An outcome-based culture offers six major benefits. In this article, we explain why manufacturers should adopt an outcome culture.
What is Workplace Culture?
It was Peter Drucker who told us, “Culture eats strategy for breakfast.” The phrase implies that we can develop a great strategy, but if the company’s culture doesn’t support that strategy, the strategy will fail. Culture will prevail.
So, manufacturers need the right culture. They at least need a culture that supports their strategy. But what is culture? Angela Duckworth, in her best-selling book Grit, offers the following:
At its core, a culture is defined by the shared norms and values of a group of people. In other words, a distinct culture exists any time a group of people are in consensus about how we do things around here and why.
A manufacturer with a strong culture, both on the shop floor and in the back office, will act in a consistent manner. Staff know how they’re expected to behave, and when unforeseen circumstances arise, the culture will determine how staff react.
A Culture in Manufacturing
In manufacturing, the quality movement has long taught us that we need ‘definable, repeatable processes’. And few manufacturers doubt the need for strong processes. Great processes lie at the heart of great results such as minimizing cost and maximizing quality.
But, there’s a catch. If the message from management is ‘you must always follow the defined process’, then that will create a culture. People will learn that ‘how we do things around here’ is to follow the process, regardless of the results. If staff can show they followed the process, and something goes wrong, no one can blame them. The problem was in the process, not in the way they acted on it. It’s not their fault.
Is a ‘Process’ Culture a Bad Thing?
Relying on defined processes works well, until one of two things happens.
First, something unforeseen happens during manufacturing. Processes might exist to deal with many exigencies, but not all. When the unexpected happens, a process culture will cause everything to halt. Because there’s no process to follow. Unexpected stoppages increase costs and undermine quality.
Second, a customer makes a non-standard request. Customers ask for things that aren’t covered by standard processes. Perhaps they want a delivery timing or mix of products or transport methods that the manufacturer hadn’t envisaged. If there’s no process, staff will tell the customer their request isn’t possible. And that might cause the customer to find a manufacturer with a more flexible culture.
The Effects of Culture on Innovation
Manufacturers believe in continuous improvement. They understand the need to constantly take cost out of the business. Or to constantly improve quality at the same cost.
If a manufacturer has a prescriptive culture, then manufacturing innovation will always be top-down. Staff will wait to be told how to do things and that limits the source of innovation. It also sends a message to staff that their ideas aren’t valued. They should just do what they’re told.
This reinforces the culture of ‘not my fault, I followed the process’.
The Pace of Change: Adapting in Business
Business is changing faster and faster, requiring manufacturers to adapt more and more quickly. If they don’t adapt at least as fast as their competitors, they’ll lose customers.
When it’s time to adapt, manufacturers with a process culture must re-write their processes. But, designing and documenting processes is resource-intensive and slow. Someone needs to think through all standard processes and every contingency needed. They’re usually busy people. They may not have time to consult and consider all possibilities. So, the new process suffers from hasty development. It may not be ideal, but it will have to do.
Challenging Authority: Undermining Staff in the Work Environment
When a manufacturer launches a hasty process, staff will recognize it isn’t the best approach and may delay support and/or negatively affect adoption of the process. But, if the culture is ‘follow the process’, they’ll adopt and fulfill the process requirements without supporting the decision, and that further ostracizes the staff from the manufacturer. They don’t like following processes they know aren’t the best approach.
An Alternative Culture: Encourage Innovation and Support Adaptation
Manufacturers aren’t going to move away from strong processes. In some industries such as pharmaceuticals, they must not only follow the process, but verify they followed it. In cases like this, definable, repeatable processes still underpin efficiency and quality.
We need a culture that recognizes the need to follow a process but can adapt when the need arises; a culture that encourages innovation at all levels and supports adaptation as the pace of business change grows.
What is an Outcome Culture?
An outcome culture emphasizes clarity on what to achieve at each stage of business activity. We focus on the outcome rather than the process. Of course, manufacturers still need processes, but we add a layer above the processes. We define the outcome needed from each group of processes.
Advantages of an Outcome Culture
Providing clarity on the outcome from each group of processes has several major advantages:
Problem Solving – If there’s a problem not covered by a standard process, staff can adapt. They have a context for deciding on necessary action. They know the outcome they need to achieve. The outcome becomes their primary focus. If there’s no standard process, there’s a good chance they’ll find a way to achieve the outcome anyway.
Customer Responsiveness – Customer-facing staff try to get the customer what they want, when they want it. If they’re measured and rewarded on how well they deliver this outcome, they’re more likely to respond positively to non-standard requests. This increases the likelihood of more business from that customer.
Innovation – If there’s clarity on their outcome, staff at all levels will observe ways to improve how the outcome is achieved. Management in a manufacturer with an outcome culture will welcome the suggestions. This increases the chance of improving effectiveness.
Ability to Change – If staff focus on an outcome, they will respond more positively to change that improves how they achieve their outcome.
Less Administration and Overhead – Designing and documenting processes is time-consuming and expensive. In a process culture, someone needs to imagine every reasonable contingency and write a process for each one. With an outcome culture, staff won’t need as much guidance. They won’t need a process for every possible situation.
Positive Employee Experience – Slavishly following a pre-defined process isn’t rewarding. There isn’t a great sense of purpose. Serving a business outcome provides a higher purpose, and the sense of purpose increases if there’s a clear link between the outcome a staff member serves and the overall purpose of the company. Having a strong sense of purpose improves the employee experience. This increases discretionary effort and reduces turnover.
Adopting an Outcome Culture
It’s clear that manufacturers can achieve major benefits through adopting an outcome culture. Having clear communication and documentation of business processes, including each stage of business activity, is crucial. But, how can we establish the desired culture?
Up Next: In “Why Manufacturers Need an Outcome Culture (Pt. II),” we’ll offer simple methods to define and then support an outcome culture.
