REY ELBO

MARK, a newly appointed CEO of a medium-size organization, wants his employees to adopt the Toyota system of extracting valuable ideas toward continuous improvement. He hires Tony, a consultant who boldly prescribes a six-month roadmap and installs a corporate-wide program that requires all workers to come up with at least three ideas a month from each of the company’s 968 workers. This means 2,904 ideas a month, or a total of 17,424 ideas for six months alone!

Tony, with the approval of Mark, hastily established the Kaizen Performance Institute, or KPI, an internal body and focal point of everything that includes promoting the program, administering the program mechanics, training people on problem-solving, receiving their ideas and processing them for management approval. Both are convinced they should be able to hit the jackpot on the second month with several millions of pesos worth of savings, plus improved quality and productivity along the way.

Tony is banking on Gary Hamel’s principle of requiring the “corporate sperm count” to represent an army of workers bringing the best of the brightest ideas to secure their first millions of pesos. And this can only be done by forcing people with more ideas or better than the 2,904 monthly target.

Sure enough, they hit the 2,904-idea quota on the first month, with 2,910. Mark and Tony were happy. Then, on the second month, the suggested ideas fell dramatically to 2,313 ideas. And it went down further to 1,845 on the third month, with no millions of pesos worth of cost savings. Almost all employee ideas that were submitted were half-baked, many of which required the company to spend more money as part of the suggested solutions, such as buying equipment and hiring more personnel.

“What happened?” Mark asks Tony. “How can we arrest the decline of the numbers that resulted only in a meager yield of savings of P68,000—barely enough to pay for the services of Tony for two months? The ideas submitted were hundreds of kilometres away from what we planned.”

Without trying to know the reason for the quantity and quality of the monthly idea quota, Mark holds his first-ever town hall meeting with the workers, after almost one year in office. He continued to force the issue of the KPI with them, this time, with a mild threat against the workers’ job security. He engages the support of line managers and their supervisors to pressure the workers to produce their first millions of pesos worth of savings. On the fourth month, the ideas submitted by employees went up to 2,145, still short of the 2,904 monthly quota. Despite the increase, they produced nothing significant, and this time, poison letters were found in the company’s suggestion box.

Mark and Tony blame the line management for their lackluster support of KPI. They formed a conclusion, without deep analysis and without consulting the workers who are mechanically forced to come up with the idea quota. But really, to me, this is a dangerous belief without being supported by objective facts.

In psychology, this is called the confirmation bias, known as the mother of all misconceptions. Mark and Tony ignore the fact that the program was forced hastily on people. In the first month, the workers were coerced to meet the idea quota, even without proper orientation and training and despite incomplete buy-in by the employees.

Writer Aldous Huxley is right: “Facts do not cease to exist because they are ignored.” But Mark and Tony have continued to ignore the line executives and their workers on how to define the proper approach in the first place.

They were not consulted, which contradicts the letter and spirit of why the KPI was established. In other words, there was no co-ownership in the creation of KPI, and yet the people are expected to support it.

This situation is one of those things that make our work complex and difficult. Remember Peter Drucker, TaiichiOhno and W. Edwards Deming? They were geniuses in their own unique way. They said that what we know about management is how to make the life of our people difficult. Some managers, including CEOs and COOs consciously do it because they think they can do much better with their command-and-control style, no matter how it often results in miscues, delays, if not the painful miscommunication with workers and their line bosses.

To review what happened before: clearly, the responsibility should start with the creation of a blueprint for the KPI. At the outset, the program should have been presented for consultation first with the workers, in line with the company’s culture. That was missed by Mark and Tony.

And worse, the trouble was compounded when they coerced people into submission to come up with three ideas a month. They should have started with at least one idea a month per employee and give everyone the chance to exceed that minimum, then raise the target gradually until everyone has become adept at and fascinated with it, like being addicted to Sudoku puzzles.

Lastly, the major focus is not in creating the first million pesos in cost savings. That should not be the main objective. Otherwise, it’s like putting the cart before the horse. Rather, the goal is to increase awareness of the target and the number of ideas per employee, and make it as a natural, recreational activity for everyone. Forcing the issue is not the answer.

At least, not yet. In due time, the workers will be challenged to come up with better ideas in both quantity and quality if only Mark and Tony had been sincere enough. The trouble is that they missed the point of employee empowerment and engagement—soliciting the first one million ideas is better than longing for one million pesos, which could come in a little later.

Bring Rey Elbo’s popular Kaizen Blitz program into your organization and choose from any one of our five risk-free options. Guaranteed! Nothing to pay if you’re not happy with the result of our intervention. Call Ricky Mendoza at (02) 846-8951 or 0919-808-7023 or 0915-406-3039 or email inquiry@kairos.com.phfor details.