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CYA…Cover Your Assumptions

Most business projects start out as an irritating tactical issue. A problem will come to someone’s attention that they believe needs solving. Unfortunately, the normal approach is to suggest a solution on the fly and initiate the resolution. It is rare that leaders take the time to understand the causes and the scope of a problem before the whisk a team into heart pounding problem solving. Just get it done! It is even more rare that these type of solution projects have measurable outcomes defined so that they know whether they are successful or not. The common outcome is that activity ceases and the organization declares victory; but, what was achieved and how do you know?

A great example of assumptions driving ineffective solutions was a service case tracking system that I looked at once. The company complained that their people didn’t classify cases correctly, identifying what types of technical support problems the customer experienced. They assumed that the drop down selections that were in the system did not provide enough granularity for them to select the right one or that the engineers just didn’t take the time to select the right classification. This company had tried to change these menu items 4 or 5 times in the past but could never get the accuracy that they could trust to make decisions with. The Technical Support Managers had also spent a great deal of time coaching the employees on the importance of careful categorization. The project team wanted to add more selections. It turned out that there were already 128 classifications! We did a statistical analysis that proved that experts were not capable of getting the right classification with that many choices. It wasn’t the people, the system itself was the problem. How much time and money was wasted because they didn’t look closely at the problem’s cause?

When an issue arises, it is best to ask a number of questions before making assumptions. The most important thing to understand is what is the goal of the activity? Why is it occurring? You’d be amazed at how often I run into people that perform activities just because it is the way they’ve “always done it.” It is usually best to diagram what exactly is happening and try to find out why. Once you have a clear understanding of the details, try to put dollar values to the activities (time, materials, etc.) and find out how often this occurs. Don’t spend $10,000 to solve a $1,000 problem.

I saw a company almost spend $3 million on a recall program because the system had no way to catch very specific orders and channel them to a cheaper alternative using repaired product, which would cost $1 million. The logistics organization said that they couldn’t change their process. My team suggested that they invest $200,000 for a fully burdened head count that would be tasked to monitor those orders (and could perform other jobs in the mean time). They spent $200,000 to save $1.8 million. It didn’t matter that it was an exception to their process, it saved money and didn’t disrupt business.

When business problems occur, always take a step back and examine what your organization is trying to accomplish and look at the details of how they are accomplishing it, how much it costs, and how often it happens. You will be much better equipped to identify alternatives to achieve the established goals if you take the time to know what they are and how important they are to your company.

My Zimbio
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1 comment to CYA…Cover Your Assumptions

  • We fix problems every day. Sometimes we end up fixing the same problem over and over again.

    We need to ask:
    How does one determine which situations are candidates for root cause analysis?
    How does one figure out what the root cause is?
    Does the removal of the cause entail less resource expenditure than it takes to continue to deal with the symptom?

    How do we find the root cause?

    Check out the book Improving Performance: How to Manage the White Space in the Organization Chart (Jossey Bass Business and Management Series) by Geary A. Rummler and Alan P. Brache

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