Many organizations are stagnant. In their current forms, they’ve been hierarchical strongholds for decades, where craftsmanship has been reduced to mindless work and all the fun has been “managed” away. Learning remains limited to annual performance reviews. Action isn’t taken until after the fact, when the mistake has already been made. Organizations that aren’t in motion, that aren’t constantly trying to learn and improve, eventually cease to exist. Decay affects any system that isn’t maintained and developed. The organization has to be kept in motion by continuous improvement. PDCA is the perfect vehicle with which to do that. But that only works on a larger scale, where every step of the PDCA Cycle is loaded with the correct data and accompanying BI tools.
Getting mugged in a stagnant hotel
For the fourth time this year, Carl noticed that the reservations manager of his regular hotel had booked the wrong room for his big data training. The trainer, Carl, had already asked the hotel several times to consider the fact that he needed half again as much room as the number of trainees. So for a reservation for ten people, Carl wanted a room with at least a fifteen person capacity. He needed this because his training incorporated all kinds of experimental ways of working. He simply needed the extra space. Also, he knew from experience: it’s easier to learn things in a spacious environment where people don’t feel cramped.
Always keep smiling
The hotel chain prides itself on hospitality. But how does that hospitality manifest? Carl overheard the manager talking to his employees: “whatever happens, always keep smiling and stay friendly. If a guest has a complaint, give them something extra.” And so it came to be that the hotel gave Carl some flowers and a mug with his company logo on it, for the fourth time.
In 75% of organizations, employees don’t know how their work contributes to the company strategy and mission
Reduce the odds of repeating a mistake
It’s not a faux pas to perform hospitality in this way in the 21st century. But it takes much more for a hotel to become one of the top training locations. It’s only a matter of time before a company vacates the premises because they have a closet full of mugs, but their complaints were never actually addressed. The organization of the future is focused on structurally reducing the odds of repeating a mistake. What good is a smile if the same mistakes keeps being repeated? What’s friendliness worth when there is no improvement? The hotel’s processes had completely stagnated.
Don’t get stuck in the Plan and Do phases
Research has told us that many organizations don’t manage to complete the entire PDCA cycle. Fewer than 10 percent of organizations can manage this, the other organizations just stumble through it. They get stuck in the phases Plan and Do, making plans and executing. Or worse, they make plans that aren’t or can’t be implemented. Many people in organizations don’t know what they’re doing. In 75% of organizations, employees don’t know how their work contributes to the company strategy and mission. You’d want every employee to understand their contribution so that they feel the necessary commitment and passion, and they’re not ignorant of the higher goal. Take the anecdote of the hotel, for example. Where is the learning capacity of this organization?
Set off the alarms
The learning capacity of an organization doesn’t develop until the organization actually learns from a plan and its execution. The essence of development is to strengthen the desired elements and to track down and restore or eliminate undesired elements. The organization needs to acquire new knowledge through cyclical improvements. If a mistake occurs multiple times, all the alarm bells in the organization should start going off.
Making mistakes is human. Making the same mistake multiple times is a systemic error. People can be forgiven their unique mistakes. Forgiving stagnant systems is unforgivable. Placing the blame outside of yourself is undesirable. Not taking action is unwise. Always staying friendly and continuing to smile and hand out extras isn’t hospitality, but a hotbed of hostility. Shrugging your shoulders at stagnant systems is, eventually, fatal to the organization.
Employees perform a recurring masquerade
“Plan, do, plan, do” as a pattern and standard reaction in the hospitality case is a form of organizing without learning. Employees perform a recurring masquerade, a ritual dance. Sometimes they put on a different mask, hand out a different present, but within the masquerade, the hotel is stuck in its cycle of hospitality thinking, which was once relevant, and which they always got away with.
But when no lessons are learned from a repeating mistake, the organization will never reach a higher level. An organization like that will get stuck on their current level, literally and figuratively. And it reveals a complete lack of ambition. Those who stick to the same plan no matter what will be taken over by competitors and start-ups left and right. Their ambition doesn’t just give these entrepreneurs a higher purpose or goal, but they also manage to structurally implement improvements.
How NedCargo expanded its lead
NedCargo is famous for its cargo ships filled with containers, their yellow trucks, and big transit warehouses, where they store all kinds of provisions and send them to supermarket distribution centers. With a distribution of 800,000 containers per year in domestic shipping and almost 5 million pallets, NedCargo is the logistics leader in the Netherlands and Belgium. Aside from investments in sustainable domestic ships in order to achieve climate neutral transport, NedCargo (almost literally) ran into a problem multiple times per day in Gouda: their ships were too tall to pass under the seven meter high bridges. The bridges always had to go up.
Ask yourself, every time: what can we do better?
NedCargo asked itself how they could improve. The company also calculated what waiting for the bridges cost them. Per ship, valuable time and fuel was lost every day. The time it takes to stop for the bridge, wait for the bridge to go up, accelerate again… Every day for every ship that sailed this route. NedCargo came up with the idea of an adjustable wheelhouse which could be lowered to just below seven meters. Bridges were thus no longer obstacles.
NedCargo invested a lot of money in this (design, testing, fabrication), but earns some of that investment back every day by saving time and fuel. And the societal gain is that the bridge road remains usable for traffic. Think about all those trucks and cars that had to wait for the bridge, sometimes for ten minutes, and all their emissions. A beautiful example of an improvement cycle that only has winners!
Innovate from passion
NedCargo’s example clearly demonstrates how a passion to improve can lead to innovative solutions. They don’t get stuck in Plan and Do, but carefully study where and how they can still make gains (Check). They adjust their plans by equipping ships on this route with adjustable wheelhouses (Act). This ‘Act’ delivers yet another PDCA cycle: the implementation of the adjustable wheelhouses. A prime example of a well-functioning improvement cycle.
Automatic decay if you don’t continuously improve
Organizations that don’t work on continuous improvement automatically decay. Given the disruptive nature of the market, if you’re not improving – or don’t implement improvements quickly enough – you’re going backwards.