A second misalignment issue is initiative overload—too many initiatives competing for limited resources and lacking in alignment to an overall strategy that links them in an understandable way. Beta is like most companies and has numerous initiatives. Each one is justified on its own merits and is typically approved as part of a strategy for improvement in that area. Examples include improving safety and environmental performance, driving major cost reductions, market expansion in product line and/or geographic areas, procurement initiatives for consolidation of suppliers or supply chain management, and often the use of one or more new tools for improvement (e.g., Six Sigma, TPM, RCM, and so on). Quality initiatives such as Total Quality Management (TQM) appear to have gone through their fad phase.
In the eyes of most people on the shop floor and in middle management, these initiatives appear to be independent and not linked to any particular overall strategy. The safety initiative is driven by the safety function, environmental by the environmental function, cost by the business unit leaders, procurement by the purchasing function, and so on. Each one is demanded as a matter of policy. Each initiative saps resources, which taken individually does not seem excessive, but taken in the aggregate very often is. Unfortunately, when middle management and the people on the floor try to implement these, there is often substantial dilution of their effort, or at worst confusion and failure. Most just try to do enough to satisfy the minimum requirement and not get into trouble. It’s very difficult to have good organizational alignment when each of the functional groups is claiming priority without any particular overarching strategy that demonstrates how each fits into that strategy. Bob Neurath believes Beta needs to do a much better job at this and plans to use the following approach:
Get the basics right first—focus on reliability and stability as a foundational element of the strategy. If we get the basics right—excellence in operations and maintenance practices and good communication with marketing and R&D, and an overall strategy—we’ll do better. We’ll have greater reliability and stability in our processes, less variability, and lower cost. We’ll also have better quality and delivery. And, we’ll earn a bonus in fewer injuries and environmental incidents, and it will be easier to achieve the other initiatives. We won’t have as many people scurrying about “putting out fires” and they’ll be available to support higher value-adding activities.
Develop and communicate the company’s strategy, including an explanation of how all the initiatives support that strategy, including a general priority for each.
Identify specifically how each initiative will be resourced, particularly at the plants. Most of the initiatives converge at the plants. Having adequate resources to implement the initiatives and keep the plant running well is critical to the success of the initiative for the overall strategy.
Keep the strategy and initiatives as simple as possible, letting the people on the floor work out the complexity in the context of their day-to-day operation.
Communicate the strategy, its progress, and any clarifications regularly, leaving the communication channel open for criticism from the people actually implementing it and its related initiatives, so that adjustments can be made in a timely manner.