Tag Archives: continuous improvement

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!

Two Steps Forward… And Then What?

John Kotter Quote

“Two steps forward and one step back” is a phrase with which you might be familiar. It implies the inevitable fact that when we make improvements things are not likely to simply “go as planned.” Instead, unexpected snags, complexities, or opportunities for making even more improvements are likely to arise.

However there is another risk we must avoid – that being the devastating “backslide” to the way things were before the improvement was made.

Sustaining improvements is a fundamental aspect of Continuous Improvement. When the gain has been celebrated and attention shifted elsewhere, how do we keep the improvement from sliding back to the old way? To maintain the gains we have to stabilize the new process and new behaviors or the process will slip back out of control and people will slip back into old habits. How do we extend the improvement to other areas? How do we adapt the improvement efforts so they survive over the long term — getting better and better?

These “sustainability” questions are at the heart of ‘Step 7’ of Conway’s eight-step improvement process, and also align with the 8th step in John Kotter’s model for leading change.

Several forces can undermine sustainability, and prudent leaders must be prepared to both recognize and address them quickly. Among the most damaging are:

  • The issues and pressures that triggered the change are no longer visible or apparent to people.
  • Attention moves on to something else before the improvement has been effectively stabilized.
  • Sometimes those who initiated the change or participated in the analysis and improvement leave the organization and the on-going success of the improvement may be dependent on their understanding and adherence to the improved process.
  • Sometimes replacements inadvertently introduce variability.
  • Organizations can lose their focus. This can sometimes jeopardize the entire CI effort. Loss of focus is more profound ‘when an organization engages in strategic maneuvers.’ People’s roles are redefined, organizations, equipment, tools, teams are all in flux, creating mounds of waste that needs to be studied and removed — just when the teamwork needed to do it is at an all time low due to job anxieties.

In addition to avoiding the negative outcome of “backsliding” there are two concepts that leaders can (and should!) promote: “Stickability” and “Spreadbiltity,” which will be the subjects of our next post

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4 Ways to Increase Value-Added Work

value added work

Our previous post noted that approximately half of the work done in well-run organizations is value-added, which is defined as “the work our external customers would be willing to pay for if they know what we were doing.” Regrettably, the percentage plummets to only 20% in many businesses!

Yet in reality, a great deal of “non-value-added” work is necessary and important!

Consider that many people and functions play a vital role in helping the internal customer provide value for the external customer. These are the folks ‘on the banks’ of the value stream, some of them providing key enablers such as technology, safety, or information to those creating the value for external customers.

The key is to find the right balance. In most cases, the ultimate conclusion is that it’s to our advantage if we can increase the percentage of value-added work by identifying and eliminating the “waste” that is non-value-added.

Here are four ideas to increase the portion of resources that are directed at value adding activities:

1 — Work on The Bottlenecks
When we work on many things that have a small effect, we will have a small impact. The way to increase value most substantially is to work on the bottleneck, or constraint. All improvement effort that is off the critical path will have a lower impact on increasing the value add. If the bottleneck can be widened even just a little, it provides a pure increase in value.

2 — Increase Understanding of And Alignment With What Customers Truly Value
One of the biggest wastes is when the products or services we offer do not align perfectly with the customers’ needs and values. Errors are possible in two directions.

  1. Bundling a feature into the product or service that the customers do not really need or want. Does the technology have features that are seldom used? Does the product have any bells and whistles no one really cares about? What features have been introduced with inadequate understanding about how the products or services will actually be used? A systematic and thorough understanding of the customers is the only effective way of ensuring we are not merely adding cost instead of value when we add features to our offering.
  2. We also can err by overlooking ways we could leverage our capabilities to solve a problem that the customers may not even have articulated to themselves. We all, to a certain extent, take the world somewhat as we find it, assuming boundaries of what is possible simply by understanding what has always been. So listening to what customers would like to see is unlikely to surface needs. Innovative value creators will try to understand what the customers need before they even know they need it. Steve Jobs did this with the IPod: surfacing an unarticulated need that the resources at his disposal could brilliantly address.

3 — Get at The Root Causes
Replace the constant working on problems and symptoms with lasting solutions by drilling down to root causes. For example, the sales force of one company needed to better understand the value of additional services they could provide to customers. Rather than addressing the issue/opportunity in each proposal, they developed a calculator to make it quick and easy to help the customers (and themselves!) see the value provided by the additional services.

4 — Eliminate the Non-Value Adding Administrative Work
A great deal of time in most organizations is spent on emails, meetings, and reports that do not produce additional value for the customers or the organization. Here are a few approaches to reducing this waste:

  • Reduce clutter in the inboxes
  • Introduce and enforce meeting management protocols and best practices
  • Streamline reports


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.

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…

Are Questions the Answer to Making Breakthrough Solutions?

questions

An article published in 2020 as part of the Drucker Forum’s “shape the debate” series raised some interesting perspectives about leadership and making breakthrough improvements.

The simple premise shared by consultant and author John Hagel is that “questions” are the answer.

“The most effective leaders of the future will be those who have the most powerful and inspiring questions,” Hagel said. “…and who are willing to acknowledge they don’t have the answers, and that they need and want help in finding the answers. It’s in sharp contrast to the conventional view of leaders as the ones who have the answers to all the questions.”

This view aligns nicely with ours, as we’ve found that posing questions of and involving the people closest to the work is the shortest path to the largest gains.

After all, where do new ideas that lead to lasting solutions come from?

They come from people… that is, if those people are asked.

Here are three different approaches to identifying new ideas and solutions along with some of the questions we might ask the right people while studying the related work:

  1. Classic brainstorming. When studying the current situation and causes does not lead directly to identifying lasting solutions, you need to elicit a number of different ideas from your team by asking questions that stimulate creativity. How can we increase our productivity by 10 percent? What are the most common obstacles causing the process to stall? What is the most difficult aspect…”

    Before you launch into your brainstorming, make sure you have convened a diverse group of people with some knowledge or interest in the problem at hand. Keep in mind that it is always easier for people to “think outside the box” when they come from outside the box.

    The classic rules for brainstorming are:
    • No criticism of ideas—no idea is too crazy
    • Go for quantity of ideas and worry about quality later
    • Brainstorm individually first and then read the ideas out round robin style it is okay to pass
    • Build on positive aspects of other ideas to create new ideas
    • Capture the ideas on flip charts or on large Post-Its that everyone can see and read
  2. Tools such as the Six Thinking Hats and Heuristic Discovery, which systematically change one’s perspective to open-up new possibilities for solving problems.
    • First, state the problem in terms of an opportunity or goal. For example, a keyboard refurbishing operation needed to increase throughput, so they would ask: “How to we double our daily throughput of refurbished keyboards?”
    • Second, create a picture or map of the problem as part of the system, labeling each of the significant components.
    • Third, describe the impact of each component as it impacts the goal. Use a question format. For example:
      • What tools might we use to increase throughput?
      • How can we make sure that people’s skills are sufficient to double the throughput?
      • How can we make sure that people’s speed is sufficient to double the throughput?
      • How can we ensure the workspace layout enhances throughput?
    • Fourth, Prioritize these and generate ideas for solutions to the component problems that are most likely to impact
  3. Imagineering perfection, which helps you surface possibilities to leap past incremental improvements…
    • “What would this process look like if everything were right?”
    • What would it mean if the input we need always arrives on time and exactly the way we need and want it—no delays, no expediting, no rework?
    • What if every step of the work process were to go exactly as it should with no waste, no rework?
    • What if our work produced exactly what the customer needs, on time, exactly as they require it all the time? What would this look like?
    • What exactly does the customer need for perfection?

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?