Your personnel waste between 1.4 and 1.9 hours per 8.5 hour day (~20%).
In the current economic climate, organisations are attempting to use this spare capacity to deliver their performance improvement objectives, at no additional cost.
“David with your spare 20% capacity you’re going to redesign the widget making process and cut out all the rework. John with your spare 20% capacity you’re going to upgrade our widget machine to operate at a higher rate. Julie with your spare 20% capacity you’re going to improve our widget machine training program”.
There are three perceived wins:
Win #1: The 20% of wasted internal labour is now actively utilised…
Win #2: The projects they deliver will boost performance…
Win #3: The costs of establishing a dedicated performance improvement team are avoided.
Unfortunately this strategy delivers no performance improvement & costs the organisation more money than it saves. Here’s why.
Too many projects
There’s spare capacity in everyone’s work day so everyone gets allocated an improvement project.
This doesn’t work. Just because it’s David’s project doesn’t mean that David can deliver it by himself. He needs help. He reaches out to John, but John isn’t available for a week because he’s tied up focussing on his own project.
David pushes on by himself.
Everyone works in isolation
Your personnel are under pressure to deliver but they can only work on their projects part time. Proper engagement is the first thing that goes out the door!
…David redesigns the process to manufacture a widget…John upgrades the widget equipment…Julie develops a best practice widget operating manual.
Then they roll out their solutions to the impacted stakeholders and…
John’s machine upgrades call for a new mode of operation…but David’s new operational process doesn’t account for this…and Julie’s best practice manual was developed on the old mode of operation and the old system.
By working in isolation they have developed a clunky, ineffective, conflicting solution that has their stakeholders confused & offside. Everything needs to be reworked and this draws out the project delivery timeframes.
Project delivery takes forever
The revenue of today is a higher priority than the revenue of tomorrow.
Project tasks are deprioritised to deliver revenue generating day to day activities.
The widget machine has a critical failure & the business can’t generate revenue. This requires John’s complete attention for a fortnight. He works on nothing else.
As the fortnight goes by, the performance improvement project falls further behind, momentum is gone & stakeholders lose even more faith.
John works his back side off to catch up…until the next critical failure hits and it stalls again!
Management see dissatisfied stakeholders, become frustrated with the lack of delivery, and see zero performance improvement.
Zero performance improvement results in zero utilisation improvement
Zero performance improvement makes the benefits associated with improved labour utilisation meaningless.
David, John, and Julie’s downtime has simply been moved from chatting over coffee, to working on too many projects, that take too long to deliver and/or deliver poor results.
Sustainable performance improvement requires a dedicated team
The odds are already against you. Performance improvement is notoriously difficult to deliver and even more difficult to make sustainable.
A dedicated team is essential to deliver tangible, sustainable performance improvement.
Sure you can save money by not setting up a dedicated team…but what is the cost of not delivering your performance improvement? Usually it’s significantly more than the cost of the additional labour. Most performance improvement departments work on a minimum 5x return on investment.
The kicker is that by having a dedicated team you can utilise your existing employee’s spare capacity in a way that really adds value – by acting as subject matter experts (SMEs). The performance improvement team brings the focus, framework & momentum required to drive project delivery. The SMEs complement this by bringing the organisational knowledge, credibility and relationships to make sure a quality solution is delivered and is sustainable long term.
About 3 Ps in Profit
Our Vision: Enabling more Australian small & medium businesses to succeed & thrive through genuine partnerships that deliver performance improvement & growth.
Our Mission: Improving & growing Australian small & medium businesses by focusing on the three fundamental elements that drive performance; planning & alignment, processes & systems, and people.
Want to find our more? We would welcome the opportunity to discuss your performance improvement objectives and how we can help you achieve them.