Reducing costs through wholesale layoffs ostensibly tied to ultimate results provides quick hits on balance sheets, but its clumsy blows can raise hell with operations.



Operational results can be achieved consistently with precision and power not when people are taken out of the organization but instead put back in.

"Putting people in" doesn't mean adding headcount but instead putting people into the mix of vital factors that contribute to operations results — having power with people, not over people.

Just as we're supposed to use only a fraction of our brains' capabilities, so I'm convinced, working with businesses in major industries, that few organizations come close to achieving their potential operational results.

That's because many operations leaders ignore one of the most important aspects of operational effectiveness: the human heart.

When I speak of the heart, I speak of that intuitive, emotional, feeling aspect of all of us.

No question: It's not just technology and equipment that drives operational success. It's employees. Clearly, they must be skilled and knowledgeable, but they also must be emotionally committed to their work. They must be motivated.

Yet most operational strategies and programs focus on rational not emotional/motivational considerations and so let great opportunities slip away.

To understand how quantum leaps in results can be achieved, far beyond re-engineering's capabilities, let's view operations three big drivers —— cost-reduction, productivity and efficiency — in terms of motivational factors.

Cost-reduction: Operations founder when they fail to achieve continuous cost-reductions. A leader of a world manufacturing organization told me, "One of my most tenacious leadership challenges is motivating employees to never stop getting costs out of our plants and processes."

Lesson: Cost-reduction is a leadership issue. It's an issue in which leaders don't order people to do a job but motivate those people to want to do the job. It's in the realm of want to that significant cost reductions take place.

Action: Institute comprehensive strategies, processes, and measurements that focus on having employees be ardently committed to getting continuous cost reductions, and those reductions will far outpace the ones achieved through re-engineering.

Productivity: Clearly, productivity isn't about doing things simply faster but also better. To speed up and be more productive, employees must slow down, reconsider their situation, reevaluate their education and training, then take new action. Only employees who have a strong emotional commitment to their jobs do well in that sequence of actions.

Lesson: Fifteen minutes before shift change, a machine starts to break down. The motivated operator will stay with that machine until its fixed or he will at least get a repair process under way. On the other hand, the less-than-motivated operator will punch out and let the next shift operator take care of the problem. Incidents like these are common and cost countless billions of dollars in lost productivity.

Action: Develop operational systems that are woven into the very driving force of productivity: the heartfelt convictions of the rank-and-file.

Efficiency: Businesses cannot compete well simply by selling what they make. Instead, they have to make what they sell. Which means that operations must be closely connected to the sell, the customer. And because customer needs change rapidly, operations must change with them or risk making inefficiency an institution.

Lesson: Efficiency begins in one place: with small-unit leadership, the leadership of the supervisors and front-line managers. In trying to realize operating efficiencies, top leaders often get jammed up in small-unit leader meat-grinders. Top leaders can usually persuade their direct reports to participate in the changes needed to make efficiencies happen.

However, the far more important task is to persuade the small-unit leaders to champion those changes. Small-unit leaders, who don't buy-in, can and will make mincemeat of any operational program.

Action: Get small-unit leaders to champion your changes at the beginning of the change process to insure that those changes take root.

In summary: When driving cost-reductions, productivity and efficiency, avoid the re-engineering reflex of ringing doorbells by rolling up cannons. Instead, roll out simple, precise strategies tied to the heartfelt needs of skilled employees — then let them get the big results.

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2005 © The Filson Leadership Group, Inc. All rights reserved.

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