Insights about improvement, innovation, and leadership…
Operational Excellence, Improvement, and Innovation
What's the Cost of Poor Quality?
We used to talk a lot about the cost of poor quality (COPQ) earlier in my career as a way to calculate the potential value of improvements. Generally, COPQ involves summing the annual costs of inspection and appraisal, any internal costs related to dealing with defects before it leaves the business, and external costs associated with defects once they reach the customer.
This was usually done to try to get a leader or executive to support whatever idea you were pitching, or convince others of the risks and costs related to failing to attend to quality. Short-sightedness and a misplaced belief in a trade-off between speed and quality are often the primary barriers to addressing COPQ.
There's usually a sound business case for reducing the COPQ, but what about a $21 billion COPQ? Boeing, in its latest round of fines, has agreed to pay $200 million in fines to the SEC related to the 737 MAX fiasco. $200 million sounds like a lot, but it's a drop in the bucket to the $21 billion hit Boeing estimates it has taken to its bottom line since the crashes and the $115 billion loss in market cap. Cutting corners on quality seems like a good idea until it isn't.
If you haven't yet, check out Downfall: The Case Against Boeing on Netflix.
Most claims of continuous improvement are decidedly not continuous. Organizations love to label projects, events, and episodic innovation as part of an approach to continuous improvement but fail to embed improvement into their work and management systems. Why? Because it's very hard. Gad Allon highlights Starbucks' (Dis)Continuous Improvement approach as an example of how improvement is rarely continuous.
Can't Get Used to Losing You
It's really hard to stop doing something you're used to. For example, try getting a standing meeting for all managers out of a calendar. I worked for an organization that would produce millions of money-losing seasonal products year after year because it “covered overhead”, rather than seek to replace it with something profitable. How do you dump a losing business without damaging the winning business? Roger Martin shares an approach to Shutting Down Losers.
Operation(al) Excellence – A Focus on Surgery
Surgery has a long history of being one of the most challenging workplace cultures.
Surgery continues to be responsible for some of the greatest advances and innovations in human health, while at the same time combatting a reputation for fostering workplace cultures that are vulnerable to fear, abuse, deference, and opacity.
Some of my most enduring lessons are related to attempting to help support making some reasonably benign changes to patient flow and safety processes in acute care surgical services. Anyone interested in operational excellence and culture can be well served by learning about how surgery “operates” (sorry!).
I've been a fan of the writing of Dr. Atul Gawande for well over a decade. He has laid bare the challenges of healthcare and culture in his excellent books, Complications: A Surgeon's Notes on an Imperfect Science, and Better: A Surgeon's Notes on Performance. He challenged the industry to heed the experience of industry and the need for standardized work in The Checklist Manifesto: How to Get Things Right.
Dr. Gawande continues to challenge us all to remain humble in our pursuit of excellence in a revealing discussion on Worklife with Adam Grant: Surgeon Atul Gawande wants everyone to have a coach.
Last week, Amy Edmondson, known for her work in psychological safety in the workplace, was a guest on The Resilient Surgeon. Give it a listen to hear Dr. Edmondson and Dr. Michael Maddus go deep on surgical culture, fear in the workplace, the consequences of a lack of psychological safety, and what surgical teams can do to change the conversation.
Creating a Culture of Improvement
Your organization is thriving. Congratulations, but remain vigilant. What got you here may not keep you there or get you where you're planning on going. Is Your organization Future-Ready?
Compassion Without Compromise
Managers still think too often that being kind will result in people taking advantage, leading to a deterioration in performance. More and more, employees seek leaders who listen and care – not coddle. Here's How to Show Compassion Without Compromising on Performance.
Bursts of Culture
“We don't have time to take people out of the work to focus on culture.” Culture can be nurtured in short bursts of time and reinforced in the work every single day. Author Brad Federman, author of Cultivating Culture: 101 Ways to Foster Engagement in 15 minutes, appears on the latest episode of Connecting the Dots to challenge us all to rethink organizational culture for the 21st century.
Coaching – Developing Self & Others
I'm Failing Away
To tell or not to tell? One of the hardest things to do when developing others is to avoid the temptation to jump in and rescue them. But simply letting people fail is not instructive either. Designing productive failure into the learning process allows students to discover for themselves without flailing or drowning. If you're not failing, you're not learning.
Failure or mistake is indeed a rich source of insight and learning. Mark Graban has amassed an impressive collection of candid stories from leaders around the world about times they learned from failure. I highly recommend giving the “My Favorite Mistake” podcast with Mark Graban a listen on your commute or treadmill.
Our brain calculates trade-offs all the time, and it knows that the path of least resistance feels better. But the brain can be trained to make effort itself rewarding. How to train your brain to enjoy doing the hard things.
Follow Ryan & Subscribe:
What do you think? Scroll down to comment or share your thoughts and the post on social media. Don't want to miss a post or podcast? Subscribe to get notified about posts via email daily or weekly.
- Ryan McCormack's Operational Excellence Mixtape: December 2nd, 2022 - December 2, 2022
- Ryan McCormack's Operational Excellence Mixtape: November 18, 2022 - November 18, 2022
- Ryan McCormack's Operational Excellence Mixtape: November 4, 2022 - November 4, 2022