Thursday, August 30, 2012

Did He Eat the Steak?

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As I was boarding a plane in Atlanta some years ago, I noticed a customary face in line in front of me. The unmistakable beard and steel-rimmed glasses, even the trademark bow tie -- C. Everett Koop, former Surgeon normal of the United States, Mr. Anti-Smoking and Eat Healthy.

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It was a big plane and my seat was a good distance from his, so I didn't see him again after boarding. When the meal was served, it was a steak dinner (you can tell this was some time ago!). As I loaded up on cholesterol, along with the patented artificial vegetables, simulated sour cream, preservative-laden salad, and chemical cheesecake, I couldn't help but wonder what C. Everett was doing. Did he eat what the rest of us did? Or did he have the foresight to ask a low-cholesterol meal or vegetarian entree? When faced with a selection of eating unwisely or not eating at all, what is the preferred alternative?

In Koop's case, he was the country's advocate for corrective practices. When he eats, there are probably habitancy watching to see if he practices what he preaches. There is no way he could light up a Camel after his meal and retain credibility. But what about us? Do we institution what we preach?

We are not under close scrutiny in the way a public frame is. We can talk all we want about best practices and green reserved supply management, and few will ever know if we have achieved success in that area. Nor should they. The improvement programs you undertake are aimed at good performance, lower costs, and becoming more competitive, and as long as the follow justifies the attempt and expense, it doesn't matter what you call it or who knows about it.

So the real issue is either you do what you should be doing, even if no one is looking. Just how serious are you anyway? It's always the tiny things that trip you up. Top on the list is procedural discipline. Take inventory accuracy, for example. Let's say that your inventory narrative accuracy is 40 percent. If you spend half a million dollars to automate your inventory records but do nothing to tighten up procedures, what you end up with is a half a million dollar self-acting 40 percent-accurate inventory system. Sometimes we forget that systems are only as good as the information that we furnish to them. Even if we remember, it is easy to slip into old habits when no one is finding and destroy the benefits we worked so hard to achieve.

Early on in an implementation task there is a lot of visibility. Top management wants to see results from that big investment. We pay attention, tighten up, and get our act together to get accuracy up to around 90 percent. After a few months, however, when the spotlight has moved on to an additional one project, it is easy to lose the discipline that brought success while implementation. That accuracy level will quietly slip back to the 40 percent. We start eating steak and fries again.

What we as a matter of fact need is a spotlight that doesn't go away after the implementation attempt ends. Prosperous associates post the inventory accuracy measurements where everybody can see them. Make it public so there are witnesses to your success or lack thereof. Nobody likes to air dirty laundry, so what good way is there to keep the pressure on and certify results? The visibility rule applies at all levels. Any private who has a accountability related with the company's success (which I'm assuming includes everybody in the company) must have an standard spotlight aimed in his or her direction.

There is an incentive law at work in each situation, either it is a formal performance law such as incentive pay or management-by-objectives evaluations or as informal as "do it right or lose your job". The key is manufacture sure the incentive is specific adequate to encourage the desired behavior, and that the encouraged behavior achieves the desired results.

People retort to their motivating law either the motivation is properly aimed or not. If a output foreman is paid a bonus based on the quantity of stock produced, he will do his best to produce the maximum quantity per month, regardless of either that is the best follow for the business. When implementing a priority-based planning system, the maximum output quantity per month will likely disagreement with the priorities developed by the system, which are tied directly to shipment schedules or complete goods objectives.

For example, it is the last day of the month and there are three jobs in the queue. The output numbers for the month (total quantity) are a tiny below average. Of the three jobs, one is high priority but small quantity, the second is a large quantity but long running (average priority), and the third is a quick, high quantity job that is early (low priority). Guess which one will get run today? Of course, the high-quantity, low-priority job; this yields the top bonus for the foreman. As a result, the high-priority job is deferred and a customer ship date is likely to be missed while unneeded parts sit around inflating inventory.

It is not the foreman's fault. You can't blame him or her for responding to an incentive system. Instead, blame the incentive law for not properly reflecting the goals of that company. The spotlight is there, but it is illuminating the wrong target.

The challenge is threefold:

1. You must recognize what the true objectives are for each employee, in line with the allinclusive objectives of the company (make a profit by shipping efficiently produced, quality products on time)
2. Find a way to motivate employees properly in line with these objectives
3. Create and monitor the incentive law and adjust as valuable to reflect changes in company goals, procedures and environment.

So did Dr. Koop eat the steak? I'd like to think he ordered a special meal and wasn't faced with the qoute in the first place. I am sure that he did not have a smoke afterward.

We have to devise our own spotlights to motivate ourselves and our employees to do what is best for the company's health. Incentive is necessary. Make a commitment and reinforce it with a determination law that keeps the pressure on. Doctor's orders. It's for your own good.

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