Link the Goals of Your Business to the Work of Your Team

Rick Phelps

Synchronous Solutions

Think of a role in your business. Any role. Can you clearly connect how that role contributes to your company making money? What measurement best informs how well that role is making that contribution? Chances are, there are very few roles in your business for which you can quickly answer these questions.

Now imagine asking the person in the role you chose above how they contribute to the success of your business, and what measures they use to keep score of their performance. Are you visualizing an uncomfortable, blank look staring back at you?

There is an explicit methodology to connect every role in your business to the goals of your business. Synchronous Solutions leverages this methodology as part of our Strategic Planning Process, built on Eli Goldratt’s process of on-going improvement. 


The process has six iterative steps: 

    • Define the system

    • Define the goal of the system

    • Define how to measure progress towards the goal of the system

    • Identify the constraint of the system

    • Identify strategies to maximize the constraint

    • Identify strategies for all non-constraints that support maximizing the constraint.


When you follow the Strategic Planning Process, you are setting your business up as a multi-layered experiment in which everyone has a role to play to maximize the business’ performance.

1. Define the System

Step one is to determine the boundaries of your business. In fabricating shops, the most challenging part is how you think about sub-contracted services for processes such as templating and installation. I would generally recommend treating them as being inside the boundary.


2. Define the Goal of the System

Don’t overthink this step. The goal of every business distills down to “make more money now and in the future.” You can embellish if you wish!


3. Define How to Measure Progress Towards the Goal

There are three key money metrics in every manufacturing business. They are, in the order of importance:

      • Throughput – the money that stays in the system when you make a sale.

      • Inventory – the money the system spends on things it intends to sell.

      • Operating Expense – the money the system spends converting Inventory into sales.


Your business is moving towards its goal of making more money if:

      • Throughput is going up

      • Investment is steady or going down

      • Operating Expense is steady or going down.


The objective of our Strategic Planning Process is to link each of these key company metrics to the work of everyone on your team. To keep things simple, I will only focus on the “Throughput is going up” goal as we proceed!


4. Identify the Constraint of the System

The Constraint in your business is what limits its ability to make money. Let’s assume it is within our example business and NOT in the market. We would determine which of our processes limits the company’s ability to create Throughput. In our example business we determine that Finishing is the Throughput Constraint. This means some combination of CNC Routing and Hand Fabrication Shop limits the number of jobs that can be produced and therefore the amount of Throughput Dollars ($T) that can be produced BY THE BUSINESS.

Reflect on this for a moment.

If the business is to make more money by increasing Throughput, then you MUST get more Throughput though this one-process step. This provides tremendous focus and clarity for your business. 

It is only in this context that strategic planning makes sense. These first four steps have simply set the stage for all the thinking and work that needs to be performed to actually move your business toward the goal of “making more money, now and in the future.”

With the Constraint identified we are ready to talk Strategies!


5. Identify Strategies to Maximize the Constraint

The business’ ability to make more $T is limited by the Constraint (which is finishing, in our example). With our example business, our first strategy will be “Don’t waste time in Finishing.” We get our heads together and identify a number of specific tactics we can use to “not waste time in Finishing” by drawing from our Lean Manufacturing training, and the Lean bag of countermeasures. One of these tactics is Quick Changeovers which we will apply at the CNC Routers. Another tactic might be 5-S (workplace design) applied in the hand fabricating shop. Another tactic might be using an assistant to pre-stage materials. You get the idea!

Once the strategies to maximize the Constraint are identified and further refined into specific tactics, it is time to move on to all the other processes and roles in the business.


6. Identify Strategies for All Non-constraints that Support Maximizing the Constraint

For each other process in the business, we will now systematically determine how that process can support the Constraint process in achieving its goal of maximizing $T produced. We will identify general strategies, followed by the specific tactics to deploy at each process.

In our example, the process immediately before our Constraint at Finishing is Cut. One strategy for the Cut process might be “don’t waste the fabricator’s time.” This strategy can then be translated into A) Never Starve Finishing; B) Never pass bad product to Finishing; and C) Don’t let Finishing do work that can be done in Cut. There are a number of tactics one can apply for each of these strategies. Prioritize them and get to work!

Let’s look at one other process before moving on: the Quoting process. How does Quoting impact the $T that Finishing can produce? It’s HUGE, isn’t it? I will let you ponder that one on your own.

Every process in your business directly or indirectly impacts the Constraint of your business. Using the process sketched out above, you can directly connect every process, and therefore every person in your business, to how they help the business move towards the Goal of “making more money, now and in the future” by enabling the Constraint of the business to process more $T so that “$T is going up.”

You can repeat Steps 4 through 6 for the other two aspects of making money – Inventory and Operating Expense. Just remember that these two aspects of making money pale in comparison to increasing Throughput.


Work Design

Every tactic you defined above can and should be translated into Current Best Practices (formerly known as Standard Operating Procedures) for the role executing the tactics. 

All work should be designed as an experiment. For example, if in Finishing you implemented the quick changeover tactic, then changeovers should be designed as follows:

CONTENT – to change profiles on the router, do this set of work steps…

SEQUENCE – The best order to do those work steps is…

TIMING – Changeover should take X minutes from machine stop to machine start

OUTCOME – CNC will produce edges that meet these criteria…


Every time your crew executes a changeover, they are executing the experiment “If we follow these steps (CONTENT), in this order (SEQUENCE), then the changeover should take this long (TIMING) with this resulting quality (OUTCOME).” If any aspect of this experiment fails, this gives rise to problem-solving and continuous improvement.


Metrics

Every Strategy you defined in this process has a metric associated with it. For example, our maximize strategy “Don’t waste time in Finishing” has the metric TOTAL ROUTER RUN MINUTES. A good strategy would be to post this metric at the CNCs so that all could see!

Every tactic you defined has a metric associated with it. For example, our tactic Quick Changeovers has the metric Time to Changeover. We would plot this number at the CNC as well.

Every Current Best Practice created has obvious metrics associated with them. In the above example, they are Timing and Outcome of the Changeover. At the execution level, the metrics aren’t just something to plot, they are something to ponder. We had specific expectations built into the design of the work. We believed that if we did the work as designed, we would get an expected result in terms of how long it should take and the quality of the next run. If we did not get the expected results, it raises a red flag. What happened? What can we learn? What can we change or do better next time? Do we need to revise and create a new Current Best Practice?

I hope that through this example you see that it is possible to understand your business so completely that you and your leadership team can connect the dots from your company profit goals to the specific work practices of every member of your team. 

Every member of your team should explicitly understand how they contribute to the success of the business and have a way to tell how they are doing, because every team member has an innate need to know what success looks like, and how they are doing. 

What happens when employees don’t know what their contribution to success looks like or how they are doing? I don’t know for sure, but I suspect it looks a lot like what is being called “The Great Resignation” that is happening across our country. So, if you regularly do strategic planning in your business but fail to connect all the dots in that process, rethink what you are doing. Follow this Strategy -> Tactics -> Work Design process using the Six Steps described in this article. Link the goals of your business to the work of your team. Your team will be glad you did, and so will you.

If you want to read more about these concepts, they were largely drawn from the following book and Harvard Business Review article: 

The Goal, by Eli Goldratt
Decoding the DNA of the Toyota Production System, by Spear & Bowen, Harvard Business Review #99509


If you think having a skilled facilitator to walk your leadership team through this process will make it go a lot more smoothly and efficiently, contact Synchronous Solutions  though our website www. synchronoussolutions.com/contact-us/ .


Rick Phelps has been applying the concepts of Synchronous Flow to difficult industrial problems at dozens of businesses and organizations around the world, since the early 1980s.

In 2009, as Cleveland Cliffs’ Director of Continuous Improvement, Rick took on a failing Lean Six Sigma organization, refocused their improvement work using Synchronous Flow, and created a shop floor, engagement driven, continuous improvement process that Cliffs credits with creating a sustained $100M per year reduction in production costs.