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 kind of clarity for what your current costs are in areas like turnover, productivity, or downtime? And I mean the total costs involved in each, not just the simple ones that show up when you submit an expense report…
If you’ve taken those numbers I shared before from the Gallup study citing BLS turnover data seriously, and I believe they should grab everyone’s attention even though I struggle now to picture many organization’s with an average pay as low as the $35k in 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 true 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, it can be just as difficult to identify the root cause(s).
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. In fact, I’ve heard similar approaches taught in sales training too, but now’s not the time for that… Through an incident investigation, our goal was to dig as deep as we possibly could so we could 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 as well as 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 Why’s instead of just five, I’m convinced that we could have identified some major contributing factors to each of those things! I remember so many scenarios where individuals missed their monthly productivity numbers, which typically led to some sort of 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, nevermind that those same individuals were often the ones who were out of the assigned work areas for 15-20 minutes of every hour!
The cold, hard truth is that it’s far more comfortable assigning blame to an object 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 ever known as a bridge 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, as long as we set clear expectations for measurable results.
Setting Expectations
Once we’ve identified the root causes that truly 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… If it were some sort of new tool we purchased and trained our team to use, would we even consider that same approach? Of course not! Any training we did provide would be very specific on how that tool should be used then we’d certainly make sure that tool was actually taken out of it’s 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 have to 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 that 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 really 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 had learned that no great idea amounted to much unless translated into a physical action (a behavior) that someone could see. I was held accountable to taking action on whatever course or workshop I attended in a way that could be seen, and more importantly, had a positive impact on our operations. I won’t pretend it was always easy but it was absolutely 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 that are just as clear as the ones that 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 won’t be hard at all. 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 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 such a terrible time in the 40 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 lb kid who runs a 5.4 sec 40 is good 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 a host of 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 on an hourly or daily basis. Having such a visible way for measuring my progress made life pretty simple for me! I quickly learned that all I really 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 a little bit of 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 that 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 or not the actions they’re taking are having 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 we’re tracking the impact that action has.
I’ve never been great at keeping the things I’m excited about as secrets. 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!