SOURCE: Kay Sever | January 27, 2023
In 2022, we focused on numbers used for decision-making and how that set of numbers influences and sometimes narrows management’s options for operating strategies, budget targets and expansions. The influence of these numbers on decision-making is so great that they can push management into a plug and play” mindset that stops questions from being asked, stops actions from being taken and stops problems from being solved. In 2023, we are going to explore the people side of the business and how it can impact your success with optimization (i.e., achieving your best possible results).
In January, we introduced the term “organizational dynamics” as a key factor in optimization success. Dynamics is defined as the science of the motion of bodies and the action of forces in producing or changing their motion. If we apply this definition to companies, “bodies” are individuals or groups within a company. Dynamics refers to how individuals or groups act, react and interact in the workplace. The profit (or loss) linked to organizational dynamics is often unmeasured and is not recognized as a factor in achieving what I call “full” optimization at a site or company.
STRONG ORGANIZATIONAL DYNAMICS
Strong organizational dynamics contribute to profit and sustain optimization gains; weak organizational dynamics create invisible losses that reduce profit and make it easy to backslide into the old way of doing things. How do you know if your organizational dynamics are strong or weak? How do you know if your organizational dynamics are strong or weak?
Last month we listed the criteria that position a company for strong organizational dynamics. I have included them here for your convenience:
1) Departments have a “seamless energy and information flow” and actively apply “big picture” thinking.
2) Departments understand how they contribute to the success of the company and “work as one” to identify, prioritize and solve problems and reduce invisible losses.
3) Executives, leadership teams and management teams use decision processes and strategies that incorporate optimization metrics.
4) Executives, leadership teams and management teams have raised awareness about executive/management actions that unintentionally reduce profit, weaken organizational dynamics and threaten the sustainability of optimization gains.
SCENARIO OF THE MONTH
To raise awareness about weak organizational dynamics and their impact on optimization, we will introduce a different scenario each month linked to those dynamics. Your personal experience with a scenario will greatly influence your perspective and your thoughts on each scenario, which is great! Let’s say that you have sat in many meetings where new ideas are presented, discussed and approved for further study or implementation. Have you ever observed the following? If your answer is “yes”, then you are working in an organization with weak dynamics.
SCENARIO #1: Within the production value stream, a significant measurable loss was occurring downstream. The loss was caused by a department upstream. Stopping the loss depended on the cooperation of the upstream department. The workforce was aware of the problem. Management was made aware of the amount of the loss and the root cause. In this case, NO MONEY was required to fix the problem. One change to a management process would fix the problem and stop the loss.
REMEDY: Management took no action to solve the problem, but instead added it to the Future Projects List that was only reviewed at year end.
QUESTION: Why was management willing to ignore a known loss that required NO MONEY to fix?
ANSWERS: The drivers behind this choice could involve several different factors… management personalities, long-time practices handed down from senior managers to manager trainees, a lack of accountability for results or responsiveness, or an unwillingness to admit that some management decisions can cause financial losses.
TRICKLE-DOWN EFFECTS:
When management decided to do nothing to solve the problem, they sent unintentional and unspoken mixed messages across the organization. Here are some of those messages (which may not reflect how management really thinks or feels):
1) We are not going to change what we do to prevent losses, even though we expect you to change what you do to prevent losses.
2) We don’t care about losses within the value stream as much as you think we do.
3) We might have to admit that we need to improve what we do and we are not comfortable doing that.
4) We are not aware that our actions affect your morale, your sense of urgency and your responsiveness to future problems (i.e., the corporate culture).
5) We are willing to spend millions of dollars on new equipment to increase profit, but are not willing to change what we do FOR FREE to save millions of dollars.
6) Our values are not aligned with the values we defined for our optimization initiative.
TAKEAWAY: Management failed to take action on a problem that only they could fix. This decision sent unintentional and unspoken mixed messages received by the workforce and every person with management responsibility. These messages will negatively affect future profits and the corporate culture. Once sent, it will take a long time to undo their effects.
Thought for the year: There is an astounding lack of management awareness about the power of moments… moments when opportunities to capture millions of dollars hang in the balance… moments when courage is the defining factor in preventing or stopping losses and shaping a corporate culture capable of sustaining optimization over the long term. Executives and management teams that have this awareness are empowered to help their people achieve optimization and accomplish great things!
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.
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- About Us
Kay has worked side by side with corporate and production sites in a management/leadership/consulting role for 35+ years. She helps management teams improve performance, profit, culture and change, but does it in a way that connects people and the corporate culture to their hidden potential. Kay helps companies move “beyond improvement” to a state of “sustained optimization”. With her guidance and the MiningOpportunity system, management teams can measure the losses caused by weaknesses in their current culture, shift to a Loss Reduction Culture to reduce the losses, and “manage” the gains from the new culture as a second income stream.
