Measuring What Matters: How To Build The Resilience Quotient Into Your MBA Toolkit

The notification arrived at 11 p.m. the night before a critical Go Live; one of our most senior operators on our nighttime crew had quietly submitted his two weeks’ notice. There were technically no known problems with the automation line. All of the technology KPIs were good. The overall project dashboard showed us meeting every milestone and deadline.

However, what it did not show was my experience the next day on the floor. A team that had not asked questions for over a month now, since the person who had last questioned anything was told “we have this covered” in a very polite manner. We did not lose the project that week, but we lost the team’s ability to question things freely close enough to losing everything.

I concluded my opening article with a statement that STEM MBAs had created an entire new generation of Master Architects, those that could create a technologically flawless process but lacked the Resilience Quotient (or RQ) to effectively manage the people working in them. Most commonly I received versions of “But how do you really develop RQ?” or “How do you even quantify something as soft as RQ?” from both classmates and readers.

That question deserves to be answered with something greater than just metaphors. The above represents the “playbook” that I wished someone would have given me when I was at that point in time (nine years ago), prior to receiving that 11 p.m. message; it represented my first experience as a manager of a cross functional roll out and where I thought a Gantt chart that was developed correctly meant a team that was managed successfully.

THE MEASUREMENT PROBLEM

Organizations continue to treat RQ  as “a vibe” – whether someone has it or they do not, and can only be seen during a crisis. This is an error. RQ behaviors are evident prior to crises through behavioral means. From my experience of managing $50M manufacturing and supply chain portfolios, I have found that there are three specific indicators that distinguish Resilient leaders (high RQ) from those who are less resilient (low RQ).

1. Low-RQ leaders rely heavily upon their employees to be proactive about sharing what is going on within the organization. This means there needs to be an opportunity for employees to share their concerns and ideas in a safe environment. Employees are encouraged to share their thoughts and concerns by being rewarded for doing so.
2. High-RQ leaders recognize this as well but use different methods. Instead of waiting until something has gone wrong, high-RQ leaders encourage their employees to come forward when they see something that could potentially go wrong. High-RQ leaders also create opportunities for open communication and encourage employees to communicate openly without fear of retaliation.
3. High-RQ leaders are more focused on how issues arise. When a problem arises in either case, low-RQ leaders focus primarily on who was involved. The leadership of low-RQ organizations asks “Who?” prior to asking “Why?” High-RQ organizations, however, focus on the why. High-RQ organizations focus on “What happened” (process) instead of “Who did it.”

None of these require a personality test; they need you to watch how a leader behaves under normal pressure and not extreme pressures and use those observations in how we will evaluate MBA talent and promote operational leaders.

THE RQ PLAYBOOK: FROM CONCEPT TO PRACTICE

In the first piece, I proposed three pillars for “The New Core” of a STEM MBA curriculum. Here is what each looks like when it leaves the classroom and hits the plant floor.

Practical application of operational mindfulness. It is not a meditation application. It is an exercise of pausing before escalating. For example, in a rollout valued at approximately $50 million, we had on site union representatives who believed that the rollouts would be a direct threat to their jobs. The technical solution to this problem would have been to issue a memo. The RQ solution was to walk the floor with these employees for two weeks prior to issuing the memo; listen to them as they shared what it was that they were actually afraid of; then use that information when framing the messaging. The subsequent rollout experienced very little if any resistance from employees. Not because the plan changed, but because of the trust that existed as a result of the communication process.

The above quote illustrates how ethical governance was put into practice for each predictive model that I implemented. The key process element I brought into our organization prior to deploying every predictive model was a one page “who is affected by this” document. This document needed to be completed prior to any discussion around optimizing the model or determining when it would go live. The creation of these documents made technical teams identify all of the people impacted (human) by the results produced from their models prior to making them run faster. Although this was a very minor process improvement; it has had a tremendous impact on whether technical teams trust the tools that are provided to them.

The sociology of operations. Every time there is an automated process change on a floor it will change the informal social structure (people) and not simply the formal organizational chart. Leaders who are most successful at creating lasting change identify this informal structure; the individual whom people go to when equipment malfunctions. This is typically the one with the greatest influence on change efforts for the team. It may be your biggest supporter or your strongest obstacle. Therefore, as a leader, it would be wise to understand their perspective prior to changing workflow.

A CASE STUDY IN RQ

The most obvious example from my experience has come about when I experienced a critical supplier outage that occurred at mid-implementation on a multi-million dollar manufacturing transformation project. Within 48 hours our contingency plan functioned flawlessly as intended. However, our contingency plan failed to address the fact that the shift floor employees had developed trust in their new processes over the course of six months while they watched that trust be destroyed through the implementation of an emergency manual process in one night.

The recovery was not a technical one. Instead of a lengthy outage process using an outage management tool such as maximo or sap pm, it consisted of three quick stand up meeting (approximately 5 minutes each) held on two consecutive days, to clearly articulate what had occurred, why, and when they expected to resume their normal work with the primary system. This team’s attrition rate for the next calendar year was nearly 0 percent. In this same facility, other teams that experienced similar disruptions, but were also utilizing a spreadsheet-based system for tracking employee performance and work assignments, exhibited attrition rates exceeding 10% over the following 12 months.

WHAT SHOULD SCHOOLS & RECRUITERS DO NEXT?

The first article called for an MBA curriculum rethink; the second article calls for the same rethink to be quantifiable.

Business Schools: Include the RQ observation within the grade components of capstones or consulting practicums with technical deliverables. Do not include the RQ as a soft skills afterthought. For example: a well designed presentation to a group that has no credibility in the eyes of the presenter is not worth full credit.

Recruiters: Ask Behavioral Questions that bring out these three signals:
Not “Tell me about the last time you demonstrated leadership,” but “Tell me about the last time one of your team members delivered you some bad news early, and how you reacted during the 10 minutes immediately after.” This type of response can tell you much more about your candidate’s Risk Quotient than anything else they say.

Working Professionals who pursue a STEM MBA: Keep a log of all times when you made decisions based on reason and logic, yet were resisted by people. Log each quarter. Your log can be a far better interviewing tool than yet another credential, and the best way to develop your risk quotient consciously, versus developing through experience like everyone else.

THE NORTH STAR, PLOTTED

The “North Star” will help to find direction in your travels only when you know which direction you are headed. RQ, as a discipline, has nothing to do with being an inspirational leader. Rather, RQ is a measurable, reproducible behavior set that can be viewed, demonstrated, instructed, measured & evaluated – just like teaching/presenting/grading Six Sigma and Predictive Analytics. We have been using our technical skills to get us to where we want to go. The Reliability Quotient gets us there on foot. This particular employee (who had given his two weeks notice) pulled back from giving notice one week into us changing how we run our daily stand-up meetings. He remains employed by the company. This is the Return On Investment (ROI) that will never appear in any dashboard.

Kishan Kumar is a Buyer at Pearse Bertram based in Bloomfield, Connecticut. In his nine-year career he has worked on strategic sourcing, procurement and supply chain management within the manufacturing, industrial automation and FMCG industry. Kumar earned his MBA from Southern Connecticut State University and a Supply Chain Strategy & Management certification from the Indian Institute of Management. He is a certified Six Sigma Green Belt, SAP Certified Implementation Consultant, and Agile Leader Certified professional. Kumar is currently an active professional member of  the Association for Supply Chain Management and has written articles for Poets&Quants , SCMR.com, Techtarget & ExpressPharma.

DON’T MISS THE ROI OF RESILIENCE: WHY CONSCIOUS LEADERSHIP IS THE NEW NORTH STAR FOR STEM MBAs

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