Category Archives: Process Improvement

Why An 8-Step Improvement Plan?

While organizations in most sectors work at making at least some ongoing improvements to their work and work processes, most industries or vertical markets consist of leaders and followers.

People often ask about what makes the difference between the industry leaders and the follow-behinds.  In our experience, there are two things:

  1. What they work to improve
  2. How they go about the improvement

Industry leaders tend to “work on the right things,” which, as we’ve noted numerous times in this blog, is the most important decision we all must make every day. They also go about making improvements in an effective way. By working on the right things and following a proven effective improvement process, an organization can get further faster.

We recommend an 8-step process for studying and improving the work. While it is possible to make improvements in fewer steps, the more comprehensive eight-step process helps to ensure people are working on the “right” things, and also that the improvements will “stick.”

These steps are:

  1. Identify and quantify the waste you want to eliminate
  2. Clearly define what you want to do (including problem statement, objective, measurements, scope, team, and plan)
  3. Study and measure the current situation
  4. Analyze the root causes and evaluate and plan solutions
  5. Implement
  6. Study the results and take appropriate action until objectives are met
  7. Stabilize and standardize the improvement so that it stays in place and is used throughout
  8. Evaluate and learn from this improvement effort and plan the next

As noted above, some people think this seems like a lot of steps and wherever we go we meet people who want to “streamline” this process . We call them the “two-fivers” because the improvement process they follow is simply:

  • think of something they believe will improve things
  • implement it

Two-fivers eliminate 3/4 of the steps we recommend! Possibly a good, or at least workable idea… but the whole point of the eight steps is to make sure people are working on the right thing, that they get to the right solution, and that it sticks. If you can do without that, by all means, be a two-fiver.

Conventional Wisdom & Specialization

Conventional wisdom is an asset in so many situations that one can hardly do without it. After all, it “makes sense!” Or at least it seems to make sense… and it can speed-up consensus and increase our confidence in our decision making.

But in a dynamic world when the underlying assumptions shift, we conventional wisdom easily lead our organization to make some big
mistakes.

For example, conventional wisdom holds that specialization is good. A person can get very fast and reliable doing the same thing the same way again and again. The classic example is Henry Ford’s assembly line which broke the complex craft of auto assembly into a sequence of very specialized jobs that could be easily taught to the relatively unskilled labor on the assembly line. Assembly line efficiencies put automobile ownership in reach of a much larger portion of the country and made the benefits of specialization a part of our national business psyche.

Specialization is applied to many jobs today as well, such as dividing a call center into teams of specialists by type of call, or dividing incoming orders so that one person handles all of the especially complicated jobs, or conversely, the easiest tasks may be pruned off and assigned to a junior person to exclusively handle.

When the volume and nature of the work flow is predictable, specialization can increase both efficiency and quality. But when the quantity, timing, or nature of the demand for work is uncertain, specialization significantly reduces efficiency!

For example, when a service organization wanted to speed up throughput and reduce overtime costs for processing new account applications for clients in the Financial Services industry, they organized their processors into different groups to handle different clients. This enabled each processor to complete an account
set-up faster because they could easily memorize the steps and forms for their small group of clients.

Nonetheless, the efficiency of the operation as a whole declined substantially. Variation in the incoming volume resulted in one group being swamped one day and working overtime, while another group was very slow.

So the rule is: sequential specialization, like the assembly line, often speeds up the mastery and execution of the subset of work, but will also reduce the total throughput whenever there is variation in the amount of time that a step may take. Each hand-off is an opportunity for work to be waiting for a worker or for a worker to be waiting for
work. When variation is low, specialization can increase throughput, but if there is variation in incoming quality or in the amount of time needed to execute a step, specialization tends to reduce efficiencies of the operation as a whole.

Poka-Yokes?

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.

Has your organization created or made effective use of poka-yokes?

If so, we look forward to hearing from you! If not, our next post will focus on how to go about creating poka-yokes.

Workforce Capability, Management & Change

While identifying the right things to work on is a critical decision we must make each day, it’s important to also have the right people working on the right things if we hope to truly achieve breakthrough solutions. In other words, it is imperative to have a solid grasp of the team’s capabilities, strengths and  developmental  needs.

We’ve discovered that workforce assessments need to be done in an organized, comprehensive way that includes a strategic mixture of observation, one-on-one and small group interviews to cover a diagonal cross-section of an organization. Key activities include an analysis of layout, work flow, bottlenecks and yield, and also an assessment of people’s understanding of tools as well as how their work impacts the total organization.

It is also important to ask questions about the organization, how people feel they are treated and valued, and, in so doing, it’s important to assess their level of engagement.

Based on discovering the best opportunities for improvement, an improvement plan can then be implemented, which will involve making key changes in processes and behaviors.

Finally, it’s also necessary to review how people are being managed, as without engaged, effective leadership it is difficult to implement the changes that are necessary for achieving a culture of continuous improvement.

Bigger CI Gains Can Come With “Bigger” Challenges

We all strive to achieve breakthrough or “bigger” gains when involved in Continuous Improvement, and a basic fact of accomplishing this is to pursue cross-organizational improvements.

However, these efforts typically involve more people, and this size factor alone can make projects more difficult to execute.

Consider that the larger the group, the more effort is required to ensure that good working relationships develop among the team members. Scheduling meetings becomes more difficult, and individuals may take less responsibility because with a large group it is easier to assume someone else will pick up the slack. There is often a limited window in which people are available, and the more people who must participate, the more constraints the project leader must schedule within.

Here are a few recommendations on how team leaders can minimize these “size-related” difficulties :

  • Make sure each participant has a clearly defined role and that everyone is clear about why each participant is needed.
  • Develop (and continue to refer back to) a clear charter and mandate from senior management
  • Develop ground rules about how to handle absences in a way that ensures the project continues forward. Will substitutes be used? Who can substitute and how will the team make sure that a substitute will know what is expected of them?
  • Set up firm meeting times and locations at the start of the project.
  • Publish minutes so that everyone is clear about what was decided and who has what action item.
  • Publish agendas so that everyone knows what is expected to happen at each meeting. Send reminders to make sure that action items are ready when planned.
  • Involve a facilitator to make sure that everyone provides input and that discussions stay on topic. Projects without a good facilitator will lose focus.
  • Develop concrete time lines and scope, and “chunk the work.” Breaking the work into specific deliverables helps to manage the size and complexity of cross-organizational improvements.

Communication & CI Part 2: Hidden Costs?

As noted in our previous post, communication is an important, yet often over-looked tool for bringing about a culture of continuous improvement and engagement within a workforce.

But the effect of communication depends on its quality, and poor communication can be costly.   Even worse, these costs frequently go unnoticed!

For example, as reported in a recent Society for Human Resource Management (SHRM) article, a survey of 400 companies with 100,000 employees each cited an average loss per company of $62.4 million per year because of inadequate communication to and between employees. The article also referenced another study showing that miscommunication in smaller companies of 100 employees cost an average of $420,000 per year.

To determine or impact the quality of internal business communication, it is important to recognize that some communication forums are better than others.

For example, many organizations use suggestion boxes as forums. But the results are often disappointing. While a suggestion box requires little time or effort to initiate, its success relies on the ideas being completely and clearly expressed in writing.  Unfortunately, many people with good ideas simply cannot express them well.

Furthermore, if a suggestion requires more  explanation  or  development before it can be turned into a really great idea, the suggestion box does not offer an opportunity for clarification, debate, or refinement. Even worse, when the initial ideas are not fully formed or expressed, and management doesn’t have an opportunity for clarification, the ideas are harder to act upon, and often management loses interest.  When people notice nothing comes of the suggestion box, they stop offering ideas.

Here are some additional examples of costly miscommunication in business environments identified by Helen Wilkie, a consultant and author specializing in profitable, applied communication:

  • Long, boring, poorly-planned unproductive meetings that reach no conclusion and serve no purpose
  • Sales presentations that show no concern for, or understanding of, the client’s needs
  • Wasted time due to miscommunication about time or scheduling
  • Badly written e-mail messages that cause misunderstandings, ill will and wasted time
  • Employee alienation caused by managers who don’t listen
  • Lack of understanding between people of different age groups
  • Lack of understanding between male and female employees

Ultimately, the best forums are regularly-scheduled gatherings in which people can surface and discuss problems, waste, and opportunities for improvement.

When well-crafted, these forums allow for discussion to make sure each idea or observation is fully understood; any problems with an idea should be raised freely and discussed with the goal of improving the idea. In the end, the most effective improvements and innovations are often quite different from both the initial ideas and even the counter proposals. They emerge from listening to and incorporating different perspectives about barriers and unintended consequences to raise concepts to new levels.

“Classified” Decisions

A past post focused on how we make decisions, and noted that while people often think they could make better decisions if they had more facts and data, in practice the presence of “too much information” often complicates decision-making.

In fact, behavioral economists report that “data driven” decisions tend to increase confidence in the decision far more than the quality of the decision.

While the above-mentioned post shares a five-step process for making critical or complex decisions, a simpler approach might be equally as good for certain decisions. Consequently, we might want to first consider the “type” of decision with which we’re faced. In other words, if we “classify” the decision first we can then proceed more strategically.

For example, in their book “A Leader’s Framework for Decision Making,” authors  David Snowden and Mary Boone explain that decisions can be categorized by context:

  • Known knowns: That is, we know what information we need in order to make a good decision and we can acquire that information. These decisions can be mapped out with simple decision-trees to reliably and quickly produce good outcomes. For example, a supplier selection process can be mapped out and reliably executed to produce good results.
  • Known unknowns: The problem is knowable, but not simple. We require an expert to gather and process the information to arrive at a reliably good decision. Decisions about how to design a website to maximize traffic or where to position a power plant relative to cooling sources are examples of “known unknowns.” Snowden and Boone refer to these as “complicated decisions — the domain of experts.”
  • Unknown unknowns: Complex decisions, in which we may not even know all the right questions, are increasing in frequency. Many strategic decisions organizations face today carry a great deal of uncertainty. Since best practices are by definition past practices, we have little to go on when faced with unknown unknowns. Thus the more detailed 5-step decision-making process outlined in the above-referenced post can help us achieve the best results.

 

 

 

 

Engagement & CI Correlation

In one of last year’s posts we noted that, while enterprise engagement has emerged as a key objective in today’s business world, a surprising number of organizations have no formalized engagement strategy.

At this year’s Engagement World Conference in Galveston, this fact was once again recognized, along with several other connections between enterprise engagement and Continuous Improvement (CI).

For one, an ad-hoc approach is almost never effective.

Whether attempting to engage a workforce or drive continuous improvement, a formalized plan with clearly-stated objectives and measures is required.

Similarly, without the buy-in and support of top management, engagement and improvement efforts alike are bound to fail… they will not become the “cultural way,” and instead will simply peter-out as priorities shift.

Another correlation is the importance of quantification. Just as a CI project requires us to quantify waste and the gains our effort will generate, a successful engagement initiative will include the calculation of an anticipated return on investment or ROI once objectives are achieved.

Finally, just as ISO 9001 helped bring-about the use of more standard procedures in CI, ISO 10018 will now encourage organizations to standardize their engagement efforts. 

As noted in our previous post, the emergence of these new standards brings into focus both process improvement and quality people management/engagement, both of which are necessary to achieve and sustain high levels of quality and performance.

 

 

ISO Quality Management Principles – Balancing Process & People

As you may know, in 2015 the International Organization for Standardization (ISO) issued an update to its widely followed 9001 standards. 

This update was not, at the time, officially part of the 9001 standards, but it included the addition of new Quality Management Principles outlining, according to an Engagement Strategies Media (ESM) article, the fundamental conditions necessary for an organization to sustain high levels of quality and performance.

The Quality Management Principles are:
  1. Customer focus
  2. Leadership
  3. Engagement of people
  4. Process approach
  5. Improvement
  6. Evidence-based decision-making
  7. Relationship management

As noted in the article, these principles focus on both “process” and “people/engagement.” As the article goes on to suggest, this balanced focus is clearly necessary to achieve and sustain high levels of quality and performance.

Read the full article…

Sales Process Productivity – 20 Questions?

Our previous post focused on applying the fundamentals of CI to the sales process, and included some proven best practices that can help boost field-day efficiency.

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 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.

The first step toward improvement — that is, moving from “where we are now to where we’d like to be if everything were right” — is to identify specific areas of waste, and a good way to start 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 more questions and steps associated with analyzing and improving an organization’s sales process, but these twenty questions are a good starting point.