Operational Audit: Synergy

     Within any business and most departments there are a number of functions that are completed by various groups or people. For any company to be truly successful it must have synergy. Merriam-Webster Dictionary defines synergy as combined action or operation. The second meaning is a mutually advantageous conjunction or compatibility of distinct business participants or elements (as resources or efforts). Based on this meaning we can ascertain that to have synergy we must have combined action or be doing it together and it must be mutually advantageous—it can’t only benefit one department or function, it has to be for the greater good of the company. So how do we know if our departments or companies are synergized?
     For starters, you want to evaluate if information is flowing freely. This includes information flowing from the top down, down up, and side to side. Free information flow is critical to being on the same page. If the top leadership develops strategy and your front line workers don’t have a clue you can be sure information is not flowing freely. Same applies if top leadership is not aware of the environment on the front lines whether it is workload capacity, lack of resources, personnel issues, etc. And just as important, you have to be able to determine if the departments or functions are communicating with each other. If there is an objective that requires a combined effort (as in majority of organizations) to execute and only half of the group is aware and as a result are not working together to determine the best course of action, your final product or service will only be half as good as it could have been. To determine this, select an organization wide initiative and begin asking the various parties what they know about that initiative and what their role is. I assure you, you will quickly be able to grasp how freely information is flowing.
     The next step you will want to identify is how well the departments or functions follow-up with each other. Do these departments place a high value on communicating with each other? This can quickly be determined by conducting a few interviews with the various functions and/or departments. Without prompt follow-up a negative environment will begin to grow because people’s natural response will be to think that they don’t respect me enough to communicate back with me. Morale will be impacted. Productivity will be stifled since people will not be able to move forward because they won’t have the necessary information. Without proper follow-up you’ll be fighting against the grain since your teams will be exuding energy on hunting down what they need versus focusing on process or service improvements.
     Another important aspect to evaluate is whether key decisions are made in a vacuum or involve all departments involved. It is pretty common for key decisions to be made by a single department that for the most part is responsible for the initiative. But 99.9% of the time that department will have to rely on other departments to execute the final objective. As a result, when other departments are needed to support this initiative they are unaware and unprepared resulting in unnecessary stress. And whether we like it or not, animosity probably begins to set in—further reducing synergy. Turf wars begin to develop and productivity once again is impacted.
     The last area to assess is to try and determine if there is a mechanism for feedback and candid communication. There has to be an open door to leadership at all levels where employees can freely come in and share frustrations, ideas, solutions, etc. Jack Welch in his book Winning says, “Trust happens when leaders are transparent, candid, and keep their word. It’s that simple.” Leadership has to be candid and allow for their employees to be candid. This creates transparency for the organization and as a result everyone is on the same page and moving in the same direction. And when that happens, trust happens, and when trust happens, synergy happens!

Operational Audit: Quality

     If your desire is to have a successful department or organization then quality must be at the top of your list. Quality is a key component of long term success. Pat Williams in his book The Leadership Wisdom of Solomon states, “Don’t be too quick to undercut your competitor’s prices; instead, deliver better quality and better service.” I am yet to hear of an organization that has been successful while putting out sub par quality products or service. As a result, you must be able to gauge the level of quality that your organization is generating at all times.
     I have experienced and determined that a full assessment of quality is a three prong approach. You have to know what your customers think (external), you need to know what your indicators show (internal), and you have to know how your team and leaders are performing. These three areas integrated into one quality assurance system (QA System) will ensure that you are delivering the levels of quality that will allow you to be successful in the long term.
     The first step is to determine how you will consistently gather information from your customers. If your customers are not happy, you will not be happy (since you’ll be looking for a new job). I believe it is critical to know what your customers are expecting, how satisfied they are, and what their future goals are for your product or service. You have to identify how you will stay engaged with all of your customers at all times. The free market is a very competitive one. Businesses are constantly looking for better ways to support their customers—this should apply to you too. The only way to do that is to be consistently asking them where you stand. So from an operational audit standpoint, the question is, do you know where you stand with your customers? What system do you have in place that is constantly gathering data about your customer’s satisfaction? And most importantly, what is your department or organization doing with this information? I cannot tell you how many companies I have come across that gathers information and does nothing with it. As a result, the customer is even more frustrated because they took the time to communicate with you, but you failed to communicate with them. So what do they do? They go to someone who does ask, listens, and takes action to meet their expectations.
     There are many mechanisms for knowing how satisfied your customers are but the two most common are mailed customer questionnaires and electronic survey systems. But by far the most effective is face to face interaction. Of course if you are a multinational organization this may not be cost efficient so you have to determine which method provides the most value at the lowest cost. But reality is, people buy from or continue to buy from or work with people they like—not companies. And the only way people can determine if they like you is through a relationship. And the only way to build a relationship is to spend time together. As a result I have found that the best way to gauge customer satisfaction is to do a customer assessment face to face.
     The next step in the QA System is to know exactly what level of quality you are producing internally. Your team and leadership have to be engaged and look for every opportunity to improve quality. However, it has to be measurable. You need to create KPI’s (Key Performance Indicators) and commit to consistent inspections. This is the only way you and your team will know exactly where you stand. It is critical that you understand what are the levels of quality that you are trying to achieve and more importantly that your team does. So you have to evaluate your system to determine whether you have metrics that you are attempting to achieve, are you gathering the necessary data, and what steps are you taking to improve them. The most common ways to gather this type of information is through visual inspections and automated systems. These systems generate reports or highlight your KPI’s on an automated dashboard. Once you have this internal assessment in place, you are constantly evaluating it against what your external input is and are looking for any gaps. The point being that you may be meeting the quality levels that you think are important, but they may not be important to your customers.
     The final step in the QA System is to evaluate what mechanisms exist to monitor and develop your team and leadership on a consistent basis. Majority of organizations evaluate their employees once per year. And once per year they identify opportunities for improvement. If you desire to beat the competition with quality products or service you have to link your team’s performance to your quality assessments and results. It is a tremendous commitment but I believe leaders have to be evaluated on a monthly basis. You identify what their strengths, improvements needed, and significant observations are for that month. This assessment has to link to the level of quality they have produced based on internal and external assessments.
     It is imperative that your quality audit determines that the proper methods of assessing your customer’s satisfaction and internal operations exist and that these results are linked to your team’s performance. If you commit to this three pronged QA System I guarantee your quality will improve, number of customers will increase, and ultimately, your department or organization will have long term success!

Operational Audit: Staff

     I was part of a healthcare organization that was very focused on improving its patient (customer) satisfaction surveys. They created scripts that every employee had to say when coming in contact with a patient. They made sure that the script used the same words as the survey that would be received by each patient. Every employee wore buttons that proclaimed that they strive for the highest scores in patient satisfaction. So why didn’t the patient satisfaction survey improve?
     The reason the scores didn’t improve is because leadership missed a critical component to high patient satisfaction—happy employees. You see, customers can only be happy if your employees are happy. It doesn’t matter what you say to your customers, how many times, or that you advertise that you want happy customers. What matters is how your employees say it. I’m sure you have been in a situation where somebody has apologized to you but you clearly knew they were not sorry. That’s because their body language did not support their verbal language. And we all know that non-verbal communication is 80% of overall communication. John Maxwell in his book Everyone Communicates Few Connect says, “If you want to connect with others, you have to get over yourself. You have to change the focus from inward to outward, off of yourself and onto others.” This is very difficult to do if you are self involved with your current environment which is usually the case when employee morale is down.
     So if you identify that your productivity and sales are down. You observe that your customer complaints are on the rise, you learn that your customer satisfaction surveys are trending down—look to your staff’s morale. You should start by talking to them. You’ll be amazed at what you can learn by just asking questions, by learning what the environment is like. Of course, if you normally don’t engage with your team they may be hesitant to open up to you—more the reason to engage with your team at all times. Another great way to learn about your team’s morale is to speak to your internal customers. Most departments in an organization either support another department or work with them to provide the final product or service. The people in these departments will be a great resource for you because if your team is unhappy, they will usually be the first to feel it. You should also conduct an anonymous survey—it has to be anonymous so you can ensure full disclosure. There are many employee engagement survey templates on the web, research them and choose the questions that best apply to your department or organization. You should also observe the work environment. Take time to identify how your team works with each other and others by simply observing them. Are they engaged and excited or are they isolated and downtrodden? Another telltale sign is negative trending KPI’s (Key Performance Indicators). Your staff is the primary driver of productivity and quality. If the KPI’s are changing for the worse, you have to look at your staff.
     Once you identify that morale problems exist you have to take action! You need to start by ensuring that proper leadership exists. If leadership is lacking, staff morale will always be lacking. So if you are in the position that is responsible for leadership that is directly responsible for the employees; you need to make critical decisions—see my previous article titled Operational Audit: Leadership. If there are other factors that you learned from talking to your staff, internal customers, and by conducting an employee survey—then you must take action to improve them. One of the most common and least desirable causes of poor employee morale is poor employee attitude and behavior. You may learn that one or a group of employees is impacting your teams overall poor performance. If this is the case, you have to eliminate this cancer as quickly as possible. This may happen through candid conversations and a change of heart or it may happen by separation. Not every job is suited for every employee. This is very difficult for any leader, but as the leader you must possess emotional fortitude to make this happen.
     Bottom line you must get your team engaged by communicating to them what you learned and how you want to change their environment. Engage your team in determining what is most important to them that you need to change first. As this process begins you have to communicate ,communicate, and communicate. That in itself will begin to change the environment and ultimately your staff’s morale. Employees need to know that you care for them. So commit yourself to getting to know them, determining a plan of action, and loving on them. Happy staff equals happy customers!