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:
- What they work to improve
- 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:
- Identify and quantify the waste you want to eliminate
- Clearly define what you want to do (including problem statement, objective, measurements, scope, team, and plan)
- Study and measure the current situation
- Analyze the root causes and evaluate and plan solutions
- Study the results and take appropriate action until objectives are met
- Stabilize and standardize the improvement so that it stays in place and is used throughout
- 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.
When it comes to Continuous Process Improvement (CPI), action is what it’s all about — thus the importance of “Quick Wins,” which require us to promptly move into action to get things done, measured, and stabilized.
A “Quick Win” must be completed in 4 to 6 weeks at most, but 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, or half-time for a week.
Because of the speed imperative, if a solution requires a significant capital investment, it is probably not going to be a “Quick Win.” If it requires a large team or cross-functional buy-in, chances are it will be a slow win if it succeeds at all. In fact, many “Quick Wins” do not require a formal team, but rather a natural work team can identify the problem and implement a quick solution. For a solution to become a “Quick Win” it 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 a number of related or consequential benefits associated with “Quick Wins” as well. For example, according to John Kotter, author of Leading Change and The Heart of Change, “Quick Wins” are important because they:
- build momentum
- defuse cynics
- enlighten pessimist
- energize 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:
- Customer focus
- Engagement of people
- Process approach
- Evidence-based decision-making
- 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…
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:
- What is our current market share?
- What are our customers’ requirements?
- How well are we meeting these requirements?
- What would it take to truly delight our customers?
- How long does the sales process take from lead to sale?
- What is our lead conversion ratio?
- What were the top 3 reasons for lost sales over the past quarter?
- How many calls do our sales people make, on average, each day?
- How much time do we spend talking with uninterested or unqualified leads?
- How do we continually improve our sales team’s skills and habits?
- What percentage of prospects contact us first?
- How does this percentage (#11) compare with industry data?
- Does the sales process take less time to complete for inbound leads? If so, how much less?
- What is our response time to customer or prospect inquiries?
- How many customer complaints do we receive?
- How much time do our sales people spend interceding or responding to complaints?
- What is done with the information associated with customer complaints?
- How do customer complaints or how does customer dissatisfaction impact our ability to make sales?
- How often are discounts extended, and what is the average discount?
- 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.
Completing our series of posts about focusing on waste, people often ask how they might best nurture the ability to recognize the waste that is undoubtedly embedded in business processes.
Here are 3 proven methods:
- Constant questioning. Ask yourself and everyone else if you would need this if everything were right, and right the first time.
- It sometimes helps to bring in outsiders to help you look for waste, because it is easiest to think “outside the box” if you are “outside the box.” Customers and suppliers or people from adjacent processes may challenge assumptions we don’t even realize we are making.
- Benchmarking internally, within the industry, and in different
industries can also raise questions and help you recognize waste
that you have overlooked before.
If you can take a path of searching for WASTE rather than just improvements, regardless of whether you already have a solution, you can avoid the “road of diminishing returns,” and instead delve into the underlying causes to make truly important improvements.
Continuing with the theme of focusing on waste rather than “just on improvement,” the secret to making breakthrough gains or “optimization” is in surfacing and addressing the hidden assumptions.
Optimization is the process of evaluating the trade-offs between two things that seem to be in conflict.
For example, as you increase inspection, you increase costs but you decrease the defects that get through. If you shorten your production runs, you can reduce your inventory but your production will decrease because change-over time required to change machines from producing A to producing B means more downtime.
With optimization, you try to find the exact point that minimizes the total cost.
But every optimization problem has some “givens.”
Taiichi Ohno, creator of the Toyota Production System, and his followers achieved breakthroughs by shifting their focus from finding the best trade-off to working on these “givens.”
When we talk about root cause analysis, we mean to focus on those “givens” or “underlying assumptions” that cause you to try to find the path of least waste.
Once you find and address the underlying cause, assumption, or given, you can find and move to an optimum that is at a totally
new level – often referenced as the “Imagineered level,” or the way things could or should be if everything was right!
In our previous post we referenced the cultural change that takes place within highly-successful organizations, so that continuous improvement becomes the new way of working rather than “just a program.”
Not surprisingly, some of the highest achieving organizations with which we’ve worked are those that have successfully planned and developed high performance cultures.
Within this type of culture, people at all levels are encouraged to continually look for better ways of doing their jobs. They are continually educated about, and coached to use, the tools of improvement; and to understand the link between individual or team performance and organizational goals.
Leaders within such a culture make available the necessary resources for helping people at all levels to understand the core competencies, values and beliefs which drive the culture. These leaders also devote the necessary time and attention toward encouraging an environment that supports high quality and productivity, and toward effective performance management.
This perspective was nicely summarized in a recent article in which Tony Burns, author and CEO, noted his concerns about an organization in which only designated “experts” took on the responsibility for making improvements.
Burns wrote, “Dr Deming recognized this problem when he advocated breaking down the barriers. We need to get all employees working together on quality, rather than building divisiveness. Quality is everyone’s responsibility, not just a few… Everyone should be trained in quality.”
Continuing our discussion of how to accelerate a continuous improvement effort — or how to “get further faster” — the brainstorming approach is perhaps the quickest and easiest way to identify an extensive list of the waste in an organization.
Simply collect a group of people knowledgeable about the work and solicit all the ideas about what waste is where.
It is also a great method for getting people involved in looking for and identifying the waste. Because the people who know most about the work identify the waste, these people are often very committed to working on improvement projects to get rid of that waste.
On the initial attempt to identify waste, people generally leave untouched the waste that is deeply embedded in operating practices and instead surface more superficial opportunities.
However, some of these will bear substantial fruit and an organization’s skill at surfacing waste will generally grow as it develops more experience with studying and eliminating waste. Brainstorming areas of waste is an excellent way to start an organization on a path of systematic continuous improvement.