Category Archives: Continuous Improvement

Defining Problems?

defining problems

Our previous few posts have focused on identifying waste.

After an area of waste or an opportunity for improvement is identified, the next step is to define the specific problem. Few decisions have a greater impact on the likelihood of success of an improvement project than the definition of the problem.

For example, Stephen Covey says that the way we see the problem is the problem. Albert Einstein warns that we cannot solve problems at the same level of thinking with which we created them. The way we define and communicate the problem the team is expected to solve will greatly influence the speed and efficiency with which a team will complete its work, the degree of satisfaction between the team and the project sponsor, and the efficacy with which an organization prioritizes and sequences the problems to devote resources to.

Consider these different approaches to defining the same problematic situation:

  • Order fulfillment is too slow and is costing us a lot of business.
  • Our lost sale rate has increased from an average of 125 per month over the previous six quarters to 190 per month this quarter.
  • Our Order-to-Delivery timeline has increased to 60 days due to a bottleneck in packaging.
  • Profits are down.
  • Sales has missed their target for the past three months.
  • Packaging is too slow due to old equipment.
  • Order-to-Delivery time from the Mid-western plant in Q3 increased by 15 days over the same quarter prior year, and was cited as the cause of 42 lost sales in Q3 impacting revenue by $270,000 in the quarter.

Some of these are statements of fact, while others are judgments. Some are very broad and others are very specific.

They may ALL be valid observations about the same situation, yet the problem solving efforts they would guide would differ greatly in urgency, efficiency, and efficacy. Developing a good problem statement at the start will help you define and lead an improvement project that most efficiently arrives at better results.

In our next post we’ll share four best practices for defining problems.

Identify Waste by Going to Gemba

identifying waste

As you may know, “Genba,” which has been popularized as “Gemba,” is a Japanese word meaning “the real place.”

The word is widely used in Japan, where detectives frequently refer to a crime scene as genba, and Japanese TV reporters often refer to themselves as reporting from genba/gemba.

In the business realm, gemba refers to the place where work is done and value created. For example, in manufacturing gemba is typically the factory floor, but looking further afield it can be any location — a construction site,
administrative office, or sales bullpen — where the actual work is being done.

When it comes to Continuous Improvement, problems are most visible in these areas, and the best improvement ideas will come from going to gemba. If your objective is to identify waste, there is no substitute for ‘going to the work’ and there are things that can only be learned by going there and watching the work with a purpose.

Thus a gemba walk, or waste walk, is an activity that takes management and other stakeholders to the front lines to look for waste and opportunities for improvement; to observe the work where the work is being done, and to identify what goes wrong or could go wrong, how often it does or could go wrong, and the associated consequences. The waste walk is designed to help everyone understand the value stream and its problems; it is not to review results and make superficial comments.

Aside from identifying waste and the specific gains made during waste walks, there are also higher-level benefits associated with the practice:

  • Engagement: Since people at all levels are involved, and since the waste walks have proved to be an effective method of detecting hard-to-identify problems as well as solutions which improve both productivity and day-to-day quality of work life, a noticeable increase in workforce engagement is a common by-product. People like it when problems they have known about for a long time are finally solved!
  • Trust: Company leaders are able to establish greater levels of trust with the people closest to the work, by showing interest and seeking the opinions and input of those doing the work.
  • Learn the Truth: Going to gemba enables leaders to identify reality versus what they think (or hope) is happening. Waste walks help leaders to question their assumptions as well.
  • Better Ideas: When the people who are doing the work or executing the process every day start talking, thinking and feeling empowered, the ideas really flow…
  • Ask the Right Questions: as suggested in an earlier post, questions are often the “answer” to making breakthrough improvements. However, the quality of those questions is the key! Getting the data and seeing it for the first time based on direct observation is powerful; and then if you can get customers, suppliers and company personnel working through the chain, the quality of questions that surface promote more innovative and accurate solutions.
  • Improvement vs. Habit-forming Execution: The combination of fresh eyes, diverse perspective, amnesty, and a collective, sincere interest to eliminate waste and continually improve the work process tends to bring about real, often outside-of-the-box solutions; true Improvement versus dong things the same way.

Identifying Waste?

waste is often the elephant in the room that nobody sees

As suggested in our previous post, our approach to Continuous Improvement (CI) has always involved a focus on the waste, as opposed to simply focusing on ‘improvement’.

What’s the difference?

Most of the big waste is hidden in plain sight — long-standing business practices that compensate for a problem that has not yet been solved. The root causes of the problem have not been addressed, and instead, compensating steps have been built in to avoid bad outcomes such as poor quality or lost productivity.

Compensating for Unsolved Problems
For example, a maintenance organization for a power plant “walks down” each preventive maintenance job to make sure the instructions are clear and the parts are available. A financial services company sends every transaction to “QC” for inspection and corrections. A financial services company sorts all of the transactions by client and by transaction type before processing them. Inventories are built up just in case, and long production runs are scheduled to avoid long set up times. Each of these is compensating for and masking an underlying problem that has not been addressed.

In fact, whenever you find yourself trying to find the best trade-off between two evils), you can be sure that you are masking underlying root causes which, if addressed, would lead to breakthrough business improvements. Nearly all the breakthroughs of the past forty years are a result of seeing waste and addressing the underlying causes where the competitors simply saw standard operating procedures.

The secret to doing better than the “optimum” is in surfacing and addressing the hidden assumptions.

Optimization is the process of evaluating the “trade-offs” between two things that seem to be in conflict. For example, as you increase inspection, you increase costs but you decrease the defects that get through. If you shorten your production runs, you can reduce your inventory but your production will decrease because change-over time required to change machines from producing A to producing B means more downtime. With optimization, you try to find the exact point that minimizes the total cost.

But every optimization problem has some “givens.” Taiichi Ohno, creator of the Toyota Production System, and his followers achieved breakthroughs by shifting their focus from finding the best “trade-off” to working on these “givens.” When we talk about “root cause” analysis, we mean to focus on those “givens” or “underlying assumptions” that cause you to try to find the path of least waste. Once you find and address the underlying cause, assumption, or given, you can find and move to an optimum that is at a totally new level! And more room for improvement opens up as you make more progress on the “givens.” Instead of diminishing returns you have expanding opportunities!

But people are most often risk averse. It is very uncomfortable and difficult for most people to acknowledge waste before they can envision a solution for it. An organization will not embark upon a sincere search for waste without strong leadership questioning why, encouraging and rewarding the identification of waste, and challenging conventional wisdom.

The ability to recognize waste is a rare and valuable skill and it grows with practice. Senior management needs to nurture the practice if it is to take hold within the organization. Until an organization recognizes the waste for what it is, there will be no full court press to eliminate the underlying problem.

3 Proven Steps
If you’re wondering how your organization might nurture the ability to recognize the waste embedded in your business processes, here are three suggestions for getting started:

  • Constant questioning. Ask yourself and everyone else if you would need this if everything were right, and right the first time.
  • It sometimes helps to bring in outsiders to help you look for waste, because it is easiest to think “outside the box” if you are “outside the box.” Customers and suppliers or people from adjacent processes may challenge assumptions we don’t even realize we are making.
  • Benchmarking internally, within the industry, and in different industries can also raise questions and help you recognize waste that you have overlooked before.

Before Launching an Improvement Project…

preparation

As a final installment to this short series of posts about increasing the likelihood of an improvement project’s success, it’s important to recognize the importance of up-front work.

Effective planning, even before the launch, was emphasized as critical to success during a discussion with our Partners in Improvement. Some of the key components of this planning include defining the right problem statement, scope, timeframe, and team.

One of the Partners explained that, in his organization, all project charters are required to go through a rigorous review by corporate as well as visiting the location and team beforehand to get the specifics and facilitate good communication.

Another emphasized the importance of having a charter, no matter how simple the project, that sets out the timeline. The charter should clearly identify why we are here and what the target date for completion is. This is hard to predict at the outset when the team has much to investigate, but it is important to have a vision of an end point not too far in the future to keep the scope tight. Set near-term milestones.

Similarly, one organization has implemented the practice of having the team leaders circulate problem statements to other experienced leaders before they start and ask the others to take shots at it — identify where the gaps are, where it lacks specificity in a way that will make it more difficult to define a tight scope. Identifying these hazards up front is likely to make the project more expedient and successful.

Most importantly, and as all of our Partners agreed, managing scope is a must for speed and success.

Apply the Pareto mentality (backed up, of course, with Pareto data), to focus on the 20% of the problem that will provide the biggest bang for the buck. One of the most common causes of slow results is failure to decide on a tight scope that can be addressed within 8 to 12 weeks. Often one needs to gather and study some data in order to decide on a narrow scope, and this often should be done before launching an improvement project. Sometimes a small group may be convened to quickly gather and study the data so that an appropriate improvement team can be launched.

The Bottom Line Summary
To sum it up, in order to ensure on-going success an organization must make sure that its measurement systems, rewards, recognitions, and communications systems support CI.

But more than that, one must make sure that management behavior itself supports CI.

8 Ways to Increase the Success Rate of Improvement Projects

Continuous Improvement

Our previous post shared a number of reasons why so many improvement projects fail or fall short of expectations.

Fortunately, there are a number of solutions to prevent the
downward spiral that can so easily plague improvement efforts, which we discussed during a meeting with our improvement Partners. These principles include the following:

Success! The first principle for making a project successful is simple: nothing succeeds like success. So start out with carefully selected projects staffed with highly qualified people to ensure they are successful. Give the earlier projects careful guidance and support. One of our Partners described an initiation process which started with 10 carefully selected and well trained individuals. They put five on one project and five on the other. Once those projects were complete, they launched five more improvement projects with two of their 10 trained leaders per project. This plan was designed to ensure early successes.

Communication About Success. The second principle is “advertising.” If a team applies the CI methodology to great success but no one hears about it, the methodology as “the way we do things around here” will be slow to catch on. Newsletters, presentations, story boards and discussions at staff meeting and water coolers are all ways to communicate success and make sure that everyone learns from it and is ready to try for some more.

Speed to Results. But an organization will not have many successes to advertise, if it does not make speed to results a priority. Once you start an improvement project, make sure that the project manager and the team run like heck to finish it. The more demanding the environment and more rapidly new challenges arise, the more critical it is that every effort be on the fast track to completion — before something arises to change priorities.
To the extent possible, compress the cycle time to results. Use Kaizen events and focused teams to tackle manageable chunks in short time frames.

Data. Use data to really understand the current reality and to test theories about underlying causes. The data will help you minimize the red herrings and wrong turns. People will want to substitute opinions for data because that is the way they have always worked. But the facts and data will help the team zero in on the real cause and the best solution more quickly than trial and error based on opinion. One of our partners observed that people will often create a flow chart, but then fail to get the facts about the process. A flow chart is just one step and is not really complete until it has been validated and populated with real data.

Keep It Simple. Keep the data analysis as simple as possible. Complicated is not necessarily better and it is almost always slower! A great deal can be learned from Pareto charts looking at the data from different angles — to rule out or confirm theories about the underlying dynamics and relationships.

Management Support. Pay attention to the soft side, making sure that management meets with the teams and individuals regularly. One CEO meets one-on-one with his leaders once a month and the sole topic is how the improvement project is going and what can he do to speed progress. Lots of visibility and encouragement for people working on systematic improvement helps to maintain interest, enthusiasm, and momentum.

Team Enthusiasm. One CEO lets his team leaders pick the project — focusing on what really ‘frosts’ them. This gains the enthusiasm for the work and results in quick wins.

Team Training. Most Partners believe that nearly everyone in the company needs some basic training. But team leaders need to be very well trained, so that they can ensure that the team follows the methodology, asks the right questions, gathers the right data, stays on track, and keeps the interest and engagement of the rest of the team. Choose team leaders very carefully.

In addition to the above-listed solutions for running an effective improvement initiative, there are several things that an organization can do before launching a project that can increase the likelihood of success. These best practices will be the subject of our next post…

Why Improvement Initiatives Often Fail

brick wall

During a discussion with several of our improvement partners, it was noted that approximately 80% of the time Continuous Improvement efforts fail or are abandoned prior to achieving their potential.

We also discussed a set of barriers that could lead to failure, which included:

  • Low aim, poor advance planning or scoping
  • Lack of data during the planning stage
  • Lack of buy-in from management
  • Lack of buy-in from participants
  • Lack of management support, which is required to free up the resources to work on improvement
  • Lack of progress due to ineffective or inconsistent execution. The slower the effort moves, the more likely it becomes that priorities will change, new opportunities or problems arise that decrease available resources further.
  • Poor meeting management, causing slower progress.
  • Participants need for skill development

A number of solutions to the above-listed challenges were also discussed, which will be the subject of our next post.

Improvement Project Success Predictor

improvement tools

Our previous post focused on defining and scoping an improvement project prior to launch. Another useful pre-launch tool, which was created by our consulting team, is a “success predictor.”

The “success predictor” distills a century or two of collective experience with what characteristics are most necessary for an improvement project’s success – in other words, it can help to prioritize options and increase the likelihood of working on the right things.

The following eleven factors can predict with a fair degree of accuracy how likely a project is to succeed:

  1. The potential benefit of the project to the organization is clear, substantial and quantifiable. (10 = very clear, quantifiable, substantial)
  2. The problem to be solved is clearly defined and quantifiable, and the project scope is focused and well-defined. (10 = very clear, focused, and well-defined)
  3. The project has top management’s commitment and support (resources, sponsorship and follow-up); no influential person is actively opposed to the project. (10 = very strong support)
  4. The sponsor and team leader are clear about each one’s role and partner effectively to ensure the success of the project. (10 = very clear)
  5. The team leader and key resources are devoting enough of their time to the project to complete it very quickly. (10= full time)
  6. The team is staffed and led by the right people for the job, and they are determined and capable to quickly achieve results. (10 = very determined and capable)
  7. Meaningful and accurate facts and data about the process are available. (10 = very available)
  8. The process to be improved is repeated frequently enough to efficiently study variation in the current process and to and test and measure improvements. Hourly? Monthly? Annually? (10 = very frequently).
  9. The processes to be improved are within the team’s span of control. (10 = under control).
  10. The expected timeframe for completion of the project or for achieving concrete and measurable milestones. (10 = 4-8 weeks to completion or measurable milestone)
  11. The processes are stable, that is not undergoing very recent or imminent major change (10 = very stable).

Defining & Scoping Improvement Projects

SIPOC

An earlier post referenced one of our founder Bill Conway’s favorite quotes, “The most important business decision people make every day, is deciding what to work on.”

This pearl of wisdom applies to all forms of work, and is certainly critically important when it comes to initiating an improvement project. Various tools have been developed to help people better define improvement initiatives, one of which is SIPOC, an acronym formed in the early days of TQM and one that continues to be used today in Six Sigma, lean manufacturing, and business process management..

SIPOC enables people to effectively define the process, problem, and project early on to ensure they are, in fact, working on the right things. The acronym stands for:

Suppliers
Inputs
Process
Outputs
Customers

Some organizations always start with the SIPOC to get the team on the same page so they can answer six important questions:

  • What is the process?
  • Its purpose (why are we doing this)?
  • Who owns the process (surprisingly sometimes not obvious/known)?
  • Who are the customers/suppliers?
  • Who is the primary customer?
  • What do they get out of the process or provide for the process?

Once the questions above have been answered people can focus on the high level process flow and the process measures for each step by answering five more questions:

  • What’s the ideal?
  • Is the data available?
  • Are we already measuring it?
  • What is the goal?
  • What is the impact?

Once the team members have a shared high-level understanding of the process using the SIPOC, and have gathered the data that enables them to measure the gap between the current situation and the ideal, they can create a good problem statement, objective, scope, and timetable.

These together are key components of a Project Charter, the ‘North Star’ of a project that helps keep the project moving forward to successful completion.

It’s All About the Work: 10 Questions

Continuous Improvement is all about the Work

One of Bill Conway’s favorite sayings has always been, “The most important business decision people make every day, is deciding what to work on.”

In fact, we’ve found that half of Continuous Improvement involves working on the right things!

Once people know what to work on, there are ten critical questions to consider, the answers to which will lead the way toward building a high-performance culture of continuous improvement:

  1. What processes should we use to identify the best opportunities for improvement?
  2. How will we prioritize the opportunities?
  3. How can we ensure or increase alignment?
  4. How will we identify what ‘could or should be’ if everything were right?
  5. What specific improvement goals shall we set?
  6. How can we involve the people closest to the work?
  7. What tools will we use to find fundamental solutions?
  8. How will we measure progress?
  9. How will we recognize and communicate progress and achievement?
  10. What is our follow-up system to assure that the processes, once fixed, stay fixed?

Feedback Formula

performance management

As noted in our previous post, an effective performance management regimen is a necessity for any organization hoping to build and sustain a high-performance culture of continuous improvement.

That post also noted that an effective process for giving feedback is a critically-important part of performance management. However, the post went on to share the results of research by Gallup indicating that only 26% of U.S. workers surveyed strongly agreed that the feedback they receive as part of their organizations’ performance management effort actually helps them to improve their work or behavior.

Fortunately, a simple four-step formula for effectively giving feedback or for sharing difficult messages in a “brain-friendly” way (so the receiver recognizes important feedback is about to be shared) was recently shared during a TED talk by Cognitive Psychologist LeeAnn Renniger.

These steps are:

Micro yes. Begin the interaction by asking a short, but important, closed-ended question to gain initial acceptance or buy-in and to give the other person a sense of autonomy (they can, after all, answer either yes or no). The objective is to get them to say, “yes.”

For example, you might ask, “Do you have five minutes to talk about yesterday’s meeting?”

Data point. To help others avoid confusion and to make sure your message is clear, make a concise and specific statement about the action or behavior you want to address. By avoiding ambiguous or “blur” words, you will enable the other person to more clearly understand the issue at hand.

For example, “During yesterday’s meeting you agreed to send a follow-up email with instructions by 11am this morning. It’s now after 3pm and I still don’t have it.”

The data point need not only refer to a negative situation. For example, “During yesterday’s meeting you shared a great example of how the order processing works best!”

Impact statement. Explain how the action or behavior impacted you.

For example, “The story really made it easier for me to understand how the process should work, and will make it easier for me to do my part going forward.”

Question. Wrap-up with another question (open-ended this time) that is geared toward confirming understanding and gaining commitment.

For example, “How do you see it?” Or “What do you think?”

While simple in structure, Renniger explained this approach is a scientifically proven method for gaining the attention of others and for giving feedback in a meaningful way.

Possibly most important, having a set of guidelines can make it easier for the feedback giver to approach potentially awkward interactions with greater levels of confidence, and to execute more effectively.