The responsibility of every employee, from the front-line to the executive suite, is business performance improvement. But barriers exist to realizing positive bottom-line impact, operational efficiency, organizational effectiveness, and a continual flow of improvements built on the knowledge of a firm’s employees.
According to a McKinsey & Company study, amazingly 70% to 75% of companies do not have an improvement process defined and implemented on a broad basis. Senior executives seeking performance improvement face formidable tasks such as:
- Rallying and enabling all employees to seek improvements everyday
- Defining and implementing a truly sustainable improvement process, sustainable for 10 years or more
- Shifting an organization’s culture to one of collaboration and improvement
- Leading the 4 generations which comprise the typical workforce within an enterprise, each with its own preferred style of communication and comfort with current technologies
- Leveraging constant improvements to gain defensible competitive advantage for a firm.
Over the past several decades, stretching back to the mid-20th century, several trends exist in how businesses improve.
- Many improvement methods have been attempted through the years with varying results
- Each improvement method has a finite lifecycle of impact to an organization’s performance gains (see my previous blog on “Patterns of Improvement”
- Sustainable, continuous improvement has been a promise that is seldom realized
- True sustainability has been hampered by numerous root causes.
Root Causes of Decaying Impact
Root causes of impact decay I have observed over the years include:
- Improvement is a special program within a firm and is not treated as part of employees’ day-to-day jobs
- No structural incentives exist to motivate improvement behaviors
- Outside experts, such as academics, gurus, and consultants, drive improvement programs creating the risk of high levels of organizational resistance
- At most, only 1% to 2% of an organization’s workforce is asked by senior leadership to participate in improvement efforts, e.g. 300 to 600 people in a 30,000 person company
- Distribution of deep improvement know-how and tools is limited to a central team or a select few specialized resources, e.g., Six Sigma Black Belts, the Quality Department, or the Office of Reengineering
- Organizations run out of energy and endurance beyond a 3 to 5 year period
- Special improvement programs lose focused, visible leadership from senior executives after 12 to 18 months or leadership of the firm changes and along with that comes a new executive agenda
- New improvement methods hit the market every 4 to 6 years creating systemic discontinuities caused by implementation ramp-up times of 6 months to 2 years.
The Collaborative Improvement Opportunity
To manage through the long trough of the global recession and the protracted recovery, senior executives must improve how their business improves. Root causes of the decaying impact of improvement processes must be attacked through a focused effort to create a high performance collaboration environment.
I believe a window of opportunity exists for an enterprise to leap forward beyond its competitors by requiring and enabling employees to adopt improvement behaviors executed on a routine basis. Also, a window of opportunity exists for an enterprise’s senior leadership team to create a lasting improvement legacy for the organization.
A thriving enterprise requires continual performance improvement in order to thrive. Truly sustainable improvement methods have been elusive over the past several decades. The impact of improvement programs decays as a result of a myriad of root causes, which must be addressed with a hybrid of traditional and modern techniques. Senior executives must role model improvement behaviors to drive a cultural shift in their organizations towards collaboration and the search for business improvement everyday and in every way.