Ever Given – Supply Chain Disruption in the Suez Canal
Supply Chain Resilience and Risk
Post Brexit Supply Chains UK-EU
Value, Customers and Service
Complexity and Disruption
7 V’s Explained
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So what are pressing problems? When it comes to business we often think that we have many pressing problems. In truth there will be just a few. These are the problems that will disrupt the business if they are not addressed. In the strategy literature they refer to such problems as those that are critical. Identifying such problems is not always easy. Often this is because managers spend more time doing than thinking. It is essential that tiime is set aside for thinking.
Some time ago now I spent a day in London speaking with the then UK CEO of Diesel the clothing retailer and I asked him how he spent his week. At the time I recall being surprised by the answer. I was expecting him to tell me what most other CEO’s were telling me at the time about how important they were to the success of the business and without their drive and foresight what a disaster it could be along with the many managerial concepts and insights that they had brought to enlighten the business. In the case of Diesel almost none of this was in the answer I received. The most striking parts of the discussion focused on the many store visits made by the CEO incognito to understand the business and the competition. The focus on the failures and mistakes and what they had done to identify causes and rectify what they considered to be those threatening future business was paramount. He regarded days spent in HQ as wasted days apart from the necessary team meetings and activities designed to develop his team. It was important to be active gathering data from observations about his business and talking to others about theirs. He also read a lot of business books alongside many about design. He spent a lot of time thinking about how to improve the business and had a good grasp of the end to end supply chain. When I came away from that meeting I began to think more about what I had learned from this interview.
One of the first things I did was to read more about failure and what can be learned from it. Many business and strategy books focus on success. The narrative is often a smooth passage from a sleepy start to an unfolding growth pattern by employing technical solutions, management techniques and a few four box matrices but this is far from the truth on the ground. It is one of those lightbulb moments when your experience is different from what you are reading.
Learning from Mistakes
There are books that cast light on the darkness and one of those was something I regarded as a strange book at the time I read it called ‘The Goal’ I think I picked up originally because I thought it was about football with its striking cover design. This book was an important find as it articulated in a short novel a story about a plant manager saving the business. As it unfolded it was clear that identification of the problem was the first step in a process to remove constraints. This and a later book by the same author Eliyahu Goldratt introduced me to something called ‘The Theory of Constraints’. It struck a chord with me as I had become familiar with the idea of constraints from my studies of Linear Programming Methods optimizing an objective. The basic concept is that ‘a chain is no stronger than its weakest link’. Throughput, operational expenses and inventory are key areas of focus that need to be managed in supply chains. If you search for weaknesses you will be able to identify the one or few that may be critical. Ongoing improvements can only be realised by identifying limiting factors and removing them. Constraints are anything that stop the system from achieving the goal. The key messages from the Theory of Constraints are as relevant as ever. You may adapt and apply the theory to many different contexts.
Reflexive Managers
We know that reflexive managers learn from their mistakes. In developing processes and practices with the aim of improving performance we learn to adapt and respond flexibly to the circumstances we are faced with. Resilience is a term that we use to talk about effective responses to bounce back from events that disrupt performance. We can draw analogies from sport where high performance levels are expected by those teams and individuals that win prizes. To know what it is like to win, maintain fitness and skill levels that enable us to compete we have to practice regularly. We learn how to improve performance through reading and observing stories about other athletes who have achieved success. Often within these stories there are moments of doubt, tales of endurance, commitment, mistakes and resiliance. So it is in business too. If we want to improve a situation we need to know reasons why we may not be meeting our expectations or underperforming. We need to focus on the constraints that might be holding us back but we also need to focus on specific failures to understand why they happened. It is necessary to understand mistakes so we can learn from them. Reflexive managers create learning organizations. Learning organizations are resilient. Learning from failure is expected in resilient organizations. Failing to learn is unacceptable.
Peter Senge talked about the fifth discipline in his book of the same title. In it Senge describes the five disciplines as: personal mastery, mental models, shared vision, team learning and systems thinking . The fifth discipline systems thinking creates pathways to the future. Focusing on critical issues by being open in discussions about the organization and open to receiving ideas about how to get to the future by involving everyone in the conversation is a means of unveiling the biggest issues and discovering solutions to the pressing problem(s) . Senge, identifies one of the key bottlenecks as the mental models that lock people into positions blinding them to the realities of the current conditions and situations they face. This resonates with Kurt Lewin’s approach to change management as a process. First you have to unlock the entrenched positions that prevent progress, once transition is reached the process begins all over because people are creatures of habit so they refreeze the new mental model. Lewin argued that this transformation was a continuous process.
Solving Pressing Problems
Before we can solve any problem we have to identify it. Sometimes this is straightforward as in the case of a particular supply issue. These types of problem come to us rather than we go in search of them. The impact is immediate. The magnitude can be calculated. The solution is usually straightforward such as change supplier. Other problems might be latent. Latent problems are often more complex in nature. Latent problems need to be identified in other ways. There are a number of tools and techniques that can be employed effectively to do this such as: DMAIC which is an acronymn for Define, Measure, Analyze, Implement and Control or SREDIM which is another acronymn Select the problem, Record events (Observed, Experienced, Identified), Examine and evaluate the problem, Develop possible solutions and after evaluation choose one to Implement, and Maintain by monitoring the solution and making adjustments as necessary. Other root cause analysis tools include the Ishikawa or Fishbone Diagram to identify causes, along with simple questioning techniques such as the Five Why’s so named because the cause is usually identified inside the fifth why. This was developed and applied as part of the Toyota Manufacturing System and is widely used in Kaizen to eliminate waste (Mura = uneveness, Muri = overburden, Muda = waste) and to improve efficiency in Lean Manufacturing Systems and in Six Sigma to achieve zero defects. The Five Why’s are used in conjunction with the Ishikawa diagram to establish cause and effect.
Problem solving tools and techniques are useful to help structure the problem and search for possible solutions but they are not a substititute for systems thinking, strategic thinking and practical wisdom which comes from experience and practice. Technical solutions while necessary are often not sufficient to solve pressing problems which are layered and complex. For example, a technical problem might be identified that a particular piece of software needs a patch to make it work. However, if we take a systems view it might be the case that different software is required to handle all the operations we now have to manage. Furtnermore, we may require investment in new software systems and new hardware to ensure that the new system will work. Going beyond the narrow sub-system and examining the interconnectivities may require further investment in infrastructure and training to achieve the goal we have set for the organization. So what we might have thought of as a technical solution quick fix is more of a pressing problem to change the system to meet future needs of the organization. Put differently, we have grasped at a technical solution to fix an immediate problem but failed to grasp the magnitude of the latent pressing problem which is to build future capabilities to transform the business.
Conclusions
The pressing problem is one that will disrupt your business. The problem that is, or will prevent you from achieving your goal. Often the problem is in clear view. Sometimes the pressing problem is hidden from view. The latter type the latent problem may require investigation of other issues before it becomes visible. As they say in the best crime novels it is hidden in plain sight which makes it difficult to see. It is the paradox of some latent problems. This is why it is necessary to be vigilant and involve people in the organization in the conversation. Supply chain visibility is essential to uncovering any hidden problems. Solving the pressing problem is the difference between achieving the goal or missing the target.
TONY HINES BLOG 