How operating problems are hidden

Observation #24

carpedia-observation-24We spend countless hours in many different industry sectors observing and analyzing how work gets processed. We watch employees, managers and the tools they use in order to determine how much of their day is truly productive. Unless we are observing a highly automated process, there is a good chance a typical observation will reveal that somewhere between 35% to 50% of their workday is not truly “productive.” This seems remarkable at face value. It means that roughly three to four hours of an average person’s workday is not productive. As we’ve discussed before, this doesn’t mean that a person isn’t working; it just means that what they’re doing may not be adding any real value. When we share these observations with our clients, the fact that there are some operating problems buried within most processes never surprises anyone, but the magnitude of that loss almost always does.

What’s also surprising is that this hasn’t changed significantly over the last 20 years, despite all the advancements in technology and management training.

So, how can all this waste still exist? The simple answer is that the magnitude is often not obvious or measured by anyone, so it goes largely unchallenged and unmanaged. Work standards, when they exist, are often based on last year’s actuals, which only serves to hide last year’s problems within the standard. When attempts are made to “zero base” standards, they are often softened by too many buffers so they better match the current process.

Sometimes there is also a psychological game at play; no one likes to think they regularly operate at 60% of a standard. In truth, it really doesn’t matter, as the standard is only designed to help a manager identify performance gaps, but in practice managers often find it too demoralizing and believe it demotivates their employees. We find many environments where managers prefer to better their own standards (“We were 105% of standard last month!”), but this is not overly helpful for continuous improvement.

The most effectively managed environments we see go to great lengths to measure and identify all the problems they can. They don’t see this as an indictment; they see it as a baseline. And the only thing that matters is whether or not the problems are lessening over time.