Article

Imple­men­ta­tion

Renoir In Action: How long-tenure employ­ees can actu­al­ly short-circuit your prob­lem solv­ing engine

June 19, 2019

It’s a generally-accepted myth that today’s employ­ees, espe­cial­ly mil­len­ni­als, are more apt to job hop with the aim of accel­er­at­ing their way up the pay scale and senior­i­ty lad­der. The evi­dence, how­ev­er, does not sup­port this myth, and in fact, shows the oppo­site trend over the last few decades.

Accord­ing to the US Bureau of Labor Sta­tis­tics, there has been a steady increase in medi­an tenure with cur­rent employ­er over the past three decades. Despite two reces­sions, it increased from 3.5 years in 1983 to 4.6 years in 201

The trend holds true even if we seg­ment the data accord­ing to age and edu­ca­tion lev­el. The over­whelm­ing take­away is that employ­ees want to stay with a com­pa­ny long-term.
On the face of it, this seems like encour­ag­ing news. After all, it’s wide­ly accept­ed that it’s much more expen­sive to recruit and train up a new employ­ee than to retain an exist­ing one.
How­ev­er, might there also be neg­a­tives lurk­ing with­in this wind­fall? Here’s an exam­ple from a recent project to illus­trate the point.

Uncov­er­ing the issue

An oil and gas engi­neer­ing com­pa­ny in Tul­sa, Okla­homa, invit­ed us in to help them tack­le a press­ing issue. They reg­u­lar­ly install machin­ery that will be in place for the dura­tion of a ser­vice con­tract of up to five years. How­ev­er their lat­est mod­el was suf­fer­ing from a trou­bling defect that result­ed in detri­men­tal reduc­tions in performance.
The lead engi­neer revealed that the prob­lem came to light soon after the model’s release, how­ev­er all their attempts to resolve the issue had been unsuc­cess­ful. Their most recent attempt, which cost $500,000 per unit, had worked ini­tial­ly in test­ing, which prompt­ed them to roll out the solu­tion to every unit. How­ev­er, after a few months, the defect reap­peared through­out the fleet.

This rep­re­sent­ed a real risk to the orga­ni­za­tion. Cus­tomers and con­trac­tors would soon real­ize this was a sys­temic issue affect­ing all the units of this mod­el, and that could poten­tial­ly destroy their reputation.
We imme­di­ate­ly jumped at the oppor­tu­ni­ty to help. Now obvi­ous­ly we weren’t there to pro­vide an engi­neer­ing solu­tion, but we could ana­lyze the his­to­ry of the company’s attempts to find a solu­tion to see whether that might reveal a more fun­da­men­tal issue. Our hope was that tack­ling that could help them solve this prob­lem and many others.

We start­ed by map­ping out the his­to­ry of the defect, to under­stand not only the time­line of events but how deci­sions were reached and imple­ment­ed. We then per­formed sim­i­lar map­pings in oth­er depart­ments to deter­mine if our find­ings were depart­ment spe­cif­ic or applied across the organization.

To under­stand the results of our analy­sis, you’ll need some more back­ground infor­ma­tion on the company.
For many of the employ­ees, this was the only com­pa­ny they had ever worked for. Many of those based at head­quar­ters had spent years work­ing in the field before being pro­mot­ed to office-based roles. Junior exec­u­tives had typ­i­cal­ly been with the com­pa­ny for 10–15 years. Senior exec­u­tives had often been there for 20–35 years. They would fre­quent­ly stop to chat with less expe­ri­enced employ­ees and share sto­ries from their time in the field. The lev­el of respect they gar­nered was impressive.

Man­agers bur­dened with high staff turnover might read this and won­der how this wealth of expe­ri­ence could be a neg­a­tive. After all, com­pa­nies have spent bil­lions of dol­lars on efforts to improve reten­tion. How­ev­er, as we dis­cov­ered in this case, the long tenure of senior staff can have an unfor­tu­nate impact on deci­sion mak­ing. In this instance, the rev­er­ence less-experienced employ­ees showed the senior exec­u­tives per­me­at­ed into the decision-making hier­ar­chy. It isn’t enough to say that expe­ri­ence mere­ly trumped exper­tise and prox­im­i­ty to the prob­lem. The lat­ter two didn’t even have seats at the table.

Each of the five solu­tions pro­posed to fix the defect fol­lowed the same path. News of the fail­ures reached senior man­age­ment through a vari­ety of infor­mal sources by way of tele­phone con­ver­sa­tions, email and instant mes­sen­ger. No offi­cial report­ing took place to make sure all the senior exec­u­tives were pre­sent­ed with the same facts to take into consideration.

The dis­cus­sion of the issue took place at the week­ly exec­u­tive lead­er­ship meet­ings and was based on anec­do­tal sto­ries and per­son­al expe­ri­ence, with no sup­port­ing data to facil­i­tate root cause analy­sis. The meet­ings also lacked input from field-based employ­ees who saw the fail­ures on a dai­ly basis.

In one of the first meet­ings, one senior exec­u­tive com­ment­ed that he had seen the same thing when he was in the field, and they had solved the prob­lem by sim­ply chang­ing the angle of the fan. With­out a decision-making frame­work, the com­mit­tee was swayed by the senior executive’s con­fi­dence and lev­el of expe­ri­ence. Unsur­pris­ing­ly, their first pro­posed solu­tion was to change the angle of the fan.

Find­ing the right way

We sug­gest­ed tak­ing a ground-up approach to prob­lem solv­ing. Rather than plac­ing the bur­den square­ly on senior exec­u­tives, field-based employ­ees would be empow­ered with tools to help them iden­ti­fy issues, pro­vide root cause analy­sis and rec­om­mend pos­si­ble solu­tions to the exec­u­tive lead­er­ship team (ELT). The entire process would be super­vised by the ELT.

In the future, for a spe­cif­ic issue to receive con­sid­er­a­tion, ELT mem­bers would need to approve a spe­cif­ic char­ter. A small cross-functional team of employ­ees would then use the appro­pri­ate tools from the Renoir toolk­it to address the issue.
To make this approach work, team mem­bers would need to be trained in how to use the toolk­it. So we imple­ment­ed a train­ing pro­gram called Change Cham­pi­ons. Inter­ac­tive train­ing took place over 13 weeks and fol­lowed the DMAIC (define, mea­sure, ana­lyze, improve, con­trol) approach.
Top­ics included:

• Six Sigma
• The impor­tance of defin­ing problems
• How to brain­storm effectively
• Social behavior
• Data analysis
• Statistics
• Over­com­ing resistance
• Process mapping
• Team development
• Root cause analysis.

We pro­posed that com­ing up with a final rec­om­men­da­tion for each char­ter should take two to four weeks. How­ev­er, when assigned to a char­ter, Change Cham­pi­ons could expect to devote as much as 50% of their time to the project. Man­agers were made aware of this, so they could plan and make the nec­es­sary adjust­ments. The man­pow­er com­mit­ment was undoubt­ed­ly large, but the pay­off was incalculable.

Although they had respond­ed well to the train­ing pro­gram, the Change Cham­pi­ons had reser­va­tions about whether senior man­age­ment would take their rec­om­men­da­tions seri­ous­ly. The pre­vi­ous cul­ture was so ingrained in them that they were doubt­ful of their abil­i­ty to con­tribute to the organization’s deci­sion mak­ing in such a direct way.

The pilot char­ter iden­ti­fied weak­ness­es in the accounts receiv­able col­lec­tion process. The Change Cham­pi­ons sug­gest­ed a review of the entire process to min­i­mize the num­ber of incom­ing pay­ments exceed­ing 90 days.

They had suc­cess­ful­ly mapped out the “as-is” accounts receiv­able process and not­ed cri­tiques from var­i­ous depart­ments. They then laid out three options for alter­na­tive process­es, list­ed the pros and cons of each and came up with a final rec­om­men­da­tion out of those three.

Every­thing had gone well, but still one of the team mem­bers voiced her doubts, ask­ing, ‘What’s the use? They are just going to do what­ev­er they want anyway.’
This was a recur­ring theme through­out the entire pro­gram and seemed to be per­va­sive through­out the orga­ni­za­tion. From a consultant’s per­spec­tive, it was vari­a­tion on a famil­iar theme. We typ­i­cal­ly hear ‘We’ve tried this before’ or ‘I brought this up once before and they didn’t lis­ten.’ I respond­ed as I always do: ‘I know, but just trust our process.’

When it came to the final rec­om­men­da­tion for the pilot char­ter, the team did a tremen­dous job in review­ing the entire jour­ney they had tak­en to get there. They sum­ma­rized the orig­i­nal issue uncov­ered by the Renoir team, the as-is process map, the cri­tiques of the process from mul­ti­ple depart­ments, the three to-be process­es they con­sid­ered and how they con­clud­ed that their rec­om­men­da­tion was the best path. They also out­lined a roll­out time­line, com­mu­ni­ca­tion plan and mit­i­ga­tion plan to address spe­cif­ic risks.

The ELT was tak­en aback at the lev­el of analy­sis com­plet­ed in less than four weeks. After ask­ing a few ques­tions, they unan­i­mous­ly approved the rec­om­men­da­tion and ele­vat­ed one of the non-manager team mem­bers to lead the rollout.

Rolling out the new approach

News of the suc­cess of the pilot char­ter quick­ly trav­elled among oth­er staff and it didn’t take long for char­ter requests to come pour­ing in. The field staff real­ized they could direct­ly impact the orga­ni­za­tion and this did more to ener­gize them than any mon­e­tary ben­e­fit ever could.

After a few months, the com­pa­ny real­ized they need­ed more Change Cham­pi­ons. We pro­vid­ed three addi­tion­al train­ing pro­grams, one tai­lored specif­i­cal­ly to man­agers. This less­ened the bur­den on depart­ment man­agers, who couldn’t afford to have their staff work­ing on back-to-back charters.

The Change Cham­pi­ons were now fix­ing some of the biggest prob­lems the com­pa­ny faced, includ­ing the orig­i­nal engi­neer­ing defect that had prompt­ed them to con­tact us in the first place. With­in five weeks the team had com­plet­ed a report that iden­ti­fied sev­er­al root caus­es for the under­ly­ing defect. They com­piled a list of mit­i­ga­tions that could be car­ried out imme­di­ate­ly at min­i­mal expense, which would dras­ti­cal­ly reduce the chances of the defect occur­ring in future.

The ben­e­fits of the Change Cham­pi­on pro­gram were far-reaching. The Change Cham­pi­ons felt they had a much bet­ter under­stand­ing of oth­er depart­ments’ work­flows, and that enabled them to per­form more effec­tive­ly in their every­day roles. One of the biggest impacts was that the Change Cham­pi­ons freed up the exec­u­tive lead­er­ship team to think strate­gi­cal­ly about the busi­ness rather than spend­ing their time fire-fighting problems.
We had tak­en one of the company’s biggest assets, the long tenure of its work­force, and lever­aged it to sup­port con­tin­u­ous improve­ment from the bot­tom up.

How might a change like this impact on the suc­cess of your orga­ni­za­tion? If you would like to explore the pos­si­bil­i­ties, please get in touch.

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