Summary
Companies need to expect some short-term losses when they are implementing a large improvement program. There can be only one first priority - either the initiative or business as usual. Lack of commitment to a program results in lots of great documentation but no implementation and no results. Determining beforehand the acceptable levels of participation and loss will help improve implementation success rates.
Have cake and eat it, too!
Many companies are unwilling to accept the consequences of long-term improvement programs
Usually a company will embark on a massive change initiative
when it has reached a state of crisis, like several quarters
of poor earnings, and embarks on a program in the hopes
of turnaround. (What the leadership doesn't admit is that
they are hoping for a quick turnaround.) The way it normally
proceeds is that the management team bring in some consultants,
and, with great fanfare, they announce the rollout of the
new corporate initiative. The halls of the company
are plastered with the initiative’s mantra – zero percent
defects, #1 in Customer Satisfaction, or Lean and Mean Organization,
etc. – and the entire organization is mobilized to reach
the stated goal. During this time, employees attend training
to learn new tools and methods to address the problem and
also attend focus groups to get their perspectives on the
issues. Each department sets up its own team to implement
the program and to monitor their progress. After many employees
are trained and all the teams are functioning, the consultants
will turn the program over to the corporate designated team
leaders. At this point, the entire organization is mobilized
to achieve the specific objective, and energy and morale
begin to build.
Three months after the initial rollout, there is no discernible
impact on the quarterly earnings. “It’s too soon to tell,”
everyone says, and they continue their capability efforts.
After the second quarter, the earnings report shows a sharp
drop in profits! The leadership team now hires back the
consultants to find out how this could be. After a quick
analysis and a hefty fee, the consultants report that, because
everyone is working hard on the improvement initiative,
no one is working hard on his actual job, hence the slip
in performance. With meeting the quarterly earning targets
as the number one priority in most companies, the leadership
decides that the organization has gone way off track. Although
they understand the need to build the capability, it can’t
be at the expense of quarterly earnings, especially if they
are already suffering, so the employees are asked to concentrate
on their jobs and give the initiative their second priority.
As a result, the focus groups, ideation sessions, and implementation
teams are radically scaled back before having implemented
their changes. They do have some great documentation, though.
The new mantra is now “Regain parity,” and the organization
focuses on trying to match their pre-initiative (poor) performance.
Some hardy souls try to continue the improvement initiative,
and they end up working 60-80 hour weeks and quickly burn
out and become disillusioned. After about two quarters,
the company has regained its former performance, and the
capability initiative is re-introduced as a priority. It
takes much longer to re-mobilize the organization, and it
doesn’t quite meet the initial levels of enthusiasm and
energy. Here’s where one of two possible paths occur:
-
One, leadership is certain to
ensure that the job priorities come first, and so the
initiative never really takes off and/or the employees
become overworked and don’t perform either their job
duties or their initiative tasks very well. The company
never realizes any improvements and just hobbles along
much the same as before.
- Two, after a much longer start, the initiative takes root and employees are working diligently on building capability. At first, there are no effects on earnings, but soon after, earnings drop because employees are not focusing on their job responsibilities! Once again, the CEO steps in and restarts the “regain parity” initiative.
I call this effect the “want cake and eat it, too” syndrome
because many corporate management teams refuse to acknowledge
that you really can't do two first-priority jobs at the
same time. If you are concentrating on an initiative or
a merger, sale, or acquisition, you need to expect that
the normal business activities will suffer. This is
a lot like halting an exercise program because your muscles
hurt. It's going to hurt until you build the capability.
In my experience, very few organizations are willing to
take the short-term hit in order to grow long-term and end
up becoming dependent on acquisitions for growth.
Setting the expectation upfront on how much time, money, and resources should be devoted to the program versus running the business and determining what is an acceptable level and duration of loss during the program will go a long to ensuring that the improvements will actually get implemented. Unfortunately, not everyone may be able to participate, but that brings me to another scenario that spells failure for an initiative. I call it The Best Thing Since Sliced Bread.