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

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.