[Post by Chuck Krugh, December 9, 2022]
Continuing the discussion of our Business Operating System (BOS), we now move into the third quadrant of the Plan-Do-Check-Act (PDCA) model: “CHECK.” In this part of the BOS, we measure whether – and how well – we are achieving our operational goals (Safety, Quality, Schedule, Cost) and the goals for our workforce – we are calling these our “People” goals. The measuring we do in the CHECK stage answers the question: Did we do what we said we would do?
In business, we set meaningful goals for running the company. We must continually measure our ability to hit those goals because how well we hit our goals indicates the health and strength of our business. CHECK helps us do this at many levels.
One of the traits of a strong and healthy company is predictability. Reaching our goals is one way of demonstrating our predictability. Much like in the rest of our lives, predictability in most things makes life easier – it’s the same in a business. Predictability helps us make hiring and training decisions as well as know the right time to order products and manage many other aspects of the company.
We make a plan to reach our goals. As we carry out that plan, we check to make sure the plan is effective. Leaders may make adjustments to the goals in order to achieve more predictable results.
Our overarching goal is to continuously improve the way we run our business. To do this, it takes all of us doing our job and meeting our goals. Increasing predictability is one key factor in continuous improvement. The more predictable we are, the better we understand how much we can lean forward and act aggressively toward new business, new work contracts or other opportunities.
So let’s dive into the CHECK quadrant. There are two supporting documents we use to measure our success: the Balanced Scorecard and the Dashboard.
The Balanced Scorecard has its roots in the Annual Operating Plan (AOP). Remember, the AOP breaks down the high-level, broad company strategy into division, department and team levels. The Balanced Scorecard is how we check our progress on the AOP, our operational goals (Safety, Quality, Schedule, Cost) and our People goals. We are in the process of breaking down these goals for each team for 2023. We want you to know what your target is going into the new year.
By breaking the AOP down this way, everyone in the company knows what and how they are contributing to the company’s success. But to ensure that is clearly communicated to everyone involved, we need the second supporting document – the Dashboard.
Using a dashboard allows us to communicate to everyone in a consistent, structured, easy-to-understand and color-coded format to convey the status of where we are in reaching our goals. Each crew might have different tasks, and thus their specific goals may differ; however, a glance at the dashboard will tell anyone in the company, or, for example, a new member of the crew, where that crew is in terms of meeting their safety goal, their quality goal, and so forth.
The dashboard comes in many shapes and sizes – from paper print-outs to viz boards. As we begin to implement the BOS, we will use a combination of both methods.
The Balance Scorecard and Dashboards are vital parts of the BOS because they allow us not only to track but also to communicate our performance against our goals to the entire company. To ensure that we are a learning and growing company, we have to understand our performance. The CHECK quadrant provides us the opportunity to measure the company, division, department or team against the goals we set.
If we’re hitting our goals, then we’re doing well. Conversely, if we are not attaining our goals, then we need to make corrective action in the form of Root Cause and Corrective Action – commonly referred to as RCCA. I’ll write more about that in a later blog.
Next time, we’ll look at the fourth and final quadrant of the BOS, “ACT,” and then we will have a few blogs on other elements of the BOS. Thanks for reading!
Safely Execute High-Quality Work
President, General Dynamics Bath Iron Works
P.S. – Starting as early as next week, you should start seeing viz boards in the major functional areas in our company; they’ll look similar to the one below. These viz boards are our Dashboard. They will provide an at-a-glance view of how well we are doing by using stoplight colors (green–yellow–red) to distinguish whether we are on or off target.
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