Often, the problem that leaders think they have is not the real problem. If they understood their real problem, then they would fix it. The fact that the problem still exists is a likely indicator that the real issue remains unresolved.
The symptoms of their problem are more visible so that becomes the focus of their work. Are you working on your symptoms, unaware of the real issue?
It’s that time when the past year’s plans are assessed in preparation for setting next year’s goals.
Have you noticed that some of the same issues you wanted to resolve are still problems a year later? Have these issues been on your goal list for a while? Perhaps you’ve made some progress but still have not achieved your goal.
When you don’t fully achieve your goals or objectives, then it is probable that you’ve been dealing with symptoms rather than the real problem. Your goal is realistic but your approach to it is not working.
For example, many organizations have goals to ship more or improve due date performance as a means of increasing profits. To achieve these goals, they believe that they must be more efficient in utilizing unused capacity. But when they pursue greater efficiency through improved capacity utilization they discover that profits are not substantially increased by shipping more with the same people and resources or by getting more on-time. So these goals get recycled to the next year.
Low efficiency and utilization are symptoms of a real problem yet to be discovered. Increased profits come by increasing the “flow” of products or services through your operation – focus on your throughput.
Throughput is not about productivity – it’s about aligning your operation to increase sales as the most productive way to increase profit. In his book, The Goal, Goldratt defines throughput as the rate at which your operation generates money through sales.
Every operation or part of an operation – sales department, production, quality, finance – has a primary constraint that inhibits throughput. Find it and increase flow through the constraint to increase throughput, sales and profit. Leverage your product or service to help your customers increase their throughput – that produces quantifiable financial value that earns you preference with your customers.
Have you noticed that you’re trying the fix the same problems year after year?
How could focusing on throughput finally achieve your repetitive goals?
