August 2005 - Library

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In one case, a large mining company wanted to improve productivity at one of its major operations. They hired a consulting firm
with an excellent reputation to help them identify areas for improvement, develop a business case for change, develop an
i m p rovement program and then to help implement it. The consultants worked with them for two years and they did manage to lower
costs and increase production output. Despite doing everything “right” and having success in the short term, as soon as the
consultants left the site, it began to unravel. Production levels dropped back to the levels experienced before the change and costs
rose as they hired outside help to solve new problems that were now arising. This same scenario happens in many companies -
as soon as the consultants leave, it all falls apart. So what has gone wrong?
The first underlying problem was that the change belonged to the consulting firm, not to the company. The consultants had gathere d
the evidence of poor performance, they had the improvement ideas, taught the company what to do and how to do it. They worked
alongside while the company got used to doing things diff e re n t l y. The employees however didn’t own any of it - as far as they were
concerned, there was nothing to fix. They hadn’t participated in the initial reviews, they hadn’t provided input on what to do to fix
the problems that were uncovered and their improvement teams were always being watched by the consultants. There was fear
of the consultants and resentment towards them. The consultants moved through the site like a bad storm and once it was over
the people who were left, the survivors, re t u rned to life as normal - as they knew it before. Only this time, there were fewer of them
to do the work and they didn’t care about the outcome, so overall performance dropped.
It seems easy to blame the consultants here but that would be unfair. They did what they were asked to do. Their methods worked
and they got results. Unfortunately the pattern of failure after they left was not uncommon. The real failure however, didn’t happen
after the consultants left, it happened before they arrived. This is the more significant underlying problem that is often not
appreciated. If it isn’t dealt with no change will succeed.
The VP responsible for the operation didn’t appreciate that his own people could have done some of the improvements without
outside help. Rather than believe in his people, challenge them to make the needed improvements and support their eff o rts as they
asked for help, he got outsiders to take charge of it. Not only did he give his power away, he undermined any faith that people at
the site had in both him and in them selves. His attitudes were reflected in the way things worked (or didn’t work in that case) at
the site.
Having a full appreciation of his employees would have made a big diff e rence. Using the right consultants with the mandate to “get
to the bottom of this situation,” right at the start would have helped him see what choices he was making that were resulting in the
status quo. They could have then helped to identify changes the site could choose to make and those that it could handle on its
own. They could also help identify outside support that would most likely be needed to augment the site’s own capabilities. It was
that first step - appreciating the choices being made now, that enabled different choices that could be far more successful in the
long term.
And so this corporate story continues, over and over again in companies all over the world, perhaps even in yours. Does it have
to? No.
What does it take to get it right?
You get it “right” when you fully understand the choices you are making now and then make the new choices necessary as a
company. Making all the choices necessary means communicating and listening to each other, every problem, objective and goal,
to find the way to get the result the company wishes to achieve in a way that all can agree to and understand. When this occurs,
the company is creating the common basis on which every employee in the company can think, act and move as one. It means
realizing that people have fears and feelings that can and do get in the way of getting a job done. It also means encouraging,
supporting them in ways that are meaningful to them and not necessarily to you. It means appreciating them and acknowledging
their humanity. Although, this is a seemingly simple solution, it is one of the most difficult to put into practice because it entails
change at a personal level first.
In another case, we observed one of the largest North American newsprint paper mills that consistently achieved low costs per
tonne, yet didn’t use conventional “best practices” to achieve it. Their low costs could not be explained simply by the scale of
operations. When we visited them, we observed very little that would suggest they really did things well, yet they had excellent
results. After a lot of observation and reflection on what we were seeing, we finally realized what was working so well. They had
their success because they had excellent interpersonal relationships. Excellent union relations existed at that mill and there was
an atmosphere of caring that extended from the mill manager to the shop floor. Formal processes, pro c e d u res and IT systems were
used, and some not that well, but they were all seen as tools that helped people - the real flow of information was person to person.
The people at that mill very simply worked well together in a fairly informal atmosphere.
A similar phenomenon also occurs in many small organizations, those with 150 people or fewer. In “The Tipping Point”, Malcolm
Gladwell describes how small organizations often work very well using informal methods, but once the number of people exceeds
150, there is a need for more formalized systems. In the smaller organizations everyone knows everyone else and they work in such
a way as to accommodate each other - things work smoothly. There are several other best selling business books that identify
successful practices at companies that rely more heavily on people, culture and attitudes than on formalized systems, even in larg e
organizations. All of these are observations of a fundamental element that must be in place.
Aw a reness, the appreciation of employees and the value that they bring to the company is important. It doesn’t matter if the
individual’s contribution is minor as he contributes to the organization as a whole. What he does is important to this individual and
that makes it important to the organization.
The experience of the mining company could have been very different had they taken a different approach. Discovering the nature