Benefits vs. Barriers – The Misunderstood Relationship in Change

In the beginning of every change initiative, companies estimate the potential benefits that are available for capture. In mining, total benefits are often equal to the value of the gap between equipment capacity and actual performance, plus some dollars added in for cost savings. It is assumed that process changes at the operational and admin support level will generate the additional tons and cost savings, and that culture change will happen as the result of the new processes and procedures. Expectations are also set for the timing of dollars flowing to the bottom line.

In reality, many of the dollars don’t materialise as forecast; sometimes they are never captured. These shortfalls in expected benefits happen so frequently that people begin to:

• Believe it is really not possible to capture the predicted gains.
• Lower expectations for what can be changed.
• Accept the shortfalls as part of the change process.
• Blame the methodology or the project team or both for the shortfall.
• Go in search of a “new and improved” methodology and join the “flavor of the month” club. The dues to join this club are high; in fact, they are equal to the cost of resources, consulting, and equipment associated with each new effort to change.

The “flavor of the month” is another name for the current improvement method in play. The continuous search for the “latest and greatest” improvement method is driven by the belief that prior shortfalls were caused by substandard process work in the “last initiative”. Billions of dollars of spending are justified annually based on this widely-held assumption about change.

What if this assumption is false?

• If each successive methodology fails to deliver the expected benefits, then barriers that prevent success MUST LIE OUTSIDE the scope of process improvement work:

1. Some operations and maintenance problems cannot be improved by process changes.
2. Some problems in purchasing, warehouse, accounting, marketing, environmental, HR, etc. cannot be improved by process changes.

• If barriers that prevent success are allowed to continue to sabotage improvement efforts and steal profits, the barriers are worth the same as the estimated value of the initiative, project, etc.
• A lack of focus on barriers to change is the biggest and most expensive oversight in improvement work. 

When you buy new equipment or upgrade equipment, you expect to use the capacity you paid for to produce additional tons. You justify the purchase based on the value that the additional capacity will generate. You budget for the additional tons assuming that the tons will materialize as expected. You also forecast lower costs for maintenance repairs and/or operating supplies. Then time passes…

If your numbers are reasonable and processes are well-designed, the potential exists to achieve the forecast, but … how many times have actual production stats and costs fallen short of forecast?

If you have done everything you can to maximize production and minimize cost and still experience shortfalls in performance, it is likely that hidden barriers reside in your management system. These barriers will unintentionally sabotage improvement efforts year after year, but go undetected during the change process and day-to-day activities.  

When you drive down a highway, you expect to “just go”… no stoplights, no detours, and no landslides, rocks or fallen trees to drive around. Why can’t change be the same way?

IF management barriers become “the scope of work”, change can be accelerated in a big way when the barriers are removed. Process changes become much easier and the culture will move from reactive to proactive. Your ability to capture expected benefits and protect your credibility will increase exponentially.

Thought for the month: Barriers created by management processes, beliefs and behaviors separate companies from the opportunity to optimize performance, change culture and sustain change. This insight followed by a decision to change will change everything.            

Author: Kay Sever CMC, CQIA, Sustainable Improvement Consultant and Coach. Kay Sever is a leader in sustainable improvement for mines and plants. She combines over 30 years of mining experience with a common sense approach to improvement that raises awareness about lost opportunity and hidden barriers that prevent improvement success. Her new management training program, The Change Revelation, shows management teams how to remove the barriers that are holding them back.www.thechangerevelation.com.

Read the article online at: https://www.worldcoal.com/coal/02072012/benefits-vs-barriers-%E2%80%93-the-misunderstood-relationship-in-change/