Category Archives: Continuous Improvement

A ‘must have’ for today’s successful business

must_have

There was a time when engaged employees were a ‘nice to have’ asset, but there were no formal processes for achieving engagement and the prevailing approaches yielded few, if any, measurable results.

Fortunately, as summarized in an article by Engagement Strategies Media, things have changed and engagement is now recognized as a competitive edge.

“With sales growth slowing and competition continuing to grow in many industries, market share goes to those organizations that “wow” not only their customers but all of the people involved with their businesses,” the article said.

“Research consistently confirms that talented “wowed” employees help create “wow” experiences for customers.”

Another fact that has changed the playing field for achieving higher levels of employee engagement is that there are formalized, proven methods for doing so.

One such approach is Engagement Around the Work, which is based on engagement with a purpose. With a clear objective of building and sustaining a high-performing culture in a measurable way, Engagement Around the Work involves specific steps for achieving a culture of engagement that is inextricably linked with team productivity, performance and job satisfaction. It incorporates a clear objective of engaging people around the one thing they all have in common—and the one thing that can bring about increased profitability and a sustainable competitive edge—the work.

You can read our free white paper about this approach here.

4 key questions for better thinking & avoiding bias

four_questions

A recent post shared insights into the pitfall of confirmation bias, which is the tendency to pursue and embrace information that matches our existing beliefs. 

Here are four questions that might help you surface biases or preconceptions that could impact the quality of the thinking processes that convert the information you have gathered into a lasting breakthrough solution:

  1. Did you have this idea as you began your analysis of the current situation? If so, maybe your thinking process was affected by theory-blindness, which is similar to confirmation bias. Theory-blindness is the tendency we all have to give disproportionate weight to evidence and testimony supporting our preconception and an unconscious inclination to discount or miss entirely evidence that refutes the theory.
  2. Are you under the influence of the experience trap? This occurs when we think, “I’ve seen this before and here’s the solution that worked before, so that’s what we should do now.” Often a solution that succeeded in one place at one time produces very different results when the circumstances have changed. We can work to overcome this bias to arrive at an even better solution by noticing this is at the heart of our thinking process.
  3. Could our judgment be influenced by the availability bias? The term describes a tendency to base judgments on how quickly and easily something comes to mind. If an event happened recently, or if we were personally affected by a type of event, we are likely to over-estimate its frequency or importance. If we have never experienced a type of event, our bias is to underestimate its occurrence. If we are aware of this bias, and are careful to compensate for it with data, we improve our thinking process and the likelihood of arriving at a good outcome.
  4. Have we fallen in love with our first idea? We tend to have a powerful urge to stick with the first idea that comes to us, focusing on what’s right about it rather than its flaws. Our attachment to our first idea can keep us from surfacing better alternatives. Or, as French philosopher Émile Chartier (Alain) said, “Nothing is more dangerous than an idea, when it’s the only one we have!”

As we work through the improvement process, we will be most successful if we carefully and objectively evaluate and continually improve the thinking processes we use to convert the facts and data into the best solution.

An uncommon solution to a common business problem

SMIT goals

As noted in our previous post, to pull significantly ahead of competitors an organization must make process innovations in addition to standard improvements.

Continuing with that theme, it is important to recognize that in order to achieve a breakthrough process innovation, a leader must make a powerful case that the breakthrough goal is truly necessary; and then the leader must follow that up with performance targets that are impossible to reach by conventional methods.

People almost always stop looking for an idea once they already have one. Even a flawed or inadequate idea can look good when it is the only one you’ve come up with.

But as French philosopher and journalist Émile Chartier (Alain) said, “Nothing is more dangerous than an idea, when it’s the only one we have!”

When we “fall in love with our first idea,” rationalizations as to why it is still ‘better than the alternative’ come easily. Furthermore, all the natural incentives in most organizations work against making a big innovative change. Big ideas are harder to think of; they are harder to sell, and they are risky or scary to implement. Process innovations simply do not happen unless the situation or an influential leader demands an innovation that is significantly and measurably better.

The Common Problem: SMART v. SMIT
Unfortunately, most of us don’t like to set our teams or ourselves a goal that could lead to failure, so we ask for goals we think can be met.

In fact, managers are taught to develop SMART goals, and ‘achievable’ and ‘realistic’ are at the heart of SMART goals. Yet, achievable and realistic goals never lead to innovation.

If the target is less than 20% improvement, most of the time people will tend to try to get there by doing the same things faster and harder or skipping steps without completely eliminating the need for those steps. These ‘stretch goals’ lead to disappointment or unintended consequences far more often than true innovation.

To inspire innovation, the goal must be out of reach via conventional thinking. Goals must be “SMIT” (specific, measurable, impossible, and timely) to spur innovation.

The Uncommon Solution
Innovation follows the necessity to invent, so a critical ingredient to process innovation is a leader with the courage, conviction, insight, and imagination to persuasively communicate the necessity for a game changing breakthrough process innovation.

How to Process Information into Lasting Solutions

analysis_process

Our previous post shared best practices for gathering quality input when engaged in an improvement effort. Certainly, high quality information about the current reality is necessary, but it’s not sufficient to produce lasting solutions.

We also require systematic analysis, unencumbered by preconceptions and biases, to identify the best solution addressing the root cause(s).

Some useful methods of processing some of the inputs are:

  • Systematically ask and answer the following questions to analyze the quantitative data gathered: o What question is this data intended to answer? o What can we conclude regarding that question from this data? o What additional questions does this data prompt?
  • Develop a cause-and-effect fishbone diagram with the people closest to the work and with someone who brings a “fresh set of eyes” to theorize about root causes. And then they can identify what data would test the possible causes they identified.
  • Use the 5 Whys to drill down from a confirmed cause to root cause(s) to avoid applying a superficial solution or ’patch’ instead of a powerful and lasting solution.
  • Analyze the process flowchart to evaluate which work steps are inspection, rework, transportation, wait time, or a gold nugget adding value. Once the waste is identified and quantified, apply the 5 Whys thinking to drill down to root causes.
  • Imagine perfection. Take some quality time with your team to think wildly about possibilities. Use exercises, including Triz, to prompt creative thinking to broaden the set of possibilities. If the best solution isn’t in the set of options a team surfaces, it cannot be selected for implementation!

How to gather input

gathering data

To optimize the effectiveness of our Improvement efforts, it’s important that we begin with a thorough understanding of both the situations we’re trying to improve as well as our own thinking and decision-making processes.

But these tasks are not always easy.

The quality of the output of any process is determined by two things:

  • The quality of the input to the process
  • The quality and reliability of the process of converting the input to the desired output.

Shortcomings in either of these will result in poor quality output. In this regard, the Continuous Improvement process is like any other process: the desired output, i.e., meaningful and lasting improvements, is produced when high quality information about the current reality is studied and analyzed by a systematic thinking process unencumbered by preconceptions, untested assumptions, and biases.

The Foundational Step
Gathering the right input about the current situation is the foundational step. If we overlook important information at this step, we are unlikely to achieve a meaningful and lasting solution.

We suggest the following four major types of input to produce high quality Continuous Improvement:

  1. Quantitative data about the current situation: How frequently does the process deliver high quality? When it fails to deliver high quality, where and how does it fail, what types of failures occur, what are the impacts of those types of failures, what factors seem highly correlated with the failures? Quantitative data about the process provides important information about how and where the process succeeds and fails.
  2. Observations and insights from people closest to the work: This includes the people actually doing the work and the customers and the suppliers of the work. Members of all these groups can bring unique and important perspectives about how the system is working and some ideas about how it might work better. Recipients of the output of the process (internal or external customers) can also provide a great deal of insight: what are their pain points and what do they value? Taken together, observations from people close to the work provide valuable input to the improvement process.
  3. Documentation of process flow charts or value stream maps: Gather a team of knowledgeable participants to compile a step-by-step understanding of how the process works, where the bottlenecks and opportunities for error take place, where the work sits waiting, where and how the work is inspected and reworked.
  4. Direct observation with new eyes: An outsider watching the process will often notice an aspect of the work or work environment that is so familiar to the people closest to the work, they no longer see or notice it. This information will not surface in interviews with people close to the work nor in process mapping. The only way to surface a full understanding of the factors influencing quality and productivity is to spend time directly observing the work.

The value of a written problem statement

problem

Few decisions have a greater impact on the likelihood of an improvement project’s success than the definition of the problem.

Stephen Covey says that, “The way we see the problem is the problem!”

In a past post, we shared four guidelines for accurately defining problems, which included:

  1. Defining the problem in writing
  2. Specifying and quantifying the waste the problem is causing
  3. Identify the metric that will be use to “size” the problem
  4. Omit judgments, opinions, and predispositions about the underlying causes

These aspects of framing a problem have a huge impact on how well a team can analyze and solve a problem. They also enable a team to create an accurate problem statement.

In fact, creating a written, specific and measurable problem statement that incorporates a baseline against which solutions can be tested helps people avoid biases about root cases or solutions. This practices also makes clear why and how much we should care about the problem, and might inspire a team leader and sponsor to more enthusiastically guide the team to efficiently achieving the results the organization desires.

The act of crafting a problem statement does require some careful thought, but a good problem statement is worth the effort because it helps you to ensure that:

  • Team participants, leaders and sponsors, have a shared understanding of the problem that will be solved
  • The organization will give the project the appropriate priority and urgency
  • The team has a good baseline against which they can test the results of their solutions
  • The team is open to surfacing and testing a range of possible root causes so as to increase the likelihood of finding an effective and lasting solution.

Improve Sales by focusing on customer/supplier relationships

sales

Continuing with the theme of improving our sales process, it’s important to remind ourselves that satisfied and delighted customers are the lifeblood of any organization.

Providing customers with the highest quality products and services at the best possible price starts with clearly understanding the customers’ needs and requirements and then designing and implementing processes that consistently deliver value.

But there are two types of customers:

  • external customers
  • internal customers

It’s important to recognize that both types of customers are important and have needs that must be met. External customers are the people who pay for our products and services. As Dr. Deming said: “No customers, no orders, no jobs!”

Paying attention to the external customers’ requirements is essential and helps us keep the entire organization focused on doing value added work (i.e., “work the external customer would pay for if they know what we were doing”).

However, to effectively meet the external customers’ needs, we must also work with our internal customers. Understanding and meeting our internal customers’ needs and requirements helps the process of producing our product or service to flow smoothly, be problem-free and deliver the highest quality at the lowest total cost. When we work with our internal customers we are, in fact, “internal suppliers.”

Of course, this customer-supplier relationship extends to our external suppliers as well. From our external customer’s point of view, we are responsible for what they buy from us; and our suppliers are part of the system.

It is increasingly important to build strong customer/supplier partnerships that ensure that we get exactly what we need, in the right quantity, at the right price to be able to meet our external customers’ needs.

Studying Our Work to Improve…

If we’d like to increase sales by improving our “sales” process, we should begin by studying our work. As a first step, identify our top customers’ 3-5 “must-have” requirements. As requirements are identified, it helps to understand their relative importance. What requirements does the customer consider “musts” versus “wants?”

Keep in mind that customer requirements are constantly changing as well, and yesterday’s “wants” may become tomorrow’s “musts.”

Sales Process Improvement: 5 best practices & 20 questions!

sales

While many businesses make efforts to improve production, distribution, and various administrative work processes, it is less common to find organizations that focus on applying the fundamentals of Continuous Improvement to the sales process.

However, our research and experience indicate the selling process is more complex than many people realize. In addition, we have consistently found that the largest waste in most commercial and industrial organizations is lost gross margin that results from sales not made, sub-optimal pricing, and excessive costs in sales-related processes.

So, leaving aside the “selling skills” or “charisma” that is often associated with those perceived as the most successful sellers, when you consider the day-to-day activities required of field-based sales professionals, there are some proven best practices that can help boost field-day efficiency, which include the following five:

  1. Pre-call planning: by planning each sales call in advance, in writing, sales people can position themselves to accomplish more in less time, thus increasing personal productivity as well as accelerating overall cycle-time. Not only will conducting more comprehensive sales calls increase efficiency, but the habit will also make a stronger, more positive impact on customers. Many who have embraced this best-practice report that their customers recognize the difference and, over time, become more willing to schedule meetings, thus enabling them to more easily make more calls each day.
  2. Set a daily call volume goal. This may sound like an unnecessary step, but a surprising number of sales people are unable to quantify the actual average number of sales calls they make each day. As author Jack Falvey has said, “Want more sales? Make more calls.” By setting an average personal goal, (or company requirement) which will vary depending on the nature of each territory, sellers are often able to self-motivate more effectively and make more calls per day.
  3. Geo-plan: by creating a strategic geographic or travel plan each day, outside sales people can minimize drive time and optimize “face” time (Or, in our current situation, “virtual face time.”). The best plans will begin by creating territory quadrants and then mapping the locations of customers and key prospects. The rule-of-thumb is to avoid traveling beyond two quadrants in any given day, so when an appointment is set in one area, try to schedule meetings or plan to visit others in the same general region to enable a maximum number of interactions in a minimum amount of time.
  4. Bookend each day by scheduling an appointment early in the morning and another late in the afternoon. This will promote “staying the course” as opposed to deciding to drive back to the office early to do administrative work. This best-practice might also help to achieve item #2 above.
  5. Try to schedule next steps (i.e., follow-up meetings, conference calls, etc.) “on the spot” before the conclusion of each sales call. This simple best practice can significantly boost efficiency for two reasons. First, it helps sales people more easily populate their calendars for future selling days in the field; and second, it can help shorten selling cycles by securing time with buyers sooner than could be done otherwise.

But the sales process extends well-beyond a day in the field, as it encompasses everything from identifying a lead to delivering a solution. Considering this broad spectrum, it is really not surprising that the largest waste within most businesses can be found in the sales area.

The first step toward improvement or to moving from “where we are now to where we’d like to be if everything were right,” is to identify specific areas of sales process waste, and a good way to begin might be to answer the following 20 questions:

  1. What is our current market share?
  2. What are our customers’ requirements?
  3. How well are we meeting these requirements?
  4. What would it take to truly delight our customers?
  5. How long does the sales process take from lead to sale?
  6. What is our lead conversion ratio?
  7. What were the top 3 reasons for lost sales over the past quarter?
  8. How many calls do our sales people make, on average, each day?
  9. How much time do we spend talking with uninterested or unqualified leads?
  10. How do we continually improve our sales team’s skills and habits?
  11. What percentage of prospects contact us first?
  12. How does this percentage (#11) compare with industry data?
  13. Does the sales process take less time to complete for inbound leads? If so, how much less?
  14. What is our response time to customer or prospect inquiries?
  15. How many customer complaints do we receive?
  16. How much time do our sales people spend interceding or responding to complaints?
  17. What is done with the information associated with customer complaints?
  18. How do customer complaints or how does customer dissatisfaction impact our ability to make sales?
  19. How often are discounts extended, and what is the average discount?
  20. Are discounts offered due to competition or in response to dissatisfaction?

Clearly there are many ways to analyze and improve the productivity of an organization’s sales process, but these five best practices and twenty questions are good starting points.

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.

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.