Every idea that I’ve ever had did not always work out the way I planned. I know that’s hard to believe, but it’s true.
One time in my career I found myself managing the manufacturing division of a company that designed and manufactured packaging machinery. Our machines were designed to take printed tuck-end cartons (the kind that toothpaste comes in) from the flattened condition as they came from the carton manufacturer and open them up, tuck in the flaps and transfer them to the filling area where the product was inserted. (It sounds pretty basic and simple, but our machines saved thousands of manual labor hours for the manufacturers of all kinds of products.)
The manufacturing division of the company was itself divided into two parts — the fabrication division that made all of the individual components of the machines and the assembly division that assembled the various components into the finished machines. It was a system that worked well and allowed close coordination between the two divisions as well as with the engineering department that designed the machines.
But one little problem existed, and that was the occasional mistakes the two divisions would make. The fabrication department would make a part slightly out of specification or a component would have some flaw of one kind. On the other hand, the assembly division had its own problems maintaining quality without some slip-up of one kind or another — a belt installed incorrectly, a painted panel scratched or a motor wired incorrectly.
Taken individually, these mistakes were not that serious or expensive, but added up over a year they were fairly significant. If we could eliminate or reduce them, it would mean greater profitability for the company.
So I came up with an incentive program designed to reduce mistakes. I proposed a monthly reward to be paid to the division with the fewest mistakes. Each month a tally would be taken of the mistakes made by each division, and the one with the fewest mistakes would be awarded the cash prize. It’s a win-win situation. The company makes more money because of fewer mistakes, and the employees share in the savings.
So what could go wrong with this idea? In the game of golf, players are expected to call penalties on themselves when they violate a rule. And they do.
But in the case of XYZ Manufacturing, whatever savings we expected to see from fewer mistakes were outweighed by the amount of time each division spent spying on the other to detect the other’s mistakes. It was a disaster, and we abandoned the whole idea after only one month.