Top 3 Problem Selection for the Balanced Scorecard

The following describes a step by step process for problem selection for the Operational Excellence (OE) balanced scorecard monthly meeting. Quick facts: The visual OE balanced scorecard allows for 3 problems in each priority: safety, quality, productivity, human development, cost, and OE implementation.  6 priorities, 3 problems per priority, 18 problems.

5 Step Approach for Top Problem Selection

Step 1: The responsible person (“R”) for each functional area (department, division, line, shift, whatever functional team that person is leading) comes to the selection meeting prepared with his/her top 3 problems on problem solving sheets.

Step 2: Separate the problems into the world-class priorities of safety, quality, productivity, human development, cost, and operational excellence implementation.

Step 3: Discuss the sheets in each stack to select the top problems.

Step 4: Compare the selected top 3 problems with the top 3 problems that are currently on the balanced scorecard.

Step 5: The “R” person for each priority takes the associated top problem solving sheets and the remainder of the sheets go back to their problem solving boards.

balanced scorecard after problem selection

The Steps to Problem Selection Explained

Step 1, Problem Selection: The responsible person (“R”) for each functional area comes to the selection meeting prepared with his/her top 3 problems on problem solving sheets.

Example:

Leader: (CEO, Mill/Plant Manager, President, Team Leader, Group Leader, etc) John Doe

Functional areas with Responsible Person for that area

• Operations – Anthony
• Finance – Brad
• Human Resources – Cathy
• Maintenance – Dennis
• Sales – Erica
• Engineering – Frank

Anthony comes with the top 3 operations problems (on problem solving sheets), Brad comes with the top 3 finance problems, (again, each on a problem solving sheet) and so on.

*If you currently only have one problem solving board (steering committee level), sort through the problems so they are divided in functional areas.  If you have a problem solving board in each functional area, each person brings the top problems from his/her board.

Step 2, Problem Selection: Separate the problems into the world-class priorities of safety, quality, productivity, human development, cost, and operational excellence implementation.

problem selection (safety stack)

Once this is completed, you should see 6 stacks of problem solving sheets, one for each priority.

Here’s what the “Productivity” stack might look like:

1. Operations’ down time problem
2. Operations’ on-time shipping problem
3. Finance’s reporting on monthly statements in a timely manner problem
4. Engineering’s drafts not getting to the floor in time problem
5. Sales’ customers not getting back to us fast enough for quotes problem

Step 3 Problem Selection: Discuss the sheets in each stack to select the top problems.

problem selection

At this point, the problem solving sheets are in 6 “stacks”

1. safety
2. quality
3. productivity
4. human development
5. cost
6. OE implementation

Some stacks might have 10 problem solving sheets, some stacks might have 3 problem solving sheets.  Each person then goes through each stack and selects candidates for the top 3 problems.

One way to get consensus might be to use post-it notes to designate your selections.  If you don’t have post-it notes use a check or tick mark in a common location on the problem-solving sheet.  You (individually) may select more or less than 3 problems as having top 3 potential.

Again, each person should do this for each stack.

Here’s an example this may look like in the safety stack at the end of this step:

• Fire in the warehouse problem – 9 post-it notes
• Chemical burn on employee shoulder – 8 post-it notes
• Employee cut finger – 7 post-it notes
• 2% below target on safety audit – 1 post-it note
• Sore back caused by desk chair – 1 post-it note

Step 4, Problem Selection: Compare the selected top 3 problems with the top 3 problems that are currently on the balanced scorecard.

Now you have the top 3 problems that your team just selected.  Check those against the top 3 problems that you selected during your last selection process.  How do they compare?  Are your “old” top 3’s still valid?  Have they been solved?  If they aren’t valid or have been solved, you can take them off the balanced scorecard and replace them with the new top problems you’ve selected.

Step 5, Problem Selection: The “R” person for each priority takes the associated top problem solving sheets and the remainder of the sheets go back to their problem solving boards.

Now that the top problems are selected, the “R” person for each priority (safety, quality, productivity, human development, cost, and OE implementation) takes those sheets to update the his/her column of the balanced scorecard.  The problem solving sheets that have not been selected as top problems go back to their functional problem solving board (a productivity problem in engineering goes back to the engineering problem solving board).

Frequently asked questions about Top 3 Problem selection:

Can I remove a top problem from last month’s monthly balanced scorecard meeting that hasn’t been solved?

If there is a top problem without a planned and checked solution on the balanced scorecard, think long and hard before removing it and replacing it with another problem.  You should only do this if the problems you are replacing it with are glaringly of higher priority than the former problem.  Even if you do take the unsolved problem from last month’s BSC off of the scorecard, it still belongs on the problem solving board and should be solved.

What if the top 3 problems we’ve selected through this process aren’t really our top 3 problems?

Do more problem solving!  Why aren’t your top 3 problem solving sheets representative of your top 3 problems?  Is your team not doing enough problem solving sheets?  Are not all the right people trained in problem solving sheets and the problem solving process?  There could be many reasons.  Start to explore them.  In the meantime, a good containment measure is to start a problem solving sheet on the top problem(s) if there isn’t one.

Here’s an example:  You (the “R” person for safety) see that there are no problem solving sheets in regard to safety from any functional area.   You also notice during your top 3 selection meeting that the safety audit results have been 20% below target three weeks and running in the warehouse.  After some discussion with your team, you all decide this is the top problem in safety.  Start a problem solving sheet during your selection meeting for the safety problem.

Problem Statement: “The warehouse safety audit score has been 20% below the target for three weeks and running.”

Target Condition: “Safety audit score is greater than or equal to 90%.”

The second problem solving sheet you should start after the meeting is:

Problem Statement: “The top safety problem concerning the warehouse safety audit score did not have an associated problem solving sheet.”

Target Condition: “Top problems have problem solving sheets.”

Containment: “Start a problem solving sheet during the top 3 problem selection meeting.”

What if we have 4 or 5 really big (and different) safety problems?  Can we select all 5 problems?

Nope!  Three is three.  That doesn’t mean you can’t solve the other two, but only three problems can “live” in each priority on the balanced scorecard.

What if we have similar problem solving sheets, or problem solving sheets that relate to the same problem?

If there are many problems that are similar in nature, and you decide that they are a phenomenon, group them together and the responsible person for that priority (for example the “R” for Quality) starts a new sheet based on that phenomenon, in preparation for the monthly balanced scorecard meeting.  This may require som team problem solving and our Problem Solving II techniques.

What if there is a tie for the top 3 problems?

In the KCOE System, we use Meeting Facilitation as the standard work for meetings and team problem solving.  Within Meeting Facilitation, there are multiple pathways to make a final decision.  These pathways range from full consensus to “authority makes the decision” (team leader makes the decision). Determine process for making decisions prior to the meeting. Let the team discuss between the tied problems, and the leader can choose after the discussion.

If one of my team’s problem solving sheets didn’t qualify as a “top” problem (i.e. is not located on the balanced scorecard), should I still solve it?

Yes! You should still make progress on the problem solving sheets that did not quality as top 3 problems.  Once the selection process is complete for the month, take the problem solving sheets that belong to your functional area and place them back on your problem solving board.

Should the leader (in the example in Step 1, John Doe) come with problem solving sheets?

Yes. If you are the team leader, you should be doing problem solving sheets and coaching your team in problem solving.  Selecting top problems is a process that you need to lead – lead by example.  Don’t stifle the team’s consensus building, though.  Let them work through the process – doing so will build teamwork. No matter where you are in the organization, you are either a team leader or a team member. Always use problem solving and always be prepared to select top problems with your team.

What if I have a major point of recognition with multiple points of cause (e.g.: 3+ problem solving sheets)?  Do all the sheets belong on the balanced scorecard as one problem?

Remember that all of the artifacts in the KCOE System represent the processes behind them.  In this case, the visual BSC with top problems and problem solving sheets represents the process of reducing the myriad of organizational problems you face monthly to three for each priority. If you try to handle more than three top problems in each priority, you will begin to lose that world class edge for selecting top problems, finding root causes and removing them.  Organize your problem solving sheets according to the top problems.  If you have more than one problem solving sheet for a top problem, you’ve probably identified more than one possible point of cause.  Or, maybe you’ve found multiple root causes.  The important thing is that you are reducing the hundreds of problems your team handles monthly to 18 and that you are actively and aggressively pursuing the five whys, removing root causes and checking for the problem recurring.

To ask another question about top 3 problem selection please email us!