Whether you’re facing price pressure from domestic competitors, startups, powerful customers, or low-cost overseas providers, you’ve heard the mantra of “productivity” preached again and again. What typically comes to mind when your organization starts talking about increasing productivity?
- Asking employees to find a way to do more with less
- Large, clunky capital projects to upgrade assets
- Benchmarking, finding new “best practices,” and implementing broad Management of Change documents
- Brainstorming sessions to come up with productivity ideas
- Suggestion boxes
- Broad training programs
- Walkabouts looking for “waste” in the business and hoping you’ll find something juicy
- Staying at work late to find an extra 1% or 2% to squeeze out
Such is the sad state of many productivity or continuous improvement efforts across the world. People work hard, the business spends a lot of money, and leaders just might sneak past their 2% annual improvement target… only to be saddled with the same thing next year.
A large mineral extraction facility was in such a state a few years ago. It was already best-in-class in its cost per tonne of ore moved, but investors wanted more. They had hired a prestigious management consulting firm to help them find opportunities to improve. The firm performed a benchmarking study between many aspects of this business and its peers: they found about 15% total possible price improvement, with about 10% of that being “achievable.” The opportunities included dozens of arduous or expensive changes they could make to different parts of the business.
While it was nice to hear they were operating so near maximum possible efficiency, they weren’t looking forward to their next conversation with their investors. So they decided to change tack, and got help approaching their cost from an angle of problem solving. They identified new problems in the business that could be solved that could theoretically bring a 60% reduction in their cost per tonne. Aggressively attacking a few of the most valuable problems brought their costs down by 20% in just 18 months.
What made the difference? By dropping the dead weight of “productivity” efforts and converting to finding and solving hard problems, they radically changed their perspective. There were two steps to their success:
- They investigated their business to find previously-hidden problems that were worth millions
- They developed the skills and behaviors in their team necessary to solve hard problems with simple, elegant solutions
Your business can do the same.
Seeing New Solvable Problems
Typically, when business leaders think “problems” in their business, they are thinking of thousands of little things going wrong all the time. They don’t know how much each one is worth, and solving all of them just doesn’t seem worth it. Often they’ll teach basic improvement methodologies to a large base of their business in the hopes that their employees will autonomously solve small problems, which together will add up to something significant. More often than not, the return on that investment is dubious.
In reality, there are problems in your business that are worth far more than others–this is simply the pareto principle, or 80/20 rule, at work. But many of these very valuable problems are hidden by constraints or assumptions that the business has about what is possible, and what is an immutable law of nature. To see valuable, solvable problems, businesses have to pierce this veil.
Such sight can come from solving simpler, more apparent problems to root cause, and implementing elegant solutions. As problem-solvers get into the habit of finding the root cause of problems, they’ll begin to see how processes all around them have problems that are hidden, ignored, or accepted. They’ll learn to identify and attack them.
Solving problems to root cause requires great problem-solving skills. How do you develop those?
Developing the Skills to Solve the Hard Problems
Problem-solving is nothing new to most businesses that are conscious of their cost structure. Many are familiar with popular problem-solving processes that apply structure to problem-solving efforts. Many of these methods are meant to help a broad set of people solve relatively simple problems. Simple problems have few potential root causes, and structured guidance in investigating the problem and then coming up with ideas to solve them can indeed accelerate the path to solving them.
But hard problems–the ones that lock away huge value–require a new approach. They tend to exist in complex processes in the business. They have hundreds or thousands of potential root causes. Problem-solvers can’t rely on a rote method which replaces their thinking. They’re going to need to use their brains.
Instead of teaching your team another checklist-method, teach them new behaviors that help them unleash their smarts in the most effective way. The right behaviors will get people out of brainstorming sessions, break them of the habit of guess-and-check, and make their approach much more powerful.
Such behaviors include:
- Stop Guessing: time to put that habit to bed
- Smell the problem: investigate the nature of the problem rigorously and thoroughly
- Embrace your ignorance: know that you don’t know, and ask the “stupid” questions
- Know what problem you’re solving: make sure you’re working on the observable problem itself–rather than trying to solve an assumption about what’s causing it
- Dig into the fundamentals: learn how the process really works, and the science behind how it controls the problem
- Don’t rely on experts: don’t ask them to solve the problem for you; get their help understanding the process
- Believe in a simple solution: have the confidence that when you find the root cause, a simple and elegant solution will be in your grasp
- Make fact-based decisions: don’t let anyone’s opinions or assumptions lead the team
- Stay on target: eliminate distractions and quickly cleave off as many avenues of inquiry as possible
Changing your improvement approach from “productivity” to problem solving will unlock massive value in your business. And to boot, it will help you meet your goals with a lot less effort. What problem solving behaviors are your greatest strengths? Find out here with a brief quiz.