As I mentioned in the FI pillar, a common challenge for organizations is focusing their resources on what really matters. There’s always a list of losses to address, opportunities to seize, but often limited resources to do so. One key resource is people, both in terms of number and skills. Organizations need to develop strategies to grow and strengthen their workforce.
There needs to be someone who can guide the team on how to improve productivity, and who understands the step-by-step process for building an effective pillar. In fact, some major losses occur because of specific skill gaps within the organization.
These losses due to a lack of skills cannot be ignored. I remember a big issue in a milk company where a contamination problem occurred. The issue was so serious that it could have damaged the brand if not handled properly. Surprisingly, when they investigated, the root cause was that a technician didn’t know the difference between types of O-rings—some were heat-resistant, and some were not. Because of this knowledge gap, the wrong O-ring was installed during an overhaul of a valve near the aseptic tank, leading to a major issue. People often don’t realize how a single skill gap, like in the O-ring case, can result in millions of dollars in losses.
This happens in many organizations where people don’t recognize the impact of losses caused by skill gaps. The role of the E&T pillar is to raise this awareness among all stakeholders. E&T pillar members need to know how to do this.
There are different ways to identify major losses and whether they are linked to skill gaps. A common method many organizations use is root cause failure analysis. For example, if a maintenance department is required to perform a “5 Why” analysis after every major breakdown, they can see how many root causes are related to people and methods over a certain period. The E&T pillar can dig deeper into these root causes and address those related to skill gaps or organizational issues.
This is just one example. Every E&T pillar must build systems and capabilities to help organizations identify and address skill gaps that can lead to losses. I once visited a company in Dhaka, Bangladesh, and spoke with the E&T pillar leader. One of his strategies was to have two pillar members attend the Daily Control System (DCS) meetings at each plant. They created a schedule where Member A would attend Plant 1 on Monday, Plant 2 on Tuesday, and so on. Member B attended Plants 3 and 4 at the same time. By attending these meetings, the E&T pillar could see how skill gaps were affecting losses across the organization. This also helped them align their training and development plans with the real needs of the plants.
As I mentioned in the previous article, the main role of the first pillar is to be the “spy” for losses. The two examples above show how pillars focus on this function, and in the case of E&T, it’s about losses caused by people lacking the right skills.
As the pillar develops, it becomes clear that losses are not just limited to things like product defects or breakdowns. In many cases, there are other types of losses. For example, if an organization plans several projects for next year but doesn’t prepare the necessary skills to ensure the success of these projects, that’s a loss. A broader definition of losses also includes missed opportunities. For example, if an organization lacks the capability to analyze data and, as a result, the sales team misses the chance to enter a profitable market segment, that’s a significant loss.
Like other pillars, after identifying the associated losses, the E&T pillar must help improve the organization’s ability to eliminate those losses. Typically, skill gaps are addressed through training. A well-planned, well-executed, and well-evaluated training program can have a huge impact on the organization and help eliminate losses.
How should an organization manage its training programs? First, it’s important that the list of training topics includes what’s really needed. If the E&T pillar is doing its job well as the “spy for losses,” it will know which training topics are the most important. These training needs must be aligned with the business unit, which should be aware of them.
Did you know that poorly executed training can also lead to losses? According to Michael M. Lombardo and Robert W. Eichinger from the Center for Creative Leadership (CCL), there’s a concept called 10:20:70. This refers to how skills are effectively absorbed by participants. It says that only 10% of skills are gained from classroom training, while 70% comes from hands-on experience. The remaining 20% comes from coaching, which helps bridge the gap between classroom learning and real-life application.
After training, participants often face detailed questions like, “After applying what I learned, I encountered this problem—how do I solve it?” or “This issue wasn’t covered in training, what should I do?” Not everything can be understood in class, so the role of a coach is critical. A coach is a Subject Matter Expert (SME) who helps guide the trainee in applying the skills they’ve learned. Without a good coach, trainees may struggle to absorb knowledge and apply it effectively.
The E&T pillar must ensure that training is executed at the highest level. Poor training can lead to more losses. For instance, participants spend valuable hours in training that could be spent working. If those hours are wasted on training that doesn’t fill their skill gaps or if the trainer isn’t a true SME, then their time is wasted
The E&T (Education & Training) pillar needs to ensure that real Subject Matter Experts (SMEs) are available to conduct training. If the organization doesn’t have these experts internally, they should bring them in from outside sources, like vendors. I remember at one company I worked for, they faced significant losses due to a lack of expertise in handling a compressor in their CO2 recovery process. It was a major issue, causing business losses for years. Instead of being able to sell excess CO2, they had to buy it for their products.
Once the E&T pillar identified this lack of capability, they realized there was no SME within the company to provide training or coaching. They brought in an expert vendor (OEM) who analyzed the problem and offered services for training, coaching, and restoring the machine. The OEM delivered high-quality training, assessed the compressor, and replaced critical parts to restore its basic condition. They also corrected operational mistakes by training the staff. As a result, the company was able to sell CO2 while also meeting its own needs. Initially, the cost of training seemed high, but it ended up being a great investment when compared to the losses it helped eliminate.
The third key function of the E&T pillar is to build a system that prevents losses from recurring. This system should require each department to create a competency development plan. Every department needs to have the ability to define what skills are needed for each position. Traditionally, this is done through brainstorming, but this method can sometimes miss important skills. A more structured approach is called “line mapping,” where they follow the tasks of each position and list the specific skills required for each activity. Departments also need to consider upcoming projects and see if these will require additional skills.
Once the needed competencies are identified, the gaps within the team should be assessed. Since not all skill gaps can be addressed in one year, departments must prioritize the most critical gaps linked to business needs. The largest and most important gaps should be the focus of the development plan for the next year. This list can be adjusted based on operational needs. For example, if it’s hard to find highly skilled automation engineers, the organization may prioritize training more engineers in this area as a backup.
From everything we’ve discussed, it’s clear that the E&T pillar plays a critical role in any organization. It helps eliminate current losses, anticipates future losses, and strengthens the organization’s capability to continue improving. Losses can come from direct inefficiencies due to lack of skills or from delaying the development of other pillars that contribute to the organization’s success. If you’d like to know how to build a strong E&T pillar step by step, feel free to contact me