Issue link: https://industrialmanagement.epubxp.com/i/249982
the true nature of the problem, developing the actual solution and fleshing out the details of the implementation plan. Even if the initiator thinks she has nailed the true problem, solution and implementation plan, there is much to be gained by following a Socratic approach. Under the initiator's gentle guidance, the key players should discover for themselves the nature of the problem and help develop the solution. In this kind of process, it is likely that the others will offer insights that can lead to valid improvements. As the players become more involved in the analysis and the development of the solution, their level of ownership will increase. And their level of buy-in and commitment to the project's success will increase accordingly. Misfiring bonuses To illustrate the layers of resistance, consider the following case study derived from a real-life situation involving a company with several hundred employees. Let's call the company PCB, since it produces printed circuit boards. The CEO is concerned about PCB's recent performance. For many years, his company had been quite profitable. But in the last two years, profits have decreased to the point that the enterprise barely makes money. We'll call undesirable effects "UDEs," and low profitability is UDE 1. Two major sources of trouble are that the revenue flows from both new and mature products have been decreasing (UDE 2 and UDE 3). The CEO also knows that some major customers have switched to doing business with competitors (UDE 4), and new products are arriving late to the market (UDE 5). At least the cost side of the company seems to be under control. Otherwise, the company could be deep in the red. The CEO credits a new company bonus plan that he implemented nearly three years ago with helping to keep costs in line and the company operating in the black, at least for now. Under the GOING DEEPER Figure 2. Within the three broad categories lie seven specifc layers of resistance to change. Disagreement about the problem Layer 1: Disagreement that there is a problem Layer 2: Disagreement about the nature of the problem Disagreement about the solution Layer 3: Disagreement about the general direction of the solution Layer 4: Disagreement about the details of the solution Layer 5: Yes, but the solution has negative side effects Disagreement about the implementation Layer 6: Disagreement that the solution can be implemented successfully Layer 7: Unspoken/unresolved reservations bonus policy, vice presidents received annual bonuses only if their specific departments (for example, sales and engineering) did not exceed their budgets. This policy change happened because, although the company was quite profitable, several departments habitually were over budget. The CEO reasoned that the company could reduce costs and increase profitability if he could motivate his vice presidents to keep their departments within their budgets. The CEO is considering several proposals. One would implement a new information system to update processes and better link the company to its suppliers and customers. A second possibility is to implement a new production and inventory management system that promises to streamline the manufacturing process and gain better control over inventory. What should the CEO do? The seven layers of resistance The three broad layers of resistance illustrated in Figure 1 give us the big picture perspective from 10,000 feet high. However, as shown in Figure 2, seven specific layers of resistance generally occur within the three broad categories. Each of these seven layers of resistance will be discussed in detail in relation to the PCB case. Note that the TOC literature includes a set of "thinking process tools" that help illustrate how to overcome the layers of There is much to be gained by following a Socratic approach. resistance. However, that level of detail and complexity is beyond the scope of this article. Layer 1: Disagreement that there is a problem. Virtually all organizations have significant problems that either limit current performance or threaten future performance. Furthermore, almost all improvement initiatives are preceded by a realization at some level that the organization has a problem that needs to be addressed. In most cases, the organization's key players will recognize the need and are open to actions designed to improve performance. However, occasionally one or more key players will argue that they are happy with the way things are going and do not see a need to change anything. In such cases, you have bumped headlong into layer 1. You must overcome this layer of resistance before moving ahead. People might be stuck in this layer for various reasons. They really might be unaware of any problems. Or they might accept the problems as part of a new reality that cannot be changed. Regardless, the approach is to step back and let them explain their perspective – and listen carefully to what they are saying. Once you fully understand their perspective, it will be easier to help them see the problems and opportunities that exist. It might be necessary to refer to the organization's goal and discuss whether it is being met. Another option is to identify the january/february 2014 19