Basis Of Singaporean Spirit - People Power: The Importance of Basis

[This is part of the book: Basis Of Singaporean Spirit - People Power, click here to go to the main page]

[Readers' advisory: This is a very technical chapter, however, I still have to include it in order for readers to fully appreciate the importance of basis]

I have come across many leaders and professionals who are experts in their respective fields, with impressive resumes, titles and great credentials. However, we have to understand that prior experiences, good qualifications, and excellent profiles do not reduce the probability of one being mediocre.

In fact, those could even increase the degree of mediocrity. I am going to share with you a case study (simplified for ease of understanding) that really shocked me.

A 6-sigma Black Belt[i] was tasked to perform an investigation and provide root cause analysis and solution for complaints received from customers.

After extensive investigation and data collection, the Black Belt provided the following information and a Pareto chart[ii] as follows:

 Table 1: Complaints Received from Customers

S/No	Complaint Type	Count	Cumulative Count	Cumulative %
1	Unfriendly staff	200	200	20.0
2	Overprice	180	380	38.0
3	Long wait time	150	530	53.0
4	Poor ambience	120	650	65.0
5	Cleanliness	100	750	75.0
6	High noise level	80	830	83.0
7	Food not fresh	60	890	89.0
8	Not accessible	50	940	94.0
9	Limited choices	40	980	98.0
10	Small portions	20	1000	100.0
	Total	1000

Figure 2: Pareto Analysis of Restaurant Complaints

The recommendation provided was for the restaurant to focus on addressing the issues with Unfriendly Staff, Overprice food items, Long wait time, Poor ambience, Cleanliness and also to look at the High noisy level, citing that once those were addressed, the restaurant would be able to address more than 80% of the issues.

The management was so happy that the causes were identified and solutions proposed and hurried to implement those.

The end result of the changes was a much bigger mess. Do you know why?

Well, looking at the numbers and the chart, the analysis was logical, isn't it? Do you know what was wrong? (Hint: nothing to do with data or the chart)

If I were to tell you that everything was wrong, do you know why?

Yes, indeed, everything was wrong! This is because the basis of Pareto analysis is 80-20 rule, the law of the vital few.

In simple terms, what Pareto analysis stated is that 80% of the problems are caused by 20% of the issues – by addressing 20% of the issues, you will solve 80% of the problems. The above ended up with solving 60% of the problems to get that 80% benefit, which is totally rubbish!

My dear leaders, this happened so often in real life and I am sure some of you are even guilty of it.

Therefore, the right conclusion above should be that the root cause of the complaints from customers was not due to staff, food, price, etc. and that we needed to perform further investigation.

The following is the same information being presented differently, grouped by Complaint Location:

Table 2: Complaints Received from Location

S/No	Complaint Location	Count	Cumulative Count	Cumulative %
1	Bedok Mall	450	450	45.0
2	West Mall	350	800	80.0
3	Jurong Point	60	860	86.0
4	Centrepoint	40	900	90.0
5	Clementi Mall	30	930	93.0
6	ION Orchard	20	950	95.0
7	Marina Bay Sands	20	970	97.0
8	Westgate	15	985	98.5
9	Tampines Mall	10	995	99.5
10	White Sands	5	1000	100.0
	Total	1000

Figure 3: Pareto Analysis of Restaurant Complaints by Location

Now we know the root cause – the Bedok Mall and West Mall branches were causing 80% of the issues. So by addressing the problems with Bedok Mall and West Mall branches (20%), we would be able to solve 80% of the issues.

Further analysis could be done to understand what was wrong with those branches. Who knows, maybe the so called 'talented' managers that you employed from those 2 locations had bogus certificates as well as fake working experiences!

Relating these back to the first analysis and the actions being taken, did you realise how dangerous it was to take any remedial actions without understanding the root cause?

See, other branches were working fine. By enforcing new policies and procedures throughout all the branches, the management had caused havoc throughout the organisation, yet, not solving the root issues.

This is one of the core reasons why business improvement initiatives failed badly – solving the wrong problems. In Chinese this is called: "Climbing up the tree to look for fishes" (缘木求鱼). Silly, isn't it? So why are you doing it?

You can pay top dollars to employ the so-called 'best and most qualified' people, you can leverage the best methodologies, you can perform the most complex analysis and modelling, but when the basis is wrong, nothing will be right.

This is similar to what our leaders are doing, they can give out incentives, they can revamp National Service, and they can also do massive changes to the CPF[iii] schemes. But if the basis is wrong, nothing will be right.

As you can see, "basis" is of utmost importance in anything. Relating this to leadership, what do you think is the basis of a leader?

BOSS Wisdom: "The basis is of utmost importance, when the basis is wrong, nothing will be right." - BOSS

[This is part of the book: Basis Of Singaporean Spirit - People Power, click here to go to the main page]

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[i] 6-sigma Black Belt is a process improvement expert.

[ii] Pareto Chart is a type of chart used in analysis so that you can focus on the most significant problems or causes (if done correctly, of course), refer to the diagrams.

[iii] CPF stands for Central Provident Fund. It is meant to be Singaporeans' pension fund.