Performance Improvement Initiatives must include a focus on Sustainability
by Adam Horelik and Bob Moran
Why would you choose to invest vast amounts of time, effort and money on improvements that will most likely revert to your current level of performance? Would you make this type of decision in your personal life? Would you invest years on home improvement projects to sell for the same price as today? What’s the point of making improvements that are not sustainable in the first place?
As companies search for ways to improve various parts and pieces of their organizations, many executives in recent years have put their organizations through the paces of some sort of performance improvement initiative, or other.
Whether their efforts focus on operational excellence or capital efficiency improvement, many of these companies reach their initial goals and see significant gains in productivity or cost reduction.
Unfortunately, many companies often stumble at the same point in the improvement continuum, and have a tough time maintaining and sustaining these gains. Achieving and then hanging on to their hard-won improvements is the much more difficult part of this task.
In our experience working in multiple industries across the globe, we have identified four scenarios that trip-up companies from maintaining their performance improvements:
- The Premature Victory Dance: In this first scenario, an organization declares victory before sustainability has really been achieved.
Since a significant amount of resources, including manpower, equipment and/or capital was committed to reaching the goal, pressure is created within the organization to show positive results. These might be in the form of improvements in a specific set of metrics, or meeting or exceeding an individual cost target. Once the organization sees some gains, many executives want to declare the initiative a success…and move on to the next “big thing”!
However, when the focus is on the end goal – with little or no emphasis on sustaining the particular performance improvement – we generally see a decline in performance once the goal is achieved.
This fall-off does not necessarily mean they go back to previous levels of underperformance, but we often see improvements plateaued, or beginning a slow downward slide from their desired target. What organizations need is continued improvements as the original initiative is more fully implemented, sustained, and ingrained in their day-to-day operations.
- Consistent Messaging: To achieve any successful change management, all messaging about their performance initiative, must be consistent and clear, and reinforce the intended objectives. It must resonate throughout the entire organization.
However, often the message is unclear and not fully accepted by an organization. When left in the vacuum created by incomplete or inconsistent messages, the human element of any organization, will have difficulty achieving or sustaining any real positive change in their performance.
- Initiative Overload: When many different initiatives are shoved into the pipeline from the top of the organization down to the rank-and-file, adding one more can seem like just background noise. This is true whether mandated changes occur within a single region of a company or are enterprise-wide.
For example, one client organization recently had several initiatives underway simultaneously, that required training and presentations to all its employees at in every plant.
- On Monday, a safety officer conducted a six-hour training class.
- On Tuesday, the Human Resources department arrived to lead a sensitivity training module.
- Wednesday and Thursday were marked by additional training about operational excellence and benchmarking of day-to-day processes.
Employees pulled from their daily work routines and expected to absorb and implement this much change feel overwhelmed and often will begin to push back. A fragmented approach toward improving the business often leaves organizations with a lot of confused people.
The solution is one cohesive plan that the entire organization can understand, which includes specific initiatives and changes that are properly integrated into the overall approach.
- Optionality: A fundamental tenet of change management is that people don’t like change and given the option, they will try to avoid it. So it should be no surprise that if an initiative is optional, most organizations will continue to do business as usual.
Change is uncomfortable and often involves traversing uncharted territory, which in turn can require some level of individual initiative and risk, attributes in short supply in many complex and regulated industrial industries. If a performance initiative has any hint of optionality, it generally will fail from simple lack of clear and consistent implementation.
The Solution: Building a Culture Based on Performance
In response to these common problems within many industrial companies, we always recommend that executives embrace and encourage a performance culture, which enables an organization to reach a performance level – and then sustain it.
This approach combines process enhancements with behavioral change to create and maintain improvements and benefits. This specific culture is achieved by modifying leadership and functional behaviors. The specific path for each company will vary, but typically, it incorporates clearly defined, quantifiable behaviors capable of driving sustainable results. They may include optimized cost structures, improved production volumes, and a focus on identifying and closing performance gaps.
Establishing a performance culture generally involves:
- Assessing behaviors and practices within an organization
- Designing programs and processes that successfully address and modify undesirable or non-contributory human behaviors
- Improving functional processing within the organization
- Developing strategic performance plans that help put desired behaviors and change in motion
- Reshaping aspects of the organization’s culture that stand in the way of successfully achieving the necessary change
These sort of initiatives are very successful in identifying and eliminating sources of loss, and creating sustainable improvements and benefits.
Three Ingredients for Success
Leadership: At the heart of any successful performance culture initiative is a strong, engaged, and fully aligned leadership team. It is virtually impossible to sustainably improve organizational performance without leadership engagement. If leadership chooses not to take an active role in defining and shaping the organization’s culture, it should not be surprised by the results it gets.
Communications: Organizations that successfully implement this type of culture set and communicate clear objectives that cascade down through the organization. They develop mechanisms for capturing appropriate metrics that quantify progress, which are then reported back up to executives for review, evaluation and refinement of the overall approach. Having easily understood and widely communicated metrics is critical because they ensure that all levels of an organization are clear on how they are being measured and where they stand.
Accountability: Organizations that establish and embrace a culture change meets their targets – changing their culture is what changes their results- on a consistent basis. These organizations routinely eliminate variability in their business, including production, application of business processes, because they successfully implement clear roles and responsibilities that hold individuals accountable for results. But most importantly, these changes and modifications are both achievable and sustainable.
Adam Horelik, Director
Bob Moran, Operations Manager
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