Quantifiable Results
With the importance of a "realistic, clear-eyed, complete assessment of the current state" in mind, I'll challenge you to get really honest with yourself... Do you have that clarity for your current costs in areas like turnover, productivity, or downtime? And I mean the total costs involved, not just the simple ones that show up when you submit an expense report.
If you've taken those numbers seriously that I shared before from the Gallup study citing BLS turnover data-and I believe they should grab everyone's attention, even though I struggle now to picture many organizations with an average pay as low as the $35k that study referenced-you're on board with me that we all do indeed face significant profitability killers in our organizations. The hard reality is that establishing valid baseline numbers showing the actual cost of things like turnover, downtime, and less-than-optimal productivity requires a ton of work. And once we have that data, identifying the root cause(s) can be just as challenging.
In all the years I worked in behavior-based safety, I was nearly always part of the team that conducted incident investigations following injuries or significant damage to equipment. One of the tools we used during those investigations was called the "5 Why Method of Problem Solving," based on the idea that the immediate response given as the reason for doing something may not be the real reason. I've also heard similar approaches taught in sales training, but now's not the time for that... Through an incident investigation, our goal was to dig as deep as we could to uncover every possible issue or scenario that contributed to the incident with hopes of preventing similar incidents from happening in the future in our facility and other facilities throughout the company.
We did this with injuries and with significant quality issues because those were so visible, but I can't think of a single time where we applied this approach to turnover, downtime, or productivity. While it may have required six or seven Whys instead of just five, I'm convinced we could have identified some major contributing factors to each of them! I remember many scenarios where individuals missed their monthly productivity numbers, which typically led to disciplinary action. Fingers were frequently pointed at equipment and material issues but rarely at anything that was actually within the control of the person in question, never mind that those same individuals were often the ones who were out of the assigned work areas for fifteen to twenty minutes of every hour!
The cold, hard truth is that assigning blame to an object is far more comfortable than accepting how our behaviors impact results. This same idea holds true for measuring increased (or decreased) performance when a physical change is made in a process or the equipment that's used in the process. With each of those factors in place, compounded by a society that seems increasingly focused on avoiding responsibility in every possible situation, I suppose I shouldn't be all that surprised when I hear someone say, "I don't have time for the touchy-feely stuff..." Oh, and even when we are willing to accept responsibility and change our behavior, we'll need to sustain the change long enough to get measurable results. Remember, you might build 1,000 bridges before you're known as a builder!
When we're willing to dig deep enough to uncover the behaviors that are indeed contributing to that lost profitability, and we're willing to accept responsibility for making some changes, we'll be pointed in the right direction. This can impact every aspect of our organization if we set clear expectations for measurable results.
Setting Expectations
Once we've identified the root causes that are our profitability killers, our next step is to initiate change. In so many scenarios, though, those changes seem to be expected through throwing some training at an issue and hoping it sticks... Would we even consider that same approach if it were some new tool we purchased and trained our team to use? Of course not! Any training we did provide would be precise on how that tool should be used; then we'd certainly make sure it was taken out of its packaging and put to use. To achieve quantifiable results in the areas that are killing so much of our profit, the things that tend to get written off as soft or intangible, we must maintain the same approach.
As Cindy and I wrap up any lesson we share with any group, I tell the story of working for a manager who ALWAYS expected me to put something into action from whatever training I attended that would have a measurable impact on our facility's overall productivity. As an engineer, that would make perfect sense. Even for a production supervisor, that's practical. For someone in safety or human resources, that was a steeper hill to climb since the general focus of those roles is nearly always cost avoidance (at best). Through all my work in behavior-based safety, I learned that no great idea amounted to much unless translated into a physical action (a behavior) that someone could see. I was held accountable for taking action on whatever course or workshop I attended in a way that could be seen and, more importantly, positively impacted our operations. I won't pretend it was always easy, but it was the right approach.
If we're serious about addressing our profitability killers, we need to be willing to set and maintain expectations for the leaders on our teams-expectations that are just as clear as the ones my manager set for me so many years ago! Once we've invested the time into knowing exactly what our efforts should be focused on and establishing solid baselines to work from, identifying the necessary tools will be easy. Being clear about the results we expect when providing those tools will require intentionality, specifically in how we expect those tools to be used. But unlike getting a new saw out of the box, plugging it in, and cutting boards right away to measure increased performance, the types of tools we'll need to use to deal with some of our biggest profitability killers will require more support to sustain ongoing application and some different measurement than just parts per hour...
Progress that Yields a Return
I often share stories from my first few years in manufacturing, explaining how terrifying it was back then for an engineer to hover over my shoulder with his stopwatch. I didn't understand that he was capturing the cycle time of the machine I was operating and not necessarily timing me. I guess I was a little scarred from being a skinny kid with a terrible time in the forty-yard dash the one year I was on the junior varsity football team in high school. By the way, do you know what position a 115-pound kid who runs a 5.4-second forty is suitable for? NONE!
In doing what was more of a machine capability study-which provided data to create reliable hourly production standards that could be used for budgeting and other things in the manufacturing process-the engineer had the opportunity to see immediate changes in performance under different working conditions. They then took all of their data and created productivity standards that provided operators like me with a clear expectation of what we needed to achieve hourly or daily. Such a visible way of measuring my progress made life pretty simple! I quickly learned that all I needed to do to meet those expectations was stay at my workstation and keep my machine running. If I wanted to be an overachiever, and I usually do, I just had to add some hustle into the mix.
When it comes to addressing the profitability killers that so many organizations miss entirely, changing our focus and achieving quantifiable results will still require setting clear expectations. But the way we measure progress will be very different-especially when we're intent on showing real return on investment. And let's be extremely honest with ourselves here: it ain't an investment unless it produces a return!
Once we've provided our leaders with practical tools they can use to address each of the profitability killers we'll soon start digging through one by one, and we've challenged them to identify the specific behaviors they'll apply as they put those tools to use, we'll need to look for ways to measure their progress in sustaining those behaviors (because changing our habits and routines is never as simple as wishing it into being). And we'll need to determine which signs help us (and them) show whether the actions they're taking have the impact they had hoped for. Even then, though, the results won't likely show up on the bottom line by the end of the first day, and maybe not the first month or first quarter. But the results will show up when we're taking the right action and tracking the impact that action has.
I've always struggled to keep secret the things I'm excited about. How I asked Cindy to marry me is as good an example of that as any! With that being the case and me being so excited to start digging into how we can eliminate each of the profitability killers that impact so many organizations, I'm going to let one gigantic cat out of the bag right now before we touch on a single specific area. LEADERSHIP IS THE SOLUTION! If you're serious about capturing lost profit, though, you cannot confuse leadership with managing processes or dictating orders with the threat of consequences. It's so much more than that. But as you'll see in each area we work through moving forward, this juice is always worth the squeeze!
