Adding two points to the bottom line is possible by replacing silo thinking with cooperation, visibility, and sustainable processes. In the case at hand, the silo mentality at a manufacturer of durable consumer goods had led to a downward spiral of quality and productivity. Accusations flew in all directions, dampening morale. The management approach had degenerated into something resembling a feudal system propped up by sycophants.
We entered the challenge at this point. The assigned goal was to add two points to the bottom-line in 9 months. Over the past decade, their single-digit profit margin had never risen above the current level.
The first action was to rebuild trust with the workforce and engage them directly in searching for solutions. Easy to say, not as easy to do. The people received respect as the real experts regarding the processes they perform. This approach accelerated creativity and elevated solutions. The effort included:
- Winning agreement with the “old guard” to step back and allow changes to take hold. (Convincing them to stay out of the way is a story for a future blog.)
- Mapping the processes to make the current state visible.
- Providing a general amnesty, forbidding recriminations against anyone who brought visibility to a problem. The “old guard” had assigned blame before looking for solutions, driving people to bury problems.
- Installing a two-tier incentive system.
- Tier one: rewards for bringing problems to light, rewards for bringing problems to light, regardless of the source of the problem
- Tier two: greater rewards for providing solutions.
- Prioritizing resources to implement solutions in an orderly and sustainable process. This step helped convince the workers we were serious about listening to them and making changes.
With trust and free-flowing communication, people felt it safe to bring buried problems to light. The incentive programs greatly helped. Slowly at first, then becoming a flood, solutions poured in from team members. By comparing the ideas with the existing process maps, value became easily identifiable. Cooperation allowed us to identify a rapid, reliable implementation process for each idea. There were many hiccups and difficulties, but open communication helped us work through them as we continued to push forward.
The dormant value hidden in the organization provided two points of sustainable bottom-line improvement in the first three months. This springboard allowed us to find another two points that took a higher level of effort to realize, but they too were dependent upon bottom-up ideas.
The lesson was clear, sustainable results are achieved when you respect people, see problems as opportunities, and cultivate cooperation.
