Decision making process

In a past post we discussed the importance of having a decision-making process, as researchers from various sources all agree that “how” we make decisions in business is as important as the decisions themselves!

Their studies also indicate that the “best” decision-makers share certain traits. They:

  • Follow a process
  • Involve others when appropriate and use knowledge, data and opinions to shape their final decisions
  • Know why they chose a particular choice over another
  • Are confident in their decisions
  • Rarely hesitate after reaching a decision

The first trait is critically important, as following a standard process enables people to make more deliberate, thoughtful decisions by organizing relevant information and defining alternatives.

Naturally, there are different processes from which to choose, and the previously mentioned article shares one approach.

Here is another option developed by the University of Massachusetts, Dartmouth.

  1. Identify the decision
  2. Gather information
  3. Identify alternatives
  4. Weigh the evidence
  5. Choose among the alternatives
  6. Take action
  7. Review your decision

how to lower the cost of disengaged workers

cost die

Continuing with the theme of employee engagement, or the lack thereof, people readily agree that disengaged workers are “expensive.”

For example, recent data shared by Gallup indicates that 74% of actively disengaged workers are actively seeking alternative employment. Along those lines, turnover is much higher among disengaged workers, as is absenteeism.

In addition, if the predominant environment within an organization is one of disengagement, productivity and profitability are lower, there is little or no continuous improvement, and pay tends to be higher.

Clearly it is advantageous to engage our employees or, at least, make a concerted effort to address and lower the costs associated with disengagement.

Here are a few suggestions for driving engagement within a business organization and for lowering the costs of disengagement based on input from CI professionals and leaders:

  • Enhanced recruiting and on-boarding – At an Engagement World Conference, leaders from several organizations explained how they had increased employee engagement and retention beginning at the recruiting stage. The first steps involved the inclusion of the organization’s mission and vision into interviewing conversations, and a more conscious effort to identify and hire people with aligned goals. Adding a mentor program to the on-boarding process helped new hires assimilate faster so they became more productive in less time.

    Enabling people to achieve higher levels of productivity and success early-on not only promotes greater engagement levels, but also reduces first-year attrition rates, which are often among the highest. Early churn tends to demoralize the entire workforce as well, so in addition to reducing rehiring and re-training costs, the costs associated with negativity within the existing workforce are also reduced.
  • Flexibility and work/life balance – Employer/employee relationships, expectations, and engagement criteria have evolved significantly over the course of the pandemic. Depending on the type of organization, scheduling and work-from-home options has become a priority in many workplaces.
  • Consistent performance management and communication – People need to find meaning in their work, and understand how their work aligns with organizational objectives. This point was well made by several speakers in an episode of TED Radio Hour, called The Meaning of Work. If managers communicate a shared purpose or sense of direction, and encourage employees to openly share their perspectives and input, then they can increase employee engagement.

    This type of communication works best when systematized as part of structured, proactive approach to performance management. This methodology includes frequent feedback rather than annual performance appraisals and reviews, ongoing engagement surveys (i.e., e-Net Promoter Score) with real-time feedback loops, and protocols for keeping people aware of how individual work impacts organizational goals and how it aligns with mission and vision.
  • Learning and development – A young, seemingly fast-rising junior executive had been working at a large bank for just over six years. When he was asked about his job and how he felt about it he said, “The job’s OK.” His lack of enthusiasm was evident, and when pressed to say more he added, “Well, I’m not really learning much anymore.” He went on to confirm that he was not truly engaged, and that he did not make much of an extra or discretionary effort, which engaged workers regularly put forward. Only recently has it become clear to forward-thinking business leaders that the path to sustainable employee engagement is to drive productivity, and to do so through ongoing education and empowerment. In support of this perspective, a recent article in Human Resource Executive magazine identified “continuous learning opportunities and personal development” as being two of the four key criteria (scheduling flexibility and social responsibility being the other two) recent graduates value most as they evaluate career options.
  • Recognition and rewards – Recognizing and rewarding employees is not a new concept, but if the goal is to engage workers rather than simply acknowledge milestones (such as length of service), then the approach must be different and must be aligned with what is meaningful to each recipient.

Why employee engagement matters more now

engagement around the work

A recent article shared by Gallup indicated that 36% of the U.S. workforce is engaged in their work. Surprisingly, this statistic is higher than it has been for many years, though the number itself is typically perceived as disappointing. However, Gallup also says that globally, only 20% of employees are engaged at work.

Equally important, their findings indicate the percentage of actively disengaged employees in the U.S., has risen to 15% through June 2021. Actively disengaged employees cost businesses a lot… higher turnover, more safety issues, more absenteeism, and so on; they generally “report miserable work experiences and are generally poorly managed. They also tend to bring-down their coworkers.

Why Now?
The reason workforce engagement has emerged as more important now is that the U.S. Bureau of Labor Statistics says employee turnover or “quit rates” are reaching record highs, and Gallup research has found “substantial differences in intentions to change employers as a function of the quality of the work environment.”

“Among actively disengaged workers in 2021, 74% are either actively looking for new employment or watching for openings. This compares with 55% of not engaged employees and 30% of engaged employees,” the article states.

With this fact in mind, and despite the recent rise in engagement levels, with only 36% of U.S. employees engaged in their work, there is much room for improvement.

The first step in this improvement process is to formalize an employee engagement plan, and to do so in the same fashion as one would implement a continuous process improvement initiative:

  • Get acceptance and buy-in from senior leaders. Little will be accomplished without this; the best results are achieved when leaders understand the benefits of engagement and take action.
  • Create a formalized implementation plan and establish performance measures so that progress can be tracked. Develop realistic, achievable, and measurable goals and objectives.
  • Work with the leaders so that they can model the right behaviors and cascade the concepts throughout the organization.
  • Create and equip project teams to identify and quantify opportunities for improvement.
  • Foster an atmosphere of collaboration, innovation, continuous improvement, and fun. Increases in productivity yield increases in engagement.
  • Make sure people have the knowledge and skills needed to succeed.
  • Implement an appropriate integrated communication plan, reinforcing the concept of improving both the “work and workplace.”
  • Reward and recognize people so that they feel supported in their efforts.
  • Measure results and ROI… and keep your foot on the gas!

What to do when Improvement projects stall or hit the wall

question mark what to do

Our previous post shared ten reasons why improvement projects stall or peter out.

But simply knowing “why” doesn’t help when we’ve hit the wall!

A poll of CI leaders and specialists revealed the following suggestions when a project grinds to a halt:

  • Go back to basics… “be true to the Continuous Improvement process and manage it; review systems, put routines in place, collect additional data, and reaffirm objectives.”
  • Review of CI fundamentals and roles with both participants and sponsors can often result in getting projects back on track. “It’s important for sponsors to fully understand their role; otherwise, when things begin to shutdown they are unable to provide the necessary support.”
  • Encourage project participants by showing or reminding them of “what’s in it for them” (WIIFT) as opposed to how the organization-as-a-whole.
  • Reassign people and tasks to bring about fresh outlooks and give everyone a shot in the arm that helps them get back on track.
  • Communicate! This must involve running effective team meetings and action planning sessions as well as publicizing success, or even the lack of it. “It’s important to celebrate the wins and achievements to help anchor the participants, and also to make the results as well as the activities known throughout the organization.”
  • Root-out naysayers.
  • Conduct more frequent project reviews.
  • Make sure you’re working on the right things; on things that will make a difference.
  • Measure progress and results in a “visual” way.
  • Apply the principles outlined in the “4 Disciplines of Execution”
    • Identify and focus on a Wildly Important Goal (a WIG)
    • Monitor and act on LEAD measures
    • Keep a compelling SCOREBOARD updated by the people doing the work
    • Develop a rhythm of ACCOUNTABILITY.

10 Reasons improvement Efforts hit the wall

failing improvement projects

Regardless of methodology or intention, Continuous Improvement efforts frequently lose their momentum, leaving quality and improvement leaders looking for ways to reenergize teams, reengage with sponsors, and resurrect or redirect their projects.

In a poll of business leaders and quality experts, the following “top 10” reasons for what we have often referenced as “discontinuous” improvement are:

  1. Lack of managerial or sponsor support, or failure on their part to commit the right resources
  2. People believe they have “already eliminated all the waste”
  3. The law of diminishing returns… if projects last too long people lose interest
  4. Absence of quick-wins / results; if teams don’t achieve at least some early results, then their focus and effort tends to drop-off
  5. Disengaged culture in which “naysayers” discourage teams
  6. Too many projects / Scope creep
  7. Changes in top management and organizational goals
  8. CI is viewed only as a cost-cutting tool with short-term or ad-hoc focus
  9. CI is viewed as a “side line” job rather than the cultural “way we do things”
  10. People are “stretched” with day-to-day responsibilities and the prevailing culture is one in which the “don’t have time” for improvement projects

it’s about time!

time_is_money

When we are faced with the task of evaluating and improving a business, we have many metrics to choose from. We can ‘follow the money’ — study the spending: where does it go, how does it compare to previous periods or to competitors; we may look at market share or wallet share; we might measure revenue per employee or benchmark against the competition; or we might measure customer satisfaction or the customer experience.

But one of the most powerful measurements for helping to make breakthrough improvements is also one of the simplest: following where the time goes.

In fact, many agree that time is the most universal and most valuable component of work and work processes! Consider that by determining how much time it takes to complete a cycle of value (i.e., building a widget, closing the books, making a sale, completing a project, etc.) and how much of that is truly adding value, an organization captures information that provides a motivating vision and road map for making improvements.

Key areas to study are delays, over-processing, rework, transportation, and inspection; and using time as a measure to find and focus opportunities for improvement has three big advantages:

  1. time drives important business results
  2. time is universally applicable
  3. it is very simple to do — i.e., something anyone can do!

Once you’ve decided that managing time is an ideal way to reduce costs and increase customer (internal and external) satisfaction, you might try using the following five steps for effective measurement:

  1. Identify the process to study and improve — where it starts and where it ends.
  2. Confirm with the customer (internal or external) the key element of value the process yields. Sometimes this is obvious, but in some cases not so much. An accurate understanding of what the customer considers of real value is key to any improvement effort.
  3. Determine how long the process actually takes today. This number— in minutes, hours, days, or weeks, whichever is best suited to the process — is the TOTAL component of the ratio we will calculate in step 5. Some questions often arise at this step:
    • Should we collect “person hours” or elapsed time? Measure elapsed time. If you study and improve elapsed time, you increase customer satisfaction and quality as well as costs. Person hours spent on the work almost always decline when an organization focuses on elapsed time.
    • How precise do we need to be? It is valuable to get good data about the total time elapsed from start to finish, if only through a modest sample. Of course, there will be variation — and the variation can be quite substantial for some processes. Keep the raw data and calculate the average TOTAL.
  4. Determine which steps actually add value and how much time is spent on those. For a step to be considered to add value, it must:
    • Be directly related to what the customer values and would pay for (if they knew what we were doing)
    • Actually change something of value — the product, database, approval status, whatever, (inspecting something or moving something does not actually change the thing, so does not ‘add value’)
    • Do so for the first and only time. Fixing or reworking something does NOT add value, because it compensates for not being done completely or correctly the first time.
    • Often these steps must be done today, because they compensate for an imperfection somewhere in the process. Correcting those imperfections is what will yield the improvements.
  5. Study the differences between the total time and the value adding time to identify and eliminate the root causes. Then calculate again. To calculate the ratio: if total time today is 55 hours and value adding time is 2 ½ hours, then the ratio would be either:
    • Total-to-Value: 55 divided by 2.5 = 22, which means that the organization spends 22 hours for every 1 hour of value add, or
    • Value-To-Total: 2.5 divided by 55 = 4.5%, which means that 4.5% of total elapsed time is actually spent adding value.

It doesn’t matter which you use, as long as you are consistent.

designing a “poka-yoke”

designing_poka-yokes

As noted in our previous post, poka-yokes are meant to mistake-proof a process. They must be devised to prevent a particular type of error, which is why it is so important to thoroughly study the problem, the process, and the root causes.

Once you have all the facts and data about what goes wrong most frequently, in what way, and why, you can set your collective creative minds to designing a poka-yoke that most effectively and efficiently prevents the most frequent human errors or omissions.

To effectively design a poka-yoke, follow these simple steps.

Include the right people. Often the simplest and most effective poka-yokes are thought of by the people closest to the work.

For example, a port for the dry-docking and repair of supertankers needed to perfectly align the ship, and this was very time consuming and expensive with lots of engineers with sensitive measuring devices. A fellow working at the dock saw all this effort, and suggested a poka-yoke. His idea was that they move his shack to just the right position on the dock to line up with where the ships needed to align, then mount a scope on the shack in just the right position. He would then watch through the scope and tell them when the ship was in the right position.

It can also be helpful to include an outside perspective. Someone not immersed in the work every day may spot opportunities to eliminate problems or difficulties that the people executing the process every day may take for granted. Also, a good poka-yoke can often be created by borrowing from one industry or application to another, so diversity of experience is very useful in mistake-proofing.

Identify the specific mistakes you want to prevent. Poka-yokes are individually designed to prevent a specific mistake. Since you cannot mistake-proof everything at once, you must study the process and gather the data to identify what specific errors to address first.

Explore modifications to the work environment to reduce errors. The Five-S method identifies ways that the environment contributes to errors, often by making it hard to detect when a problem has occurred. Clutter makes it difficult to spot deviations in the location or condition of critical items. Sorting and cleaning help to mistake-proof. A bank greatly reduced the frequency of delays in processing mortgage applications by clearing off all the desks so each desk had only two applications at any one time, the one the processer was working on and one waiting in their in-box. Many organizations have found shadow-boarding ― creating outlines of tools that should be hanging on the board in that place ― to help them reduce time looking for the right tool or errors from using the wrong tool.

Explore modifications to machines or tools. Using jigs and automatic stops are changes to machines that make it much easier to execute the work to specification. Similarly, tools such as Excel are filled with poka-yokes, such as conditional formatting that can be used so that a cell’s color changes when the data in it meets certain criteria such as a date within a certain date range, quantities over a certain level, or even simply a required cell is blank.

The data validation feature is another handy mistake-proofing tool. This lets you prevent the entry of a wrong data type or an invalid name or a quantity that is too high or non-standard. This feature can be set to prevent entry that does not meet certain criteria or merely alert the user to re-examine the entry.

Explore modifications to materials. Changing materials can help to prevent an error or make a mistake readily visible so easy to catch before it causes trouble.

For example, one company gathered data on the types of errors people made on the forms they were using, and then redesigned the forms to make it much more obvious which fields were required and which were not. This greatly reduced the number of forms that had to go back to the customer for rework.

Explore modifications to the process to reduce errors. Changes to the process can be made to catch critical errors at the time they are made. Many hospitals have implemented a pre-surgical process poka-yoke that involves marking the point of incision ― in some cases having the patient sign off on the spot. To prevent the risk of an undiluted medication being delivered to a patient, a hospital changed the process so the medicine was diluted in the pharmacy rather than in the patient’s room.

mistake-proofing with “poka-yokes”

poka-yoke

Are you familiar with the term “poka-yoke?”

If so, then you know that a poka-yoke is a specially-designed feature of a process or a product that either prevents common mistakes or catches them before they cause trouble.

Often referred to as “mistake-proofing,” The term comes from the Japanese, meaning “inadvertent error” and “avoidance” and was popularized by the engineer Shingeo Shingo in his crusade to improve quality by eliminating human errors.

We see and use poka-yokes every day. For example, years ago, a dead car battery due to forgetfulness was a common problem. Since then, a poka-yoke was designed to sound a warning bell if the car lights are left on. A “warning” poka-yoke is a big help, but not fool proof. A more powerful poka-yoke has since been built-into newer cars and turns the lights on and off automatically.

Similarly, you see a wire gate swing out of the front of a school bus to guide children safely across the street; you are asked to double-enter a new password to guard against typos; wires are color-coded; highways have rumble strips.

All of these are features of a product or process that were specially designed to reduce the likelihood of a particular human error.

The best poka-yokes are easy to implement and involve inexpensive changes to the materials, tools, environment, or process. They fit the problem so perfectly they seem obvious once they are deployed. These poka-yokes render the specific human error that was targeted for elimination almost impossible to make.

For example, color-coding, redesigning forms, and other changes to the materials you use may reduce human errors. One company reduced accidents by replacing the white work gloves with neon gloves so that people were more aware of the hand position. One financial services company greatly reduced the number of transactions they had to reject due to customer error by analyzing the data, identifying which mistakes were easiest to make, and then redesigning the form to make required fields hard to overlook.

Yet a simple and powerful poka-yoke is almost never the first solution a team comes up with. The best ideas take creativity, collaboration, and the time to press on past the weaker solutions that come to mind first.

Most often, the first idea is one of the following:

(a) ask people to be more careful,

(b) ask management to send an email telling people to be more careful, or

(c) schedule a training session in which people are instructed to, yes, be more careful!

These solutions might help for a little while, but improvement is fleeting. Instead, we must keep brainstorming ideas until we can find a way to inexpensively make it much easier to do the work right or at least automatically alert a person when he or she has just made the mistake.

Here are some categories or types organized in increasing degrees of effective prevention:

  • Job aides are a little less fleeting than exhorting people to be more careful, because these are present at the work site when the work is being done. Examples include: cheat sheets, check lists, laminated guides, photographic work instructions. We’ve all seen and used these. They make it easier to do things right because they aid our memory, if we consult them. Their weakness is that we can forget to consult them especially when we are rushed, tired, or distracted.
  • Situational visual guides are better. When you design a form, design it to draw attention to the key items. If a particular type of transaction or operation requires an extra step that could easily be forgotten, consider using color coding or conditional formatting to highlight the important information. These can be effective and are often very quick and inexpensive to implement.
  • Situational audio alerts can be even better such as alarm bells when you are about to make a mistake. If you were trying to reduce pick and pack errors, you might want to set up a bell that will ring whenever the package weight does not equal the expected weight for the order. This may be a little harder to implement, but in certain environments the audio signal may be much more effective than a visual cue.
  • Automatic guides can reduce mistakes by leading you through the necessary fields or screens of a data transaction, the safest path through the warehouse, or the correct movement under a jigsaw. Automatic guides can often be designed fairly inexpensively, although may require some programming.
  • Automatic controls are the most effective. These are design features that do not allow a certain mistake. For example, a gas cap may be tethered to the car to control against its loss. An automatic shutoff switch will prevent the work from continuing under the wrong conditions. A form requiring a valid entry is used to prevent missing or invalid entries. These generally involve more time and investment to implement, but if the mistakes have serious consequences automatic controls are the best option.

Fortunately there are some proven best-practices for “how to” design the best poka-yokes, and that will be the subject of our next post.

quick win risks?

risk reward die

in our previous post it was noted that a lack of early success / quick wins can derail a CI effort. And in a past post, we shared more in-depth perspectives on quick wins and how an organization might best go about achieving them.

However, there are risks, and going after quick wins is not a sure fire strategy!

For example, without effective leadership, an organization may end up with quick failures instead.

Here are some additional examples of the potential pitfalls of pursuing quick wins:

To get a solution implemented quickly a team might skip over the analysis. This is fine in situations where it is easy to quickly determine if the solution worked. If trying the solution is cheap, and it is quick and easy to determine if it solved the problem, just do it! In such a situation, measuring the results is all the analysis you need. But if the results are not likely to be quickly visible or measurable, it is better to do more analysis up front to make sure that the solution you want to implement will actually yield improvements.

For example, if an organization is concerned about employee morale, there are many quick changes that could be made in hopes to improve it. But organizational morale cannot be measured daily or even weekly. It could take many months to know if a change was actually for the better. In a situation like this, more analysis up front is essential to choosing the right solution.

Sometimes, when you aim for speed, you get a rush to judgement
resulting in sub-optimization
, which is another pitfall. The first idea becomes the only idea in these situations, when a more thoughtful consideration of the alternatives could surface a substantially better solution.

In other words, an organization may simply resort to a band-aide or patch or work-around rather than a solution that addresses a root cause. These band-aides can accumulate until they represent a pretty big component of waste in themselves.

In other situations, a quick win is really just an idea someone has “on the shelf” — that is an idea they have been carrying around for a while. When an organization is introduced to Continuous Improvement, a flood of these ideas may be surfaced. But an off-the-shelf idea doesn’t provide a real cycle of learning in systematic process improvement because eventually people run out of ideas “on the shelf”.

Unless an organization really internalizes the search for waste, the study of facts and data, the search for root causes, and the testing then standardization of the solution, they don’t know how to keep improving once these “off the shelf” ideas get used up.

Similarly, speed does not necessarily mean a team must take short cuts in the process improvement methodology. Thoughtful exploration of alternatives can be bounded by time. Even 30 minutes of brainstorming alternatives or improvements to an idea can make a difference. Allowing 24 hours for feedback and improvements on the idea can identify ways to make it even better — with minimal impact on speed.

Clearly “quick wins” can be positive and can help sustain a CI culture, but only if they are approached in the right way.

3 Additional causes of CI derailment

derailment

Continuing with the theme of our previous post on “discontinuous improvement,” we have identified three additional causes of Continuous Improvement derailment.

As you’ll see, all three are preventable. But, like many things in life, simple things are not always easy.

For example, removing barriers or obstacles to Continuous Improvement seems a simple and straightforward objective. Yet there are many instances in which the people in charge fail to do so!

One barrier that commonly falls into the ignored category is that of an important individual in the organization who is simply not on board. The individual may feel uncomfortable or threatened by the new way of working and leading; or may simply not agree with one or more key principles of a continuously improving organization, such as the import of what the customer values, or the way to treat employees, or the imperative of constantly improving the work, or using facts and data instead of just opinion. When someone in a position of influence is not on board, he or she creates a misalignment between what people hear and what they see.

If the misalignment is not corrected, the situation has the potential to bring the CI journey to a close.

Similarly, while communication and alignment are essential, they are never really sufficient. People also need the training and skill development to follow the organization’s improvement methodology. Lack of capability or training will prevent people from progressing very far.

But personnel policies or practices can also easily obstruct productivity improvements. Sometimes jobs are defined so narrowly that managers cannot easily move people around to take advantage of productivity improvements. When managers are rewarded financially or in organizational prestige based on the number of people who report to them rather than how efficiently and effectively they operate, managers have powerful disincentives to increase productivity and move their people to where they would add more value.

Often organizations lack an effective mechanism to match up the skills and capability that one department has in excess resources with the needs of another department with a need for resources. To move resources effectively to their point of maximum value, you must develop a system of information about the skills and capabilities of your workforce. A thorough and cross-functional knowledge of people and their skills can enable an organization to move freed up resources to where they can contribute the most value rather than laying off the excess people and snuffing out motivation for further improvements.

No one but the leadership of the organization can remove the barriers to effective continuous improvement. Careful monitoring of progress to identify and remove barriers is essential to achieving a culture of continuous improvement.

Lack of quick success or “quick wins” is another common cause of CI derailments.

Early successes are the nourishment required to keep improvements going. If improvements are too slow, people get discouraged. People begin to adjust the pace of their effort to the slow pace of results.

Third, letting up on the gas after successful improvement initiatives is a more common occurrence than one might think!

In other words, success often carries with it the seeds of failure: the greater the success, the less urgency is felt for further improvements. Without a continued level of urgency, momentum toward improvement will disappear. People will be pleased with the level of performance they have achieved and turn their attention to other things.

To achieve a continuously improving culture, you must never rest. The leaders must continue to reward success, and identify bigger problems or opportunities. They must continue to strengthen the organization in continuous improvement and begin promoting based on skill at improving the work.

Challenges and best practices associated with continuous improvement