Tag Archives: continuous improvement

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.

The Best opportunities?

continuous improvement

Continuing with our previous post’s theme of identifying waste (or the best opportunities for improvement), the process of doing so is one that is often misunderstood.

Case in Point
For example, we were invited to visit a large packaging company which had been “in Continuous Improvement (CI)” mode for many years. They wanted help because their efforts were not having any impact on their profitability.

Their sector of the industry suffers from substantial over-capacity, which has created major challenges for all the major players. We began with an assessment, during which we met a broad cross-section of people so we could gain an understanding of what they had been working on, how they had gone about it and what results they have achieved.

What we found was very interesting…

Conventional wisdom in this industry dictated that the only way to make money is to keep the presses running. Consequently, anything that slows down the presses needed to be “fixed.”

With that principle in mind, the company launched a number of projects aimed at improving uptime; project teams consisting of the crews and technical people were put in place and they developed good ways of measuring performance, getting to root causes and taking corrective action. Several of these projects delivered substantial improvements in up-time.

However, in this industry, cost of raw materials is by far the largest proportion of total cost. It therefore made sense to re-focus the improvement efforts on ways of improving yield, which was defined as the percentage of inputs that end up as saleable product made correctly the first time.

This new focus revealed all kinds of problems leading to yield loss, including:

  • Lack of training
  • Inconsistent procedures
  • Errors in getting correct customer requirements
  • Inconsistent internal information
  • Standard loss factors which may lead to complacency
  • Inconsistent raw materials coming from a sister plant

This is an example of a well-intentioned company with well-intentioned people who did not ask what impact their projects would have on the bottom line. If that question had been asked, a much different direction would likely have been taken.

As Bill Conway often said, at least 50% of Continuous Improvement involves working on the right thing.

what should we improve?

Spring boarding off of our previous two posts on decision making, people often fall into the pitfall of missing the biggest opportunities for improvement because they ‘decide’ on a solution before evaluating the best opportunities for improvement.

In other words, instead of trying to identify waste, they come up with lists of idea driven improvements.

This happens very simply when someone comes up with an idea for an improvement (usually some new technology or equipment that will do something faster or better), puts together a proposal, and then tries to implement it.

The problem with the idea-driven approach is that there is very little correlation between the list of ideas for improvement and the biggest problems or opportunities for improvement within the organization. As noted above, the idea-driven approach to improvement depends on someone identifying a solution at the outset.

The biggest opportunities are usually buried in the tough long-term problems for which solutions are not immediately obvious to anyone! If a solution doesn’t occur to someone, the problem doesn’t make the list. If it doesn’t make the list, it is never studied sufficiently to come up with a solution.

Organizations get further faster by identifying the waste first and choosing the best opportunities from all of the areas of waste you have identified. A portion of the waste is easily spotted and addressed if you take the time to collect the information. But much of the waste is hidden — built into budgets, accepted practices, current operating procedures, and shared assumptions. It is built into processes that are compensating for problems that have not yet been solved. This waste is difficult to see without expanding the vision of what is possible.

How to identify the waste?
Over the years, we have seen several approaches to identifying the waste put into practice. Four such approaches will be the subject of our next post.

You Want it When?

quick-wins

Continuing with the theme of driving and sustaining change, one proven way to get people on-board with new and better ways (i.e., improvement) of doing things is to achieve success – and to do so quickly!

Thus the concept of “quick wins” can be very important.

A “quick win” is exactly what it sounds like, that being a successful improvement made in a short amount of time. A few guidelines for defining and completing a “quick win” include:

  • Must be completed in 4 to 6 weeks at most (many are implemented much faster such as in a “kaizen blitz” where a small group focuses full time on an improvement for a day or two).
  • Relatively low cost of implementation (if a solution requires a significant capital it will likely take longer periods of time to gather approvals, funding, etc.).
  • Small or manageable team size. If an initiative requires a large team or cross-functional buy-in, chances are it will be a slow win if it succeeds at all. In fact, a quick win is almost always an improvement that can be completed with the people closest to the work and with the resources close at hand.

Sometimes a “quick win” is a high value improvement executed with speed. But even an improvement with small dollar impact can have a great ROI — because the time and expense invested is so low and the organization begins reaping the benefits so quickly.

In addition to making sustainable and potentially recurring gains in less time, there are numerous other benefits associated with a “quick win,” which include:

  • Builds momentum
  • Defuses cynics
  • Enlightens pessimist
  • Energizes people

A few best practices for successfully achieving “quick wins” are:

  • Don’t Let the perfect be the enemy of the good. If a problem appears to be too costly to tackle or if resources are not readily available, seek a more attainable “plan B” as opposed to tabling or abandoning the effort.
  • Eat the elephant one bite at a time. Many of us choose scopes that are way too big. A large scope greatly slows the work and reduces the likelihood of success, making the project into a lumbering giant.
  • Rely on the people close to the work, who often have the best ideas about the problem and possible solutions.
  • Keep it simple.
  • Have fun! A quick win is both satisfying and fun! Make sure you celebrate and spread the news!