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Business Visioning

Stop Firefighting, Start Strategizing

This essay is about effective leadership. But not the out-front, high-energy, heroic, final-step type of work that wins recognition in magazines about management. Instead it’s about an element of effectiveness that comes from the unglamorous, behind the scenes, stick to the systems stuff that’s just as important, but rarely gets headlines. It’s not about the player who scores the final shot that wins the championship, it’s about the player who practices free throw shots for hours before the game starts because he knows that’s what it takes to get the job done.

One tool of effective ongoing leadership is something that I learned from Peter Drucker, who has been called the greatest management thinker of the 20th century. (If you don’t know his writing on leadership, check it out—I give his books my highest possible recommendation.) He noted that 90 percent of the decisions managers make are in response to repetitive problems. Many—though not all—of the problems, challenges and opportunities that we come up against each week at Zingerman’s are about issues that happen in similar ways over and over again, if not every day, then every month or year. These can include issues around ramping up for the holidays, people calling in sick, handling customer complaints, dealing with out-of-stocks, etc.

Even things like rush or last-minute orders—which many will argue are aberrations—are in fact exceedingly repetitive. We regularly get customers who want to order food after our set deadlines have passed. In fact, in response to the regularity of this issue, we’ve come up with a last-minute catering menu for customers who didn’t realize that they’d need a meal catered within a matter of hours.

Drucker pointed out that most managers seem to insist on applying unique solutions that aren’t needed if we realize the situations are repetitive. Once I got that concept in my head, it became obvious that the most effective way to respond to repetitive problems is with repeatable solutions. When we do our work well and take heed of Drucker’s advice, we’re able to develop effective organizational recipes—systems that allow us to take lessons learned and apply them consistently, repetitively and systematically.

Our goals are to:

*Help customers have a better experience by reducing problems and errors. In the process, service quality and sales go up.

*Make a more enjoyable work experience for the staff. The more we reduce problems and mistakes, the more fun the customers are having, and the better the staff’s work experience will be. And, of course, the more the staff is having fun the better the customers’ experience is likely to be. This in turn increases sales.

All of this brings me to a discussion of a system that we’ve come to call a Code Red Knockdown (or CRK for short). The name comes from the “Code Red” form we use to write up customer complaints or suggestions for improvement. The key of the Code Red Knockdown is to apply a systemic approach to resolving, reducing or, better still, eliminating problems and errors. Any groups that have mistakes or problems that are at all repetitive in nature, and are interested in improving their businesses, are prime candidates for this approach.

Here’s how it works in seven simple—though probably not so easy to stick to—steps:

Step 1: Set Up a Regular Schedule to Review Problems.

It’s critical to this process that mistakes and problems be reviewed regularly, not just when there’s a major explosion on an issue. In my experience, it works best when:

  • We commit to a regular time and place to review problems. Here at Zingerman’s we cover it at our weekly department and business “huddles.”
  • One person, or a small group of team members or service reps, takes responsibility for making sure that data is ready for the review.

Note that the work of reviewing and organizing the data is separate from fixing the actual mistake. In our organization, the first person to find out about the problem or customer comment writes up the Code Red form to document the issue. That person is then fully responsible to make sure that the proper follow-up happens. But the service reps take the work one step further—they go through all the Code Reds written up about their business, looking for patterns, trends, follow-up needs, etc. When you review written data weekly the repetitions pop up easily—in most cases you’d have to actually work hard to miss them. The service reps then organize the information they’ve gathered into a written summary report that goes out to everyone in the business or department.

Step 2: Pick a Single Problem.

When you’re just beginning with CRKs, it’s most effective to focus on a smaller issue because it makes it easier for the staff to get the hang of the process. Employees get a few wins under their belt and make meaningful, if not huge, improvements while they learn how to do this work effectively. Once you get good at CRKs, you can begin looking for problems that are going to have the biggest bottom-line impact. Here at Zingerman’s we have three bottom lines—food, service (to customers, staff and community) and finance. Don’t agonize over choosing which issue to address. It’s more important to pick one problem and get it fixed and then move on to the next one next week.

Step 3: Get Clear on What Exactly is Going Wrong.

Once you’ve picked your problem, make sure everyone involved is clear on the situation. To quote Mo Frechette, one of the managing partners at our Mail Order business, and one of the folks who really helped to get the CRK going, “This is a tough act to do well.”

Begin by listing the compelling reasons for addressing this problem. It could be that we’ve seen an increase in complaints from two to ten; it could be we’ve had a sudden spurt of breakage in shipping a particular salsa or that we’ve had 12 returns on a specific pastry in the last month.

This work doesn’t have to take long. In a few minutes you can get most of the information out in the open. It helps to list things on big sheets of white paper or dry erase boards so that everyone can see what’s being written. It’s important that everyone be on the same page with this in order to address the issues at hand clearly.

For more challenging issues, Mo recommends going to see where the problem occurred in person. There are almost always details of the process that don’t pop up until you actually see people in action doing what they do.

Step 4: Review the Process to Identify the Breakdown.

This step requires strong discipline from the leader. As soon as you get into the explanation of the problem in Step 3, most well-meaning people want to dive directly into a solution. But the point of the CRK (and of Drucker’s insight) is to really look at processes, identify where they are breaking down and only then create new systems. A well-structured system will make it almost impossible—or extremely unlikely—for people doing the work to err.

In order to be effective, we need to identify all the elements that are a part of the current process. To do this we ask the crew to describe and document every single component in the process in which the problem has occurred. While the leader’s role here is important, take note that it’s really not his or her job to fix the problem. Rather, that manager’s main role is to make sure that the group sticks to the CRK process, through which the problem will be fixed. Mo recommends that the leader “ask probing questions to get past surface-level responses and get all the nitty-gritty details out there.”

Step 5: Review the System with an Eye for Improvement.

Once the existing process has been made clear—and usually that turns out to be more involved and more complex than people ever imagined—we can really see what’s going on. Usually we find that either the process if fine but we failed to consistently follow it or, indeed, the system itself is flawed.

By looking over the existing process it’s easy to find areas where we can improve. The idea of the CRK is to get the systems set up so that it’s nearly impossible to make a mistake. That could mean something as simple as using square pegs because they can’t inadvertently go into round holes. It could be double checks that are always done by someone other than the person who put the order together. It could be any number of other things. But the key is to steer clear of personal and personnel issues and look at the process.

It is most effective to put the emphasis on assessing, using and improving the system. Often when you get going with this work, most team members will start to fix things by merely picking out the people whose work has not been up to snuff. While there are times where it is the individual, more often than not we’ve found that the system or process is what needs the work, not the man or woman who happened to fall short on any given day. Remember too that by teaching this approach we’re helping to provide tools to our front line staff that they can use regularly to make their work life better.

Step 6: Make an Improvement to the System.

If were working in a manufacturing setting, it’s important to make only one change to the system at a time. In general there’s a tendency for overachievers like me to try to do too much too quickly and in manufacturing process work that can be a big mistake—even if we get improvement, it becomes almost impossible to tell which change is the one that actually helped.

In other instances though, there may be a couple of things we can do simultaneously to help us get better results. One example comes from the Roadhouse (our sit-down, full-service restaurant). We had a problem with customers being unhappy with our black fin tuna being overcooked. The complaint showed up half a dozen times over the course of a month. After reviewing the process all the way through—from the writing of the daily fish list on the specials, to the customer placing the order, to the dish being delivered to the table—we came to the conclusion that the biggest cause of the problem was one of expectations.

Black fin is different than the similarly named, and more widely known, yellow fin tuna. Black fin is much darker fleshed and it doesn’t cook up to that nice bright red that customers’ expect from yellow fin. Fairly quickly we identified three things we could do differently that would help customers’ expectations match reality and, in the process, reduce the likelihood of the problem occurring:

  • Adjust the printed menu. We added a line to our daily fish next to the black fin entry that says something to the effect of “cooked medium rare to medium” in order to frame things more effectively. This isn’t a fish that you generally order seared and super rare.
  • Alter the server’s presentation at the table. We asked all the servers to be sure to let guests know that even if they order black fin cooked rare, it’s not going to look very pink.
  • Adjust the cooking process. Cooking fresh fish is not an exact science. So given current complaints about the doneness of the black fin, we reemphasized to our grill cooks that we always want to err on the side of this fish being underdone. (A piece of fish that’s slightly undercooked is always better than one that’s slightly overdone because you can bring the former “up to temp” far more quickly, and at lower cost, than if you start from scratch and have to cook a new one.)

In this case it makes sense to make all three changes at once—none of the three are really related; the changes are made by different groups who work in the system; and there’s really no cost nor any risk to taking any of the steps.

Step 7: Review Progress One Week Later. Part of making the CRK as effective as possible is to track the changes we’ve made over time. That allows us to see if we’re actually making the progress we’d like and if we’ve reduced or eliminated the problem in the weeks and months after we’ve improved our system.

One way that we’re able to do that here at Zingerman’s is to use our Open Book Finance huddling—where everyone in a department gets together once a week to report key numbers—and put the specific problem at hand up to be tracked on our white boards. (For more on Open Book Finance and huddling, you can write us at By putting a particular problem on our boards, we’re assured of watching that issue carefully on an ongoing basis. Some Code Red Knockdowns could take a few weeks to really resolve—the first efforts to improve the system might not be enough, or might have been well intended but not effective. If problems continue to turn up with the tuna, for example, then we clearly haven’t resolved the issue effectively and would be likely to return the problem for additional CRK review and systems improvement.

In order to do this follow-up work most effectively we recommend that at each weekly huddle the group should first revisit one problem they’ve already been working on, and then start to tackle one new problem. To really gild the improvement lily, I’d take that tracking one step further—create a Code Red Knockdown Diary with which you can chart the weekly work you do and watch the improvements that you’ve made. By the end of the year you should have quite a list to look back at and feel good about.

Ongoing Discipline

Like any system or recipe, this one only works when you actually use it. Doing CRKs requires a good deal of discipline. Without the regularity and rigor of holding to the process all the way through all the steps, we’re going to be stuck with the same old problems we’ve always had. We can talk about them a lot, we can hope for the best, we can blame others around us, we can even blame our customers. But the problems won’t go away; usually they just get worse.

Ultimately it takes time to get good at using the CRK. As with all meaningful organizational change here at Zingerman’s that probably means six to 12 months of working it to get some overtly meaningful traction, and maybe two years to see it built into the culture in a significant way.

As I said up front, the Code Red Knockdown isn’t the glamorous side of leadership and it won’t win you any quick kudos from your crew. In fact, it’s likely that if you try to put it into place you’ll catch flak from almost every direction. Comments like: “no time,” “another meeting,” “it’s not working,” “we tried that,” and so on are all likely to come up. But having both used this simple approach with great effectiveness (and also not used it all), I can pretty confidently say that if you stick with it, the discipline of doing it will pay huge dividends for your business, your staff, your customers, the quality of your products and services and your finances. In fact, I’d love to hear any stories of success that you have with this or other similar systems for reducing problems and/or eliminating errors. Send them my way!

The ultimate goals of Code Red Knockdowns are to: Help customers have a better experience by reducing problems and errors. Make a more enjoyable work experience for the staff. The more we reduce problems, the more fun the customers are having and the better the staff’s experience will be.