George Perry: Want better performance and problem solving? Get everyone together and talking.

George Perry

George Perry

Do you want to strengthen your company’s performance, increase customer satisfaction and improve its bottom line without having to resort to high-priced consultants or sending your employees to expensive and time-consuming seminars?

First, introduce your salespeople to your accounts receivable staff. When you’re done, continue making introductions throughout the company until each person knows the people in every other department whose work either affects or is dependent upon their own output.

If you’ve not gone down this path before, you’ll be very surprised how quickly it will enable the management team to generate improved business results. I know I was surprised.

I discovered the power of this approach not by experiencing a moment of brilliance but by becoming frustrated over the lack of progress in solving a serious problem. The company was experiencing significant aging of its receivables beyond the targeted time frame. To make matters worse, the number of bankruptcies in the industry had been rising for years as both the customer and supply base faced continued economic uncertainties, increasing the risk that some of our receivables could become uncollectible. We engaged many of our top people in an attempt to quickly get to the root cause of the problem.

Was it the customers who were at fault or were we the problem? To make a long story short, when we got all of our salespeople and our receivables staff in the same room to put an end to the finger pointing that was going on, we discovered that many of these long-term employees had never met face to face, despite working on the same customers’ accounts.

We also found a lack of clarity as to where the roles and responsibilities of each party began and ended as well as what authority each had to troubleshoot issues or bring them to a head. Once this situation was recognized, it didn’t take long to clear up almost all past due receivables (very few were caused by customers), and the improved clarity and communications between those departments provided assurance that the new level of performance would be sustained.

Improved intra-department communications was also found to be effective in driving down inventory, shortening lead times, increasing production, improving product field performance and reducing warranty expense. Why should this simple act make such a difference?

Perhaps it’s not news to you that any given department is sure that many of the company’s problems stem from the incompetence that exists in one or more of the other departments. Oftentimes, when these folks understand each other’s roles, responsibilities, and more importantly, the issues faced by those in other departments, they develop a new respect for those colleagues. Then the hard work of continuous improvement can begin in earnest.

A good management team should take advantage of this phenomenon by creating cross- functional teams that are given ownership of specific key processes or company metrics. These teams could set targets, establish meeting schedules, assign priorities, create action plans, monitor performance and report out to management at predetermined frequencies.

To get started, select one or two key processes or company metrics that are in need of improvement. It’s important that you make the case for the needed improvement to the team by clearly defining the benefit to the company. It’s wise to initially select areas where you suspect there might be some low-hanging fruit, because you’ll want to publicize early successes throughout the company and recognize successful teams.

Making sure that people in different departments get to know each other isn’t just a nice thing to do. Properly exploited, that practice can be the catalyst that enables your company to pull ahead and stay ahead of the competition.

George Perry has more than 40 years of experience in engineering, operations and executive management. He retired as president and CEO of Yazaki North America Inc. in December 2009. Reach him at [email protected]