Only 29 percent of North American employees are actively engaged in their jobs. Of highly engaged employees, 84 percent believe they can positively impact quality of their organization’s products. This compares with only 31 percent of those who are disengaged. (BlessingWhite, 2008 Employee Engagement Report)
As these statistics suggest, the most effective way to achieve operational efficiency is to leverage your employees. By including their ideas, you not only make your organization a great place to work, you establish a management system to facilitate future growth.
The first step to engaging employees in an improvement effort is establishing SMART goals:
S – Specific
M – Measurable
A – Attainable
R – Relevant
T – Time-bound
When setting an improvement goal for your company, be sure it is Specific. Specific goals focus on well-defined areas with clear boundaries. For example, “Improve the operation” does not provide any parameters. Yet, “improve throughput by 20 percent” gives everyone a target.
Next, the goal must be Measurable. In a shop that cuts steel plate, we could measure the linear distance of cut per labor hour, i.e. feet per hour. This is a productivity measurement because it measures the amount of output for a given level of input. Measuring productivity helps to encourage the right behavior. Had we chosen a more general measurement like total pounds produced, we wouldn’t be considering the efficiency of production or the impact of building excessive inventory.
Goals must also be Attainable. Doubling the productivity in the plate cutting shop overnight would be great, but is it realistic? Perhaps, a 15- to 20-percent improvement is more likely. Achievable goals play a critical role in employee engagement.
Obviously, relevance also is an important goal-building element. Relevant goals are focused on an important area of the business. Most often, this is an area where improvements will impact the bottom line with benefits in cost, quality, and delivery that will be felt immediately by customers.
Last but not least, a goal can have a short-term or long-term Timeframe. When initiating an internal improvement effort, it’s helpful to have some fairly short timeframes – three months or less. This enables you to gauge and report how well your efforts are progressing. And, quick wins help build momentum!
So, how does this sound? “Increase the productivity of the plate cutting shop in feet per direct labor hour by 15 percent by March 30, 2009?”
As an example of an effective measurement, this goal is easily understood by everyone in the organization – from the C-suite to the front line. Furthermore, this simple measurement is quickly and readily retrieved or calculated. That’s important, because real-time measurements ensure we don’t wait hours, days, or weeks to see the impact of improvement efforts.
Next Steps
The essential next step is to begin conducting a daily huddle to discuss performance relative to the goals and to share ideas among team members. During the huddle the cross-functional team needs to meet in an assigned area to review the previous day’s performance. Questions for discussion include: “what went well?” and “what needs to improve?” By examining what produces results, we create opportunities to keep doing the things that are working. By asking questions about what isn’t working, we provide an opportunity for the team to discuss the specific challenges and brainstorm some new changes.
A well-executed huddle will review the performance trends, concluding with tangible actions and timelines for follow through. The entire process should take no more than five to ten minutes.
Building on the daily huddle is a more in-depth weekly update. The weekly update is an opportunity to celebrate the champions driving change in your business. It includes a cross-functional and multi-level review of an action list. The action list is the document that is used to capture improvement ideas that require more than three days to complete and/or resources outside the immediate focus area. Review of the action list should not be lengthy and deliberative. A quick status update on items by those responsible is all that’s required. The weekly update is the time for team members to ask for resources to complete an action item and gives leadership an opportunity to reinforce the importance of driving change and improvement throughout the organization.
Making change can be difficult even in organizations where it is common. As a company leader, you must best position your team to achieve desired improvements. Establishing SMART goals with effective measurements, implementing a daily huddle, and a weekly update is a proven pathway for improving your operations…and creating an engaged workforce.