Tag Archives: working on the right things

Why An 8-Step Improvement Plan?

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

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

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

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

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

These steps are:

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

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

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

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

4DX & Engagement

Not long ago during a meeting with our Partners in Improvement we discussed The Four Disciplines of Execution, an insightful book written by Sean Covey, Chris McChesney, and Jim Huling.

As you may know, the ‘Four Disciplines’ or 4DX is a management system of making consistent and systematic progress on the vital few, a term derived from the Pareto Principle, which indicates that many defects come from relatively few causes.

Our conversation centered on the best ways for an organization to put the disciplines into practical use to improve business results.

An organization can have an excellent strategy, but fail to execute
effectively on that strategy. Almost always the reason is that everyone is BUSY. Organizations experience a conflict between all of the demands to keep the business running on a day to day basis (the ‘whirlwind’) and the time required to move the organization forward to accomplish something great, to make the organization
better and better… to achieve goals they’ve never achieved before!

The book identifies four key elements of execution that can help any organization achieve steady progress on the strategic objectives:

  1.  Identify and focus on a Wildly Important Goal (a WIG)
  2. Monitor and act on LEAD measures
  3. Keep a compelling SCOREBOARD updated by the people doing the work
  4. Develop a rhythm of ACCOUNTABILITY

Like many things in life, these elements are simple but not necessarily easy… but they do enable an organization to apply Deming’s Plan—Do—Study—Act cycle in the face of the whirlwind. They can also serve as catalysts for workforce engagement, as people become increasingly engaged when their goals are clear, and when their progress and productivity are measured and recognized.

We will take a closer look at each of the disciplines in upcoming posts.

CONQ?

In a recent CI discussion on LinkedIn, Rob Kooijmans, a quality manager in the Netherlands, referenced the importance of quantifying waste and opportunities for improvement.

“The best way to know the strengths and weaknesses of your organization is to get good insight in your cost of non-quality (CONQ),” he said.

As noted in several previous posts, we certainly agree.

Bill Conway always said, “At least 50% of improvement is working on the right things.”

Thus a “waste and opportunity” search is key. We must identify waste and then act upon the opportunities for improvement that will potentially yield the greatest results – i.e., the “right things.” Once this quantification step has been completed, it is much easier to gain the buy-in of all stakeholders – leadership and colleagues alike –  because it is easier for everyone to see what can be gained (or lost!).

“The biggest reason why CONQ is so important is that it is expressed in money – and money is the universal language all managers and company owners understand. If you need to convince management to invest in your team and to invest in quality in general , you need to be able to substantiate the benefits,” Kooijmans said.

We have found that when organizations “identify and quantify the waste,” people are able to more readily recognize the best opportunities for improvement, allocate resources, and then set effective priorities and time-frames.

 

The Way Things Could or Should Be

Our previous post discussed various ways of identifying waste, which can be defined as the difference between the way things are and the way things could or should be.

Imagineering” is an ideal process for making this type of determination, and for goal-setting, developing the best project plans, and for putting improvement ideas into practice.

As you may know, Imagineering was popularized in the 1940s by Alcoa to describe its blending of imagination and engineering. It was also adopted by Walt Disney a decade later, and is often referenced as a means of achieving “blue sky speculation,” a process where people generate ideas with no limitations…, where they try to achieve what “could or should be.”

Over the years we have consistently found that well-executed Imagineering workshops help people unleash their organization’s true potential and achieve breakthrough improvements.  Much more than traditional or simple brainstorming, the process starts with a strategic approach for imagining perfection, and ends with engineering this ideal state back down to earth.

You might consider the use of Imagineering as a means of generating innovative ideas and applying the principles to set goals and achieve breakthrough improvements.

Challenge to CI: Focus on Improvement vs. Waste

When initially beginning to practice Continuous Improvement (CI), people are typically flooded with ideas and opportunities to improve.  Training in CI helps some team members to see opportunities they hadn’t noticed before, and others bring forth ideas that had occurred to them over time and that they had been keeping “on the shelf.”

But eventually, even the most richly-laden shelves will go bare
and all the “low-hanging fruit” will be harvested.

This scenario, which is a big challenge to Continuous Improvement, plays out when people embark on a search for solutions or ideas for improvement rather than a search for WASTE. To sustain an improvement effort, and to make the most significant gains, it is critically-important to focus on the waste, as opposed to simply on ideas for ‘improvement’.

What’s the difference?

Most of the big waste is hidden in plain sight — long-standing business practices that compensate for a problem that has
not yet been solved. The root causes of the problem have not been addressed, and compensating steps have been built in to avoid bad outcomes such as poor quality or lost productivity.

For example, a financial services company sends every transaction to “QC” for inspection and corrections; inventories are built-up just in case, and long production runs are scheduled to avoid long set-up times. Each of these is compensating for and masking an underlying problem that has not been addressed.

In fact, whenever we find ourselves trying to find the best
trade-off between two evils, we are most-likely masking
underlying root causes which, if addressed, would lead to
breakthrough business improvements. Nearly all the breakthroughs
of the past forty years have been the result of seeing waste and addressing the underlying causes where the competitors simply saw standard operating procedures.

Work Matters Day-to-Day

Continuing with the theme of why “work matters,” the goal is to implement improvement initiatives in work at all levels every day.

Continuous Improvement in daily work helps organizations make improvement a way of life — a workplace culture rather than just a program or one-time event.

A few additional considerations for achieving this mind-set include:

  • Clear accountability for each person in each department or group
  • There must be agreed upon ways to measure performance
  • There must be consequences (good and bad) to reinforce accountability
  • Established and understood performance measures and targets
  • Confirm the purpose of each person’ work and each department’s work. As noted in our previous post, people perform best and maintain higher-levels of engagement when they know that their work matters. It is important that everyone understands the purpose
  • There must be clear priorities and goals, which creates alignment
  • People must be trained so that they have the skills to analyze and improve the work; leaders should be involved in these educational programs — in both a participatory and supportive role

Steps for Quantifying Waste

Noting that at least 50% of improvement is working on the right things, our previous post shared insights on “why” identifying and quantifying waste within our organizations is so important.

Now, the question is “how” to do it…

The first step is to identify areas of waste, many of which may have previously gone unnoticed. This step often requires the use of historical financial and operational data, and also that we think “outside of the box” when examining our work processes. Involving people at all levels, and people from cross-functional areas, can help the team look at each problem or bottleneck without bias.

Once problems are uncovered, review how each affects the four forms of waste:

  • Lost sales or opportunities (typically the largest waste)
  • Material costs
  • Capital costs
  • Lost time

If the problem causes delays, think through and estimate the form of waste that the delay results in.   Does it increase capital such as inventory or receivables?  Does it delay sales and revenue?  Does it cost you customers and future business? Does it require additional people time?

Keep in mind that many problems will affect more than one of the four forms of waste.

For example, excess inventory not only ties up capital, but may increase the number of people who need to manage it, the warehouse costs to store it, and the probability of scrapping All these factors can be reasonably estimated with some historical data and getting close enough to the work.

Next we must quantify the impact of each problem, recognizing that some assumptions and estimates will probably have to be made.  Try to document a range that you are pretty confident about.

Finally we can “do the math” to prioritize the improvement projects we’ll undertake first. Key criteria will be the overall potential savings (i.e., the problems creating the most waste), and the estimated time-frame for implementation.

These two determining factors are important, and sometimes it is better to opt for a smaller “return” if the project will involve fewer complexities and a significantly shorter time-frame. We’ll take a closer look at this perspective in our next post.

Are You Working on the Right Things?

At least 50% of improvement is working on the right things. Organizations that are able to engage people in making good, fact-based decisions about what to work on and then execute with laser focus reap huge gains.

An opportunity search is key.

That means that we must identify and act upon the opportunities for improvement that will potentially yield the greatest results. In other words, we must identify and then quantify the waste.

Quantifying the waste helps in three specific ways:

  1. It helps you distinguish between the big‐hitters and the nice‐to‐have improvements so you focus on the most important opportunities first.
  2. It makes the organization aware of the cost of a delay in tackling a ‘big‐hitter’.  If a problem is wasting $5 million a year, every week of delay is wasting nearly $100,000, so the organization wants to make sure nothing slows this improvement effort.
  3. Quantifying the waste enables you to have more meaningful discussions with other parts of the organization whose support you need to change the processes that cause the waste.

Now that we’ve identified “why” quantifying the waste and working on the right things is so important, our next post will focus on some of the best ways to go about doing so.

Predictive Analysis & Capacity

Our previous post shared a method for predicting the likelihood of success before launching an improvement project. Based on your assessment of the situation, this method will predict your overall likelihood of success and produce some suggested steps you could take at the outset to increase your likelihood of success.

If you’re wondering why this tool is so valuable, it’s possible to answer the question with a single word: capacity!

Simply stated, every organization has more processes with opportunity to improve than they have organizational capacity and management attention units to execute.

Careful consideration of each of the eleven factors within the “success predictor” tool will help you in three critical areas:

  1. Focus your capacity on those improvements with the best chance of long term success
  2. Move your organization further faster down that never-ending road of Continuous Improvement
  3. Reduce the risk of lost opportunities – most often the biggest waste within every organization

Prioritizing & Predicting Success

Continuing with the theme of working on the right things, you might find the tool outlined below of use, which was developed by our team of improvement coaches.

The “success predictor” distills a century or two of collective experience with what characteristics are most necessary for an improvement project’s success – in other words, it can help to  prioritize options and increase the likelihood of working on the right things.

The following eleven factors can predict with a fair degree of accuracy how likely a project is to succeed:

  1. The potential benefit of the project to the organization is clear, substantial and quantifiable. (10 = very clear, quantifiable, substantial)
  2. The problem to be solved is clearly defined and quantifiable, and the project scope is focused and well-defined. (10 = very clear, focused, and well-defined)
  3. The project has top management’s commitment and support (resources, sponsorship and follow-up); no influential person is actively opposed to the project. (10 = very strong support)
  4. The sponsor and team leader are clear about each one’s role and partner effectively to ensure the success of the project. (10 = very clear)
  5. The team leader and key resources are devoting enough of their time to the project to complete it very quickly. (10= full time)
  6. The team is staffed and led by the right people for the job, and they are determined and capable to quickly achieve results. (10 = very determined and capable)
  7. Meaningful and accurate facts and data about the process are available. (10 = very available)
  8. The process to be improved is repeated frequently enough to efficiently study variation in the current process and to and test and measure improvements. Hourly? Monthly? Annually? (10 = very frequently).
  9. The processes to be improved are within the team’s span of control. (10 = under control).
  10. The expected timeframe for completion of the project or for achieving concrete and measurable milestones. (10 = 4-8 weeks to completion or measurable milestone)
  11. The processes are stable, that is not undergoing very recent or imminent major change (10 = very stable).