Solving the symptoms that occur daily in organizations will not solve the real problem that afflicts them. Managers lose their vision in the ocean of data that surrounds them, they lack the ability to handle real information in their organizations. Indicators that point to the Goal of the organization can improve your performance and that of the organization. This article presents some thoughts on this common problem.
Of how we face life
Imagine that you wake up on any given day with a terrible headache that keeps you grounded throughout the morning and at one point in the day you find a friend who asks you: what problem do you have, do you look terrible?
What is the common answer that almost everyone would give?
Obviously it would be: I have a terrible headache.
Now I'd like to ask again: Are you sure the headache is your real problem?
Well I must tell you that maybe NO. The headache is probably caused because you have problems with your vision, or with your back, or perhaps because you have flat feet, without stopping to talk about the subjective factors that may be involved in this situation. So your headache is just a symptom of possible real problems. However, if I were a bad doctor and you decided to go to my office, I would probably say, "Come on man, take an aspirin."
The painkiller would ease him, perhaps, until the next day when the annoying symptom would return to torture him again.
A good doctor, without fear of being wrong, would first carry out a diagnosis, and then give him his prescription. Obviously, for the diagnosis, you must know what will be analyzed and how, because the results should guide you in your future behavior.
Undoubtedly, you could spend your whole life taking painkillers and never go to the doctor, but trust me, you will never be able to get rid of the real problem that is afflicting you.
It should not be forgotten that, on many occasions, the most wonderful medicines work only on the most pressing symptoms, not on chronic problems.
A symptom, of course, quickly becomes a problem for you because it limits your behavior, yet the symptom is a problem that causes us immediate pain. Most people work only on solving the symptoms that afflict them in life because they want to quickly get rid of the evil that bothers them. However, most of the time, they perceive that no matter how much they seek quick solutions for their symptoms, the worse the real problem that causes it becomes. Everything lies in the fact that there are no compromise solutions for real problems, to solve them, we only have the option of facing them.
Until we stop to treat the symptoms and confront the real problems, all efforts will be unproductive.
How we face the organization
The situation described above is experienced by organizations to the same extent. Obviously, not a few executives suffer from the inability to understand their organization and its behavior.
Organizational performance, at times, is as mysterious to the people who cause it as the INTERNET can be to a man of prehistory, and in the best of cases it is accepted as an act of faith rather than knowledge and understanding of what is happening. However, such knowledge and understanding are necessary for the success of any organization.
This ignorance and confusion is caused by the absence of a system of indicators that communicate to executives the behavior of their organization in a clear and simple way, it is the author's opinion that once these indicators have been established they would serve as an invaluable help for such knowledge and understanding organizational performance.
Today's organizations have innumerable indicators to measure their performance and someone might wonder why we need some more.
The idea is not to add another number of indicators, but to propose new indicators that replace the old ones or, at least, integrate those that organizations have in order to use them correctly.
We certainly use various ways of measuring organizational performance, but it is also true that it is very difficult to extract true and quick information from these methods. A lot of data yes, but no information, not a real image of the organization that allows making decisions with it.
Some time ago I was in a company "whose name I do not want to remember" and when I asked for information about the organization in question, they gave me a "ton" of paper that they named after all the information about their business. I started swimming in a big paper pool and after two hours I gave up. The basic information problem is finding the only grain of corn in a straw wagon. To do this, one must have the means to quickly search through large quantities of straw.
The financial reports are a photo, there is nothing dynamic in them so they will not say anything about the dynamic landscape within the company.
We have indicators, but we do not know if it is good or not, for example, that productivity is low or high this year.
If I see you get an infection in the nail of your little finger, which looks really bad, I might say, "This man is very sick." But if you hide your finger from me, I would still be allowed to say, "This is a completely healthy man," even if he has a serious infection developing under the nail of that little finger that I never saw.
"Tell me how you measure me and I will tell you how I behave," said E. Goldratt in his book "The Haystack Syndrome."
We need to understand what is really going on within our organizations and what buttons to push to turn off the red lights flashing throughout the organization. In order to apply improvements, it is necessary to have a mechanism that indicates which processes or elements the improvement should focus on because it is limiting or causing disturbances in the Goal.
That is why before establishing indicators the organization must have something clear: What is its Goal.
However, before establishing the indicators that really solve the problem of ignorance, we must understand that each of them must be directly connected with the Goal of said organization.
An indicator is a direct result of the chosen Goal. Indicator systems fail because it has not been defined first. Indicators are needed to judge the impact of local decisions on this Goal.
Discussing what this organizational beacon (Meta) is and reaching an agreement on the issue is essential to truly understand the organization. It must be made clear that, in the case of for-profit organizations, the Goal is to obtain profits through the satisfaction of the needs of the market segment to which it has been oriented, in turn complying with the social responsibility of improve the quality of life of society in general.
Money has been treated, on many occasions, in a poetic way associating it with petty pleasures, but it is a reality that more money now and in the future is the Goal of any organization that declares itself for profit. This if it wants to subsist, grow and sustainably fulfill the social purpose for which it was created.
Men want to live longer and better, organizations too, and for them living means having money to operate with.
Every performance indicator should point to this Goal and should give us an understanding of how well the organization is meeting its Goal.
Anything that limits getting more money now and in the future is wrong unless it is strategically justified to earn more later.
Organizations must pay for everything that comes into them and satisfy the requirements of the owner and the state, and this is one of the reasons why you need money to avoid going bankrupt.
For-profit organizations must make money. Once we verbalize what information we need, we will have verbalized the indicators and some necessary conditions.
Undoubtedly, obtaining profits requires at least two necessary conditions, an effective human organization and satisfied customers.
The effective human organization because they are in charge of "providing" products and services in the quantity and quality and opportunity requested, and satisfied customers because they are the ones who have the money that the organization needs to stay alive.
No one can deny the longing for profits. It is in the nature of for-profit organizations how living things breathe, and it is independent of the motives of any executive.
For all this, indicators are needed that give us an image of the organization, which points to the restriction that limits the obtaining of more goals, now these indicators must be integrated, and they must measure the organization as a whole.
A for-profit organization is a system whose main purpose is to create added value, profits. An organization that makes a profit can better withstand the onslaught of the environment, no matter how changing it may be.
Successful performance is relative, and there is a tendency to confuse indicators of success with causes of success. The king can wear a crown, but it does not follow that someone will become king by wearing a crown.
The performance of an organization should not be measured against any ideal such as excellence, but against those who, in the same market scenario, make the same products or provide the same services, and the one that is capable of creating greater profits will be The most successful.
A good organizational performance, as well as its failure, is multidimensional and depends on each link that composes it as part of a great chain, despite the old idea that some maintain of seeing the organization as a box of isolated links.
Bibliography
1. Goldratt, E. (1992). The goal. Ediciones Castillo SA Monterrey, Nuevo León, Mexico.
2. Goldratt, E. (1993). The haystack syndrome. Ediciones Castillo SA Monterrey, Nuevo León, Mexico.
3. Goldratt, E. (1994). It was not luck. Ediciones Castillo SA Monterrey, Nuevo León, Mexico.
4. Goldratt, E. and Robert F. (1992), La Carrera. Ediciones Castillo SA Monterrey, Nuevo León, Mexico.
5. Gomez, BL (1991). Continuous Improvement of Quality and Productivity: Techniques and Tools. Ed. New Times. Venezuela 96 p.
6. Gomez, BL (1990). Productivity and Quality. Consultant Manual. Andean Development Corporation. Ed. New Times. Venezuela. 190 p.
