Category Archives: Control Systems

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I just got back from a road trip to Pennsylvania, working with two groups on the research of Elliott Jaques. As part of the workshop, we spent time looking at their biggest managerial issues.

Accountability. Accountability was a big one.

  • We find out a project is behind schedule. How do we get it back on track without being a bully?
  • Some defects in finished goods make it into the hands of our customers. How can we get our team members more focused on quality when we aren’t around to check?
  • How do we make our control systems more effective, without looking like a police force?

The next Subject Area in Working Leadership Online is Accountability – Control Systems and Feedback Loops. We are opening 50 Introductory Memberships (Free) for this program. If you would like to get on the list, please let me know. This program kicks off next Tuesday, June 1, so sign up today.

Control Systems and Feedback Loops

“So, let’s make the list. As you look at your control system, what makes it less effective?” I pressed.

“You talked about delay,” Ronnie replied. “You are right, delay makes the control system less effective. But, updating more often, is going to take up too much time for my manager.”

“But DELAY still makes the list,” I insisted.

“Okay,” Ronnie relented. “But I don’t see how my manager can do more.”

“Then, let’s have your manager do less. After all, if there is a problem with production, who is in the best position to take corrective action?”

“Well, the corrective action would be taken by the team.”

“Then, why don’t we change this control system into a feedback loop? Why don’t we have the feedback loop tell the team, and why don’t we run the feedback loop in real time? The manager just gets in the way.”

It’s Late and Unreliable

“Let’s run this timeline, again, looking at your control system,” I nudged. “Monday, your production team shows up for work. They have daily and weekly targets. A machine breaks down and they lose 45 minutes of production before they can get going again. How does your control system capture that?”

“The control system is counting,” Ronnie replied. “And it is sophisticated enough to detect the change in throughput.”

“So, that’s Monday. And on Friday, the control system automatically compiles a report and forwards it to the manager, five days after the machine broke down.”

“Yes, I mean, the manager is busy. We could compile the report every day, but the manager is busy. Besides, it’s not a good idea to have him yelling at his team every day.”

“Why have him yell at them, at all?” I asked.

“What do you mean?” Ronnie pushed back. “It’s my manager’s job to hold his team accountable. We are very big on accountability around here.”

“But, bottom line, your production crew is double-passing finished goods under the counter, or skipping the counter, making the whole system unreliable. So, where is your control system? It’s late, it’s unreliable and puts the manager in between the feedback and the production team.”

Ronnie stopped. I could tell he was frustrated. “So, what should we do?”

“First, let’s list the problems and see how we can change the system to make it more effective.”

Teach Each Other

“Alright, so I should have members of my team inspect their own work for accuracy. How do I know they will do the right thing?” Daniele asked. “These files are important and they have to be right. The feds could shut us down if they believe we aren’t in compliance.”

“Does your team know what the standards are?” I replied.

“Well, they should. Every one of them went through an orientation when they started to work here. And we have our quality sessions where I tell them what the auditor found that was wrong.”

I smiled. “Daniele, have you considered that when your team members went through your orientation, they were disoriented and may not remember all the details? Do you think we might go over that again. I looked at your orientation manual, it looks like there are five major sections to these files. You have five people on your team. Do you think you might divide things up?”

“You mean, have the team members teach each other?” Daniele gasped.

Too Busy Working

“You are right,” Daniele admitted. “I have been keeping some quick stats on the mistakes we are finding in the files. Whenever I hold one of my accountability sessions, the mistakes disappear for about a week, then, boom, they are back again, and we find more.”

“So, finding the mistakes is not the problem?” I asked.

“No, and fixing the mistakes isn’t that hard either, but I want to stop the mistakes from being made in the first place.”

“So, tell me, Daniele, can the auditors stop the mistakes from happening?”

“No, they’re auditors, they don’t work on the files, they audit the files.”

“Okay, so who can stop the mistakes?” I pressed.

“Only my team can stop the mistakes.”

“What if you had your team audit the files?” I suggested.

“They can’t audit the files. They are too busy working the files. Can you imagine what would happen if they stopped production to check their work?”

Daniele stopped. A strange look emerged from her eyes as she thought about what she just said.

The System is Being Ignored

“So, you think when I have this conversation about their mistakes, they are ignoring me because I lecture them?” Daniele asked.

“No, they are not ignoring you. They are ignoring your entire control system. Your control system is finding the mistakes, but the mistakes are continuing. Is the purpose of your control system to find mistakes or to find the causes for the mistakes and repair the cause?”

“I know. But I have to find the mistakes. And I have a great audit team. They are very thorough. I don’t know what I would do without them. They keep us in compliance,” Daniele stated flatly.

“How does your production team feel about your audit team?”

Daniele visibly changed, sat back and pulled away from her desk. “Well, they are not supposed to like the audit team. I don’t run a popularity contest around here. There is some friction, but I think it is good friction. My production team knows if they make a mistake, my audit team will find it. I think there is respect in that way.”

“Daniele, here are some things I know based on what you describe.

  • There are mistakes in your files that your audit team is NOT finding, that will put you out of compliance with the Feds.
  • Your production team has no respect for your audit team and is ignoring the results of your audits.
  • Some mistakes are being found, but the causes of the mistakes are not being identified.
  • Your situation is getting worse.

Why Are You Being Ignored?

“You have a control system. Let me list the elements.

  • Your team works on a file.
  • Someone from another team audits the file and finds a mistake.
  • You, as the manager, get the results of the audit.
  • You, as the manager yell at the team member for making a mistake on the file.

Did I get that right?” I asked.

“Yes, well, I don’t really yell at them,” Daniele replied. “I mean, I talk calmly, I don’t raise my voice.”

“You don’t have to raise your voice to be yelling,” I chuckled.

“Okay, but let’s call it a lecture, not yelling,” she insisted.

“Why do you think they are ignoring you, when you have this little talk with them? I know they are nodding their heads, but trust me, the results from the audit team and you, as the manager, are being ignored in this control system. Why do you think that happens?”

Little Rain Clouds

“We are subject to both state and federal compliance. There are important standards that we have to observe. No getting around them. So, I don’t see what all the fuss is about from my team when I try to enforce those standards,” Daniele explained.

“What happens?” I asked.

“We have to maintain files. They have to be up-to-date and complete. Each person is responsible for the files on the clients assigned to them. Once a week, I go and pull five files, at random, give them to someone on my audit staff. They go through the file and find all the mistakes.”

“What happens, then?”

“I bring in the person responsible for the file and we have a very serious discussion. During the discussion, I seem to get my point across. Everyone always agrees with me. But then, they go back and make the same mistakes, again.” Daniele sat back.

“They make the same mistakes, again?” I prompted.

“Yes, and then they get all huffy about it. They walk around the office all day with a rain cloud over their head. I can look over the cubicle farm and see all the little rain clouds. I am just trying to do my job and keep us in compliance with the feds.”

Rearranging Deck Chairs

“When you look at this inventory problem, where should you be spending your time?” I asked.

Bruce looked down. “You’re right. I walk around the store barking orders about removing this display or re-working that shelf arrangement. I have team members to do that, and I have supervisors to make sure it happens.”

“What should you focus on?” I repeated.

“I need to focus on the system. I mean, I can still walk around the store. It gives me a better sense of reality, but I need to focus on the system. It’s the system that provides the predictability in our inventory management. Everything else is simply rearranging deck chairs.”

In Control

“If I had to reduce my inventory by 30 percent by the end of May,” Bruce continued, “I would be able to spend more time analyzing which inventory I wanted to get rid of, adjusting my min/max and re-order points. I would look at inventory turns, lead times and ship frequencies.”

“So, what’s the difference in blowing out 30 percent of your inventory by the end of next week and reducing it by the end of May? You still get your inventory down?” I asked.

Bruce smiled. “If I just blow out my inventory in one week, I will guarantee that within two weeks, my levels would all be back. I might even have more inventory then, because people will be ordering stock outs without any rhyme or reason. In the short term it works, but in the long term, it all comes back.

“By working systematically, I can make permanent changes in stock levels. I will have much more control. We will have the profitable inventory we need, that turns, that makes us money. It gives us more predictability and consistency. It all gets back to the system.”