provide considerable leeway on how an organization specifically goes about its attainment. The emphasis placed on each requirement depends on an organization’s specific brand, culture, people, situation and goals. If you’d like to determine how close your organization is to achieving ISO 10018 certification, Engagement Strategies Media has created a chart that outlines the pathway. You can access the chart here.
During one of our Partners In Improvement forums it was noted that in approximately 80% of the cases organizations embark on a path of Continuous Improvement, they abandon the effort prematurely.
The reason? No results.
The Partners went on to the discuss “why” so many CI efforts fail to succeed, and agreed that the following three causes are among the most common:
Lack of buy-in from both managers and participants derails many improvement efforts. Management support is required to free up the resources to work on improvement, without which meetings tend to get pushed out and progress slows. The slower the effort moves, the more likely it becomes that priorities will change, or new opportunities or problems arise that decrease available resources further. When projects fail to produce good results, buy-in deteriorates rapidly. Unless serious intervention counters this adverse reinforcing loop, subsequent efforts become less and less likely to succeed.
Lack of data when defining a project is another common reason for failure. Without data the waste is not adequately quantified, thus increasing the likelihood of working on the wrong things and the likelihood that priorities will shift before the project is complete — leading to no results and subsequent lack of buy-in.
Along similar lines, poor decisions about scope can cause stalls and frustration during implementation and can ultimately result in failure to achieve goals. If the project tackles too much at once, progress will be slow; and if the team substitutes opinions for facts/data about the problem and possible solutions in an effort to accelerate pace, they are likely to make a number of wrong turns — once again slowing progress and bringing the effort to an unsuccessful conclusion.
Fortunately there are some straightforward ways to avoid these three common pitfalls, which we will summarize in our next post.
Run Charts are simple line graphs of data plotted over time. They are used to better-understand the performance of a process, as they help people distinguish between random variation and special causes, or to track information and predict trends or patterns.
A run chart can also reveal whether a process is stable by looking for a consistent central tendency, variation and randomness of pattern.
One of the most common CI tools, a run chart is easy to interpret and does not require tedious calculations or special software to produce.
How to create a run chart:
Identify the question that the run chart will answer and obtain data that will answer the question over a specified period of time. For example, if you were looking at how long it takes to complete a task, you will make note of the time taken (in minutes) to complete it over a specified period of time.
Gather data, generally collect at least 10 data points to detect meaningful patterns.
Create a graph with vertical line (y axis) and a horizontal line (x axis).
On the vertical line (y axis), draw the scale related to the variable you are measuring. In our example, this would include the complete range of observations measuring time-to-completion
On the horizontal line (x axis), draw the time or sequence scale.
Plot the data, calculate the median and include into the graph.
Interpret the chart. Four simple rules can be used to distinguish between random and non-random variations:
Shift – 6 consecutive points above or below the median
Trend – 5+ consecutive points going up or down
Too many/too few runs – too few or too many crossings of the median line
Astronomical data point – a data point that is clearly different from all others (often a judgement call)
A simple yet extremely useful improvement tool, a flowchart is a type of diagram that represents a workflow or process. As a graphic depiction or visual map, a flowchart can represent a process with greater clarity than text descriptions alone, thus enabling people to more easily view and follow the “steps.” Consequently, they are very useful when communicating with users or managers about policies, rules, and unnecessary, duplicitous or cumbersome steps within a work process, and help to quickly highlight problems or opportunities for improvement.
When creating a flowchart, process steps are shown as shapes of various kinds, and their order by connecting the shapes with arrows or lines. Different shapes are used to indicate actions, decision points, recycle loops, work and wait times.
Among the most commonly-used shapes are the following:
Originally, flowcharts were created by hand using pencil and paper. Before the advent of the personal computer, drawing templates made of plastic flowchart shape outlines helped flowchart makers work more quickly and gave their diagrams a more consistent look. Today’s flowcharts are typically created using software.
Challenges and best practices associated with continuous improvement