“Nobody gives a hoot about profit. I mean long-term profit. We talk about it, but we don’t do anything
about it.”
– W. Edwards Deming
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W
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hy do so many
companies seem to be happy with mediocre performance? People generally consider
the idea of having it all – perfect safety, high quality, short cycle times,
low costs – as something that is impossible to achieve. As a result, the bar is set low and everyone feels
good when the low targets are achieved.
So often, it is our
experience that interferes with moving to the next level of performance. We
don't set aggressive targets because we know they are impossible to achieve and, in
the end, we don't want to be disappointed or suffer the consequences of missing
a target. As a result, we trudge along with average results and view many problems
as inevitable or out of our control. If we're lucky, our competitors operate in
the same mode. If not, we fall further and further behind until we are either
acquired or forced to close our doors.
Energy Can Be Created
and Destroyed
A group-wide acceptance
of problems as inevitable is what causes people to lose their energy and
inspiration. When one views significant improvement as impossible, intrinsic
motivation wanes and extrinsic motivation – e.g., compensation – dominates. And
the longer this type of “it happens” mentality continues within a company and
the more deeply engrained it becomes in the culture, the more difficult it
becomes to change course.
Leaders can stop or
prevent mental mediocrity by first realizing that their own behaviors and the
systems they created may at the root of the problem. It's not necessarily easy
to do, but letting go of some traditional beliefs and methods of management can
begin to drive the type of change that can energize improvement efforts and
give people the confidence that they can have it all.
To do this first
requires that leaders believe that problems are not inevitable and that the
company has the ultimate control over its own future. They must fundamentally believe
that they can have it all.
Stretching Without
Breaking
Leaders have to trust
that the people in the organization possess the talent to successfully tackle
the difficult problems facing the company. They must often develop this
ability, though, by stretching people and encouraging them to accept
challenging projects and targets, and coaching them in their efforts to
succeed. People won't always be successful in achieving the target (if they
are, they're probably not being stretched enough), but the learning and
development that occurs with each project is invaluable to tackling future
problems and opportunities.
A stretch target refers to a target that is
difficult, but not impossible to achieve and, although you can't stretch people
all the time, you've got to make sure there is enough tension within the
organization to keep people developing and the company's performance improving.
Getting people to
accept stretch objectives assumes that they will not be penalized for missing a
target. Reward systems need to support development and participation in
stretching the organization rather than merely meeting a target. If you
encourage people to stretch but continue with a reward system based on meeting
targets, nothing will change. People will continue to pursue safe targets and
push back on any attempt to stretch. In the end, mediocrity will reign.
More often than not,
organizations cause their own problems. The effects of problems caused by the
external environment tend to pale in comparison to those created on the inside.
Understanding and accepting this, however, often requires a shift in thinking
toward the idea that mediocrity is unacceptable and that the organization can, and
will, have it all.
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