The formulations or recipes we work with in industry are precise, BOMs are set up to the 3rd or 4th decimal point and in extreme cases are set up in milligrams. On the other hand, the strategy, action plans and KPIs tend to be loosely defined as are the policies and procedures (SOPs) we follow to manufacture our products, leaving gaps for interpretation and assumptions. We also allow people to deviate from the “system” by setting up independent measurement systems, and then spend more time debating information accuracy, instead of working out ways to improve performance based on what the information is telling us. Is it any wonder that we continually struggle with product quality, throughput and ultimately delivery to customer?
Organizations that struggle with these issues are more than likely ego driven than eco driven. Silo mentalities dominate and people have a myopic view, focusing internally rather than externally. Customer service takes a back seat to internal measures, organizational measures are often overridden by departmental measures and we wonder why we can’t achieve our full potential as a business. Added to this, we have issues with morale and unnecessary staff turnover in key areas.
Taking the Systems Thinking approach we need to step back and take a look at the organization’s strategy. Where is this taking us, is it clear in its focus and direction? Does it embody our culture or is it intended to be the catalyst for culture change? The answers to these questions need to be clearly articulated and the leadership needs to embody the strategy and walk the talk. Taking the strategy forward, we need to extract our plan for the organization and create the performance measures that will guide us in the correct direction. A particular focus is service delivery to both external and internal customers to drive the Customer centricity and all policies need to be aligned.
The next level is creating action plans for each department in the value chain, alignment needs to be ensured through the correct measures so that department effort is always focused at achieving organizational goals with individual job descriptions aligned to the goals. KPIs can be set in 3 categories, organizational performance, department performance and individual performance with the objective of driving team work supported by individual performance.
Our businesses all have some level of ERP, and this needs to be accurate and the single source of information for the business. Reports must be aligned to support the performance measures so that focus isn’t diverted from the real issue of improving the business. Operational meetings then become more meaningful and objective, focusing on systems issues and discussing team performance rather than targeting individuals. Decisions in the value chain become easier to make, and it becomes more stable taking unnecessary stress and “busyness” out of the equation.
At the operational level, SOPs are aligned to achieving the measures and as a result will become more detailed and specific, supporting compliance, quality and throughput. Flexibility is improved in the workplace and dependency on personalities is reduced because more team members can perform quality work by adhering to SOPs. Responsibility should be delegated to the lowest possible level and teams must held accountable for their performance. The alignment of policies and procedures to the action plans and overall strategy takes the personality out of the equation and eliminates reliance on individuals, reducing stress and improving staff retention where it is most needed.