A vital tool for ensuring long-term success.
I can’t tell you how often I’ve heard the phrase “we don’t need help” from business owners. Usually, I take it as a brush-off tactic because I know they don’t want to face the reality that they have problems they don’t know how to fix.
This is a big problem with owners in our industry and why there is such a disparity between the haves and the have-nots. The progressive companies are laughing all the way to the bank, while the “we don’t need help” companies are treading water at best.
Granted, if they keep their head in the sand with an (Ostrich Mentality), they avoid the hard work to change, but thinking they are not affected by the world evolving around them or that they are immune to dis-ease in their own company are false expectations. Furthermore, I’ll bet they could make some changes right now that would greatly benefit their companies, but they don’t know what to change or how. Everyone in the firm realizes it but them. The employees see it, the customers feel it, and the bankers know it!
At this point in the article, let’s shift from the term change to its friendlier counterpart, ONGOING improvement.
One of my favorite quotes is: “An organization’s ability to learn and translate that learning into action rapidly is the ultimate competitive advantage.” Jack Welsh
This can’t happen without embracing a culture of Continuous Improvement, a vital tool to ensure long-term success.
What is ongoing improvement?
The Institute of Quality Assurance defines “ongoing improvement (OI) as a gradual never-ending change focused on increasing an organization’s effectiveness and efficiency to fulfill its policy and objectives.
When managing a OI company, you constantly look to improve the things that aren’t working while creating a better environment that makes the customer and employee experience more enjoyable with higher ROIs for stakeholders.
An ongoing improvement culture company is all about living and breathing improvement in your daily operations and by everyone in the organization as part of the total effort from now till “death do us part.”
Without an OI mentality, people start to do “complacent thinking,” assuming things are okay because that’s how you have always done it; if it’s not broken, it doesn’t need fixing. WRONG! You are setting yourself up for a big surprise. All you need to do is look at recent trends to be reminded that no organization is bulletproof.
Successful OI organizations share five things in common
- Goal Setting
- Dependable Systems
- Data Monitoring
- Real-Time Reporting
- Involve everyone
- Goal Setting
Goals should be set based on the short and long-term objectives of the organization’s strategic plan, with short-term being (3 – 12 months) and long-term (2 – 3 years). The two programs work together and are designed as a single strategy broken down into monthly and quarterly objectives. This keeps things in focus so teams can be accountable because they can relate better to visible “must outcome” targets and “now term” action. When written down, tracked, and managed, the chances of success increase exponentially.
- Dependable Systems
Dependable managed systems and procedures ensure “good work” is performed the same way every time, resulting in a predictable level of quality and within predetermined standards.
Some desirable traits of systemization are.
- Improved employee morale
- Management stress reduction.
- Minimize rework and overtime
- Dependable delivery schedule
- Increased profitability
- Improved receivables and cash flow
- Data Monitoring
The main goal of monitoring things like time, materials, quality, and any other activity is to understand progress towards a particular objective better. The observations provide a basis for problem-solving or the ability to exploit the positive thing you are doing to get even more of a desired result if things are going well.
Key Performance Indicators (KPIs) are an excellent way to focus on what matters most. KPIs evaluate an organization’s success or a particular activity; they can be tangible and intangible.
Accordingly, choosing the right KPIs relies upon understanding what is essential to the organization. ‘What is important’ often depends on the department measuring the performance – e.g., the KPIs helpful to sales will differ from those assigned to production.
Examples might be:
- Client loyalty & retention
- Number of rework hours.
- Average project duration days.
- Number of time loss accidents.
- Rate of securing new customers.
- Number of customer complaints.
As the saying goes, “You can’t hit a target you aren’t aiming for.” in effect, monitoring or measuring is a form of aiming, and if you don’t know how or if you’re getting there, you won’t be able to navigate the obstacles which are sure to get in your way.
- Real-Time Reporting
Don’t make this more complicated than it needs to be. I know too many companies that measure everything; they even have staff on the payroll to count hours and widgets, yet they don’t use metrics to manage. And if they do, they won’t share the information with the line-level contributors.
Please keep it simple! You only need enough info to get the job done. Let most of your manager’s time be spent working on your company by leading and implementing strategy, not writing reports and long review meetings. That’s why the use of a scorecard format works so well. You can measure both tangible and intangible data very quickly. The important thing is to make reporting quick & easy, to the point, and consistent so people can make good decisions based on what the results tell you, not by ego, emotion, or personal agendas.
- Involve the Staff
As I mentioned in the article, if you only keep the data for upper management, You are leaving out the people who can most likely give you the best results. Often, it’s the employees who are closest to the source.
You will also find they are as concerned about productivity and quality as you are. They have a deep pride in artistry and a vested interest in “job security.” And the big kicker…getting more money isn’t necessarily their first issue; they often want to have a voice and be heard where they spend the most time. At the office!
Leading without an Ongoing Improvement culture is like fighting with one hand tied behind your back…it’s a losing proposition that will cost you more pain in the long run and certainly prevent an early arrival to your destination.
Why not be transparent and bring your team together? You will find more cooperation, better relationships, and more profit in your pocket than you could imagine…something to think about.
