Common Pitfalls in Operational Management Consulting

I have often been asked what pitfalls or challenges I’ve experienced In consulting, and while all engagements are different, there are many common issues or themes that run across industries and businesses, regardless of size, scope, or company focus.  Here are just a few of the most common issues that I have seen.

1.       Mistaking the problem’s symptom for its root cause.  For example, a client that was experiencing high employee turnover wanted to figure out how to prevent employees from leaving.  In this situation, oftentimes it can be easy to blame the employees and rationalize away the departure of valued or “good” employees as leaving for reasons outside of the control of the company, such as a change in family status, health issue, or relocation, and to adopt an attitude of “good riddance,” “about time” or even, “kids these days…” when less favorable employees leave.  

Fortunately, this client had a strong sense of self-awareness and wanted to take steps to improve the company’s culture.  Therefore, we turned the gaze inward, analyzed company data, interviewed employees, and identified some critical cultural issues that could be addressed.  In the end we focused on instilling accountability, empowering employees and building a culture based on mutual trust and respect in order to increase employee engagement, and hence – retention.

2.       Not communicating company goals and objectives.  For another client we worked to achieve alignment between the management team and the employees.  One key task that we undertook was to develop a plan to communicate and manage performance to companywide goals and objectives.  After we’d spent a great deal of time defining and refining the goals which we planned to attain over the course of the next twelve months, we put together an all-employee meeting agenda to share these goals and objectives with the employees to get their buy-in.  Once shared, the next step was to post them in a highly visible location, update them monthly, and review them with the team during quarterly all-employee meetings.  Having well understood visible shared goals builds team cohesion and engagement. 

3.       Metrics, metrics, metrics.  In working with a retail client when asked about metrics, he indicated that he had a whole slew of data and metrics for his store concerning all things sales, inventory, costs, shrinkage, cash flow, and so on including values, ratios and trends, essentially anything that QuickBooks could generate.  However, when challenged as to who owned these metrics, how he held his teams accountable to them, and how he used them to make decisions, the answers weren’t as clear. 

Having a snazzy looking dashboard is one thing.  But the science is in assigning owners, capturing the data, turning it into information, and using that information to make decisions.  We worked together to monitor and track only those metrics whose data provided meaningful information with which he would use to make decisions.  All the other ones were just great filler for the classic red-yellow-green charts on that snazzy looking dashboard.

4.       Not holding regular effective operational review meetings.  Oftentimes companies are caught short when they find that their performance isn’t meeting their budgetary plans.  When working with clients I will ask them how often they review their plans, and then for them to show me their process of conducting the review of their forecast, P&L, annual plan, budget or whatever moniker they use to refer to their plan for the next twelve months or year, laid out month-by-month and split into quarters.  This is the “roadmap” of where they want to go.  Having the numbers on the page is one thing, and understanding the actions necessary to achieve those numbers is another, but lastly, holding empowered employees accountable to achieve those results is where leaders can struggle. 

I have helped clients set up regular operations review meetings where instead of the owner or the CFO presenting the results, the employees present the status of their objectives and utilize a “better/worse” approach to compare the actual results achieved vs. the planned results.  The focus is on driving accountability to the lowest level of the organization, and instilling a sense of ownership in employees for the results being presented.  For instances where the results are worse than what was expected the employee presents the corrective action plan including the timeline for recovery.  For instances where the results are better than expected, the employee explains whether it was an anomaly or a new trend and what can be done to keep and build upon the positive momentum.  For both cases, the employee is prepared to explain the root cause and what if any deviation to the rest of the plan will occur.

Once results are well understood and all assumptions validated, the plan is adjusted to reflect the new reality, actions assigned, and follow-up meetings set as appropriate.  While this sounds simple and intuitive, having regularly scheduled effective meetings with a set agenda is a discipline that can easily fall by the wayside unless enthusiastically embraced by the leadership.

Achieving operational excellence takes an unwavering commitment to do the whole job, focusing on what I refer to as the three legs of the stool; customer delight, employee engagement, and financial results. When leaders create and foster a culture of accountability, it not only enhances individual and team performance but also builds a foundation for sustained growth, innovation, and success. As leaders and collaborators, it is our collective responsibility to nurture this culture, unlocking the full potential of our teams and propelling our organizations towards excellence.

To learn more about the leadership topics of operational excellence, managing to a P&L, creating a culture of accountability and empowerment, organizational development, and performance management, please send me a note at info@ventusstrategies.com