Deliverables: Current Reality Assessment

 

Q: Where are we, right now?

 

A process of continuous improvement is just what the term describes – it is a constant, never-ending quest for improvements in operating performance and business outcomes. For a homebuilding company setting out on this journey, this is the question that needs to be the first one asked, and the first one answered.

Every situation is different, and situations can change, but you always start with where you are right now; you start with an understanding of a specific current reality.  You start with an objective analysis of your specific current condition, with an objective assessment of your current performance, resources, capabilities.

To be clear, we offer two types of assessments: a Competitive Assessment® and a Current Reality Assessment®. Both types of assessments involve looking at results, checking facts, and drawing conclusions, but a Current Reality Assessment® is specifically designed as the demarcation point for a focused process of continuous improvement: a series of initiatives conducted in consecutive order with short durations, aimed at producing targeted, measurable improvements to a specific economic outcome.

It is the same type of rapid-cycle improvement program we use in Results-Based Consulting® arrangements. It is also tailor-made for use with a team-based approach to performance compensation.

Comprised of interviews, surveys, and a working group, a Current Reality Assessment® focuses and prioritizes your improvement effort, and establishes the baseline for continuously improving your operating and business performance. In doing so, it draws conclusions about the order and priority of initiatives, based on dependencies, on cause-and-effect relationships.

It is an assessment deeply-rooted in an understanding of how systems work and how they are improved.  It is root cause analysis directed at identifying core problems and identifying the limitations – the constraints – to the business outcome being sought.

Systems-thinking is about improving the performance of the system; it is not about improving the performance of its pieces or parts  – not any of the parts, not some of the parts, not even all of the parts, independent of one another.  The way you improve a system is by focusing the improvement efforts on identifying and resolving the problems that affect the performance of the entire system.

It would be a mistake to look at the facts and measures from a picture of your current reality and conclude that these are a set of equally-important-yet-independent, related-yet-isolated measures. It would be a mistake to conclude that the best way to improve your current reality is to spend time and effort improving the outcome of each and every part of it, all at once.

You cannot improve everything, everywhere, all at the same time; you cannot treat everything as the cause of the problem.  If you do, you will spend all of your time and effort treating the symptoms of the problem, without ever resolving its cause.  If you are lucky, you might succeed in improving performance in some areas, and you might relieve the symptoms and effects of some of the problems.  But – you will likely never solve the one problem that is preventing your company from achieving the outcome it seeks right now, and the unintended consequences of separate actions on different parts will likely make the situation worse.

The business environment in which you must operate does not provide you with unlimited capacity, resources, capital, and opportunities, which means that any effort to improve has to be prioritized, has to be focused.

It means that solving some problems, exploiting some opportunities, must wait until more important problems are solved, until better opportunities are exploited.

What comes out of a Current Reality Assessment® is a plan:

“This is where we are, right now. These are the problems, and this is the priority in which they will be addressed.  We will attack them in this order, and only in this order.  With the first initiative, we will eliminate all of these other issues, because we have established their cause-and-effect relationships.

“We have x-days to get this first initiative done; we will work on no other initiative until this one is finished.  We are going to throw the right people and resources into this initiative;  in the meantime, everyone else do their jobs.

“When we are done with the first initiative, this will be our second initiative.”

And so on.

Next:  Deliverables:  Team-Based Performance Compensation

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