Organizational Opportunities from the Frontline Story 11: Alignment and Accountability | Operational Excellence Quick Hits

In today’s session, we’re going to continue on the concept of organizational opportunities and lessons learned and stories from the front lines. So today’s session is going to be talking about alignment and accountability. So the background of this company was their distribution environment. They had several issues trying to manage a supply chain and sales was under pressure from customers to get their orders shipped. And so every time a new shipment of inventory would arrive, the salespeople would be down in the warehouse telling the people in the warehouse what orders they should be working on. And what happened was it created a lot of chaos, it created a lot of loss productivity, it created a lot of quality issues. So what did we do to get alignment and accountability in this situation?

So let’s talk about alignment and misalignment between functions. So typically, when a resource feels pressured to take action outside their area of responsibility, we call it swimming outside their lane. So what we want people to do is stay in their lane, and what happens if they swim in other people’s lanes? They create disruptions. So this is an indicator of a breakdown in the process or a broken process. So in this case, extra efforts required to correct the issue. And in most cases, the action taken reactive in nature and it deals with the symptoms, not the root cause. And of course, when we do this, we don’t improve the overall situation but we typically make it worse. So in this case, them coming down, giving directions to the warehouse outside their area of responsibility and creating chaos in the warehouse and creating all types of issues in terms of productivity, not getting orders out, quality issues and so forth.

So how do we go about dealing with this? So this is a organizational cultural issue to me. So what is culture? Culture is the values and behaviors that create a unique social and psychological environment within the organization. It represents the collective values, beliefs, and principles of members of an organization and it influences how people interact within the organization. It influences how decisions are made. It influences how people treat each other. It influences how knowledge is created. It influences how change is viewed by the employees, and then also influences how employees share or don’t share knowledge.

So what are symptoms of cultural issues? So things like improvement efforts are not sustained. Employees are frustrated with lack of accountability. Employees feel that the communication is poor. Employee morale is declining. Employees are frustrated with overall improvement efforts. Managers feel pressured to micromanage. Employees don’t feel appreciated for their efforts. Resources are spread too thin. There’s lack of buy-in to the plan changes. Problems take too long to resolve. There’s no time to provide timely feedback to employees. Resources are constantly under pressure to deal with new priorities. And the one that we’re talking about here is employees take action that are outside their area of responsibility. So when dealing with these issues, we got to look at building accountability into the process. Let’s talk about the management window. So what is the management window? The management window is the time between when action is taken until the management understands the effect, either positive or negative of that action taken.

And what we want to do is we want to reduce that management window. So the time between when action’s taken until we understand the effects of those actions. So if we look at a system which is made up of multiple processes, a lot of times we take action in the first process and a lot of times it goes through several process steps before we understand the effect. And then of course after multiple process steps, we see the effect now we have a long time between when the action was taken, until we understand that the effect was negative and we need to take action. What we want to do is we want to shorten that management window so when the action’s taken, we immediately get feedback on the process and understand if that action was correct or not. If it wasn’t correct, we take the immediate corrective action. Just by reducing this management window, we’ll significantly reduce the chaos and start to build accountability until the processes.

So we need to create a new culture. So when creating a new culture, there’s two things that are required. So when I was trained by Dr. Goldrat, he always said, “There’s two things that you need to do; two necessary conditions when you make a change. So first you got to start doing something new. So you got to do some new action.” So in this case, what we did is we established a single priority system for the people in the warehouse so that when the inventory came in, they could look at the single priority system and they could work on which orders are most important based on what the priority system was telling them. And then of course, you got to stop doing the old action. So that’s the old action that was happening. So we set the rule. Sales people are no longer allowed to come down to the warehouse and give them direction.

So that’s the action that we took and the action that we stopped doing. So now what was the result? So of course, the sales people, instead of focusing on the issues of getting existing orders out, can focus on getting new orders for the organization so we can actually increase sales with the same resources. Then the warehouse workers’ productivity increased and made less mistakes because they had a single priority system and they could work for that priority system at their own pace. And of course, inventory accuracy and availability increased. So there was so many positives just by changing and getting to the root cause of the issue and getting the proper focus and building accountability into the process. So that’s our session for today, and I hope you enjoyed the session. Connect with me on LinkedIn, visit our website, go to our YouTube channel, Future State Engineering. We have tons of video about different concepts.