Practicing the noble art of cheating (part IV)

Parte I, Parte II and Parte III.

We have a strategy map and we assigned indicators to each strategic objective. For each indicator we can measure current performance, the today's results, and we settle targets for future performance.

As we wrote before in Part III, today's organization generates today's results in a perfectly normal way. More demanding future desired results have to be generated by a different organization, the desired future's organization. So, to get that performance improvement we need to tramsform the current organization.

There is no chance. Sustainable performance improvements don't happen by accident.

Normally, we set a time frame between today's result and meeting the target. For example, we say that in the next 12 months the organization will increase its productive capacity utilization rate from 55,9 to 85%.

And I question you: Why 12 months? Why not tomorrow or next month?
And you answer: Because we are not yet the organization of the desired future, the one able to generate the desired performance.
Then I add: the strategy map is a theory, a hypothesis about how the organization will improve its performance, but the present organization is still not there.

So I ask: where are the weak spots that prevent us today from having the desired future performance? Concentrate on them, they are what restricts us, what constrains us from achieving our goals.

Let us look into the gap between today's results and desired future results as a perfectly normal and legitimate product of our current set of processes (that's how we work, how we manage, how we train, how we learn, ...)
Those current processes include within, a set of systemic structures that conspire (I use this word here because it seems perfect for what I want to communicate) so that today's results differ from desired future's results. Those systemic structures generate behavior patterns that quite naturally are behind today's results.

To eliminate the gap between today and the desired future we need to identify and eliminate the root causes behind those systemic structures through a set of action plans, strategic initiatives, which will transform today's organization into the desired future's organization and that way generate the set of processes of the future.

We will use a trick to identify the systemic structures: compare current performance with desired future performance. So, plunge into that gap and identify a negative fact. A fact is a fact. A fact cannot be denied. A fact is no theory. Everyone can see that fact. Be as specific as possible.

Gather a diverse group of people who together know the organization at several levels and from different perspectives. Ideally most of them were present when the strategy map was drawn. Remember to all the strategy map, the importance of the cause effect relationships and highlight the fact that the organization is still not the organization of the desired future, highlight the gaps in performance and give everyone a generous amount of sticky notes. Then ask them to individually and anonymously write a negative fact per sticky note and record as many negative facts as anyone can.

An example of a negative fact can be:

1. The machines have been down for a long time (x hours or y%)

When everybody finishes with the negative facts ask them to keep their facts secret and ask them to speculate. Ask them to give their opinion. Ask them to write down the causes that they think are behind each of the negative facts.
One cause per sticky note
For example:

A1. We do not perform preventive maintenance

B1. We have no critical spare parts

When everybody finishes with the causes ask them to give a final step and ask them to write down their opinion about why each negative fact is important for our strategy execution. One reason for importance per sticky note.
Example:

a1. Lost production capacity

This is what we are doing:

In this way we draw a cause-effect relationship anchored in reality, in a negative fact, something that no one can deny.

Negative facts are real but they can have no impact in the organization's strategy. 

I always use the example:

The company's last Christmas party was a failure.

Truth? Yes!

Relevant to the strategy? Most likely not!

So, we must test the importance criteria and check if they have any connection with strategy. Check if the importance criteria violates any promise from the strategy map:

In this example: Lost production capacity clearly goes against complying with prodution plans and maximizing usage capacity.

This way of working with facts, causes and importance criteria make us look into the organization at different levels of abstraction:

The following table can represent the contribution of one person:

Imagine that your team has 7 persons. 

Imagine that each person records 5 negative facts. So, you will have 35 cause effect relationships.

Imagine that 5 are similar to others. So, you will have 30 cause effect relationships.

Test all those negative facts to check if they are really relevant for strategy:

Now, look into the set of 30 cause-effect relationships and see if you can find new relationships among two of them. For example:

The effect "a1.Lost production capacity" acts as the cause that generates the effect "A3.We have stock shortages". And then A3 becomes the cause that generates "3.We carry unmatured product"

Go back to the remaining 28 cause-effect relationships and see if you can find one that relates very well with this two. Normally, people find more and more relationships. After some they will start to write new sticky notes because seeing all these at a wall make them find new relationships (that is why I use a codification for each individual negative fact, the new ones have no code, they are a product of team interaction)

After some iterations we can get a picture like this:

That is why I like to use the word "conspiracy".

Can you see how many feedback loops we have acting on the system?

If we want to improve we have to break this self-reinforcing cycles.

This post is already too long, in Part V I will present my technique to go from the conspiracy cycles into a set of very focused action plans, the strategic initiatives.

Other examples of conspiracy cycles (in Portuguese) here, here and here.