Sunday, July 26, 2015

Breaking Down Silos

What we need to do is learn to work in the system, by which I mean that everybody, every team, every platform, every division, every component is there not for competitive profit or recognition, but for contribution to the system as a whole on a win-win basis.” – W. Edwards Deming
One of the most important aspects of lean thinking that is often underemphasized or ignored altogether is the catchball process.  Catchball is critical for calibrating the focus and efforts of everyone to assure that people don’t lose sight of what the organization is trying to achieve and how they contribute to its success.
Without catchball objectives tend to become fuzzy, the focus of people and teams turn inward, and teamwork breaks down.  Although not necessarily an easy process, the benefits associated with effective catchball are significant.  The discussions that occur throughout the process become the magnet that pulls the team together and focused on achieving the organization’s vision.
Vertical Communication
The most common application of catchball is a series of discussions that take place between leaders at different levels of the organization to assure objectives are understood, aligned, and achievable.
During catchball meetings, the leader assures that annual objectives are understood and accepted by those on his or her team.  In many cases, an objective will be a stretch for the person involved in the discussion, with the dual purpose of moving the organization forward and developing the person’s problem-solving abilities.  Particularly for a stretch objective, it is made clear that the leader will provide coaching throughout the effort.  This helps assure that the objective becomes the responsibility of the person to whom it is assigned as well as the leader doing the assigning.
The discussion is also an opportunity for the team member to express concerns about the objective, given other priorities for the team.  The leader must be ready to discuss priorities and resources during the conversation. 
Openly and sincerely discussing the specifics of an objective with the people and teams is vital to assure that those involved buy into the intention of the objective rather than approaching it as a check the box exercise.
Horizontal Communication
One of the less common applications of catchball is the discussion that takes place between functions to assure support and alignment of objectives is clear.  It is all too common for support functions to set objectives and determine priorities in a vacuum, and focus on what they consider to be important rather than what their internal customers need.  Given the fact that people want to do a good job and consider what they do to be important, this is perfectly understandable.  Establishing horizontal catchball discussions is vital way to assure that the energy and expertise of everyone, especially those in support functions, is directed toward the organization’s highest priorities.
When the company’s purpose is clear, it is easy to determine which areas support others.  In a company that manufactures products, for example, everyone’s work should be oriented toward production – meaning that the factory is the focus.  Even those developing new products need to understand the problems in the factory to assure that new designs are producible.  In an oil and gas operation, the focus is the producing asset; and in a service operation, it’s the point where the service is delivered to the customer.  The key to assuring that everyone is focused on the same priorities is being absolutely clear about the company’s purpose.  This helps people understand who they support and who supports them.
Horizontal catchball discussions focus on assuring that objectives are clear and that the needs between areas and functions are understood.  Although it is the responsibility of a support area to remain abreast of advancements within its area of expertise, efforts should be oriented toward meeting needs of those the area serves rather than forcing new and exciting developments on them.  With that said, however, as with external customers, internal customers don’t always know what is possible or what will help them improve, so the catchball discussions should include explaining new developments and understanding whether or not they can help address problems in the short- or long-term.
Assuring Catchball Success
Like much of lean thinking, catchball is simple but not easy.  The formal effort should take place over 2-3 months but, in reality, includes discussions that occur throughout the year.
The process runs counter to traditional management in that it puts just as much, if not more, of the responsibility for success on leaders.  Leaders must be closely connected to gemba to know the capabilities of the team, including the extent of stretch that they are able to accept.  It also requires the ability to coach effectively and continually help people understand the connection between the work of the team and the company’s long-term objectives.
By defining, standardizing, and continually improving the process, catchball can become an extremely valuable element of the annual planning effort.  The better the organization becomes at catchball, the more the energy and efforts of people becomes redirected from working against each other to actually uniting toward a common purpose that results in a win for everyone.

Sunday, July 19, 2015

Is it Too Easy to Fire People?

I am convinced that nothing we do is more important than hiring and developing people.  At the end of the day, you bet on people, not on strategies.” – Lawrence Bossidy
How effective is your hiring process?  How do you know? If it was difficult or impossible to fire people after you hired them, would it change your process?
If it was a given that every hire would stay with the company until retirement, most companies would likely change their hiring practices.  The fact that we are able to fire people fairly easily, though, allows us to worry less about the effectiveness of the process and distracts us from addressing the real issues that affect long-term performance.
The objective of the process should be to recruit and hire people who have the right skills, are a good fit with the company’s culture, continually learn and develop, meet or exceed performance expectations, and stay with the company until retirement.  When this is understood, people begin to see that, whenever someone is fired or quits, the process has failed and the effort to find a replacement is rework.  The time and cost associated with dismissing an employee, and recruiting, interviewing, orienting, and training a new one is waste and would not have occurred if we hired correctly in the first place. 
Although a rather blunt way of looking at the issue, a company that truly wants to be the best has to hire the best; and “best” means those who meet the objectives described above.  Hiring is one of the most critical processes for a company, yet it is rarely taken as seriously as many other less critical processes.
Elements of Effective Hiring
The elements of an effective hiring process that are often missing include the following:
  1. Assuring the Hire is Necessary: Although it is pretty common in most companies to justify the necessity of a new hire, it tends to stop there.  Fiscal responsibility should drive companies to always question whether hiring a new employee is necessary, but the emphasis on reducing headcount should coincide with tension to improve processes to the point where replacements are not always needed.  The focus should be improvements first, and hiring second.
  2. Finding the Right Person: Wanting to hire a new employee quickly should never drive people to shortcut the need to find the right person.  It takes time to screen candidates effectively which, unfortunately, often leads companies to become impatient and hire the wrong person.  Concern about the extra workload caused by a vacancy should be dealt with accordingly (e.g., contract labor or temporarily shifting responsibilities), and any concern about losing a position by not filling it quickly is irresponsible and potentially destructive.
  3. Training and Developing People: Training and developing people once they are hired helps assure they succeed in their jobs, grow and learn, feel respected, and reduces the chance they will leave for a job at another company. Although many companies talk about the importance of training and development, very few actually do it well.  Like any critical process, developing employees should have clear objectives, a defined method, effective measures, and the proper focus to assure it happens.
  4. Measuring Effectiveness of the Process: Because the hiring process is so critical to the success of the organization, it is important to measure its performance and use the results to drive improvement. Some of the events that should trigger problem-solving include firings, resignations, and the need to hire leaders from the outside. The measure should be visible to everyone involved in the process so its objectives are clear and performance is visible.
When the culture is driven by a continual improvement mindset, hiring for any reason except replacing a retiree or to staff up for growth signifies a breakdown in the process.  If it were impossible – or extremely difficult to fire people – this concept would be much easier to accept.  As long as it remains easy to fire people, though, there will be little tension to improve the hiring process, and successfully driving a continual improvement culture within the company will remain elusive.

Sunday, July 12, 2015

Why Companies Hire Poorly

A company should limit its growth based on its ability to attract enough of the right people.” – Jim Collins
When a company is buying an expensive piece of equipment, there is often a detailed process to justify the expenditure, study the alternatives, and gain approval.  Leaders throughout the organization are often aware of, or even involved in the process to assure it is done well and that the investment pays off for the company. 
Given the importance of the decision, this makes perfect sense.  What is baffling, though, is why so many organizations don’t place the same level of importance on hiring a new employee as they do on buying a new machine.  Although the amount of damage a poor hire can do on the organization is significant, the decision is often made quickly by a relatively small group of people.
Along with promoting and developing leaders, hiring is one of an organization’s most critical processes.  And as long as a company fails to recognize the importance of hiring, the chance of successfully driving and sustaining a culture of improvement is relatively small.
In my experience, there are four main reasons for poor hiring practices, and those organizations that tend to hire poorly often exhibit all four of them.
  1. Don’t Know How: Many organizations just don’t understand how to find and screen candidates effectively to assure they fit into the company’s culture.  Just like the work done on the shop floor, screening and interviewing are processes that need to be standardized and continually improved to achieve consistent results.  Without a standardized process – and associated training – there is no way to assure that people throughout the company are using the same approach or that improvements are in hiring are sustained.
  2. Don’t Realize it’s a Problem: Companies that do not track employee turnover most likely do not consider it important.  When continually reducing turnover is not considered important, employee satisfaction tends to be low and the associated costs tend to be high.  Besides the costs of rehiring and retraining new employees, there are significant losses resulting from low morale and the loss of knowledge when people leave.
  3. Hire When it’s Too Late: There is an understanding in most organizations that bringing on a new employee is costly.  Because of this, the search begins long after the need arises.  When a team cannot keep up with its workload, there is often panic to bring in someone immediately to get the work back under control.  This panic can lead to cutting corners, hiring quickly, and unfortunately, bringing in the wrong person.
  4. It’s Easy to Fire People: I have always felt that, if it was difficult to fire people, companies would take much more time to justify the need to hire a new employee and, when it was deemed necessary, would assure that the right person was ultimately hired.  In the machine example at the start of this post, companies tend to take more time to procure capital equipment because, once they make the purchase, they are stuck with it for many years.  If we approached hiring in the same way, the process would be taken more seriously and, most likely, produce much better results
Successfully achieving and sustaining performance improvements cannot happen without the heavy engagement of the people in the organization.  And there is little chance that people will become and remain engaged unless they feel respected.  Making sure that the hiring process results in bringing in a person who has the right skills and fits with the company’s culture and values demonstrates respect for existing employees as well as the person being hired.

Sunday, July 5, 2015

Why People Don't Develop

“If we do not give people accurate feedback based on real behavior they are not growing and we are not respecting them. The job of a leader is not to put them in positions to fail, but to put them in challenging positions where they must work hard to succeed and still see how they could have been even better. “ – Akio Toyoda
If you are a production manager and one of your machines develops a problem that is resulting in increased costs or poor quality, would you let the problem continue until the next time maintenance is due?  For most of us, the answer would be, “no.”  We would shut down the machine and fix it to stop the problem from continuing.
If you are a manager and one of your team members is having a behavioral or capability problem that is resulting in increased costs, poor quality, or missing commitments, what would you do?  Experience tells me that many would wait until the next performance review to point out the problems and work for improvement (oh, and assign a poor rating in the process).
One of the biggest problems facing organizations today in the drive to improve is the inability of many managers to provide regular and relevant feedback to team members and work with them to improve.  There are a variety of reasons for this but, unless we start to dig into the causes and address them, the problem will continue and our ability to drive and sustain improvements in safety, quality, production, and cost will be severely limited.
The Causes
Over the years, I’ve found many reasons for the lack of ability to provide effective feedback for team member development that occurs in many organizations.  Although most of the reasons are fairly simple to recognize, they are system-level issues and can be difficult to address.  Like any problem facing an organization, however, a focused effort with clear objectives can result in significant improvements.
The reasons many organizations are poor at developing people include the following:
  • Leaders Don’t Know How: Coaching and developing people is not something that comes naturally to most people.  When we promote someone into a supervisory position, we need to develop his or her skills in coaching and leading a team.  We must help leaders understand the types of conversations to have with people and how to recognize when improvement is needed and occurring.  They also need to understand how to approach these conversations with respect and utilize questioning, rather than telling, to guide development.
  • Inconsistent Leadership Styles: Variation in leadership styles is one of the most unrecognized and destructive problems in business.  Unless we have a clear idea of the competencies we want in the organization’s leaders, the resulting inconsistency will confuse people and lead to demotivation, high turnover, and poor performance.
  • It’s Not Valued: Leaders are often not held accountable for development because it is not valued by the organization.  Organizations that take a cream to rises to the top approach to identifying leaders often follow a hands off approach to development creating an environment of competition and silos rather than teamwork and problem-solving.
  • Poor Hiring Practices: If we continue to hire people who don’t fit into the organization’s culture, the problem will be overwhelming to those managers who truly want to develop those on their team.  Hiring a new employee is a much more important decision than many people recognize, and unless candidates are carefully screened for fit before they enter the organization, they can do significant damage before we realize we have a problem.
  • Overemphasis on the Performance Review: Organizations that do not value development tend to put more pressure on completing performance review on schedule than worrying about whether or not it actually results in improvement.  In this type of environment, managers often feel they are fulfilling their responsibility as a leader by having one or two conversations per year related to development.
It’s a Daily Thing
Avoiding conversations with people related to areas to improvement need to happen every day in real situations.  Besides the effect this can have on the performance of the team and the organization, orienting these conversations toward truly helping someone develop and improve shows a level of respect that people will remember for years afterwards.