A tremendous amount of knowledge exists inside companies. Too bad most don’t know how to share it amongst themselves, says Jeremy Eden, coauthor of Low-Hanging Fruit: 77 Eye-Opening Ways to Improve Productivity and Profits.
Or as Lew Platt, former CEO of Hewlett-Packard said, "If only HP knew what HP knew, we’d be three times more productive."
"All companies have internal problems that cost them time and money, but most don’t know where they exist," says Eden. "In fact, the top of the house is usually unaware that problems exist at all, so employees live with frustrations."
Instead of ignoring them, companies need to take the time to identify and solve their issues. Eden and his coauthor, Terri Long, say the first step is to get rid of outdated ways of thinking.
Here are five beliefs that hinder productivity:
Often a company sticks with the thing that helped it become successful, but just because it’s been doing something a certain way for a long time doesn’t mean it’s still the right thing to do.
For example, Eden and Long were working with a food manufacturer that made spaghetti sauce. While visiting the plant, they asked an employee, "What frustrates you most?" The employee said that the tomato sauce had big dices of tomato that clogged up the machine. He frequently had to turn it off and clean it out, lowering the yield and slowing down the line.
"I asked him what he would do to fix it and he said he’d make a smoother sauce, adding that marketing would never accept it because customers love big dices of tomato," says Eden. "For most companies that would be the end of story, but we repeated the story to their marketing department and challenged them with the question, ‘How do you know customers love big dices of tomato?’"
No one had a definitive answer, and after extensive testing, the company found out that customers actually preferred a smoother sauce. The company changed its recipe and saved $800,000 a year in lost time at their factory. "All because someone asked, ‘How do you know?’" says Eden.
American companies don’t like to use the word "problem," says Eden; it has a negative connotation. Instead, they call problems "opportunities." Unfortunately, not using the word ‘problem’ can cause an even bigger problem.
"Using the word ‘opportunity’ suggests that the item could be deferred, delayed, or ignored," says Eden. "The word ‘problem’ says it’s urgent. What would have happened if Apollo 13 had said, ‘Houston, we have an opportunity."
Eden says language matters and it changes behavior. Managers need to tell employees that they want to hear about problems and they want them to be labeled as problems.
After World War II, Eden says many companies were run like military operations, using top-down command. Contemporary management style, however, has skewed to be more inclusive, with decisions made collectively by a team.
"Some leaders go overboard and become afraid to act unless they have everyone on board," says Eden. "That seeds veto power to anyone on team."
A good leader doesn’t ask for everyone’s permission, says Long. "A good leader asks what are the facts, knows what’s important for the company, and makes the decision—whether or not everyone is on board from the beginning," she says. "Most employees will get on board once the decision is made."
While executives should make decisions without the entire team being on board, they also have to give their employees the right to dissent.
"Sometimes an executive shows exuberance for an idea, and the team start unconsciously hyping the good and hiding the bad," says Eden. "Six months later when the decision was found to be terrible, a team member might say, ‘I always knew it was a bad idea.’ Employees needed to feel an obligation to dissent."
"In some institutions, such as on an aircraft carrier or in an operating room, even the most junior person is expected to speak up," says Long. "Everybody should know that they don’t just sit quietly when bad decisions are being made. And there should be consequences for those who say, ‘I told you so.’"
From the time most of us were children, our parents and teachers have encouraged us to do your best, but sometimes this isn’t practical, says Eden.
"Americans have a tendency to want to excel, and that sounds like a good thing," says Eden. "But if you use this mindset in everything you do, you’re spending a huge amount of time on things that aren’t important."
Instead, identify the things that are worth "gold plating," and then adopt a policy where good is good enough.
"If the task isn’t going to help you make a decision, stop spending the time doing it," says Eden. "Use your scarce resource of time in a smart, sustainable way."
[Image: Flickr user Darron Birgenheier]