In my work as a turnaround executive, I have learned to value some fundamental indicators leading to the identification of the strength of the leadership bench of a company. Basic operational deficiencies in this context include issues like housekeeping, EHS (Environment, Health & Safety), equipment & process reliability as well as product and service quality. As a starting point, the lack of good housekeeping has a direct impact on EHS results and can always be directly related to serious leadership gaps.
The traditional organization will only be as good in housekeeping as it is truly expected by the leader(ship). At the same time, the expectation and its execution gets diluted by every single hierarchy layer in an organization. As a consequence, it requires total top down commitment to establish and/or restore the core foundation of operational excellence – excellent housekeeping! Any insufficiency overlooked or ignored by a leader becomes the accepted new (lower) standard.
Great attention to detail is most critical to achieve real change. This is valid for every level or department of an organization. Emphasis needs to be given to the fact that the communication and the drive for execution must come from the top leader of the company or physical location of that organization. The emphasis is actually on the physical location as the core foundation, that is where the “rubber meets the road”. Good housekeeping cannot be managed remotely, because it requires consistent physical presence until it becomes an integral part of the culture of the organization.
Furthermore, the same principle can be applied for additional layers of the core foundation, EHS and equipment & process reliability. However, it is critical to recognize the order of dependence. While one can create short-term improvements attacking issues in an isolated and localized fashion, it will not serve the purpose in a sustainable way nor will it support the change of culture in the organization. Produced product quality stands, as a result, in direct relationship to equipment & process reliability.
Enforced housekeeping, improved EHS, better equipment maintenance & reliability and higher product quality represent distinct signals of change.
Improvements in the core foundation of Operational Excellence will create positive tangible and intangible results overall.
The intangible improvements are signals of change to the better which in turn create improved individual as well as organizational spirit. People appreciate consciously and sub-consciously improved cleanliness, better order and structure, a safer workplace, as well as functioning equipment and processes with limited (ideally no) unplanned interruptions. The result is reflected in the level of self motivation that is created by the improved working environment, which generates an additional positive side effect of lower stress levels.
The tangible improvement can be measured in operational efficiency improvements in different ways:
- Reduction of waste ( 7 waste improvement concept)
- Increased throughput
- Reduced cost
- Increased capacity
- Higher profit
In most organizations the main focus has become equipment and process reliability. Over the years, many tools and techniques have been developed to support the improvement of equipment & process reliability, such as Red Tag Events, TQM, Six Sigma, Kaizen events, LEAN concepts, TOC, etc. Those tools or improvement concepts have certain individual features for application. Many of them not only address the reliability factor but also process effectiveness and process efficiency.
Reciprocity: interactive responses to signals of change
It is the author’s conviction that the initial steps of the responsible turnaround or improvement manager are of critical importance, as they have the same impact as a first impression. The very meaningful expression “turnaround” already sets the stage for massive change, and it is therefore important that the first actions a leader takes will help to prepare the organization for change, as well as send some signals of positive change towards teamwork.
One important word of caution: One must not attempt to send signals that are not genuinely meant and carried through without compromise. The repercussion of superficial signals is almost insurmountable considering the task of the turnaround ahead!
It is impossible for a single person to change an organization from negative to positive without the unconditional support of a vast majority of the organization. In traditional organizations we find an “us & them” culture which manifest itself in management versus employees, sales versus manufacturing and manufacturing versus finance. As a consequence, an important signal for change on the outset is the clear indication that “we are in this together”. There are certainly different ways to deal with that issue. One practical approach is to eliminate some of the conventional management status symbols like dedicated parking spaces, dedicated seating in the cafeteria, etc. Such “sacrifices” from the executive/management level are immediately recognized by an organization and create instant goodwill.
An organization in trouble, hence the need for turnaround, is typically not in a readiness mode for change – which actually is true for most organizations in general, too. Yet openness for change is a key characteristic for the “learning organization” which is the basis for a future oriented successful organization that is capable to cope with the ever changing business environment with vigor and passion. A practical and very effective exercise as an initial signal from the turnaround manager is changing how meetings are handled.
Regular meetings are vital in any organization. Independent of the frequency, daily, weekly or monthly, most meetings develop a “firm” order of seating which often reflects an informal “pecking order” and/or other types of relationships between the participants. A clear signal for change will be sent by breaking up the established, often organically grown order and sustain the “breaking up process”. For example, implementing a new rule disallowing any participant from choosing the same seat twice in a row will mix up the group consistently and develop new patterns of interaction.
When it comes to housekeeping, it is very important to be demanding with respect to the ultimate result; one can negotiate timing depending on the physical state of the organization and the working environment. However, the ultimate goal must be defined clearly from the very beginning. There are also some very simple and practical ways to create positive movement in the housekeeping arena.
To begin with, one can create an impact on the work environment with the demand that “everything must have its defined place and everything must be in its place when not in use”. Such a statement is easy to understand for all intellectual levels in an organization and will trigger an “unfolding complexity” of positive actions towards housekeeping and cleanliness. Once such a stated demand is released, the leaders on all hierarchy levels must be held accountable for the execution without compromise!
A safe work environment is without any doubt everyone’s responsibility in an organization. However, it is the leadership that has to “walk the talk” and accept the responsibility for the potential consequences. While it is generally not too difficult to take care of the tangible items of a safe work environment such as the provision of PPE (Personal Protection Equipment), appropriate guarding, protective mechanisms to shut down devices, warning signs and access limitations, to name a few, it is much more challenging to manage the intangible side which is also called BBS (Behavior Based Safety).
To turn BBS in the right direction again requires strong leadership by example and life-long training! BBS will over time become a part of the culture of an organization, but it is potentially the most time consuming endeavor an organization must go through. An organization like DuPont can serve as a positive example and benchmark during the process . The safety related training and coaching has become a specialist task in the execution but must be fully supported by the leadership at all times, especially when it may become inconvenient due to added cost or compromised throughput! Sometimes it may represent an excellent investment to shut down a production line to fix a safety hazard on the spot instead of waiting until the end of the shift. By making such an example, one clearly signals to the organization that EHS is taken seriously.
An important part of the development process in both housekeeping and EHS is a systematic auditing procedure and auditing tools that help to measure progress as well as support the detection of deficiencies. There are already different effective audit tools available on the market.
Corrective actions taken in the area of equipment & process reliability are usually embraced by an organization with more openness and enthusiasm than housekeeping and EHS. The equipment people work with and the processes they apply are more directly related to the purpose of their employment.
However, it is the authentic commitment without compromise from the leadership of a company or an organization that will institutionalize the positive change process and maintain the continuous trend of improvement. Leaders without concern for the fundamental issues of organizational excellence will always fail to create sustainable success.
