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Measuring and Improving Organizational Effectiveness

Oil Change
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Project Management:
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A Step by Step Overview ofa 1950's Organizational Tool Experiencing a 1990's Rebirth

Hope Is Where You Find It
by Peter Block

Sorry We're Closed: Diary of a Shutdown

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Views for a Change

Sites Unseen
Reader's Favorite Websites

The Quality Tool I Never Use

Pageturners
Book Review

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Jim Harrington Responds:

Your question is more of an assignment than it is a question, but I am glad you are using Purdue University’s well-established term GEMBA, which stands for Global Executive MBA program. This is a proven, very effective management training process that has, for a number of years, produced excellent results. I am assuming you are referring to “gemba” as defined in Masaaki Imai’s book entitled, “GEMBA Kaizen,” published by McGraw-Hill in 1998. Based upon this assumption, I believe that you are interested in knowing if a self-managed communication system can be established at the worker level for small groups of about 100 people. The answer is yes. However, it may be very difficult to define a value proposition for this project. Is there a better, less expensive way of doing it? The answer is most cases, again is yes.
If I was given the assignment to implement a system of this nature by a client, the two major things I would consider are: areas where everyone has computers that are on LANs and areas where individuals are not connected through a computer LAN network.
In the first case, communication systems can easily be set up using the organization’s intranet by establishing a number of communication subjects and allowing everyone in the group to read and input into the intranet structure. The advantage of this communication system is a free exchange of ideas and information. The disadvantages:
1. A major loss in productivity because both needed and unneeded information must be sorted through to find the few gems.
2. The system can become more of a rumor mill than a fact-based communication system.
3. There can be major legal expenses.
In the second case, newsletters, bulletin boards and group meetings organized by the group can provide the communication system. Again, I believe that this has a poorer return on investment because much of the information that is communicated is rumors, not fact. Also, most of this type of communication is better handled at the coffee machine and during break periods than through a formal system.
The best approach I know of to focus the Natural Work Teams (NWT) on their processes and how their processes relate to the organization is through a methodology called “Area Activity Analysis (AAA).” In this case, each Natural Work Team develops a mission statement that supports the next level manager’s mission statement. Then the NWT defines the activities it conducts and compares them to its mission statement. Only activities that directly support the mission statement are included in the NWT work assignments. Activities that were completed by the NWT that do not relate to its mission should be directed to upper management so that they can be redirected to another area, or the NWT’s mission statement should be changed to include the activity. Then for each activity, the NWT defines the customers that receive the output from that activity. They meet with these customers to document their requirements, acceptable performance standards and define a performance feedback system. These agreements are documented in the customer’s specification and signed off by the customer and the NWT. The Natural Work Team then flowcharts the tasks that make up each activity and defines the efficiency measurements for each activity (dollars per unit processed, cycle time, cost per unit, inventory turns per month, etc.). The team then collects data to define how efficiently the activity is presently operating. These data, along with recommended performance standards for each efficiency measurement, are submitted to the next-level manager. Based upon business needs and these inputs, the next-level manager establishes the official efficiency standards that will serve as the basis of future budget plans.
The AAA process is completed by defining the suppliers for each input to each activity. Working with the supplier, the NWT will define the input requirements, acceptable performance standards, NWT’s feedback system to the supplier and have the supplier sign off on the specifications indicating that it can meet these standards. What the Natural Work Team has just accomplished is establishing many process-related gembas with backward, upward and outward communication systems built into them. Add to the AAA approach a suggestion program, a speak-up program plus town meeting programs and you have developed a really effective, gossip-free communication system that meets everyone’s needs.
One of the major problems we face today is consultants who have good products to sell, but the products are applied to situations that add little value. Be careful of improved communication systems that do not have a positive effect on one or more of the following without having a detrimental impact on any of the others:
- Improve productivity
- Decrease cost
- Improve quality
- Improve return-on-assets
- Reduce employee turnover rates
It is easy to justify expansion of communication systems based upon “touchy/feely” things like improvement of morale or increased access to knowledge that in turn do not improve the organization’s performance. If this is the case, there are better ways for your organization to spend its hard-earned money.

Knowledge management systems are playing a very important role in today’s organizations. They can add significantly to the organization’s performance if they are designed and managed correctly, or they can be very expensive toys if poorly designed and left on their own.