business

Protecting Your Company's Good Name

While most people believe it was an iceberg that caused the Titanic to sink, recent research tells us that in fact, it was a series of bad decisions by the shipbuilder. These decisions led to substandard parts failing when the Titanic hit the iceberg, resulting in the ship's demise. The shipbuilding company, Harland and Wolff, could have avoided this historic tragedy if they had created and implemented an overarching risk prevention system to manage critical decisions and processes across the three years it took to build the ship.

Today, companies have robust risk prevention systems to avoid these kinds of corporate "shipwrecks", but unfortunately, most managers and employees don't follow them. Most managers think that "quality" is the job of the Quality department at their companies. But they are wrong. Where there is great quality performance, accountability never rests solely on the shoulders of Quality staff. Instead, all managers hold their employees (even those in Sales and Marketing) accountable for ensuring high-quality products and services. A recent Corporate Executive Board (CEB) study revealed that 85% of surveyed employees from Fortune 500 Companies don't believe it is their job to follow systems designed to drive quality and reduce risk, even if the system specifies their personal role. Employees fail to follow systems for three main reasons:

Managers don't support them; 10% of managers tell their employees that they can ignore these systems in their daily work.

The systems don't integrate well with workflows; more than 97% of employees do not fully understand how systems fit into their daily roles.

Employees don't feel ownership of the systems; companies focus on the wrong incentives to drive usage at the front line.

Even companies that have developed great preventative measures aren't immune. If companies do not design and deploy these systems properly, their employees will continue to ignore them. Through its research of the best practices at leading companies, CEB has identified five new strategies that companies should adopt to compel their staff to mitigate risk: 1. Look for Adoption, Not Compliance—Observe employee behaviors daily to measure system adoption. 2. Rely on Frontline Managers—Hold frontline managers accountable for messaging the importance of systems so that their staff uses them properly and consistently. 3. Don't Tell, Show—Emphasize manager and peer coaching, rather than relying on "death by PowerPoint" training sessions to teach employees how to use the systems. 4. Make It Seamless—Make sure that the systems integrate fully with employee workflows to eliminate common excuses for not following standard procedures. 5. Appeal to Hearts Over Minds—Connect the system to outcomes employees care about to drive personal ownership of the systems.

Only 5% of employees believe that a focus on quality leads to positive outcomes in their roles. Managers who want to help protect their company's good name need to make it their job to change that in their companies. By following the strategies provided above, managers can help prevent their company's reputation from sinking.

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