How to Identify What Needs Improvement

November 29, 2011

Improving the efficiency and effectiveness of your organization is at the heart – and is the art – of management. Where do you start? What are the key areas that you should focus on?

A small set of general questions can reveal problem areas at all levels of your organization. You begin at the point most applicable to you—a line manager will use these questions at a departmental level whereas an executive will focus on a division, for example.

Are you doing the right thing? Before deciding if you are doing things right, it is always better to determine if you are doing the right thing in the first place.
  • What market are you serving?
  • What value are you providing to customers in this market?
  • What do you believe in?
As I wrote my post, Are People Buying What You’re Selling?, there is a need for good answers to these questions for both your customers and your employees. A related question to ask is: Have external conditions changed? If they have shifted against your favor, change is necessary because you aren’t delivering as much value as you used to; doing the same things is no longer good enough.

At an individual or department level, you can ask yourself how your work aligns with the goals and objectives of the organization. How is your work contributing towards serving and delighting your customers? How much value is it providing? Are there changes that can be made to make your contributions more valuable?

What outcomes are being produced? With Agile leadership, the emphasis should always be on maximizing the performance of the whole and avoiding problems with sub-optimization. This means focusing more attention on the outcomes—the achievements of a team and the organization—and less so on intermediate, process-oriented outputs of tasks or activities. These outputs are merely stepping-stones towards accomplishing a larger goal, and sacrifices in individual performance could very well be required in order to increase the results of the team or organization overall.

I made the case that revenue per employee is the ultimate productivity metric since it is a great starting point to determine how your organization as a whole is producing outcomes that customers will value and pay for, and what it is taking you on a per-employee basis to produce that outcome. At a software team level, an intermediate output such as lines of code produced is far less important than the outcome of working software containing the most-valued business features that are frequently delivered in prioritized order.

Outcomes over outputs means that everyone not only needs to perform their jobs well, but they need to make a meaningful difference to the customer in doing so.

Where are your greatest costs being incurred? The goal is to produce more for each dollar spent, but not to cut so deeply in an effort to squeeze out a profit today that you squeeze your company out of business tomorrow. Understanding where you are spending your money—and where a greater portion is being spent is naturally worthy of investigation. There could very well be opportunities to eliminate waste or reduce costs by improving inefficient operations. As I cautioned in my post, Look Beyond the Spreadsheet!, financials should inform management, but not run the company.

And keep in mind that the goal is to optimize and synchronize the whole! Reducing costs by eliminating “waste” or maximizing the efficiency of one area may come at the expense of another area. Look deeply at the work and the impact to the organizational system as you make any change to ensure that you aren’t merely transferring that overhead and cost elsewhere.

Is there a bottleneck or is something taking too much time? Do you have places where something being delayed causes several other things to be delayed? Even when there aren’t actual delays, seek out your buffers. Bottlenecks can be buffered to keep things running smoothly, but reducing your buffer sizes to introduce “problems” in a controlled manner can help you to increase efficiency because you must optimize the workflow to compensate.

Sometimes there isn’t necessarily a bottleneck, but work is simply taking longer than it could or should. Where are you spending your most time? Asking why significant time is being spent can open up a dialog and thinking that point the way to doing things a little bit better.

Are the behaviors of your people aligned with your objectives? This is particularly important to ask if you are leveraging Agile development to drive change in your organization. The same can be said for organizations seeking continuous improvement (as Agile organizations should be). You need to do much more than implement new tools and techniques—the behaviors of people are the most critical component of all.

For example, it is possible to adopt Scrum as your Agile development framework, but if people don’t change their behaviors you can wind up with what is called Cargo Cult Scrum. This occurs when organizations adopt the practices, vocabulary, and artifacts of Scrum—mimicking the behavior without really living it. In fact, you can still be living a command-and-control, mini-waterfall world while using all the trappings and terminology of Agile development.

For managers, this means developing people in new ways. One of them is developing their own capacity to improve themselves and their team. Agile development, for example, places people in control of their work. This in turn requires that people develop an understanding of what it really means to own their work and that of the team, to learn how techniques like limiting work in process and collaborating can increase throughput, to explore and use new technical practices to increase productivity – without someone doing it for them.

I wrote a separate post about some additional team-level diagnostics that are useful behavior markers in Don’t Measure. Diagnose!