Current Reality: the explanation

The first topic that needs to be addressed in the process of CHANGE is the Current Reality. By current reality we mean: ‘Analyzing systems or organizational problems at once by identifying root causes common to those problem.’ This includes understanding the following. How:

• does your company currently operate?
• are employees’ performances measured?
• well do your employees understand their work process, their functions, and their internal customers?
• and what potential improvement opportunities are currently available?

Where to start?

To understand your current reality you start with interviewing existing personnel. Focus on the issues related to their job and the negative effects they are experiencing.

The picture of the current reality becomes clear by meticulous evaluation and analysis of the issues and negative effects. This allows the leadership to create the framework of a ‘High Performing Organization’.

Understanding the company’s current reality is an important first step in building a High Performing Organization. The main purpose of this is to define “What to Change” in the organization that will lead to achieving breakthrough performance improvement.

Find the visualization of the Current Reality Tree below:

Issues between departmental functions

On account of our experience, we often find that many issues within an operating company lie between departmental functions. Actions in one department are causing negative effects in other departments. Typically, the organization does not fully understand the relationship of all the cause and effects in this complex environment; hence, the root causes do not get addressed. For example:

Take a situation where the sales people are driven to increase sales. In order to increase sales, they offer price discounts with an intention to get more sales volume. This higher volume of sales, leads to the depletion and eventual stock-out of inventory, which creates the inability to service other customers at regular prices. In an effort to quickly replenish the stock, the company has to pay expedite fees to restock the inventory. In the end, the negative effects the company experience are: increased cost, lost sales, reduced margins, lower customer satisfaction, and reduced profitability.

In this case, the act of discounting prices to get more sales is the primary factor that is contributing to the negative effects experienced by the organization. What is the root cause?