By André Smaal, Robert Vrugtman
On any given day, hundreds of boardroom conversations happen in companies across the EU. And the need for financial and operational performance improvement is a topic on nearly every agenda. While directors and executives almost always unanimously agree that tomorrow should be better than today, talk too often centres on excuses for performance misses instead of real and rapidly implementable resolutions to the problems.
Companies looking to change the dialogue in 2024 could benefit from an outside perspective and, more often than not, some hands-on help. That’s why we’re introducing Boardroom Confession Fridays. Each week, we will unpack the biggest issues being discussed behind closed doors and share tips for bringing those conversations onto the shop floor where employees at all levels can play a part in the solution.
Often times, a company’s highest levels of leadership do not learn about critical performance misses until the damage is already done. Maybe the company failed to hit its production targets, leading to revenue losses. Maybe it missed delivery dates, resulting in dissatisfied customers or canceled orders. Whatever the issue, because nothing can prevent the loss that’s already occurred, the conversation quickly turns to how to prevent similar issues next week, next month, or next quarter.
Inevitably, someone suggests making an investment in a performance improvement tool, such as a shiny new app complete with all the bells and whistles. Such solutions present a tangible solution to the intangible problem of underperformance, and it’s easy for the capex proponents to get others excited about the possibilities, especially when they can see and touch and play with the potential solution.
The problem is, even the best apps and tools can’t fully fix the underlying behavioural, cultural, and process problems that are likely driving the performance issues. Indeed, making the investment without addressing these issues first makes it difficult to realise full ROI and could undermine the success of a potentially valuable solution implemented in the right environment and under the right circumstances.
Leaders that resist the urge to jump straight to the shiny stuff and instead take a closer look under the hood at operations will often find that there are plenty of improvement opportunities they can take advantage of by optimising the assets they already have, including both people and equipment. The key here is to create processes and a culture that empowers people and utilises assets to address performance issues as they arise when there is still time to correct the issues and keep the misses from occurring.
While achieving operational excellence is a complex undertaking, some fundamental components to cheque for first include:
Talking about performance problems after the fact in the boardroom can lead to a lot of finger pointing and excuse making. Instead, create an environment where employees are encouraged and motivated to course correct immediately as issues are occurring. This can save the day, prevent critical misses from happening in the first place, and tremendously improve results. And it will lay the foundation for competitive advantage through true continuous improvement, a topic we will dive into with next week’s boardroom confession.
Key Takeaways
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