Beta, like all companies, has areas where they are not satisfied with their current performance. That can create a compelling reason for change within a business unit. Once you’ve identified the reason for change, then a strategy, a set of goals, and the appropriate tools, must be provided and communicated so that people have a clear view of the changes needed, the compelling reasons for the change, the strategy for making the changes, and the ultimate goal or end state. In some cases, Beta is likely to make it clear that not achieving the desired goals is not an option. Exactly how and when they are achieved is an option and is something that requires the support and hard work of everyone. Of course we’ll need to be able to measure against those goals to help assure that we’ve met them, and some suggestions on that are provided below.
A word of caution may be appropriate here. The strategy needs to be reasonably well defined so that it can be understood by the employees and can assure alignment of the organization to the strategy and goals. As we’ve discussed, one of the most important things a leader can do is to align the organization to its strategy and goals. However, it must not be so detailed that it leaves little room for change as we proceed with its implementation, and each step of the change process has a feedback loop that allows for improving the process itself. In his book On War, Von Clausewitz3 observed that developing a strategy without understanding the tactics and capabilities of the troops was folly. So it is with our strategy and goals. We must fully appreciate the need for tactics and understand the capability of our people, and we must be flexible enough to allow modifications to our change management process as we learn. Our people will implement the strategy. They must have a strong hand in developing the day-to-day tactics for its implementation. And, there must be a feedback loop that allows us to accommodate changes to the strategy based on what we learn as we tactically implement those changes.
In setting goals, one of the more common techniques is to use benchmark data to determine gaps in the current performance and then seek to close the gap by achieving “benchmark” performance. Be careful using benchmarks. Using benchmarks is an excellent way to determine the gaps in your performance as they relate to certain measurements. What it often fails to do is provide an understanding of how that performance was achieved, or a process for closing the gaps. It may be that the gap you’re worried about is not one that’s appropriate to be closing at this point in the business. An example might make this more clear. One of the more common “big gaps” in benchmark performance in manufacturing plants is maintenance overtime. A common maintenance overtime rate is 10% to 20%, and sometimes more. So-called benchmark performance is in the range of 3% to 5%. So, it’s easy enough to achieve benchmark performance on overtime. We order people to minimize or eliminate overtime. Nevertheless, the consequence of that may be that work doesn’t get done and products don’t get delivered. It’s better to ask how we can stop the defects that are creating the failures and in turn are creating the need for the overtime. We need to be systems thinkers and understand the consequence of our decisions at a business or operational level as we implement the change process. One of the best sources for understanding the consequences of our decisions is the shop floor. They deal with those consequences every day.