During the 1980s, top executives were judged on their ability to restructure, declutter, and de-layer their corporations. This often translated into overly flat and overly lean organizations, where remaining staff worked longer and harder with less. While the approach benefitted the bottom line, it didn’t increase organizational efficiency, effectiveness, or productivity. Now, leaders are examining how to improve business operations, but often overlook the fundamentals. They cling to the flawed mindset that technology, more meetings, and more documentation will fix it. Instead, we need to get back to the basics.
In 2001, the Toyota Way was invented, which outlined a set of principles defining the organizational culture at the auto manufacturer. Standards for constant improvement, engaging in step-by-step approach to challenges, searching for the root causes of problems, and engaging in ongoing innovation was at it’s core. Primarily utilized in manufacturing to reduce errors and streamline processes, the concept was applied as a production optimization technique, while it’s essence is about changing behaviors, specifically, the respect for individuals and incorporating ways of building appreciation and cooperation.
When fully embraced, it helps clarify and ensure that each task meets the needs of both internal and external customers. It means that less time is spent on re-work or other non-value-added activities. It means finding smart ways to ensure quality, consistency, and efficiency is built into your processes by applying intelligent automation and/or streamlining workflows. In short, embedding a culture of continuous improvement, or “Kaizen”. (‘Kai’ means ‘change’ and ‘zen’ means ‘for the better’.)
We all know the right process will produce the right results. Yet when it comes to diving in and deeply understanding how the organization’s process operates – many leaders avoid this altogether, or simply assume they already know how things work. But the devil is in the details – actually, the details behind the details. Solving root problems drives organizational learning, and if you’re not continually finding ways to do things simpler, smarter, easier, and more efficiently, you’re not learning.
Take for example, consider a department that primarily processes paperwork. They have thousands of documents they need to manage, and ensure accuracy and timeliness of processing. However, they have old technology, use a lot of manual workarounds, and have layers of bureaucracy which grinds the process through a series of stop-start gates. As the organization grows, the department can’t scale without more bodies. In addition, those bodies take significantly longer to process documents, as they require much more ramp-up time than veteran employees.
This has a trickle down effect. More new employees means the average processing time increases. Increased processing time likely impacts the productivity of other areas of the organization, who receive the processed documents to do their job. In addition, the increased time impacts customer satisfaction, as their timeline expands as well. Increased staff increases organizational costs. Frustration with old technologies and manual workarounds increases employee attrition and places the power of the department in the hands of a handful of tenured employees. Lack of transparency to the issues emboldens their resistance to change, as their influence and authority would be undermined if things were fixed.
Long story short, organizational inefficiencies kill profits, kill customer satisfaction, kill competitiveness, and kill employee retention. As a leader, ask yourself the last time you:
Issues with business fundamentals aren’t exciting or sexy. But they are essential to making it a success, and can be the key to long term success and growth. So what are three things you can do today to fix your fundamentals? Start by basing your business decisions and mindset on a long-term philosophy, even at the expense of short-term goals. Second, “go and see for yourself” to thoroughly understand a situation or troublesome process (also known as “Genchi Genbutsu”). Lastly, ensure your managers and employees are doing the same – experiencing operations firsthand in order to see how they can be improved.
About the Author
Andrea Belk Olson is a keynote speaker, author, differentiation strategist, behavioral scientist, and customer-centricity expert. As the CEO of Pragmadik, she helps organizations of all sizes, from small businesses to Fortune 500, and has served as an outside consultant for EY and McKinsey. Andrea is the author of three books, including her most recent, What To Ask: How To Learn What Customers Need but Don’t Tell You, released in June 2022.
She is a 4-time ADDY® award winner and host of the popular Customer Mission podcast. Her thoughts have been continually featured in news sources such as Chief Executive Magazine, Entrepreneur Magazine, Harvard Business Review, Rotman Magazine, World Economic Forum, and more. Andrea is a sought-after speaker at conferences and corporate events throughout the world. She is a visiting lecturer and startup coach at the University of Iowa, a TEDx presenter, and TEDx speaker coach. She is also an instructor at the University of Iowa Venture School.