SOURCE: Kay Sever | July 28, 2021
As you know, optimization is traditionally focused on equipment and systems. Millions of dollars are spent in the name of optimization to remove inefficiencies and bottlenecks from the production process so “best possible” performance can be achieved. Many leadership teams believe that when this equipment becomes operational, that most of their work is done. There is one more machine that needs to be included in every optimization effort… the organization, a “living machine” that contains its own set of inefficiencies and bottlenecks. Organizational weaknesses not only negatively impact an organization’s effectiveness… they negate some of the gains delivered by equipment and systems. When a company’s “living machine” is weak, a company can never achieve full optimization, regardless of the money invested to achieve that goal.
Two months ago I introduced the organization as a non-negotiable step in “full” optimization. You learned that the structure of organizations was never designed to achieve optimization. Why is that important? Because management teams are working with tools day after day that will not help them be the best… in fact, some of the tools they use to manage with help create weaknesses in organizations and barriers when “best possible” is the goal. Last month you learned that the organization chart is one of those tools. The barriers created by organization charts do two things: 1) they prevent people from changing the way they interact to optimize an organization’s effectiveness and 2) they keep a portion of a company’s profit potential locked away so it cannot be accessed… sometimes millions of additional profit dollars that can be harvested for free.
Let’s say that you gained some new insights by reading these articles and are ready to take an objective look at the organization. You believe your leadership team is ready to step back and look at your organization through a different lens. Your team is ready to view your organization like a “living machine” that has mechanical inefficiencies that need to be corrected. They are ready to discover the inefficiencies in their own departments or between departments and consider them as weak parts in a truck or shovel or like a bottleneck in your production value stream. Why am I spending time talking about this readiness step? This is a big shift in a management team’s collective perspective, a shift that is critical to your success with optimization!
Management perspectives have a POWERFUL influence on so many things in a company… it is important to consider a management team’s perspective when they want to improve the organization. Readiness to look inward is greatly determined by the perspectives of the leadership team. Why? Because when leadership teams look inward for weaknesses and barriers to optimization, they will learn things they did not know. Some of these things will be good and some will be bad. Some of these things will fall under their area of responsibility. Every team needs to be mentally prepared to view the bad as an opportunity and never waver from that perspective. This is SO IMPORTANT that I am going to say it again… Every team needs to be mentally prepared to view the bad as an opportunity and never waver from that perspective.
The bad news is where the greatest profit potential of the organization resides. Management’s response to the bad news IS THE KEY to optimizing the organization and sustaining optimization long-term. The good news is that new management perspectives will help you choose responses that stop the losses!
An optimization truth…
If leadership teams are not aware of their organization’s role in optimization AND are not familiar with organizational weaknesses and barriers to optimization within every company, they will forever be handicapped and not know it. If the organization is not part of the scope for optimization, achieving optimization or “best possible” performance will remain out of reach. The numbers will show gains from new equipment and systems procured for the optimization effort, but management will not know that those gains could have been higher! Invisible losses caused by organizational weaknesses will partially offset the gains… organizational weaknesses that could have been fixed for free!
Thought for the month: Are you ready to delve into the profit potential of your “living machine”?
Kay Sever is an Expert on Achieving “Best Possible” Results. Kay helps executive and management teams tap their hidden profit potential and reach their optimization goals. Kay has developed a LIVESTREAM management training system for Optimization Management called MiningOpportunity – NO TRAVEL REQUIRED. See MiningOpportunity.com for her contact information and training information.
To comment on this story or for additional details click related button above.