Tag Archives: culture

Why Pursuing Big Ideas is Killing Your Culture

The best indicator of successfully developing a continuous improvement culture is your ability to engage people. Because “engagement is all about participation,” according to communications consultant David Sibbet, it is critical that you create a way for people to consistently participate in improvement activities. Creating an annual kaizen event calendar and rotating people on and off improvement teams won’t cut it. You must design a process for individuals to embed change as part of their daily work.

What works best are employee-driven idea systems that focus on small ideas but cultivate them every day in a visual, public way. Not because the ideas themselves are earth-shattering, but because the ability to get them done quickly and demonstrate continued progress is key to motivating people to think big, take risks, and work together to create positive change.

Unfortunately, most leaders have a difficult time believing that thousands of small “unmeasurable ideas” will have any meaningful effect on key financial metrics. As a result, most idea systems quickly die on the vine as leaders create layers of bureaucracy to manage the ideas, and complex return on investment (ROI) criteria to rank each idea in the search of the illusive “game-changing suggestion.” However, when leaders set a clear objective and challenge teams to rapidly implement any idea important to accomplishing their goal, then the true power of creativity and collective energy can be released.

Take an example from the University of Washington. The Grants and Contracts Accounting Group is a 25-member team responsible for the setup, invoicing, reporting, and closing of more than $1.15 billion in annual research grants. When I started working with the team, complex grants could take upwards of 673 days to finalize the outstanding invoices, complete the reporting, and close out the grant in compliance with sponsor requirements. In addition, due to the 228-percent growth in research grants and budget cuts, a backlog of 5,478 grants had developed.

Faced with no new resources and the audacious challenge to eliminate the backlog and cut the time to close to 120 days, we engaged the team and installed a system of daily process improvement. Driven by the goal to identify and solve problems in real time, the team used workflow leveling, pacing, visual controls, and idea pads to capture every roadblock the team encountered. At the end of each day, problems were reviewed and analyzed, and improvements were made so the impact of the change could be viewed the next day. While some of the ideas took multiple days to investigate and implement, the vast majority of the ideas were small, seemingly insignificant changes that could be completed by the next day.

The result? At the end of eight months, the team had eliminated 82 percent of the backlog and increased the number of budgets closed per week by 733 percent. By using a simple daily process to identify and implement small ideas, the team has averaged 4.4 new ideas per person per month and implemented 78 percent of them. It has done this without running kaizen events and without the assistance of internal lean specialists. In fact, change is happening so rapidly that documenting the effect of the ideas has become the enviable problem the team is working to address (at the request of the University).

So why do thousands of small ideas beat a few big ideas every time? Here are a few of the unseen benefits of embracing a “smaller is better” approach to process improvement:

Motivation. Seeing progress is one of the single greatest sources of intrinsic motivation. By documenting and allowing people to see the ideas they have suggested and implemented, and how their ideas have contributed to the larger organizational goals, you give them a simple, consistent, and visual mechanism to see their progress.

Development. By documenting all the small ideas, you create “teachable moments” where you can use actual ideas suggested and implemented to teach others what constitutes good ideas as well as what making progress toward goals each day looks like.

Recognition. By making your idea system visual, it allows you to create a very public method of recognizing all the incremental improvements people are suggesting and implementing. As peer-to-peer recognition is one of the most powerful motivators, the visual element allows teams to celebrate one another and each member’s contribution to their team and the organization.

Sharing. Simple visual idea systems encourage frequent yokoten(knowledge sharing) as each idea is captured, discussed, implemented, and recognized. Unexpected benefits occur during this process as each team member is exposed to the ideas of others and challenged to find opportunities where improvements can be applied in other areas.

Creating an engaged culture isn’t about challenging people to identify and implement ideas that revolutionize the organization. As soon as leaders start thinking the key to change is big ideas, they create systems that seek to identify the best ideas and kill those which do not provide a sufficient ROI. Rather than engage teams, these systems serve as a filter to curb people’s creativity and puts blinders on their “improvement eyes.” More important, by conditioning people to filter their ideas, leaders limit the organization’s ability to tap into the motivational engine that lies within in every team member.

The key to creating a world-class idea system is spending less time asking the question, “Is this a good idea?” and more time building a system where progress is measured by the implementation of thousands of seemingly inconsequential ideas. Leaders’ primary mission is to create an environment that allows all team members to make progress every day and gives them a way to see the progress they are making. Only then will people fully engage and be motivated to change the organization, one idea at a time.

In the end, if you want teams to engage in change, be accountable for their actions, and take ownership of the outcomes, they need to feel good about themselves and the contribution they are making in the organization. Only when team members are clear about the objectives and able to confidently say, “I am better today than I was yesterday” will the organization begin to tap into their limitless ability to help make themselves, their team, and their process great.

 

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Redesigning an Industry Icon

Ford Motor Co. CEO Alan Mulally was a runaway winner of the 2010 MarketWatch CEO of the year, easily beating out Steve Jobs, Vikram Pandit, Jeff Bezos and Reed Hastings.  Since the hiring of Mulally in 2006, Ford has been on a roll.  While Ford continued to post financial losses through 2008, the company turned the corner in 2009 and started to reap the benefits of Mulally’s turnaround strategy.  Sales and profits are up, the stock quadrupled in 2009 and doubled again in 2010 and the company has gained market share in back-to-back years for the first time since 1993.  The company even posted its best third quarter profit ($1.7 billion) in over 20 years.

So how did an old aerospace guy with no automotive experience turnaround a struggling industrial icon?  Let’s look at six elements of Mulally’s strategy that have enabled Ford to transform their financial and cultural picture in four short years:

Create a Simple and Compelling Message – By defining a simple, but powerful mission to build higher quality, more fuel efficient, safer cars, Mulally gave Ford’s employees something they craved: a message they could rally around and a vision of a company in which they could believe.  “The more each of us knows what we’re really contributing to, the more motivated and excited and inspired we are.”

Make it About the Long Term – Second, Mulally invested in a long-range plan to create a global design language he called “One Ford.”  The One Ford strategy meant selling off higher profile brands (Land Rover, Jaguar, Aston Marton and Volvo), bringing back a completely redesigned Taurus, and designing cars on a global platform.

Exude Contagious Optimism – Mullally understands that his positive energy is contagious.  He exudes an optimism that is both inspiring and credible.  He has an unwavering belief in his team’s plan, balanced by relentless realism about current market conditions, and a willingness to make adjustments along the way.

Develop a Truth Telling Culture – Mulally has created a culture in which telling the truth is paramount and gets rewarded.  As an example, Mulally presides over a weekly “Business Plan Review” where the heads of Ford’s four profit centers and its 12 functional heads report on progress relative to their targets, share problems and collaborate on ideas for improvement.

Be Profitable on Lower Volumes – Under Mulally’s leadership Ford has reduced structural costs by more than $10 billion and will have reduced its production capacity by 40% by the end of next year.  In a drive to be right-sized, Ford now has fewer factories, each producing more vehicles, which has allowed the company to be profitable at near-record-low sales levels.

Create Intimate Customer Relationships – Led by Scott Monty and his talented social media team, Ford has created an extensive online presence committed to creating transparency during the turnaround.  In addition, Monty launched “The Ford Story,” a social media hub which builds intimate customer relationships through Facebook, Twitter, YouTube and other online communities.

Regardless of your size, industry or business goals, Mulally’s vision and values are equally relevant to every leader responsible for aligning people and driving change.  If you want to dramatically increase your effectiveness and post unprecedented results, “stand for something beyond profit…rally your employees around a shared mission…practice realistic optimism…and tell the truth without fear.”