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Here's what really drives business performance

January 12, 2017

 

If you were to ask a member of your team to dig a square pit — 10 feet wide by 10 feet deep — using only a spoon and measuring tape, could they? Of course they could! The real questions are: In how much time, and at what cost?

 

The answers have little to do with your employee at all. Instead, performance will be a product of the system you have provided them, taking into account methods, materials, machinery, facilities, training, policies, compensation, capital, authority, and leadership structure.

 

But let’s forget about all that for a moment. In the example of the pit, what other information may be required? How about: Where to locate the pit? How to get in and out of it as it is dug deeper? What to do with the removed dirt? What should be done if water starts seeping in? And, what will it be used for?

 

Now, if you were to provide that insight, as well as perhaps a backhoe, ladder, stakes, and some string, you would be implementing a different system for your staff to leverage. As a result, you could (and should) expect a higher level of performance, even if the workforce remains the same. Conversely, if you kept the original system, but swapped out the worker, it would be unreasonable to expect any change in performance, correct? 

 

Unfortunately, especially in manufacturing, we instinctively try to measure the outcome against the people, without any acceptance or acknowledgement of the system that was required to get there. Think of it this way: If you were to double the salaries of everyone employed in your company starting tomorrow, would you see a spike in output? An improved bottom line? Didn’t think so. 

 

In basic terms, a system brings in a set of inputs and combines them in a certain way to produce a resulting state. This entire relationship can be easily mapped out as a diagram. Once you have articulated what you wish to accomplish, you will then be able to answer the most fundamental question in the business equation: By what method?

 

Outcomes are effects, caused by methods. As a business, you have a solution for which a customer is willing to pay — that is the opportunity. But opportunity itself is not enough. The efficiency of the method, or system, is what dictates productivity, performance, and, ultimately, profit.

 

The reality is that our beliefs (or theories) govern our actions — in life and in work. Your actions will lead to your methods. And your methods will produce your outcomes. There is no ‘good’ theory or ‘bad’ theory. What matters is the utility, or effectiveness, of a theory to produce predicted outcomes.

 

Can you confidently take action that will always produce the outcomes you desire? If not, then your theories do not have utility for what you are trying to accomplish.

 

Maybe, just maybe, it’s time to question what we think we ‘know’ and start looking at the system, instead of exasperating so many resources trying to ‘fix’ our people. People only use the system. They can make suggestions about how to improve it, but it is the system — not the people — that stands in the way of producing better outcomes.

 

How could you know if that were true in your organization? If, every day, you are faced with and are discussing the same problems, then the theories you have been using to eliminate them must have limited utility.

 

Your current theories are perfect — for producing your current results. Are you satisfied with your current results? Everything, both good and bad, that is happening in your organization, is authorized by you. If you wanted a different theory or method to be applied, you would have asked for it. By not asking, you are authorizing what you have. 

 

Gordon McGilton is a speaker at the W. Edwards Deming Institute, and regularly conducts seminars across North America to teach Dr. Deming’s theories. He s currently working with Pro Metal Industries in Regina.

 

This article originally appeared in Prairie Manufacturer Magazine.

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