The Politics of Performance: The Relationship Between Results & Rhetoric in Business

Manuficient - Chess Piece

There is an interesting mix of performance and politics present in any group of people who share resources and work together. Performance can be viewed as any activity needed to help the organization to achieve its goals. If it’s a basketball team, performance can be viewed as either scoring points or stopping the other team from doing so. I like sports analogies when discussing performance because it’s one of the most objective ways to measure results. In sports, it’s difficult to deny that Michael Jordan scored a ton of points, which greatly contributed to his team winning a lot of games.

In most other businesses, performance can be viewed as activity that contributes to productivity or sales, a safer work environment, better quality product or service, or any other of the organization’s performance goals. Since these things are rarely, if ever, achieved in a vacuum, it’s not so evident who deserves credit for what aspect of success or failure. This is especially true in the absence of high-fidelity data down to the blocking and tackling level, which is often not practical for most businesses – outside of professional sports of course. Usually, everyone involved played a role in either creating success or causing failure. Who’s to say that what one person did was so much more significant that what the next person did to improve performance? Sure, this guy is in here 16 hours per day but who can say that he is productive for even one minute per day? Likewise, this other lady comes late and leaves early every day but who’s to say that her contribution didn’t accounted for 99% of the outstanding results?

In the absence of granular data and a thorough / objective evaluation of people’s actions and the impact thereof, their contributions are typically measured by one thing – other people’s perception of their performance. And perceptions are shaped by…you guessed it – politics.

Politics often have little to do with actual performance. It determines who gets access to resources, promotions, bonuses, fired, blamed, their way in a disagreement, and sometimes even life and death. Politics is about jockeying for power or control over resources; and exists as a result of scarcity. Scarcity can come in many forms such as financial, credit / credibility, titles, authority, privileges, promotions, etc. One of the rules of politics is – what gets repeated becomes reality; if not immediately, then eventually if it’s repeated enough and by enough people. This is why professional politicians develop “talking points” so that the same themes get repeated and ultimately accepted as truth. Unfortunately, politics can enable people with terrible performance to win and people with outstanding performance to lose. When this happens (as it does more often than you would think) the entire organization loses. The reality is that the poorest performers tend to get really good at politics for the sake of their own survival. Superstar performers are rarely good at politics since they believe the world is generally fair and their results will speak for themselves. However, whenever good results are produced, there are always a few over-ambitious and under-performing sharks waiting for the opportunity to take more than their share of the credit. Likewise, whenever teams do fail, these same people have toolbox full of techniques to deflect blame to someone else.

It can be annoying that we have to play the politics game; especially if you’re no good at it. However, it’s one of those things that will either propel your business to success or accelerate it’s failure. As business leaders, we tend to talk about performance as if politics doesn’t exist. But oh it does – and it has everything to do with how the business performs. But what is the right mix of politics and performance?

Internal politics is never value added but may be necessary. The ultimate goal of politics is to influence people’s decisions in one way or another and to shift / sustain power. There is a certain amount of value-added work that must be done in order for the business to achieve it’s objectives. Leadership should always look to minimize the amount of political behavior and maximize the amount of value-added activity. To do this, there must be a fair way to measure progress against equally challenging targets. Then grant power to those making the strongest strides toward achieving those targets. Thus, adverse political behavior should not be rewarded as it only begets more political behavior. However, when actual high-performance is adequately rewarded, it encourages stronger performances across the board.

The following leadership characteristics encourage adverse political behavior:

  • Favoritism
  • Gossip
  • Being aloof; unaware of people’s actual contributions
  • Incompetence; not understanding the value of people’s work
  • Granting unequal access to face-time, coaching, and mentorship
  • Creating or failing to eliminate scarcity of resources or recognition
  • Failing to acknowledge strong contributions or distribute recognition fairly
  • Punishing productive or progressive behaviors (even if they fail)
  • Accepting gossip as fact without sufficient investigation
  • Promoting based on political prowess as opposed to verified performance
  • Failing to recognize people’s (or your own) prejudice when considering a point of view
  • Failing to hold people accountable adverse political behavior

On the other hand, the inverse of these behaviors promote strong performance and help keep adverse political behavior to a minimum.

Political behavior can also be beneficial. The truth is that we are all the same; breathe the same air and bleed the same blood. We can accomplish a lot as individuals but a lot more by working together. The process of determining who will lead the group is done through politics. The better job we do of gathering and assessing people’s quality and quantity of contributions, the better results we get when we assign power to someone. We also need to assess our leaders’ capacity for respect for others and ability to get results through people. Unfortunately, by not having adequate systems in place, it’s difficult to truly size up someone’s contributions; and often use other people’s perceptions to make these pivotal decisions instead. What’s the solution? Be systematic. Continuous Improvement assumes you have a system in place to improve. Without a system (or standard) for assigning power to people, you have nothing to perfect. Once you have something, you can effectively assess each success or failure on its own merit and use that information to engineer a more perfect system over time.

One example of a great system for assessing true performance is the Factory Operating System (fOS). It helps to evaluate the members within the manufacturing operations chain of command based on the same metric. The metric is based on the principle of OEE (Overall Equipment Effectiveness) but improved so that it can measure the performance of people, assets, and entire systems. OEE is regarded as the benchmark for measuring performance against perfection and assessing the gap to World-Class execution, or 85% OEE. The fOS calculates the performance of shop floor operators, managers, and executives alike. It considers the performance of the leader to be an aggregate of their direct reports’ performance, which ties everyone in the chain of command up to the CEO to the execution on the shop floor, which is where value is created for the customer.

 

 

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Continuous Improvement in HR Part 1 – Training; the Key to Sustainment

Manuficient - Knowledge Key

Training and People Development – The linchpin that holds any Continuous Improvement initiative together. People development is at the heart of factory performance. In fact, survey after survey has shown that a lack of workforce development is one of the greatest impediments to driving a CI culture. You can get a pretty clear picture of an organization’s agility by taking a close look at their training and knowledge management systems. When a company decides to undergo a transformation such as implementing Lean or other form of CI, they are committing to a period of substantial change in the way business is being done. This impacts individuals on all levels in the organization. Many companies believe that implementing CI is as simple as hiring a Lean expert or doing a few improvement events per year. What they don’t realize is that a CI implementation demands that everyone adopt a new set of behaviors – meaning letting go of old habits and picking up some new ones. Sometimes KPI’s, performance reviews, and coaching alone aren’t enough to get people to relinquish deeply entrenched habits. Those old habits are what kill sustainment of any initiative. If you probe deep enough, you’ll find that one of the biggest reasons for resistance to change is that people don’t believe that they, their peers, or their managers have the discipline to change. The role of the training and people development function is to close this gap, especially during a CI implementation.

In many organizations, training is simply having someone sit through a presentation and sign-off that they’ve been trained. Some go as far as to give a test or quiz at the end of the presentation to validate that learning actually did take place. Modern adult learning techniques encourage incorporating activities to engage learners, mainly to keep them from completely tuning out. But a vast majority of training programs stop there. What happens when the employee goes out on the plant floor and gets back to work? What happens when that employee gets stressed or is under pressure to hit production numbers for the day? How much of the material learned in the classroom is retained after 6 months or a year. Training, and even further, workforce development goes far beyond a classroom activity. If an employee is not performing the new / desired behavior on the job as if it is second nature, they have not been trained. Similar to a boxer or basketball player who trains for months on end before the big fight or game. The training includes learning the sport but also conditioning the mind and body to execute the desired behaviors unconsciously. Best in class training programs do provide classroom time but include auditing,continuous coaching, and corrective action until the desired behavior is ingrained. Only when the employee executes the desired behavior on a consistent basis without deviation have they been trained.

The speed at which an organization can truly “train” their human assets, the more agile the organization is. Agility is a measure of how efficiently an organization can change from one state to another. Agility is critical for a transformation at the magnitude of CI implementation. An effective training program needs to incorporate 1) Standards Development, 2) Knowledge Transfer, 3) Validation of Learning, and 4) Change Management. Items 1 – 3 are fairly common but the 4th is actually pretty rare. Change Management is the piece that requires ensuring that employees have incorporated the new behavior after they’ve returned to their work area. In many organizations, the first question people ask when someone makes a mistake is – “have they been trained?” And even though the sign-off sheet confirms that they sat through the class, they were often never really trained. In other words, the desired behaviors were never fully ingrained into their work patterns. As a change agent, you owe it to the workforce to ensure that they are actually trained, which can be verified by sampling work patterns from time to time and verifying that they match the documented standard procedure. This should be a shared responsibility with the immediate supervisor. Even better if you can foster an environment where all employees provide coaching or other corrective action to all other employees whenever deviations occur. This is trademark of how a high performance team truly works. This creates a foundation for true leaders to emerge – being those who can not only help to engineer a more perfect production system, but also lead the way on developing a more agile workforce.

Copyright © Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

The Detrimental Impact of Cutting Costs at All Costs: A Case of the Goose and the Golden Eggs

Manuficient - Golden Eggs

A factory and all its glory is a business asset. Within a factory, you have many things at play: people, processes, technology, culture, waste, organizations and sub-organizations, hierarchy, opportunities, dreams, breakthroughs, failures, successes, entitlements, disenfranchisement, rewards, consequences – this list can go on forever. Its possible (and no doubt has happened) for a person to live a majority of their life inside the four walls of a factory. The job of a factory is to make stuff at the highest possible quality and lowest possible cost. From a purely economic viewpoint, you pump money into a factory and it pumps valuable product out. The intent is to pump out more value that you are pumping in because this is what generates wealth. This creates a dynamic where wealth can be maximized in two ways: one is to maximize the value being pumped out; the other is to minimize the money being pumped in. Let’s look at the merits of each approach separately:

Maximum Value Creation: Most manufacturing businesses are built on this principle. This is what gets sold and what customers come to know and love about the company. When you see the product on the shelf at Walmart, it says “look at all these fantastic features” and “new and improved”. Entire companies are built on the value that they bring to their customers’ lives. The factory is an asset that creates value for both the company and it’s customers. When a manufacturing company creates a valuable product, it can grow until the market becomes saturated. Up until that point, the company is presumably profitable, products are selling faster than you can make them – let the good times roll. Many people don’t realize that Lean Manufacturing was created as an approach to maximize value creation and strengthen the company’s viability. At some point, the market does become saturated and the company’s growth becomes flat – or even worse, starts trending the other way as many companies saw between 2008 and 2011. People come to miss those good ol’ times when the financial statements always had great news to share. With increasing pressures from all angles to turn those numbers from red back to black, many companies start looking at alternative ways to grow wealth.

Minimum Cost Operations: Cutting costs is another way for a company to grow wealth. A company should not carry costs that are not needed. In fact every company has an obligation to its stakeholders, especially its shareholders and customers to remove unnecessary costs from its business processes. The challenge is removing costs without compromising the value that it has brought to its customers’ lives. Cost cutting should be a careful, continuous, and deliberate process as to continue nurturing and protecting the asset that is the factory. Factories thrive on happy employees, innovation, and streamlined processes. When cost cutting impedes on any one of these critical factors, the factory as an asset becomes malnourished and productivity suffers. When the manufacturing base becomes malnourished, the company overall may soon find itself in trouble. Many companies have gone as far as divesting completely in their in-house manufacturing base and instead opted for outsourcing to China and other countries to take advantage of lower labor costs. This is done at many expenses, including destroying the innovation pipeline, losing core capabilities, shipping jobs abroad, and funneling American dollars to other countries. Unfortunately, its difficult to capture these costs in a financial statement. This approach essentially delegates the company’s most important job, to maximize value creation – in other words, compromising their core capability to create value for their customers.

Growth for a manufacturing business is achieved by maximizing the amount of value being created in its processes. As such, value creation should never be de-prioritized to cutting costs. However, every company has the obligation to continuously reduce operating costs while maximizing value. This is the true and original intent of Lean, Six Sigma, Agile Manufacturing and other continuous improvement initiatives. As the definition of value changes for customers, so should the manufacturing processes. This requires agility and continuous innovation, which every healthy factory needs.

Copyright © Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

To Make or Not To Make – That is the Question

Manuficient - Kid Costume
Manuficient – Kid Costume

What do you want to be when you grow up? I remember being asked this question as a kid once or twice. I may have even asked my own small children what they wanted to be; not expecting a well thought-out answer…just want to get them to think about it. Most of us had at least some idea of what we aspired to become at some distant point in the future. It was fairly easy to just pick something – after all, since we planned to live forever, we had plenty of time to work on it.

Then over time, life happens and you look up and realize that you’ve become many things. An employee, a student, a parent, a church member, a husband or wife, a moonlighting entrepreneur, etc, etc…  In the end, we seek to be as good as possible in all these things and that’s fine. That’s life. Strangely, the exact same dynamic exists in the world of manufacturing. Many manufacturers start out with the modest ambition to make something great to serve a given market. Over time, more and more operations are brought in-house for one reason or another: rather it be to cut costs, improve service levels, hire more people, or something else. I’ve seen manufacturers start out with one production line and then take on all its own outbound logistics, kit packaging, and anything else it could fit within it’s four walls. This approach has its advantages but it can also make you lose sight of why you exist in the first place. You end up spending so much time and effort dealing with these supplementary processes that they start to feel like your core business. This is called vertical and horizontal integration. I’m not suggesting that integration is always bad; I am suggesting that any process that can be done better by someone else, you should strongly consider letting them have it. Then you can focus on achieving excellence at what you should be making.  Although its perfectly fine to be good at everything in life, you need to be great at something in business.

At some point, you have to take a step back and ask what is uniquely valuable about what is done at the factory. What is the Core Value Proposition? Ask yourself: “What process or set of processes are critical to our business that we can do better than anyone else?” Then you can start asking what can be outsourced. This is an approach to leverage economies of scale. As long as the factory or company is able to focus on becoming great at what it should be great at, it can partner with other great companies to take care of the rest. In the end, you end up with a truly great business system where each component continuously strives toward operating excellence.

© Calvin L Williams blog at calvinlwilliams.com [2015]. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Calvin L Williams with appropriate and specific direction to the original content.

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