Here is an interesting story I want to share. Back in my past as CEO of an injector manufacturing plant there was a phenomenon for several weeks. Every Friday at 3:00 pm we were in crisis mode. At that time, we were working seven days, three shifts and at 3:00 pm on Friday, the assembly manager indicated that we need to shut down the assembly line on the weekend due to inadequate parts supply. The logistics manager struggled to get the parts from the fabrication department or outside suppliers, which had to produce the parts by working overtime and expedited shipping cost.
Shutting down the assembly line would have had a dramatic impact on the supply to our customer as we were one of their just-in-time suppliers. We would have shut down their production line with a huge financial penalty. We were in crisis mode every Friday for a couple of months.
Finally, I called all managers involved in the supply and production process into a meeting to discuss the constant crisis mode on Fridays. After lengthy discussions and analyzing the root cause of the shortages, we agreed to meeting on Thursday mornings, everyone providing information about demand and supplies for the weekend production. We were now able to prioritize and adjust production where needed. Within two weeks there was no crisis meeting on Fridays any more. Problem solved. We were able to reliably provide the necessary quantity to the customer.
Conclusion: Unless you find the root cause of the problem using six sigma methodology and eliminate the issues in the process, you will not see improvements in your processes and production output.
We all know the phrase: “You learn from your mistakes” or “Learning by Doing”. Most of the time mistakes happen as a deviation from an established or defined process for several reasons.
- Person did not know there was a defined process
- This action or reaction was not covered in the process
- The person forgot this step in the process
- The person used a short cut and ignored the process
- Distraction from outside created an oversight of a process step
This is just a small example why mistakes occur, and the correction depends on the type of mistake that happened.
- Mistakes that can have life threatening impact on the person or other employees e.g. not following a “lock out” procedure doing maintenance work on a machine, oil spills that can create a hazardous environment like slipping, etc. need to follow immediately a corrective action procedure like the 8-D process, a method for root cause analysis to prevent any future mistakes
- Mistakes that impact the quality of a product or service should follow the same procedure as described in 1.
- Mistakes that are not life threatening or a major quality issue and are more of a procedural issue.
There are two important follow up questions:
- Why did it happen (8-D Analysis)?
- What is the corrective action, so it cannot happen again in the future.
- What did we/you learn from this mistake
In a learning organization you need to
- Create an environment of trust, so people are not afraid to admit to a mistake and come forward immediately when they recognize the mistake
- Reduce the fear of being punished if they voluntarily admitted the mistake as soon as they became aware of it.
- Allow them to become part of the solution, if they are willing to share their experience with others, learn from the mistakes and prevent future mistakes.
Just food for thoughts and open for your comments and experience.
As I have led or been involved with dozens of business changes, I get asked often, “What makes you so successful?” I might offer up a different perspective, “What can stop a business transformation in its tracks?” In my experience it boils down to four things:
- Spotting the Need to Change
There’s an old line, “Watch out for the truck…behind the bus.” If we’re looking the wrong way, it’s easy to miss the change bearing down on us from a trigger event somewhere else.
Most of us in most of our firms are experts in our small little space in the universe, and we focus all of our energies on understanding and mastering the rules of the game in that space. Those fancy terms, dominant logic and market myopia are our real adversaries here.
They blind us to the truck behind the bus.
They keep us from seeing the impending systemic disruption. And our own biases and experiences keep us falsely optimistic in the face of big changes in our arena.
- Extreme Organizational Pride
Marshall Goldsmith famously suggested in business, “What brought you here won’t take you there.” Proverbs more famously suggested, “Pride goeth before destruction and a haughty spirit before a fall.”
Sometimes, culture is the problem. There’s truth but not a foregone conclusion that culture eats strategy for lunch. (I push back in my article, Sometimes Strategy Must Eat Culture.)
In my travels, I’ve encountered more than a few organizations and the people in them predictably and proudly holding on to a past that was indeed glorious but is no longer relevant.
My friend mentioned above suggests this is the natural sequence of events for all businesses and those that have outlived their utility must pass.
Good, maybe great for awhile, and then as conditions change, gone. C’est la vie.
Alternatively, sometimes culture can be disrupted as well. (More in the next post in this series on knocking down the obstacles.)
Know that the passion and emotion surrounding resistance to radical change in your organization may very well be the last thrashing of a dying business.
- Incorrect or Incomplete Diagnosis
We all understand the importance of an accurate diagnosis for our health maladies. The same goes for business. Much like the organizational culture change issue described above, human biases, emotions, experiences deadly sins and failings all get in the way of cultivating and agreeing on the answer to the question, “What the hell is really going on here?”
Fail to answer that question properly, and the succeeding events move organizations down the path to decay and demise.
- Lack of Leadership Courage
Transformation requires asymmetrical bets on new strategies, markets, technologies, and investments. Our management systems are set up to optimize in the short-term, and throwing sand in the gears of the management system requires leadership courage that many lack. (Young child to Mom, “Mommy, what are gears?”)
We might understand what we should do, but putting oneself on the line for a hard change and an asymmetrical bet is a commitment many will not make, and a risk most won’t take.
Why I Don’t Blame the Management System?
I debated throwing the present management system in as the fifth big obstacle to organizational change. Indeed, it is a factor. Nonetheless, I believe it is leadership’s responsibility to drive the changes needed in a system leading the firm down to the path of destruction. A management system is a tool of leadership, and as a tool, it can be changed or adapted to fit the situation. The fact that we often fail to adapt our management systems is a failure of leadership.
The Bottom-Line for Now:
Walt Kelly, the illustrator of the famous and long retired comic strip, Pogo, once suggested (drawing upon a quote from the War of 1812), “We have met the enemy, and he is us.”
It’s always true. What’s not guaranteed is your organization’s failure in the face of existential threats. In my next post, we blow up these big obstacles. And remember, all it takes is courage.
Did you know?
- Approximately 50% of businesses fail within five years
- Over 70% of businesses are owned by Baby Boomers who are nearing retirement and most will never find a buyer
- Over 80% of these Baby Boomer Businesses are not “transaction ready”.
- Only 4-5% of businesses listed are actually sold in any one quarter (BizBuySell.com).
- Over 70% of businesses sold fail to meet the expectations of the buyer.