Tag Archives: continuous improvement

What’s the Problem?

Problem

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

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.

Four Practices That Lead to Better Results
A good problem statement is not rocket-science, but simply requires some solid pre-work, thoughtful consideration & discussion, and the restraint to avoid speculating before the analysis. If you follow the four basic guidelines for problem definition, you will greatly improve the chances the right problem will get solved for good.

  1. Write It Down. If the problem is not written, shared, and discussed, all participants will feel comfortable that everyone is on the same page about the problem they are trying to solve. Such will not be the case, and the blissful ignorance about their different expectations will eventually give way to a combination of bewilderment, conflict, frustration, disappointment, and a great deal of inefficiency.

    Organizations can avoid the problem-solving frustration and rework by surfacing right up front any different views of the problem they are trying to solve. The best way to surface and discuss any differences is to write it down and discuss it with all participants, to ensure it is well understood and agreed to. In addition to getting everyone on the same page, only a written problem-statement can be tested against the next three qualities necessary to effective problem-solving teams.
  2. Include a Quantification of the Waste the Problem is Causing. Yes, this means you have done some pre-work, because no problem statement is as effective as it should be if it does not indicate why we care.

    Quantifying the waste makes certain that the organization does not invest scarce resources on something that will not have a significant impact. Every organization has more opportunities for improvement than capacity to execute on the improvements.

    Quantifying the waste also helps elicit the urgency and support that the project merits. A problem statement that is “…costing the organization $18,000 each week in excess charges” will receive more urgency than a problem “…costing the organization $800 a week.” And problems for which no discernable and measurable impact can be found probably should not receive much urgency at all. Quantifying the waste in the problem statement helps an organization make sure that they are working on first things first.

    The statement of impact best fits at the end of the problem statement but identifying and quantifying the waste should come at the start of the problem definition process. If we cannot reasonably measure the impact a problem is having on an organization, we cannot reasonably prioritize the effort.
  3. Be specific about the metric you are using to size the problem. Malcom Forbes once observed that “It’s so much easier to suggest solutions when you don’t know too much about the problem.” The rub is that you will have a hard time determining if your solutions are effective.

    To avoid this pitfall, your problem statement should incorporate the measurement you expect to move the needle on, the current baseline for that metric, and both the time and the place that your baseline measurement was taken.
    • The metric: If order-to-delivery timeframe is our problem, the problem statement should be a factual statement of order-to-delivery times. Maybe order-to-delivery times have deteriorated or maybe they have always led to lost orders. Either way, a recent measurement of order-to-delivery times must be part of the problem statement if this is the problem you intend to solve.

      For example: “order-to-delivery times have grown to 6 weeks and was cited as the reason for 25 lost orders last month.” A description such as “too long” is too general, but teams may be tempted to substitute this judgment instead of a metric because a recent measurement is hard to get.

      Bear in mind that if the problem is too hard to measure up front, chances are it will be too hard to measure later on when the team needs to evaluate the efficacy of the solution. Even if the team can gather measurements later, they will have no baseline with which to compare the new results.
    • Timeframe: When have you observed the problem? Is your metric from last week, last month, last quarter, or last year?
    • Scope: Where are you seeing the problem? Does the metric describe what is happening at one plant or all plants? Is it one product, a product family, or all products? By making the problem statement factual and specific about what observable phenomenon we saw when and where, we create for the team a clear and effective baseline against which to measure improvements.
  4. Omit Judgments and Opinions about Underlying Causes. Maslow observes that “If the only tool you have is a hammer, you tend to see every problem as a nail.” We all have biases, and when we make assumptions about the underlying cause, we bias the process to overlook other possible causes.

    In theory, this could be a time-saver — if you hit upon the correct root cause. However, in our experience this rarely happens. Making assumptions about the causes almost always makes a problem more difficult to solve instead of easier to solve. This is because if one or more important underlying causes are overlooked by the bias introduced in the problem-statement, the problem will not be solved before the project goes through quite a lot of rework.

    Most people have some sort of bias or hunch, slight or strong, about possible underlying causes of most problems and they will consider these first.

    For example, some people easily incline toward thinking that the technology is not what it could or should be and theorize that this is the cause of most of the problems they encounter. Others are quick to suspect that the incentives are misaligned. And still others may speculate first that processes are not sufficiently defined and adhered to. These hunches are developed based on experience and people with diverse experience and biases tend to serve a project well.

    However, no matter how confident in the theory about the root cause, inclusion of an assumption about the cause or the solution in the problem statement is more likely to impede results than accelerate them. A hunch makes an excellent servant (in the problem analysis phase of the project) but a poor master. Leave any comment about possible underlying causes out of the problem statement.

    If you follow these four guidelines, your project will have a much better chance of arriving at, implementing, and validating an effective solution that produces lasting results.

Four Agility “Enablers”

agility

Our previous post shared perspective on how to develop organizational agility, and noted that to do so leaders must build in their organizations four enablers:

  1. Create fast & effective information flows. We’d all like to be Wayne Gretzky and “just skate to where the puck is going to be.” What a brilliant idea! Of course, if we knew where the puck was going to be, everyone would be there. We don’t know. That’s why we need to build fast and effective information flows so that when indicators emerge about developing changes in the customers or markets, we spot them quickly. Here are some things we can do to accelerate critical information flows.
    • At each customer touchpoint, we need to solicit, capture, and quickly flow back feedback to be understood, prioritized and used to improve the work and better align the products and services with customer values and unmet needs.
    • Engage in rapid prototyping with customers. Develop small experiments and try them out with some real customers to accelerate learning about what they really think, want, and value.
    • Find out what data you have available, and develop ways to use it to understand how your customers are using your products and services. Many businesses have access to an astonishing amount of information, but do not yet know how to use it. Start by identifying the questions you and your team would really like to answer — and then explore what the data can tell you. When millions of answers are available, the advantage goes to whomever has the best questions.
    • Accelerate internal communication
  2. Strong leadership and teamwork to turn insight into action. Here are some things a leader can do to create the strong teamwork needed to operate with agility:
    • Foster trust on the team. Knowledge is becoming obsolete at a faster rate than at any time in history, so an agile team must be absolutely fearless about admitting their gaps in knowledge and questioning what they have long believed. This challenging, learning and growing does not happen when team members cannot let their guards down.
    • Establish a cadence of frequent and effective team communications: both formal and informal. These ensure the team is on the same page, and even able to write a really good page together.
    • Time is short and agile management teams leverage the tools available to help them get further faster. Some examples include affinity diagramming, interrelationship diagrams, cause & effect diagrams, FMEA, prioritization matrices, and quality tables.
    • Because innovations and process improvements have a shorter shelf life than ever, they must be executed more quickly. Make and stick to prioritization decisions and use a Kaizen approach or Design Sprints to accelerate results.
  3. Streamlined, simplified processes. If the processes that comprise your value stream are held together by patches, expediting, and human vigilance, or are full of inspection, rework, delays, over-specification, redundancies, excess inventory, complexity, etc. you will find it very difficult to execute changes you need. An agile organization must relentlessly streamline, simplify, and error-proof the work.
  4. Flexible Investments. Acceleration of change makes acquired assets obsolete faster, so both the investment and hiring strategy should consider the need for flexibility.
    • When making investments, consider what choices we could make today that will ensure the asset retains value if the expected use disappears.
    • How quickly and easily can this asset scale up, scale down, or change uses?
    • What skills should we hire for?
    • When should we use contract resources?

The Best Time Management Plans

time_management

A past post focused on five steps for improving our use of time. In that post it was suggested that using “time” as a measure to find and focus opportunities for improvement has three big advantages:

  • Time drives important business results
  • Time is universally applicable
  • It is very simple to do

Should you decide to launch a time management improvement plan in your organization, it will be important to prepare people by ensuring that the following points are thoroughly understood:

  • The waste in the system is not the fault of the people doing the work; it is there because of the way the process is designed or because of the way that the supplying processes are designed.
  • The people closest to the work can help you find and fix what is wrong with the way the processes are designed.
  • Recognizing non-value-adding work does not mean that you can simply make it go away. It only means it is a candidate for elimination or reduction. An effective solution may not yet be at hand. That’s OK. Recognizing the waste is the first step to searching for a better way.
  • Value-added work is not as plentiful as people might think – on average, only 20% of all work is truly value-added. Keep in mind, every process will contain “necessary” work that is not value-added. The goal is to optimize time spent on value-added work, reduce time spent on other work, and eliminate waste.
  • Someone who has never done this before might find it difficult to identify non-value-added work during their analysis because it is hard to recognize the waste in standard operating procedures. “If we have always had to do something, it usually seems that it surely must add value,” they will likely think. In addition, rework typically compensates for a problem that is so familiar that everyone takes it for granted. Recognize and improve as much as you can, then circle back and look again.
  • With practice and coaching (and amnesty) people can identify more opportunity.
  • Everyone must have amnesty. If people are afraid for their jobs, either because they might be blamed for the waste or be no longer needed if the work is streamlined, there is every disincentive to find and eliminate waste.
  • Successes in reducing cycle time or saving time overall should be measured and celebrated!

The less we know… the more we think we’re right!

questions

Just as continuous improvement teams face hidden perils associated with confirmation bias (see related post), there is another frequently unrecognized pitfall that plagues many-a-project, and that merits our constant attention.

“Theory blindness” is a remarkably common condition in which our theory about the way the world works blinds us to the way the world really works.

When afflicted, we readily accept evidence (however meager or flawed) that supports our assumption or theory, and we explain away or simply fail to notice or correctly interpret evidence that contradicts it.

Daniel Kahneman is an Israeli-American psychologist and economist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences.

In his book, Thinking, Fast and Slow, he suggests the human brain is wired to apply a number of biases, theory-blindness being one of them. The impact of theory blindness is that we are inordinately influenced by what we see, and greatly undervalue information we do not have. As a result, paradoxically, the less we know, the more sure we are of our conclusions.
It’s just how we are wired.

The Less We Know…
When engaged in improvement projects it is important to maintain an open mind and a heightened awareness of the impact of theory blindness, lest we fall prey to the pitfall and “assume” things that just aren’t so.

But beware!

Confidence, it turns out, depends much more on coherence (whether all the information at hand points to the same conclusion) than completeness. Thus, while the less we know the less likely we are to be right, the more likely we are to think we are right!

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.

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.

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.

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.

The hardest part of continuous improvement

While almost every business puts some amount of effort into Continuous Improvement (CI), making ongoing and meaningful improvements to a business or to work processes is not easy.

discontinuous_improvement

We have also noticed that regardless of the specific methods used for making improvements, almost all of these initiatives aimed at gaining greater efficiency, quality, speed, and/or customer delight have two important things in common:

  1. They generally produce some improvements, and
  2. Then they peter out

So, as it turns out, these well-intended CI plans are, in fact, “discontinuous,” and the hardest part of Continuous Improvement is making it “continuous!”

Based on our research and experience, there are some common reasons why CI efforts tend toward becoming discontinuous.

The most common pitfall that leads to ineffective CI efforts is unclear or delegated leadership. Continuous improvement must be fully embraced by every line manager. Delegating the effort to a Quality Manager, HR leader, strategic planning manager, or other staff person, is very likely to lead the effort to fizzle.

John Kotter, a recognized pioneer in the field of leading change, uses the term ‘guiding coalition’ to describe a powerful and strategic group that works together to bring about the desired changes within an organization. The team must be committed to the achievement of a continuously improving culture. It should include a majority of the most powerful people in the organization and may also include some people who may not be a part of senior management.

The next culprit is insufficient communication. Leadership must continue to communicate at every possible opportunity and every possible way why continuous improvement must become part of the organization’s DNA.

The vision must be clear and simple, and throughout the organization, people in leadership positions should constantly communicate the importance of continuous improvement and the progress to date. Successes must be widely shared, learnings must be plowed back into the organization to accelerate results, and new opportunities to become better at improving should be identified and clearly communicated. New employees must hear the why, the how, the
history, and the vision of what’s next.

Finally, neglecting alignment is a sure way to undermine a comprehensive CI effort. Every one of us has our own personal goals and objectives in addition to the goals and objectives of our organization as a whole and our job in particular. When these get out of alignment, progress will stop.

For example, a natural and intended outcome of most process improvement is the ability to do more with less — often with less people-time. Instantly, we have a conflict between the organization’s goals for cost saving and people’s need for income retention. And processes cannot be effectively improved or improvements effectively sustained without the support of the people doing the work. Not coincidentally, the company with the longest history of a continuously improving culture, Toyota Motors, promises employees a very high level of job security.

The leadership must think several moves ahead to both maintain alignment and to capture financial gains from productivity improvements. The choice of where to focus improvement efforts is probably the most critical.

Among the best areas on which to focus are:

  • Aim improvement methods to address the constraint to sales.
  • Improve productivity in the parts of the organization with too much work, in order to eliminate the need to hire.
  • Improve productivity in an area where people have the skills that, if freed up, could be transferred to departments with too much work or that have had attrition.
  • Improve non-people costs, such as energy, scrap, paper waste (‘if you want to find the waste, find the paper’), and work with suppliers to identify ways to reduce costs.