Leaders and managers often struggle to solve problems that seem simple on the surface but resist every attempted solution. Everything they try results in failure after failure. In the worst cases, productivity slows and profits begin to take a hit. Complaints mount and the perception of quality, as well as satisfaction, may start sliding in the eyes of customers.
Over the years I have learned to ask my clients a simple question: “Which makes more sense—investing time and energy in avoiding problems or in spending them solving the problems?”.
Unfortunately, too many companies get the wrong answer. It became apparent that what my clients needed was a structured yet flexible process to uncover the source of the problems and a way to develop specific solutions quickly with lasting effect. That led me to create the management approach we now call LEO for Listen, Enrich, and Optimize.
The basic elements of the LEO strategy are exceedingly straightforward:
LISTEN: Observe and Understand. To obtain a deep comprehension of the issue at hand, put aside past assumptions, and directly interact with all relevant parties –including customers, suppliers, and employees. Add to your findings whatever statistical and observational data can be uncovered.
ENRICH: Explore and Discover. Based upon the information you have gathered, reach out (especially to the frontline employees) for ideas and possible solutions to enrich your products, processes, systems, and your organization. The wider you cast your net, the more likely you will move beyond the usual suspects to discover new and better answers.
OPTIMIZE: Improve and Perfect. Examine the solutions you have found and select the best and implement with total confidence. Subject it to every kind of challenge it might conceivably encounter and correct any and all possible shortcomings.
Here’s how we put LEO to work to solve a management problem at a not-for-profit foundation that builds homes for people who have lost them during natural disasters.
I remember arriving at the organization’s headquarters, just as the weather bureau was issuing storm warnings. It didn’t seem to be a good omen. On a tour of the most hard-hit area, I was shown hundreds of concrete slabs, all that remained of the old homes. I also saw the dozen or so new homes the foundation had put up—a disappointing number since it was far short of its goal of 250. We were determined to help speed up the pace and make a lasting impact.
LISTEN. After meeting face-to-face with the CEO and his top aide, digging into the processes involved in the rebuilding, we were able to create a very high-level process map of the foundation consisting of just five boxes:
1. Get the money to pay for property, construction and the like.
2. Acquire lots to build on.
3. Help potential homeowners arrange for financial and other pre-ownership requirements.
4. Build the homes.
5. Aid owners get settled.
With the foundation staff of 25 people, we analyzed each box, asking detailed questions to determine how well the processes were working. After careful study we found the bottleneck in the “acquire lots” box. The problem was centered in two subprocesses: Identify potential lots for purchase within the target area and find out whether a purchase is in fact feasible. The processes were fairly complex: ownership had to be determined and the owners found no small matter given the typical exodus following a disaster. The zoning stats had to be checked along with any mortgages, taxes due, or other liens on the property. The physical condition and the desirability of the location of the lot had to be looked into. Owners had to be interviewed to find out whether they wanted to live on the lot with a new home, sell the property to the foundation, or simply had no interest in the whole project.
Three staff members had been assigned to these tasks, but they were clearing only three lots a month for closings and construction. The reason had nothing to do with them personally—all three were hard-working people committed to the foundation’s goals. But they were, in effect, focused on the RPM gauge instead of the MPH. Their wheels were turning, but the car was barely moving.
Each of the three had invented his or her own particular approach to the same task. They started the process at different stages, went about gathering data in different ways, and used different record-keeping techniques. On any given day, they might decide to alter their usual sequence of tasks, or they might forget where they had left off in the sequence and have to start again from scratch.
The confusion extended to their interactions with management. They would sometimes have to break off negotiations with the owner of a lot to check with the CEO as to whether the company was willing to meet the owner’s price. There were occasions when the CEO would approve a purchase, relying on the staffers’ clean bill of health, only to learn much later, after money had changed hands, that there were liens on the properties.
ENRICH. With a full knowledge of the situation on the ground, we had the basis for developing a solution. We made a list of all the tasks in the “acquire lots” box. Then we sat down with the CEO and three of his aides and gradually, over hours, tried to put all of those tasks into a logical, step-by-step sequence. There was debate within the room, occasionally heated, over many items, but when the working session was over, all parties were pleased with the result.
The sequence became the basis for developing a new standard operating procedure for the “acquire lots” process. Guidelines were developed for how each step of the process was to be handled.
A worksheet would enable staffers to know where they were in the process at any given time, and it also provided a record of the staffers’ actions at each step of the way. Every contact with a landowner, every call to a source, was to be set down. Standard forms were to be developed for eliciting data from some sources—government agencies, for example. A phone script would assure that all the essential points were covered and the correct wording was used. New, more efficient tools and information sources would be found and made part of the process. When a particular owner proved hard to locate, for instance, skip-trace organizations would be called in.
One major change: the CEO would set a dollar limit on how much the foundation was willing to pay for a property —including not just the selling price but also the cost of meeting any outstanding attachments to the property—and staffers working the “acquire lots” box would no longer have to bother him every time a financial question arose during a negotiation with an owner. The limit could be updated when needed.
OPTIMIZE. Once the various elements of a solution had been identified, they were subjected to a rigorous examination to make sure the process would continue to function under unexpected but not impossible circumstances – a power failure, for example. The goal, after all, was not just to put out a fire but also to prevent it from happening again.
A schedule was established for putting all the pieces in place. Staff people were assigned to handle most of the tasks, from writing the phone script to preparing standard request-for-data forms.
Once the blanks were filled in on the worksheet, the redesigned process was extensively tested and the results measured. Some adjustments were made. For instance, estimated times had been established for how long it would take staffers to accomplish each of the tasks within the process. Those numbers proved to be too high in some cases, too low in others.
In short order, though, it became clear that the changes had transformed the “acquire lots” function. The previous confusions and errors were eliminated, and the time required to complete the process was drastically reduced. It used to take each of the three staffers devoted to the process a month to declare just a single lot “feasible to acquire.” Today, one person using the worksheet can routinely declare 15 to 20 lots a month “feasible to acquire.”
In so many companies, we have seen that leaders seem to focus their tasks on collecting data associated with a problem. Unfortunately, they never seem to consider asking the tough questions of “why” and “how” about the processes behind that data. In the case of this not-for-profit organization, it was clear that enhancing the “quality” of the processes trumped the “quantity” of the data available.
By rigorously and consistently using one or all of the LEO guidelines, organizations can achieve far higher levels of performance. LEO highlights the fact that, in the final analysis, the answer to most problems boils down to one word: quality. The unending pursuit of quality should guide every action an individual or organization takes. LEO simply provides a structured process to find ,evaluate, and implement the optimal quality solutions that almost certainly are hiding in plain sight.
LEO is a registered trademark of Subir Chowdhury. All copyrights of the article belong to Subir Chowdhury.
This article is based on Subir Chowdhury’s latest book The Power of LEO: The Revolutionary Process for Achieving Extraordinary Results (McGraw-Hill, 2011).