What You Can’t See
I grew up in a small family business. As in any business, momentum is its biggest ally and simultaneously its greatest threat. The challenge is we don’t often realize that the way we do something may in fact not be working.
Our family business, Bernard’s Garage in Milwaukie, Oregon, was started in 1925 and my brother Jim owns it today.
When I was 17 or 18 and my father was running the business with 12-15 employees I got my first appreciation for processes. Dad, like his father before him, was in charge of scheduling customers. If a customer wanted to get a tune-up on Thursday we would go to dad and say, “Mr. Fisher wants to get his Rambler tuned on Thursday, can we do it?” Dad would then say “yes” or “no” and we would go back to the office phone and tell the customer.
The problem with this process was that not only did we have to find Dad to get approval to commit to the customer, but Dad also had the schedule in his head and no one else knew who or what was going to show up on Thursday.
But this was the way we had always done it.
One day I had this idea and I walked over to the local stationery store and bought a stack of blue 8×5 notecards. I wrote “Weekly Schedule” on top of the blue cards and then created five columns, one for each day of the workweek. I put it on a clipboard and set it on the counter next the phone. The approach somehow got adopted and before long Dad was no longer the bottleneck for scheduling.
At that point in my life I had no idea that I would become passionate about this kind of work and even write a book about it (Business at the Speed on Now). As I now know, what I had done at the garage was a bit of process improvement. But more importantly, it was my first experience in systems thinking in a business environment.
Many of us work inside systems that are no longer capable of accomplishing what we need them to accomplish. And, our most common response is to simply push harder and try to go faster. That might work if you are running a 10k, but if your business processes are continually falling short it won’t work.
Creating new and better capability requires us to stop what we are comfortable doing, and find a better way to do it. Like the scheduling system at Bernard’s Garage, there was no need to fear or avoid the change because it actually made things easier for everyone.
If it isn’t working, stop and look hard at why. The solution is not as far away as you might think.
How can we get people to follow processes?
Thirty years ago when the notion of improving processes began to get traction in the U.S., it held great promise. But one problem has kept the promise from becoming a full reality.
It’s too complicated!
How many organizations have shelves of binders chalk full of process maps and standard operating procedures? Lots. With the hope of improving performance it is common that the hard work is done to document processes and standard operating procedures. Again, the hope is to once and for all eliminate the confusion.
The problem is once it’s written down no one ever looks at the binder again. Unless it’s time for training new employees and then we dust off the binders and hope maybe this batch of people will follow standard procedures.
I have struggled with this dilemma for a long time myself because I know the value of understanding how work should be done – the value of using processes to accumulate and transfer knowledge. I write a lot about management as a process in my book Business at the Speed of Now. But the freight ain’t worth the price.
There is a simpler way. Like in the classic scene in the movie The Graduate, its one word that matters most. While Dustin Hoffman’s character was told it was all about “plastics”, in the case of process improvement you would well advised to understand “Checklist.”
If you want people to follow a process, create a process checklist that focuses them on the handful of factors that determine the processes success. Here are three things to think about in creating a useful checklist:
- Keep it simple – never more than 10 items
- Avoid the classic checkbox; instead require the recording of useful data (a dimension, the cycle time it took, a category or type of repair, etc.)
- Use the data collected to monitor performance, make further improvements and learn
If you put the right things on your checklist, the most important things for the people who work the process to pay attention to, you will get all the benefit of that boring material in the binder without following that hideous manual you know you put somewhere.
A great book to learn more about this is The Checklist Manifesto. I recommend it.
Why So Many Employee Ideas Don’t Make Sense
One of the great beliefs we have as managers is that our job is to listen to our employees’ ideas and then go implement those that we find valuable. Sounds like a great idea. But as managers we know the reality is that a good many employee ideas just don’t make business sense.
My last week’s post was titled Engaging Employees: The Economics of Micro Ingenuity. In that post, I referred to research that shows for every employee that crosses over from being disengaged (meaning they do only what they are told to do) to engaged (meaning they make decisions and implement improvements without being asked), you can expect to add an incremental $13,000 to the bottom line each and every year. That’s $13,000 per year per employee. Just do the math.
So if employee ideas often don’t make business sense, how is it possible that when employees implement their own ideas they somehow magically bring great results?
In traditional low-engagement organizations there are five reasons employee ideas are only half-baked if they were baked at all:
- The idea solves a problem that is not really a problem
- The idea addresses a problem in some other department, addressing work they do not understand
- The solution has negative impacts the employee has not considered or intended
- The cost of the solution exceeds its benefits
- The solution addresses a problem’s symptom not its root cause
In organizations where employee engagement is high, as I explain in Business at the Speed of Now, it is high because management has worked hard to ensure employees know where the organization is going, they understand their specific accountabilities, and they know how to effectively use facts to solve problems.
Then, when employees know they are expected to implement their own ideas they actually come up with ideas that focus on the things they can control. They also focus on improvements in the areas where they have a lot of knowledge, experience and insight.
As a manager if you routinely experience employees coming to you with half-baked ideas, you might want to look in the mirror and ask yourself why the ideas are not focused on the work the employee controls.
When employee ideas focus on the routine work they do and know well, and they have data-driven problem solving skills, the ideas almost always make good sense.
What’s been the most half-baked suggestion an employee has ever made to you?
Engaging Employees: The Economics of Micro Ingenuity
BY JOHN M. BERNARD
Wouldn’t it be a dream if every employee could add $13,000 to the bottom line of your business each and every year? No need to dream because research shows that’s exactly what happens when an employee shifts from being disengaged to engaged.
Every employee has ideas for taking waste out of their routine work. Some frontline workers see simple things that can be done to improve the customer experience and others have easy-to-implement ideas that can grow revenue.
In Business at the Speed of Now I demonstrate the economics of small ideas. A simple example is that if an employee has an idea, and that idea removes a small amount of waste from a repetitive process, it doesn’t take much of an idea to save $1,000 annually. So, using simple math, if you have 100 employees and each saves $1,000 by implementing one equivalent improvement idea each, your business adds $100,000 to its bottom line.
Now, keeping the same math in mind, if each of your 100 employees implements 10 ideas annually and each saves $1,000 then your business will enjoy $1 million more on the bottom line every year. This is how the economics of micro ingenuity pays off.
This may seem like a wild dream, but not when you realize that Toyota’s employees on average have been implementing 70 ideas annually for more than 30 years, according to Toyota expert and author Norm Bodek. At the same time General Motors implemented one idea per employee every seven years. Yes, you read that right. And this fact reveals why Toyota has grown at a much faster rate than GM, which was once the most powerful company in the world.
Toyota is a NOW company, General Motors lives in the THEN world.
Micro ingenuity is a powerful reality, and in my experience is the one true sustainable competitive advantage a company can build. But how does Toyota do it?
Next week I’ll share how Toyota focuses employee ideas on the practical reality of their daily work – the work employees can and should control.
Innovation NOW is execution NOW!
Business at the Speed of Now will be in bookstores in 23 days! Preorder yours NOW at www.800CEOread.com for the best price available.
Many of today’s pundits have no idea what they are talking about. They philosophize about social media, cloud computing and the Millennial generation through fogged glasses – fog they generate from their own naïve excitement.
Just as many people misinterpret who Steve Jobs was — because they look at the outside and guess about the inside – pundits again and again prove they don’t know what they are talking about.
An excerpt from page 99 of my book:
In late 1999, Steve Berglas, writing in Inc. magazine, offered a scathing observation of Apple’s founder: ‘‘[Steve] Jobs, like virtually all charismatic leaders, also has a well-documented dark side that causes him to mutate from mesmerizing allure to sadistic perfection- ism, often without discernible provocation. Apple’s current board of directors, although they did well to exploit Jobs’s charms . . . must now pull the plug before his arrogant and demeaning interpersonal style undoes all the good he has done.’’
Time, of course, has proven Berglas wrong. Jobs went on to engineer one of the most spectacular corporate turnarounds in modern business history.
Understanding what it takes to run a real business takes experience. While Steve Jobs was, as some called him, the ultimate consumer, he was much more. He was a hardcore business executive well beyond his legendary intolerance for mediocrity. He surrounded himself with great executors. When the iPad was first released it sold a million copies in the first month. You don’t deliver such innovation without thousands of details executed flawlessly in a global supply chain tuned to deliver on time, at cost and with incredible quality.
Steve Jobs infused a NOW culture and never hesitated to give people the freedom to take action within a highly discipline culture where doing it right is just part of the game.
Talk is cheap. Hope is not a strategy; ideas are not innovation. Business is about execution. It’s about building a system of discipline to take ideas and turn them into physical and experiential reality. It’s all about the fundamentals, the routine work of the business. The NOW Management System is about the discipline to execute on great ideas. I have led its installation dozens of times as both an executive and as a consultant and it delivers — as Jobs did — every time.
Experienced business leaders understand execution, but those who observe it miss the point. We live in the NOW and the only viable value proposition in “yes” and the only acceptable timeframe is “now.”
Jobs perfected execution. He was Mr. Now.
100 Ideas Per Employee Per Year? Impossible!
The vast majority of businesses manage to put to use an incredibly small fraction of the ideas generated by people who work in the business. For most businesses, the number of ideas implemented per employee is terribly low, less than 10 a year, and for many the number is closer to zero. So much for tapping into the natural creativity of the workforce.
Why does this happen? Why would we pass this opportunity up? Why would we let those hundreds of good ideas die on the vine?
Why would we not want to grow our revenue, lower our costs and thrill our customers?
Why would we not selfishly grab every idea that would make our business more successful?
Why would we not want our people to feel respected and creative and successful?
The answer is simple. We do want all those things. But, we cannot see how it is possible to dramatically increase the implementation of ideas – certainly not the level where in excess of 100 ideas are implemented per employee per year.
Where Ideas Go To Die
The collision between a less-than-half-baked idea and a busy boss creates a guaranteed deadend. After a few of those collisions and it’s not hard to understand why employees disengage. Why bother when your boss is your latest brilliant ideas as a bother.
That said, ideas are the lifeblood of improvement. Companies that will survive and prosper understand that the responsibility to fix problems and improve processes must belong to the people who do the work. Everyone needs the skill to solve process problems.
Effective companies use a common approach to problem solving (such as a 7-Step Method), an approach everyone in the organization understands well. The method not only develops the skills to think through ideas, but it also transfers the skills, knowledge and authority to see the solution through to success.