Article

Renoir In Action: Tragedy of the commons is killing your business

June 19, 2019

Authors

Dhruv Sanexa Jaison

Recently, I spoke with a potential client who was struggling to understand why they were not achieving better results from the many improvement initiatives they had launched over the past couple of years.

They had conceived the initiatives to address specific problems that the company had been facing year after year. They had followed a launch plan, picked the right leaders, created charters and ensured the teams involved were resourced correctly. So why were they achieving only modest gains, and in some cases, none at all? The answer to this question is simple but it’s something that many companies struggle with – they weren’t seeing the big picture.
Far too often initiatives are launched without a full understanding and appreciation of how they might impact on the business as a whole. While they are targeted at solving specific business problems, they often fail to solve the systemic issues at their core. And instead of effectively tackling the issue at hand, they can lead to budget overruns, missed targets and poor buy-in.

A company recently called us in after an initiative aimed at reducing quality defects by 50% failed. Several months of meetings and hard work had led to lackluster results, much frustration among employees and disappointed customers. They asked us to review the situation to work out why the initiative had failed.
After a brief analysis of the situation, we found the following problems with their approach:

The initiative was led by one department (quality control), without taking the viewpoints of other departments into account
The initiative team didn’t work together with another that was simultaneously looking at improving the overall customer experience
Various teams within the company had created charters that overlapped but were not tied to a common end goal
When looking for the cause of defects, the focus was solely on internal process failures – supplier quality control was not addressed
Worst of all, no one asked customers to define the impact the defects had on them
Seeing the big picture, communicating it adequately and tying initiatives into clearly identified overall goals and management systems is essential to maximize the chances of a satisfactory return on investment. It can lead to speedier execution, better decision making and improved employee involvement.

Here are a few questions that it’s worth considering when planning an improvement initiative to help you see the big picture:

How might the initiative impact on the management systems currently in place?
Does the business have the right management systems to actually implement the changes?
Is there an adequate governance model in place to manage the initiative long term?
What can be done to ensure the solutions are accepted into the company culture?
What impact might the initiative have on customers and other external stakeholders?

Taking a big picture approach will help to avoid a ‘tragedy of the commons’ situation, where an initiative is pursued regardless of potential negative impacts on the business and its stakeholders. It could not only be crucial to your initiative’s success, but also core to your business’s survival. At Renoir we have many years of experience delivering sustainable top-to-bottom management system solutions. Talk to us to discover how we could help you.

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