About Become Demand Driven | John Melbye is the founder.

Focus on Problems to Solve, Not Numbers to Meet

Breakfast Epiphanies: Operational Goals Will Force Improvement of Tactical Goals

Dramatic realizations after a good night’s sleep! I get these crazy thoughts that perhaps sometimes we are going about things the wrong way. Or maybe it is clearer to say we are starting at the wrong end. To achieve any goal, there are always at least two approaches to take. Should I start with the target and determine how it can be achieved? Or should I start with a process or behavioral change and see how much improvement I can make?

How does your company set the business goals? Is it a quick glance at last year’s performance and then simply try to improve it? For example, customer service is 92%, so let’s try for 94% next year. Heck let’s set the goal at 95% to incentivize the team to be more creative in reaching this vital, albeit random, goal. We might even set a “stretch goal” of 97%, just to give a little extra incentive. Sound familiar?

What would happen if we picked problems to solve instead? Let’s review why our customer service levels are low (92%). And let’s review it as a team. We might determine that material stock outs are a major cause. Or perhaps we are understaffed in shipping and that is a major cause.

We could then focus the team on fixing this “cause” with a measurable target based on the task. Like tracking the number of times we had all of the raw materials needed (goal of 99%). Or the number of times we had produced the items and also got them packed and shipped (goal of 99%). The team is now working on a metric they can directly impact. Improving those metrics will create a corresponding and directly attributable improvement in our top-level metric of customer service.

It may seem like a small point, but if we just randomly set a top-level goal, we run the risk of many people or teams working independently instead of focused on what can make the most impact. Or worse yet, doing nothing because they can’t see a connection between the metric and tasks they perform. Setting the random goal also may be self-limiting. Once achieved, no more effort.

Separately taking different approaches might even create conflict with other teams. The top-level metric may be known but the lower-level goals may not. So, one team is trying to increase inventory to improve customer service, while the finance team is desperately working to decrease it to lower cost.

However, if the entire team is focused on solving one cause, it is likely to get done quickly. And we will know the direct impact on the top-level metric. Then we can fix the next cause and the next. And with each one, we know how much of an improvement we make in the top-level metric.

The traditional way (set the goal and hope) mixes Tactical and Operational goals. The Tactical goal is a quarterly or annual goal, like improving the Customer Service Metric, but that goal does not translate well to the operator on the shop floor. When the individuals understand that they control the direct “levers” for achieving company success, they will work hard to be a part of the solution. Otherwise, it will become someone else’s problem.

A coordinated focus on the operational goals will force an improvement of the tactical goals. Working in the operational realm will create a spirit of teamwork. Some will lead and some will support, but when help is needed, everyone should know why it is important to participate.

John Melbye

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