THE OGM: 30 YEARS IN BUSINESS Edition - Read Now!View Past Issues
Today, I am committed to getting across to you the simplest principle that takes the least resources and makes the most practical real world impact in your business. Applying it will require doing some new things and, for most, getting out of your comfort zone.
And, of course, though it seems simple and logical that if you want new/different results, it requires new/different actions, but most people won’t do it. And if you do actually take those actions—here’s some of the things our clients reported about their results, and things you can expect to happen in your business now:
“After making this change, our late receivables have been reduced by 90 percent in two months.”
“The issue stopped overnight with all the staff.”
“The turnaround was immediate.”
“In some tasks, we have found an 80-90 percent reduction in time to completion. It was mind-blowing.”
The fundamental premise is tolerance—the higher the performance of a device or team, the lower or finer the tolerances. If there is play in the system, it can’t perform well. If there’s high tolerances in the team, it won’t perform well either. Tolerating things that don’t work in business is the equivalent of a receiver in football—kind of running in the general direction of the agreed upon pattern, and maybe being there on time and perhaps making a touchdown every season.
We don’t tolerate that level of performance in a pick-up game, let alone our great sports teams, yet we tolerate it in our businesses every day. We tolerate an incredible amount in our organizations, and then we complain and spend more time and build more systems to compensate for what we tolerated in the first place.
What if you could very quickly reduce your input and increase your output?
Take a look around the landscape of your business. Look at what works and what doesn’t work. The bottom line is you have what you tolerate.
Do you have stuff going on that you don’t want? Are there persisting complaints with people working for you? Do you seem to have the same type of problems recurring?
Here’s an example that demonstrates tolerance, and even though tolerance was understood as a concept, it was a failure because it was never taken as an opportunity to reduce tolerances and have better results. (In other words, knowing that tolerance is the issue doesn’t make a row of beans difference unless things are no longer tolerated.)
I was working with a successful highly-respected company of approximately 170 people.
I had worked with them 10 years previous to this time, when there were only 20 people in the company. They grew rapidly, and they had done very well.
When they came back to me, one of the issues they had was a low quality of work being put out by their junior staff.
They had built a top-notch reputation and tremendous success when they were small. A great deal of this was based on their incredible reliability to put out exceptional work with no errors.
They said to me, “Anurag, 10 years ago our engineering drawings went out the first time with no errors. Our customers loved us. Now we have processes and checks, peer reviews, and then partner reviews, and we sometimes have 10 percent errors after all that. That’s been going on for years now, and nothing we have done has made a difference. Our customers are now more frustrated than ever.” My response was simple: I said, “Well, here it is guys; you are paying staff to do mediocre work and make mistakes.”
“No, we’re not. We pay them to do great work, and they don’t do it,” they said.
This banter went back and forth a few times, until I stopped it and asked: “Do they do mediocre work and make mistakes every week?”
“Yes,” they replied. “And do you pay them every week?” I asked.
“Yes, they replied. So I said, “OK, then you do the math.
Every week they make these mistakes and every week you pay them. Guess what you are paying them for?”
That’s when there was a big silence on the other end.
I said, “I can handle this for you in 24 hours.” They asked,
How?” I asked, “What is your target error rate?”
“One percent or less” was the response.
“Very simple,” I said. “I will tell them that now the job description is doing drawings with less than one percent errors, and that is what they get paid for. If they don’t do that, they don’t have a job here.”
Shocked, they rebounded with “But that is an ultimatum.”
I said, “Yes, it is an ultimatum. So what? People are weird about ultimatums. But in fact, everything in business is an ultimatum.
You actually couldn’t work without them. For instance, if people just didn’t come in to work, they would get fired. So coming to work or getting fired is an ultimatum. It’s clear, if you don’t show up, you don’t have a job. The problem is in the decision of where you draw the line. You’ll need to tighten up your tolerances, so that if your people don’t do exceptional work, then they don’t have a job. People actually allow people to not do what they are paid for, and then have the gall to complain.
The problem is you and what you tolerate—not them.”
What every company has is “exactly” a function of the environment that was built I explained, “Check this out—you have zero tolerance for people just randomly not showing up for work, right? Does it ever happen?”
“No,” they replied.
“Do you have to manage it, compensate for it, or fix it or worry about it?” I said.
“No,” they replied.
“Exactly. What you have no tolerance for doesn’t happen, you don’t have to manage it, and you don’t worry about it. How easy is that?”
Can you imagine if you took this on in your company?
What if all energy was only directed productively, and you didn’t have to worry about your team’s performance every day?
Think about the medical profession for a moment. Would you want to be a patient of a surgical team where the surgeon had to try to get some of them to do their jobs?
There is no room for it, so it doesn’t happen. The environment of the operating room has no tolerance for error on the job.
You have what you tolerate—it’s just that simple! A great deal of your day is managing stuff that only exists as a function of what was tolerated in the first place.
I asserted in an earlier article that if you had a car where the parts didn’t do what they were supposed to as often as your employees, you would trade it in for a donkey.
If you were a customer at a store and you didn’t get what you paid for, you would likely do something until you did. Well, you are paying your staff for something. Don’t get me wrong, this is not about being a hard-ass. It is about being straight and 100 percent responsible for yourself and for your company.
Does that mean you just go in and hammer them with the new rules? No, here’s what you do:
– Create a future and context for the change.
– Acknowledge how things have been.
– And take responsibility for it.
– Clarify what is coming and create the opportunity for people to choose.
Here is a version (a summary) of a conversation I did for a company:
“We are in the process of recreating the company. We have a commitment to a future where the company has exceptional growth, a great reputation, and is one of the best places to work at. We want it to be rewarding for the organization and everyone in it. That future is obviously different than what we have now, so we will now be doing some things differently.
Let’s start by acknowledging that, up until now, we have built this company with you to have what we have. We thank you for your contribution to getting us here.
Now for the future, a new set of results will require a new way of working.
In working on the redesign, we saw that we have had some irritation and resentment from people and some of the operation. We can now see that was a function of how we managed and allowed things to go, and it certainly is not anyone else’s fault. It is, therefore, our responsibility to correct it and get the company lined up with our plan.
We can tell you it will require a new level of performance from everyone. It will be much more rewarding and much more demanding. That doesn’t mean you will be working longer hours—only that everyone’s hours will be of higher quality.
It may not be for everyone, and if it’s not for you, we will do everything in our power to get you relocated to a place that is right for you.”
(That is a small piece of one possible way to introduce significant change quickly.)
In this particular company, everyone understood this, but nothing was done, and so there was no change. In the quotes that I provided at the beginning of the article are the examples of what people said when it was implemented.
Understanding this will make no difference. But if you brought zero tolerance to ONE thing you have been putting up with, you will see an incredible shift immediately.
Remember the responsibility is yours.
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