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Arun Hariharan

Quality Insider

The Roots of Success

Tend these leading indicators if you want your business to grow

Published: Tuesday, March 17, 2015 - 14:13

When I was a child, my grandfather used to take me to a garden. On one such visit, I saw the gardener watering and tending the plants and trees. I noticed that he took care to water them at the roots. Out of childish curiosity, I asked him, “Why do you water only the roots? Why don’t you water the leaves and fruits?” The gardener looked up from his work and told me, “If I water the roots, the leaves and fruits are taken care of. If I water the leaves and fruits and forget the roots, the plant will die—fruits, leaves, and all.”

Years later, the gardener’s words come back to mind when I see some companies’ and their people’s attitude toward quality.

Are you a root person or a fruit person? Fruit people tend to focus exclusively (or disproportionately) on end results—particularly financial outcomes. Their view is often historical (e.g., last quarter’s profits), and their future perspective is usually limited to the immediate short-term (next quarter’s numbers). Fruit people have neither the time nor, so they think, the patience to worry about the roots that, if nurtured well, will give them fruits year after year.

On the other hand, root people, like the gardener, understand the importance of focusing on fundamentals—or leading indicators, as some people like to call them. Quality, processes, customers, and root cause analysis are some of the most important indicators. Tending to these elements, like tending to a plant's roots, will yield a flourishing organization.

Let me share a business example. Some years ago, a group of companies I worked with, while measuring and reviewing their performance, predominantly relied on financial measures such as revenue, costs, and profit. These are important, no doubt, but we realized that if we focused exclusively on the financial measures, we were behaving like fruit people. Financial outcomes are, after all, the results or fruits of various inputs—the more important among these being customers and quality. We overhauled the way our performance measurements and management were done. Although the financial measurements continued, we added a number of other measurements related to customers, processes, quality, and people.

Over time, these companies learned that focusing on these indicators (or roots) contributed to a sustained financial performance over the medium to long term. For years now, these companies have held monthly “dashboard” meetings attended by the CEO and senior managers. Critical fundamental measures such as voice of the customer, quality processes, and defects are reviewed at this meeting. “We would never go back to the old way of reviewing only the financial outcomes,” says one CEO. “Clearly, it’s the focus on these nonfinancial measurements that has helped our business achieve sustained financial performance.”

My book, Continuous Permanent Improvement (ASQ Quality Press, 2014) has a chapter titled “Measures That Matter,” which illustrates this through an interesting story.

If you like the balanced scorecard concept, here’s another analogy: I like to think that the financial element of the scorecard is the fruit (outcome), and the customer, internal processes, and people elements are the roots (enablers).

Where do you spend more time—tending to the roots, or counting the fruits?

Discuss

About The Author

Arun Hariharan’s picture

Arun Hariharan

Arun Hariharan, author of Continuous Permanent Improvement (ASQ 2014), and The Strategic Knowledge Management Handbook (ASQ 2015) is a strategic quality, knowledge management (KM), and performance management practitioner with nearly three decades of experience in these fields. He has worked with several large companies and helped them achieve substantial and sustained results through quality and customer focus. He is the founder and CEO of The CPi Coach, a company that provides partnership, consulting, and training in business excellence and related areas. Former roles held by Hariharan include president of quality and knowledge management at Reliance Capital Ltd, and senior vice-president of quality and knowledge management at Bharti Airtel Ltd, India. He is a frequent speaker at quality and KM events around the world. He is also the author of more than 50 published papers on quality and KM.