Is Your Company Showing the Symptoms?
Last month, I introduced the concept of the Performance Gap—the difference between what a sign company is capable of achieving and what it consistently delivers. I argued that many problems we often attribute to factors like personnel, scheduling, capacity, communication, or even our ERP systems may actually be symptoms of a deeper issue.
This raises an important question: How can you determine if your company has a significant Performance Gap?
You probably won’t find this gap clearly labeled on your financial statements. It may not manifest as a single catastrophic failure, and there likely won’t be a warning sign indicating that your operational systems are struggling to keep pace with the complexity of your business.
Instead, the Performance Gap typically reveals itself through everyday frustrations such as late jobs, missing information, material shortages, shifting priorities, excessive work-in-process, overtime, rework, and managers who never seem to have enough time.
While each of these issues can be individually explained, when they occur collectively and repeatedly, they might signal something significant.
Therefore, this month, rather than discussing the theory behind the Performance Gap, let’s explore your company and look for supporting evidence.
Start with the Flow of Work
Some of the easiest symptoms to recognize are related to how work moves—or fails to move—through the company.
- Changing Priorities: Priorities seem to change throughout the day. The production schedule might state one thing in the morning and something completely different by the afternoon. A customer calls, sales requests a rush order, a project manager escalates an issue, or someone discovers that a scheduled job isn’t actually ready. While occasional changes are inevitable, constant reprioritization isn’t responsiveness; it’s instability.
- Projects Enter Production Prematurely: Projects begin production before they are fully ready. This might include incomplete drawings, missing approvals, unconfirmed materials, or unresolved technical questions. We often convince ourselves that we are saving time by starting early, but in reality, we are simply shifting unresolved problems downstream.
- Engineering as the Bottleneck: Engineering is frequently where bottlenecks occur. Drawings may be late, revisions can pile up, and production often waits for answers. Before concluding that you need additional designers or engineers, examine the upstream factors. Engineering might be processing issues caused by incomplete sales information, unclear project scopes, changing customer requirements, poor surveys, or inadequate project preparation.
- Purchasing Functions as an Expediting Department: Purchasing staff often spend more time tracking late orders and sourcing emergency materials than planning for future requirements. While some expediting is to be expected, when it becomes someone’s primary role, it indicates that something else in the system is likely not functioning properly.
- Production Waiting for Information: Production frequently waits for necessary information. Employees are available, and equipment is ready, but information is missing. For example, a dimension may be absent, a color has not been approved, or clarification on a drawing is needed. As a result, employees may start other tasks, leading to multiple partially completed projects and an increase in work-in-progress (WIP). This isn’t necessarily a labor issue; it’s an information-flow problem.
- Material Shortages Discovered Post-Start: One of the most frustrating situations is halting a major project due to missing a relatively inexpensive component. While the shortage may be blamed on purchasing, the actual cause could stem from issues in estimating, engineering, inventory accuracy, project management, or supplier performance.
Together, these six symptoms raise one fundamental question: How much work are we releasing before it is truly ready to flow?
Busy Can Hide Poor Performance
Several symptoms become apparent when work reaches the shop floor:
- Growing Work-in-Process (WIP): The shop appears busy, with jobs scattered everywhere, employees moving around, and equipment running. However, the crucial question is: how much work is actually being completed? Excessive WIP leads to congestion, obscures priorities, increases lead times, and makes scheduling unpredictable. Remember, throughput is achieved by finishing work, not just starting more of it.
- Lack of Trust in the Schedule: There is an official schedule in place, but it is often accompanied by the supervisor’s notes, the project manager’s spreadsheet, the salesperson’s urgent task list, and whatever was discussed in the morning meeting. When the schedule lacks credibility, employees tend to create their own versions, resulting in multiple conflicting narratives within the company.
- Normalizing Overtime: Overtime can be effective for temporarily managing spikes in demand. However, when every week requires overtime just to keep up, it’s essential to question the underlying causes. Is it due to poor planning, rework, excessive WIP, interruptions, or unrealistic schedules? While additional labor hours can temporarily mask deeper issues, they do not resolve them.
- Rework Treated as a Production Issue: If an item is fabricated incorrectly, the common response is for Production to fix it. However, it is vital to identify where the error originated—was it in estimating, surveying, design, engineering, purchasing, or customer approval? Simply repairing the product without analyzing the process that led to the mistake often results in recurring issues.
- Quality Assessment at Final Inspection: While final inspection is necessary, it should not be the starting point for ensuring quality. The later a defect is identified, the more resources—labor, materials, and capacity—have been invested in it. Quality should be integrated into the project from the beginning, not just evaluated at the end.
These conditions can create a busy shop. Unfortunately, activity does not equate to productivity or throughput.
Look Upstream from Production
Many problems that become apparent on the shop floor actually start much earlier in the process.
- Sales Promises Without Operational Confirmation: Sales often commits to dates without consulting production. For example, a customer may request a project by Friday, and the sales team agrees, leaving production to learn about the commitment later. We’ve all experienced this. However, these customer commitments set the operational conditions for everyone downstream. Sales and production cannot operate as separate entities.
- Discrepancies Between Estimates and Actual Results: Estimates and actual performance rarely align. You may estimate that a project will take 40 hours, but it actually requires 70 hours to complete. When the next similar job arises, it’s again estimated at 40 hours. Completed jobs should inform and improve future estimates. If actual performance data is not regularly fed back into the estimating and planning processes, the organization continues to incur costs without truly learning from past experiences.
- Department Success Versus Project Struggles: Individual departments may look successful while projects falter. For instance, sales may meet their targets, engineering may ensure accuracy, purchasing may secure good prices, and production may keep operations busy. Yet, projects continue to be delayed, resulting in diminishing margins. Customers do not care about departmental performance; they care about completed projects.
- Communication Relies on Meetings and Memory: Where can the latest information be found? Is it in an email, a text message, someone’s notebook, or perhaps from a conversation yesterday? When employees spend significant time trying to figure out the status of a project, the issue may not necessarily be a lack of communication. Instead, the company needs a reliable source of operational truth.
This is why I encourage owners to look beyond individual departments. A project flows through the entire company, and weaknesses at one stage can create emergencies for others later on.
When the Organization Depends Too Much on People
The following symptoms often emerge in leadership and workforce capability:
- Leadership is seen as the solution to everything. Every significant decision eventually lands on the owner or senior manager’s desk. People tend to wait for answers, which overloads leaders and slows down projects. While the owner may feel indispensable, this reliance on a single person is precisely the issue. A scalable company fosters decision-making capabilities throughout the entire organization.
- Recurring problems in meetings. Despite different job titles, the same issues arise in every meeting. Missing approvals, late materials, engineering delays, schedule changes, rework, and labor shortages keep showing up week after week. If you continually face the same categories of problems, it’s likely that you’ve become adept at merely addressing symptoms rather than finding solutions.
- Improvement initiatives fade away. New programs are launched with enthusiasm, complete with meetings, metrics, and procedures. However, three months later, everyone has reverted to the status quo. Improvements that aren’t integrated into daily management routines often become optional—and in many cases, optional means temporary.
- Critical knowledge is concentrated among a few individuals. Every organization has key employees who possess knowledge about difficult customers, unique fabrication methods, obscure equipment settings, supplier workarounds, and decades of undocumented history. While experience is valuable, relying on undocumented expertise creates a dependency.
- Cross-training is minimal. It often occurs only when someone calls in sick, resulting in a colleague receiving a quick ten-minute lesson on how to cover the position. This is not true cross-training; it’s merely survival. Genuine workforce flexibility should be developed intentionally before emergencies arise.
- Managers focus on solving problems rather than developing their employees. Although there is a desire for stronger employees who make better decisions, managers often spend their time answering questions, collecting information, and resolving production issues. If managers never have the opportunity to coach, teach, and develop their teams, they are depleting the very leadership capacity needed to enhance operations.
There is a crucial pattern here: the more a company relies on a few individuals to keep everything running, the harder it becomes to grow without adding even more complexity.
Can Leadership Anticipate What’s Coming?
The final symptoms highlight management’s ability to see, understand, and respond to performance.
- You typically learn about performance after the month has ended. Financial statements indicate that labor costs have increased, margins have declined, or jobs took longer than expected. While this is important information, it only reflects the past. Leadership also needs real-time visibility into aspects such as readiness, work in progress (WIP), schedule reliability, material availability, constraints, quality trends, and workforce capacity.
- Each leader perceives reality differently. If you ask Sales how things are going and then pose the same question to Engineering, Production, and Finance, you’re likely to receive four different answers. Each perspective may be correct in its own context, but leadership requires a shared view of performance to make coordinated decisions.
- Technology is often used to address disorganized processes. New software is purchased to enhance scheduling, project management, communication, and accountability. However, six months later, many of the old problems persist. Technology can reinforce a well-designed process, but if responsibilities are unclear, workflows inconsistent, and information unreliable, then technology may merely digitize the existing confusion.
Now, let’s discuss what may be the most critical symptom.
- Growth creates more stress than capacity. As sales increase, companies hire more staff, add equipment, and take on larger projects. Paradoxically, the company often becomes more difficult to manage. Communication increases, coordination takes longer, and exceptions multiply. Leaders find themselves more entrenched in daily operations. Growth reveals underlying challenges.
The complexity of the business grows faster than the company’s ability to manage it.
Don’t Count the Symptoms—Look for the Pattern
At this point, you might feel tempted to tally how many out of the 25 symptoms apply to your company. However, that’s not the goal of this exercise.
Every sign company occasionally experiences some of these issues. We operate in a complex build-to-order industry where circumstances can change rapidly: customers change their minds, equipment fails, suppliers miss deadlines, employees fall ill, and unexpected site conditions arise.
The key question isn’t whether a problem occurs; it’s whether it has become a regular occurrence.
Consider how often the issue arises, how long it has been happening, how much management attention it requires, and how many other areas of the company it impacts. Reflect on whether you’ve previously tried to resolve it—and whether the problem keeps resurfacing.
Most importantly, ask yourself: Did we change the root cause of the problem, or did we simply become better at managing it? This question is crucial and provides a very different perspective. What Has Your Company Learned to Tolerate?
Organizations are remarkably adaptable.
When the schedule changes every morning, supervisors learn to work around it. If Engineering consistently falls behind, everyone comes to expect late drawings. When materials frequently arrive late, the Purchasing department becomes proficient at expediting. If unfinished work piles up in the shop, we find additional places to store it. If one employee holds all the critical knowledge, everyone learns to ask that person for help.
Eventually, something dangerous happens: the abnormal becomes normal. The company stops recognizing these conditions as problems because everyone has learned to cope with them.
Eventually, something dangerous happens: the abnormal becomes normal. The company stops recognizing these conditions as problems because everyone has learned to cope with them.
This is where the Performance Gap often hides—in the issues your company has learned to tolerate.
There’s an additional step to consider. Look for the relationships among the different symptoms. Production may continually change priorities because scheduled projects aren’t ready. Projects aren’t ready because materials are missing. Materials may be missing because Engineering was late in identifying requirements. Engineering may be late because it didn’t receive complete project information. Meanwhile, employees start new jobs whenever work becomes blocked, which increases work in progress (WIP) and makes the schedule even less reliable.
These aren’t five separate problems; they are interconnected.
Before attempting to resolve the next issue, ask yourself: “What allowed this problem to become normal?” This question shifts the focus away from blame and firefighting, steering the conversation toward understanding how your company actually operates.
You don’t close the Performance Gap by merely managing its symptoms better. You close it by building a company that produces fewer of those symptoms.
You don’t close the Performance Gap by merely managing its symptoms better. You close it by building a company that produces fewer of those symptoms.
Coach’s Challenge
Over the next 30 days, don’t attempt to tackle all 25 symptoms. Instead, focus on identifying the three recurring issues that consume the most time, create the most disruption, or require the most attention from leadership in your company.
Gather your leadership team and discuss why these issues keep occurring, what other problems they may be linked to, and what changes need to happen so that your company no longer has to manage them.
These discussions may provide more insight into your company’s true performance gaps than another month of reports ever could.
