Daily Management to execute strategy
What do a customer complaint, a defective product, a broken machine, and missed financial targets have in common?
By the time they are noticed, unfortunately, it is already too late. The damage has been done, the losses are visible, sometimes irreversible, and the consequences painful. Delays, financial losses, damaged credibility, dissatisfied customers, friction with suppliers...
This inability to prevent deviations before they become too big is one of the greatest difficulties in pursuing the objectives defined by the strategy.
So, if problems are not corrected in time, the strategy is gradually undermined and weakened, often becoming something that only exists in PowerPoints and spreadsheets.
The good news is that we have a way to avoid this. It is Daily Management (DM), a set of concepts and practices that, if applied correctly, can identify problems and solve them quickly, eliminating their root causes.
Every day, in small groups, the teams of a given area meet to find out how the day went compared with expected performance. And they take the necessary measures to make the necessary corrections and adjustments
Whether the meetings are in person, remote, or hybrid, what is essential is that teams analyze and discuss defined and structured indicators that show how the work is going, point out deviations, and bring alternative actions.
For them to work properly, three essential building blocks must be established: commitment, control variables, and problem solving, which must be integrated and will guide the daily meetings.
Commitment
Starting from the definition of the area’s specific purpose, linked to the company’s true north or priorities, this first DM building block defines the deliverables to be produced with the available resources, setting out each person’s responsibilities for meeting the established objectives.
It is in this block that the connection with the strategy becomes explicit and direct, guiding everyone to be connected and aligned.
Control Variables
In this block we have the main performance indicators, the numerical or qualitative targets that will be tracked every day. They translate the strategic priorities for each area, defining specific expectations. They represent the “pulse” of management, the “heart” of the processes.
Actual results compared with daily targets will be one of the items of every daily meeting. Clearly exposing the "reds" to everyone, making the deviations explicit, is the starting point for triggering the problem-solving process, the search for "green".
Problem Solving
Every time a result falls outside the target, the problem-solving dynamic must be triggered, requiring an action to contain the deviation and ensure the established commitment.
It is the “engine” that gives energy and vigor to Daily Management and, therefore, to the strategy. The essence here is to identify and solve problems daily (the gap between the daily target and the actual result) before they grow and cause losses.
The central role of leadership in ensuring psychological safety
One of the main challenges for any company is aligning all of the organization’s employees to meet the expectations defined in strategic planning. DM is the key process for ensuring that the company’s employees engage in seeking improvements and in solving the real problems that stand in the way of success.
Building psychological safety in the team means that employees need not fear facing the often difficult discussions that may take place, or the differences of opinion and points of view, which should be welcome.
This depends on leaders who know how to build relationships and are true mentors to their teams, inviting people to collaborate, expose problems freely, contribute ideas, ask questions, and acknowledge mistakes. It tends to work if everyone is fully confident that everyone will be there to help, not to blame or punish.
DM thus becomes a moment when, every day, employees solve problems while learning how to improve their work, guided by the pursuit of adding ever more value for customers and aligned with the company’s strategy.
José Roberto Ferro and Robson Gouveia
“Living” strategy
In previous Lean Mails, we explained that there is a lean way of thinking about and executing strategy (https://bit.ly/3ojvC6C) and that this depends on a change of mindset by everyone, especially by organizations’ leaders (https://bit.ly/3kVqYcS).
In this context, DM helps make strategy deployment a “living” practice, because it gets everyone to embrace what was planned, thus generating daily responses across all areas and employees and ensuring the agility needed to always achieve the expected performance.
In other words, DM “closes” the gap that has traditionally existed between strategy and execution. It allows the course to be corrected quickly when something differs from what was expected.
In this sense, DM brings vitality and a pulse to day-to-day work, sustains enthusiasm and engagement, and gives meaning and purpose to everyone’s work. As a result, increases in productivity, savings, quality, and more and better results are inevitable.
For all these reasons, Lean Institute Brasil will launch, by the end of this month, the book “Gerenciamento Diário para executar a estratégia” (Daily Management to Execute Strategy). It was written based on many years of practical experience with the subject, inspired by real cases from companies in a variety of economic sectors.
In the book, the authors present a new approach to DM to close an important gap in strategy execution. We therefore believe the book is essential reading for solving problems with agility and developing people in a suitable and inviting environment.
Flávio Augusto Picchi
