| by Craig Cochran
This article concludes our “ISO 9001:2000 After the Transition” series. Previous articles discussed measuring customer satisfaction, conducting effective management reviews, enhancing internal communication and assessing training needs. Craig Cochran brings us full circle with this discussion of objectives and the role they play toward fulfilling an organization’s commitment to continual improvement.
--Denise E. Robitaille, series editor
Most quality practitioners already know the three obvious caveats related to objectives: They must be clearly defined, measurable and documented. In the November 2000 issue of Quality Digest, I wrote an article titled “Using Quality Objectives to Drive Strategic Performance Improvement.” That was just before ISO 9001:2000 was officially published. Now, nearly four years later, what else have we learned about objectives? We know, for example, objectives offer one of the most powerful improvement tools available. What kind of wisdom has emerged about the best way to use them? Let’s take an inventory of some key principles related to achieving objectives.
Objectives, in and of themselves, are really nothing more than communication tools. They say, “Here’s what we believe is important for our future success. Let’s try to focus on these issues.” Objectives are bright spotlights, nothing more. Their mere presence doesn’t make anything happen. A good analogy is the farmer who buys a bag of seeds in early spring. He might think to himself, “Soon I’ll be eating corn.” However, a lot of work must occur between buying the seeds and enjoying that first golden ear. Your objectives are just like those seeds. They’re a good start, but it will take a lot of effort to make them take root, grow and produce positive results.
Once an organization sets its objectives, it must inevitably re-examine its processes. If your company wants to increase revenue, how can you make it happen? With more aggressive marketing? More reliable products? By acquiring competitors? Exactly how do you plan to increase revenue? Simply announcing that you want to do it isn’t enough. You must develop a plan that addresses your organization’s underlying processes. When you embrace objectives, change isn’t far behind. If, after establishing objections, your business operations don’t change, it’s foolish to think you’ll achieve your objectives.
Every objective must be matched to an improvement plan. The plan should address each of the following points:
 Means. You must state specifically how you plan to achieve your objectives. Saying, “By trying harder” isn’t specific enough. What processes will be changed? How are they going to be changed? What intermediate steps will be taken? Lay out the means in a logical manner so they can be implemented.
Resources. Change requires resources. These might include funds, time, people, facilities, equipment and/or information. Document the necessary resources, then make sure they’re available before trying to implement the plan.
Responsibilities. Who’s responsible for each step of the plan? Clearly designate and communicate responsibilities, and hold people accountable. Don’t leave anything to chance.
Time frames. Plans for establishing objectives take time to implement. How much time do you think you’ll need? Your time frames must be documented, especially when multiple steps are linked in a dependent manner.
Contingencies. Sometimes progress on a plan is contingent on other, unrelated variables. Examples include the actions of competitors, suppliers, regulators, lawmakers, communities and the economy. State the external issues that could possibly affect the plan’s success, then define what you must do to help manage contingencies.
Disciples of W. Edwards Deming are quick to reject the use of objectives in absolute terms. This is silly. Objectives are a concise way to communicate the variables of future success. When Deming demonized the philosophy of management by objectives, he was really criticizing the use of objectives without a plan to achieve them. Deming himself said, quite elegantly, “Internal goals set in the management of a company, without a method, are a burlesque” (Out of the Crisis, Center for Advanced Engineering Study, MIT, 1986). Obviously, an organization must have a method for achieving its objectives, and the method must drive real change.
Strap on your seat belt after you’ve established objectives and a plan to realize them, because your organization will begin changing rapidly. Your processes, procedures, methods, equipment and working philosophies might need to be adjusted. You’ll need a plan to drive and manage this change; maintaining the status quo will only guarantee failure.
This point is familiar to us all but it bears repeating: An organization’s objectives must be measurable, and must define exactly how the desired state will be achieved. General themes, philosophies and aspirations rarely constitute measurable objectives. Although these guidelines have been repeated countless times during the past few years, vague objectives abound, such as:
“Incorporate excellence into all we do”
“Offer a challenging and rewarding environment for our employees”
“Earn the respect of our neighbors in the community”
“Create an unmatched service experience for all our customers”
“Make associates proud they joined our team”
Despite being admirable concepts, these aren’t measurable objectives. However, they could serve as possible first steps toward measurable objectives. The trick is to look at high-flown aspirations and ask, “What indicates whether we’ve done that or not?” Keep asking that question until you uncover a metric that gets to the heart of success or failure. Get specific about what you’re trying to achieve. Platitudes such as “incorporate excellence into all we do” are so vague they serve no purpose.
The main reason for setting measurable objectives has nothing to do with ISO 9001 and everything to do with becoming more successful. People have trouble contributing to fuzzy, undefined objectives. They can’t tell whether their efforts are making a difference because the objective can’t be gauged. As a consequence, the organization begins to drift like a rudderless boat. However, measurable objectives focus everybody’s energies and creative powers. Combined with leadership and an empowered workforce, measurable objectives pave the way to success.
When you tell employees an objective is important, they’ll want to know how successful the company is at achieving it. Curiosity of this sort is human nature. Employees want to know if the organization is moving forward or backward. The clearest way to communicate progress is through an objectives scorecard, also referred to as a “dashboard.” The organization’s performance in achieving objectives should be reflected in colorful, simple graphics such as run charts, bar charts, pie charts and other diagrams. If you can’t fit your objectives onto a single scorecard the size of a standard piece of paper, you might have too many objectives.
Here’s a revealing story about scorecards told by Lauren Kelly of the CVS/pharmacy distribution center in Woonsocket, Rhode Island. Kelly and Keith Kirby, from the company’s division in Bessemer, Alabama, developed an eye-catching scorecard to reflect progress against their facilities’ key measures. Proud of their work, Kelly showed the scorecard to her father, an industrial engineer with 25 years of experience. He looked at it and said it wasn’t clear to him which trends were good and which were bad. He pointed out that a downward trend was good in the case of one measure and bad in another. If an experienced engineer had trouble interpreting the scorecard, it was a reasonable assumption that employees would, too.
Kelly decided the easiest way to identify the good vs. the bad trends was to affix a face next to each chart: a yellow smiley face (circa 1972) for the positive trends and a frowning face for the negative ones. Kelly took the simple scorecard concept and made it simpler. A child can now review the facility’s scorecard and understand how things are going. The scorecard, by the way, is updated regularly and distributed throughout two distribution centers with a total workforce of more than 900 employees. A lot of work? Yes, but this type of communication is worth the trouble.
It’s important to remember that simply posting progress toward objectives won’t directly lead to their achievement. It’s just a method of driving awareness. The awareness in turn must lead to improvement.
The best objectives are often broad and strategic. They lead to systematic improvement of the organization’s processes. But most employees aren’t focused on strategic issues--they’re focused on their jobs’ tactical aspects, which will probably differ significantly from the issues addressed by objectives. When you start talking about throughput, cash flow, employee retention and other topics, people’s eyes begin to glaze over. That’s why an organization must provide specific examples of how individuals can contribute to the realization of objectives in their day-to-day activities.
The CVS/pharmacy distribution center mentioned earlier developed a simple card that lists key measures on one side and the actions employees can take to help achieve them on the other. This drives a hands-on understanding of objectives. In talking to the employees about objectives, I noticed an intriguing trend. Many told me about useful means to achieve objectives that weren’t listed on their pocket cards. Employees had extrapolated and expanded on the guidance provided them, and they provided all kinds of interesting examples I’d never even considered. This meant the objectives were on their minds as they performed their work. Interestingly, a number of the examples were broader than the employees’ own jobs; they required processes and methods to be changed. Should management embrace these ideas for implementing objectives? Absolutely. The CVS/pharmacy distribution center has a suggestion system for capturing ideas and problems. Employees are encouraged to think about ways to change and improve their processes so the facility can be more successful. The best ideas are then addressed by management through action plans and followed to completion.
Can employees really affect broad objectives through their day-to-day actions? Not typically. The only thing they can do is work within the established processes that exist in an organization, and these can produce a predictable range of outputs. Employees can also propose changes to an organization’s processes, and this is where they can generate real improvement. Start by giving employees some ideas on how their jobs relate to the organization’s objectives. You’ll be surprised by the improvements people generate. If you harness and act upon this creativity, you’ll find your organization’s objectives moving in the right direction.
You can’t pick up a newspaper these days without reading about the astronomical compensation of top executives. It would be easy to assume that the purpose of working toward objectives is to fatten top executives’ pocketbooks. Smart organizations, however, compensate all employees based on the contributions they make, and they let everyone know how achieving objectives benefits them. Don’t assume employees will understand how excess inventory ties up cash that could otherwise be used for a conveyer system to reduce employee injuries, improve service speed and increase net income. Give them the facts, and draw a clear line to their personal successes and livelihoods.
The wisest, most progressive organizations realize compensation should be linked to employees’ achievements. Charts, graphs and pertinent explanations can generate only so much enthusiasm. When you start to put money into employees’ pockets as a result of meeting organizational goals, they really get engaged. Just make sure everyone gets the same additional compensation. Because every function contributes to success, no function or person should benefit more than another.
Nothing remains static in business. The competitive landscape changes constantly, sometimes on a daily basis. Objectives must change over time to reflect new realities. For instance, revenue growth might have been critical two years ago, but now it’s more important for an organization to generate a profit--two different objectives with different means to achieve them. Don’t let your objectives become static measures. Achieving objectives should become a companywide goal, but the objectives themselves must be adaptable. They’ll evolve to reflect changes in strategy, the environment and your customers’ needs.
Objectives can seem like clever mind control devices for managing hourly employees. Sure, objectives keep employees focused on their jobs’ critical aspects, but management has a different set of priorities, right? Wrong. Everyone should meet objectives. They’re strategic tools of the most practical sort. The organization should provide details of how it has analyzed progress against objectives and the real action taken as a result.
Action plans are one of the best ways to communicate how objectives are used. A funny thing happens when plans are shared with employees: They get involved with making those plans succeed. Often, employees detect weaknesses or blind spots planners hadn’t considered. Few managers are so smart that their plans couldn’t stand a little additional scrutiny. The best criticism can come from surprising places. Put the improvement plans out there, and be prepared to re-examine the plans based on employee feedback.
Objectives are a logical start to realizing continual improvement. By themselves, however, they’re nothing. Each measurable objective an organization embraces must be matched to an action plan that drives changes to core processes. Good intentions, pretty charts and encouragement to work harder don’t achieve anything. Change is the only path to making objectives work, and change must be led and controlled by management. Get employees involved in thinking about change, too. The more minds you can apply to achieving objectives, the more likely you are to realize success.
Special thanks to Lauren Kelly, Keith Kirby, Norm Lamoureux, Ben Cote, Dave LaCroix and Bill Corbeille of the CVS/pharmacy distribution centers in Woonsocket and North Smithfield, Rhode Island, and Bessemer, Alabama, for their assistance with this article.
Craig Cochran is a project manager with the Center for International Standards and Quality, part of Georgia Tech’s Economic Development Institute. He’s an RAB-certified QMS lead auditor and the author of Customer Satisfaction: Tools, Techniques and Formulas for Success and The Continual Improvement Process: From Strategy to the Bottom Line, both available from Paton Press (www.patonpress.com). CISQ can be reached at (404) 894-0968 or on the Web at www.cisq.gatech.edu.
|
