Contstruction-Worker

01 Apr Self Diagnosing Operational Pain Points A Significant Risk

We find that companies often know when they are not “firing on all cylinders,” much in the same way we as individuals know when “we don’t feel right.”

Working with a large number of companies in different industries has provided an interesting perspective on business. We see the obvious differences between companies in such areas as corporate culture, but we also see the common challenges that exist regardless of industry. We have lost track of the number of times we have heard managers say, “This process works, but employees are not executing properly,” or employees tell us, “Management just does not get it; this process is broken.”

We find that companies often know when they are not “firing on all cylinders,” much in the same way we as individuals know when “we don’t feel right.” We also see that companies (like individuals) are quite good at pointing out the symptoms of whatever ails them.
The symptoms of operational pain points show up in perception surveys when employees score communication or a disconnection to leadership as a problem. The symptoms are also revealed when managers see that employees have failed to do something they were supposed to do, work is not completed as planned, quality problems are not caught, etc.

So what do people do when they don’t feel well? Some people take to the internet, trying to self-diagnose their ailments (with varying degrees of success). Most people visit the doctor, describe their symptoms, and let the doctor look for the underlying cause of their ailments.

Self-diagnosing a company’s operational pain points brings with it the same risks as self-diagnosing medical conditions. You could be correct or you could completely miss the mark. Over the years, we have seen a number of common ways in which companies try and solve misdiagnosed problems, including:

  • Doubling Down. Under this strategy, the  company decides that their approach is the right one, and doubling the effort will guarantee improvements. Expectations get more demanding, communications are more threatening, and the consequences for failure become direr.
  • Re-training. When people are not doing what they are supposed to do, it seems obvious that the training the company invested so much time and effort into did not work. The general thought is that it’s time to repeat.
  • Blame and Fire the Underperformers.  While underperformers do exist, we see too  many companies blaming the employees who work in an area for the problems in that area. They assume that underperformance is taking place at the frontline.
  • Blame Your Tools. If the new IT system is not delivering the results anticipated, it’s obviously  a problem with the tools. Or is it?

Self-diagnosing a company’s operational pain points brings with it the same risks as self-diagnosing medical conditions. You could be correct or you could completely miss the mark.

Not only do these “solutions” to misdiagnosed  problems not work, they often make the problems worse with significant fiscal consequences.

Management may feel good for a period of time because they are “doing something” to solve the problem and the executive appreciates that  “we are getting tough.” Unfortunately, the results are often not much better than the person who tries to “tough out” chest pains or a concussion received on the football field.

The Alternative

The approach we have found to be most beneficial is a third party operational diagnostic that tackles the root causes of corporate ailments. This type of diagnostic is different from other forms of analysis companies undertake, including perception surveys and benchmarking. Perception surveys are useful for taking the temperature of an organization, but the results of the survey highlight symptoms and not the root causes. Benchmarking is a very valuable tool to determine how one organization stacks up against the competition, but benchmarking does not explain why one company underperforms relative to another.

An effective third party operational diagnostic does more than pick out the symptoms from an internal perception survey to see the areas of underperformance relative to best practice. It will, more importantly, go a critical step further to look for the root cause of the condition.

We believe doing this successfully requires a holistic perspective of the organization. This is based on the view that superior performance in any organization occurs when the combination of strategy, leadership, process, technology, communication, and execution all converge – with no single element being more important than the other. Companies that rely on a narrow focus (such as simply acquiring the latest technology, and then failing to lead, communicate, and  execute it effectively) will always underperform. An effective third party operational diagnostic looking for the root causes to a condition will consider how the six elements above interact and perform as part of the overall organization.

An effective third party operational diagnostic does more than pick out the symptoms from an internal perception survey to see the areas of underperformance relative to best practice. It will, more importantly, go a critical step further to look for the root cause of the condition.

Marble-on-Tree-Branch

Logically, any good executive would quite rightly ask,  “Why should I pay a third party to do an operational diagnostic, when we know our business best?” It’s a valid question, but the often overlooked rationale is compelling.

Expertise

  • Successful organizations are experts in their core business and well-suited to solve problems with their own products or production processes. However, the vast majority of companies are not experts in diagnosing organizational dynamics.

– A third party operational diagnostic uses the expertise of a team who have specific experience in identifying the root causes of corporate pain points and areas of underperformance. This is different than solving technical challenges associated with the products a company manufactures or the heavy equipment a company decides to purchase.

Blind Spots and Being Normalized

  • Anyone who works within an organization for a period of time becomes de-sensitized to the things they find frustrating and blind to the things they discount. They are too close to the business and lose objective insight, which is particularly difficult when they are actually contributing to the root cause of the problem themselves. It’s human nature to see the problems in others before we see our own flaws.

– A third party operational diagnostic is able to take  a fresh look at a situation, without the burden of  historical baggage, political considerations, and  personal relationships. Third parties are able to  provide feedback to all levels of the organization  without fear of reprisal or “upsetting the boss.”

Filtering

  • Senior executives in virtually every  organization receive filtered information. Summarization is inevitable due to the limited time allowance executives carry within their hectic schedules. Yet, more importantly, the information they do receive is also filtered. Some filtering occurs because an employee naturally wants to pass along positive information and suppress information casting them in a negative light. Other forms of filtering occur because even the most open executives still intimidate their subordinates simply because they are the boss, which causes people to think twice about what they say. As a result, executives are simply not told what is going on in their own organizations.

–  Third parties actually uncover more information, more easily, and more quickly because they are perceived as non-threatening from a hierarchical perspective and neutral from a political perspective. People tend to like to talk about their jobs with someone who is willing to listen, which provides a third party with valuable insights into how the business actually functions and what behavioural drivers are present within the organization.

Vastly Different Concerns

  • In large companies, the executives are quite far removed from the frontline employees. They are insulated by several layers of middle management, and have specific priorities which occupy their time and give them angst. Frontline employees operate in a different world with different concerns and different drivers. For many executives, making the transition from their own world to the frontline can be challenging.

– Third parties are in a better position to consider the impact of different drivers within different levels of the organization. Consider cascading communication from an executive to the frontline as an example. How many times have you felt a company initiative was communicated thoroughly only to have a conversation with the frontline workforce who have clearly misinterpreted the message or aren’t even aware the initiative exists?

Logically, any good executive would quite rightly ask, “Why should I pay a third party to do an operational diagnostic, when we know our business best?”

It’s a valid question, but the often overlooked rationale is compelling.

At the Engine Room, we design and conduct operational  diagnostics designed to provide management with the root causes of their organization’s pain points and practical options to address them. Operational diagnostics can be scaled to  meet the needs of any organization or even a single business unit within a larger organization.

A typical operational diagnostic involves interviews with a  representative sample of employees from senior executive to the frontline and is designed to explore considerations, such as:

  • Clarity and support for business goals and objectives
  • Leadership alignment and managerial capability
  • The effectiveness of communication at all levels
  • Efficacy of business processes
  • Employee engagement and the culture of accountability
  • Effectiveness of business metrics and reporting

When asking employees questions about their work, it is a cliché to say, “There are no bad answers.” However, in this case it is actually true. For instance, questions regarding support for an organization’s goals quickly indicates the degree to which different levels of the organization are aligned around goals. This is invaluable data to track down the root causes of any disconnect.

At the Engine Room, we design and conduct operational diagnostics designed to provide management with the root causes of their organization’s pain points and practical options to address them.

A completed Engine Room diagnostic provides management with:

  • The opportunity to apply a “surgical” approach to diagnosing specific attributes, whether that is: operational performance improvement, compliance effectiveness, transformational change projects, safety and leadership practices, efficiency and reliability objectives, cost reduction, or revenue growth tactics.
  • A distinction between the symptoms and root causes of issues surrounding operational challenges and unique cultural conditions within the organization.
  • Identification of the barriers to establishing and/or maintaining an effective culture and operational performance, including unbiased feedback free from preconceived notions that may be difficult for in-house  personnel to avoid.
  • Recommendations for senior leadership designed to provide a roadmap to address operational challenges, fiscal opportunities, and the cultural realities of their organization.
  • Insurance to truly know that capital investments on company initiatives are meeting their intended goals and ROI. If not, a roadmap based on the root causes of program challenges will move you past any pain points.

In summary, operational diagnostics evaluate the range of characteristics required to elevate performance, support rapid development, and provide senior leadership with specific recommendations leading to tailored solution for real world problems.

WRITTEN BY DUNCAN KERR