Qualtec's Business Performance Improvement Blog

The dramatic changes of the Great Recession have left many starting over.  Continuous Improvement programs are being rebuilt, reconstituted and revitalized.  The people, knowledge and leadership are critical elements but an important lesson we learned over the last 15 years of helping our clients is that the success of a Continuous Improvement program is highly dependent on its infrastructure.   So whether you are staring over or just starting, very early in the deployment, you must implement the following:

1. Launch Planning; Establish the schedules and activity tracking/reporting techniques
2. Human Resource Guidelines; Establish competency models and participant selection, position and role descriptions, compensation, reporting relationships, career planning.
3. Communication Plan; Create an overall message for the implementation.  Provide clear reason why the adoption of the program makes business sense by explaining how it aligns to the Company’s strategic vision and each individual’s success.
4. Financial Guidelines and Responsibilities; Agree upon financial definitions, project forecasting requirements, methods of evaluation, realization tracking and reporting process. Agree how the financial arm of the organization will be involved.
5. Project Selection and Prioritization Guidelines; Recognize and define criteria, project type categorizations, problem statement and objective criteria, targeted savings values, approval process, completion requirements that collectively are to be used to rank and rate projects. 
6. Establish a Project Pipeline; Go beyond selection, ranking and rating criteria to outline how ideas for new projects will be gathered, converted to projects, ranked, rated and assigned.  A pipeline of worthwhile projects is imperative to maintaining a program’s momentum.
7. Project Tracking and Reporting; Organize report requirements, systems and initial reports.
8. Information Technology Support; Software installations, computer needs, Intranet development, databases for final reports.
9. Management Review; Ensure constant measurement, feedback, and reporting on key deployment metrics to all stakeholders to ensure deployment objectives are met.
10. Commence and Maintain Executive Training; Whether you want to think of it as part of infrastructure or as a separate item for organizations that are ready, upfront executive training is imperative.  You can’t allow the CI program to be something to which leaders aren’t aware, engaged and committed.  The training should go beyond “overview” training.  It should layout executive’s responsibilities and how they are to engage.  It should also explain what benefits the executives will accrue – what is in it for them.  Make sure the training emphasizes the benefits of aligning improvement activities to their business goals – the things that really matter to the business.

 our latest executive brief, 10 Essential Do’s and Don’ts for a Six Sigma Deployment

To date, we have discussed many things important to a CI initiative from good knowledge transfer methodology to project alignment.  But to attain real long term success, make sure you have a good infrastructure.  Think of it like the barrel of a gun.  It will ensure the program takes a straight line to its target.  If you would like to discuss how to build your infrastructure and ensure your program’s success, contact me.

It is often said “free training is not always good, and good training is not always free”, and for the most part this holds true time and time again. But I have also heard the expression “Win-Win” and I firmly believe there is always a win-win out there, so how do we use our creative imagination to combine the two and help our organizations?

I’m talking about finding a partner that has as much to gain through the development of a skilled workforce as you do, but has deeper pockets and can achieve economies of scale far beyond what a company can- I am talking specifically about the state and federal government grants available for training.

You want productivity gains for your business without the expense of overhead or additional manpower, and the states want companies to remain committed to thier communities and viable going concerns that pay taxes and create jobs – I see a Win-Win. Take a look around and ask what is out there for your organization, Continual Improvement and Lean Six Sigma are designed to support bottom line activities with direct and measurable payback that can be easily translated those metrics that are important to those writing the grants and awarding the dollars at the local and state level.

I’ll let you in on a secret…. behind these grants are good people actively looking for a good investment.  Behind the money is an individual not unlike you or I that would love to find a viable company, give them grant money and show the success through job retention or promotion of participants.  It allows them to stride proudly into their place of work and say “ I found that company… I gave a grant to that company”.  These people are out there and they are looking for the same things in a client that you look for in your best clients. And when they find it they want to fund it.

Fundamentally it is simple to do, define what you want…seek out a grant that matches your needs. Some are competitive, some are bound in a certain dollar amount and some have very precise stipulations about what the money can and cannot be used for… but just as there are cars for every driver, there are grants for every business. Grants do not always have to be about promotion, hiring or overhead, they sometimes can be simply job retention or more often than not they can be about marketability of the workforce in the event of an economic downturn…define how the grant will judge success and then make sure you meet your mark.  Use the same concepts discussed in Pay-as-You-Go to build a case just like you would for your management team.

Here is another secret… shoot for what seems impossible. If you are playing on the edge there is less competition, there is a saying that after $500K it gets easier. This is because companies do not think the grants are out there, or their needs for the deployment do not come close to the amount. Don’t let this dissuade you as a company from seeking the win-win and using someone else’s money to train your employees and kick off your Six Sigma or Lean initiatives. States are just as competitive for business bids as individual business is for customers and if you reach out the response will be overwhelming, just begin with the end in mind and know what you are looking for and what you are willing to give in return.  Finally talk to your service provider, if they know what you are attempting to do they can tailor a training plan to meet your grant requirements and define the metrics to make sure you appease the ones that funded the grant.

our Lean Quickstart Presentation for an overview of Lean and Six Sigma, now they work together, and how they may be deployed.

In conclusion lean and Six Sigma address all of the key indicators grant requirements look for  profitability, waste reduction, labor retention, job promotion…etc.etc. Use this to your advantage and seek  win-win with the local governments, as an alternative you may be able to create a co-op of similar non-competitive businesses to fund the match  on the training and collaborate in the projects to off-set the costs, all of this is possible and has been done before,  it is only limited by your organization’s creative imagination and commitment.  If you’d like to know how we did this successfully for my company, contact me.

“We can’t decide whether to do Lean or Six Sigma …”.  I’m still surprised how many times I hear this, much in the same context of whether to get a Camaro or a Mustang.   There is still this misconception that Lean and Six Sigma are competing methodologies, and that you have to opt for one camp or the other based on some arbitrary preferences. 

The CI consulting industry is partly responsible for this, no doubt.  Lean shops push Lean  — Six Sigma shops have all kinds of reasons why Six Sigma is the be-all end-all.   Then the waters were muddied further with the introduction of this thing called Lean Six Sigma, which weaves the lean tools through DMAIC methodology. 

So, if you’re a business leader with real problems and real opportunities, how do you make a smart decision, one that has a good chance to deliver a solid ROI and bottom line results?   

The simple answer is Let your business tell you what makes sense.   We did a recent post that touched on the concept of letting the business pull your CI approach vs. pushing a one size fits all approach, a good example of Lean thinking itself.  We have a very structured assessment model we use when we help our customers design CI programs, but the waters can start to clear with some simple questions …

1. What kinds of business problems do I need to solve?  Do I have clear quality and defect issues that are hurting the business?  Are they complicated problems, where you really don’t know what’s happening?    Or, am I really trying to increase efficiency, make things run faster, and at a lower cost?   Quality and defect issues may tilt the scales toward Six Sigma.  Efficiency, cycle time, flow almost always point to lean.
2. When it comes to process maturity and availability of data, where is my organization, really?  Six Sigma is heavily dependent on measurement and analysis of detailed data to get to root cause. What happens if you really don’t have a lot of data, and have a lot of processes that are messy and unstable?  Projects that take a VERY long time to complete, if they ever complete, is a likely scenario.  In this case, then maybe you should look to lean to clean up and stabilize processes, establish some measurement systems, and get some quick results before moving into Six Sigma.
3. Am I under major budget and time constraints?  Six Sigma can yield some incredible breakthrough results when done correctly, but it takes some upfront investment, in money, resources, and time.   Lean is typically simpler, projects tend to be more incremental, upfront costs are less, and results (albeit in smaller bites) come quicker.
4. Do I have leadership buyin and active participation?  Getting Six Sigma off the ground really requires some support and infrastructure.  If you have that buyin, there are typically some major gains to be had.   If you don’t, and need to do things more from a grass roots perspective, then lean might be a better answer.
5. Am I under pressure to show real operational improvements, NOW?  If so, then I’d take a hard look at lean as a starting point.

our Lean Quickstart .ppt.  There is a short section that provides a high level overview of the differences between Lean and Six Sigma.

Now, before all you purists get mad at me, I know this is overly simplistic.  Did you see all the “may” and “maybes”?   But, you have to admit it is very practical and does provide some realistic guidance, a starting point at least. 

Of course, no single one of these questions should be looked at in a vacuum, but I think if you look at all of them in total, you can get some clarity on what might be the best place to start, whether it be Lean, Six Sigma, or a blended Lean Six Sigma approach.  And, remember, different organizations within the company will likely be in different places.  That’s OK.   Remember, be flexible, and let the business pull the CI approach/tools that make sense. Good results will follow ….

As always, I welcome your feedback and thoughts.   Email me if you’d like to discuss in more detail.

A key aspect of service organizations is the flow of information. In fact, a core process in any financial service organization is that information flow. There are many steps about which we have written on how to implement process improvement in service organizations. One of the most popular articles was “What About Lean in a Services Environment?”. 

Lean, with its focus on identifying the Elements of Waste, is a powerful concept in a services organization.  This article is meant to drive down one step further into using Kaizen events to eliminate said waste.    But when it comes time to actually make improvement changes, Kaizen is one of the fastest and cumulatively most impactful activities a service organization can implement.

 Our Lean Quickstart Powerpoint Presentation

Kaizen (k-eye-Zin), defined by the Japanese as “continuous incremental improvement”, is a fast and furious implementation of continuous improvement activities designed to create radical and sudden changes in business processes. During a week of highly focused activity, a cross-functional, section specific team receives training on specific tools and techniques needed to analyze and improve a process immediately. There are 10 key steps to this process and they are:

1. Training – The key issue is to select a small group of individuals to be trained as mentors who will also be the key person to select the team members.
2. Project Selection – We have written extensively about the need for projects to be aligned. A few of the articles are “Let Your Business Define Your Performance Improvement Program” and “Business Process Management (BPM) = Robust Project Pipelines After the Low Hanging Fruit is Harvested“. But along with alignment, project selections should be cognizant of the impact the project will have on the specific area in which the project is to be conducted a well as any up or downstream effects.
3. Team Selection – The team must start with subject matter experts from the targeted process’ area. But it should also be cross-functional and include process owners, finance & admin personnel, IT personnel and anyone who has pertinent knowledge of the project process. These people should be open minded, willing to challenge the status quo and influential in the organization.
4. Value Stream Mapping – This is a hands-on technique utilizing flow charting and icons to analyze information flow in graphical form. The team will identify and compile all the specific elements necessary to bring a service from inception to delivery. The purpose is to understand the relationship between process steps and identify those areas most in need of improvement.
5. Process Mapping – The process map is more focused on one part of the oeverall process than the value stream map discussed above and provides more detail. When a team builds a process map it allows everyone to agree on the actual steps performed to produce the product or service. It’s a great tool for identifying non-value added process steps and reducing complexity.  This begins the team’s root cause analysis.
6. Developing Baseline Data – You must develop Primary Metrics to improve a process. In fact, it is the development of that Primary Metric that often leads to and is an indication of improvement.
7. Creating Spaghetti Charts – This is a visual diagram depicting the information, personnel, and document movement in a process, department or entire service organization. It is a great first step to eliminating waste in motion and conveyance.
8. Conducting Time Study Analysis – This tool is used to collect and verify cycle time data relative to an operation or process. This provides for careful study of each aspect of the process and continues to contribute to root cause analyis.
9. Developing Continuous Improvement – This is where the team records the changes to be implemented resulting from the analysis of collected data and brainstorming. The purpose is to identify improvements and their implementation.
10. Implementing Appropriate Changes – It seems all that is left is to implement the improvement. But along with implementation, the team should develop Control Plans so 30 to 60 days after implementation one can assess the impact of the process changes.

our Learning About Lean Executive Brief for a good overview of Lean

Service organizations are unique in their reliance on people and information. Those two organizational elements are the service companies’ most valuable assets. One might say customer relationships are the most valuable asset but to a great extent, those relationships are entrusted to those people and organizationally captured through information. If you are part of a service organization team and looking to drive improvement FAST, then look at the aforementioned 11 steps to implement Kaizen in a service company.

If you would like to discuss case studies of organizations that have done this, then contact me.

I remember all too well when companies would be told they needed to “be a Six Sigma company” and to do so they had to subscribe to a formula requiring strict percentages of their employee population be trained as Master Black Belts, Black Belts, Green Belts and Yellow Belts.  In addition, the definitions of the knowledge those people required was equally strictly enforced.  Companies were told achieving these goals would make them a Six Sigma company and being a Six Sigma company would make them successful with their customers and shareholders. 

Anyone that lived through the last 15 years of evolution in the field of Operational Excellence can recognize the folly of this prescription.  With the benefit of hindsight, it is obvious the program can’t dictate to the business.  And in all honesty, I don’t wish to pick on any singular subject area.  We’ve seen the same sin from many other philosophies and disciplines.  In the excitement generated by a successful new tool or compilation of tools, we tend to pursue the expertise ahead of resolution of our problems.

As we enter a new business cycle, let’s bring all our knowledge together and recalibrate how we choose to apply it by putting the problem or portfolio of problems first.  To avoid having a snazzy tool take over what we do each day, we recommend the following path;

• Understand where you want to go.
• Understand where you are…which has two aspects; (i) your level of performance and (ii) your ability to improve performance
• Let the comparison between where you want to go and where you are currently performing define what you need to accomplish
• Let the comparison between what you need to accomplish and your ability to improve dictate what new capability you need to acquire.

 Our BPM Overview Presentation.

When you are finished outlining the steps above, you will see something quite different than formulaic curriculum and percentages of your population to be trained.  In fact, the solution will not appear simple or fast.  And therefore it will not be as appealing as the aforementioned formula or any other formula from the array of philosophies available in the profession.  The plan that emerges is a function of applying a series of decision rules more than simply measuring the ingredients of a recipe. 

But think about the obvious logic of the outcome.  Your business isn’t simple.  If it were, everyone would do it.  If your business isn’t simple, how can a solution to your challenges be simple.  The complexity of the solution will match the complexity of the problem.

So how and where do you start?  How do you bring order to the chaos?  The answer lies in the definition of your projects, the identification of their root causes and in grouping them together by root cause so as to build a roadmap forward.  The complexity is in the selection and prioritization of projects. The simplification comes in executing on the projects.

I spoke to an executive at a company yesterday that described the old process as creating angst.   The word itself gives you heartburn.  When I asked him what gave rise to the angst, he responded that the discipline had been forced fit.  What can you say to such powerful words as those?

If those are the feelings the prior model drove, what do we strive for today?  We strive to “PULL” the required knowledge.  We believe anyone pursuing the path above should one day describe it using words such as choice and flexible.  The emotion we hope to see at the end is relief.  That is the new paradigm. 

If participants should one day replace the words “Forced Fit” with “Choice” and “Flexibility” and the word “Angst” with “Relief”, what should we see at a business level?  Well, here are some key results that should be witnessed.

• Faster returns.  While the long path is more complex, the milestones become simpler so measured returns should be faster. The simple formula of ten years ago is monolithic and so the returns can’t be measured for a long time.  In fact, the fallacy of the monolithic argument is partly hidden by the time spectrum as you are asked not to measure for months if not years.   (A key aspect of this is discussed in our recent article “Pay as you Go”).  Armada v. Drake’s English fleet.
• Organizational Traction.  Creating a ladder of success ensures Organizational Traction by producing “wins” and establishing a foundation of knowledge and capability to tackle tougher problems.  So many Performance Improvement strategies talk about resolving the big chronic problems.  But pursuing them right from the beginning is fraught with risk. And pursuing resolution to smaller problems with the tools you need to solve big problems takes too much time and effort which is wasteful for individuals and the organization.
• Alignment.  If you adopt a Pull strategy, you can’t help but be aligned.  Your business defines your problems which in turn define your program.  As a result, your activities are ensured to be aligned to your business.  Leadership needs to see resources dedicated to the problems they are trying to resolve.  We are all living in an environment where we must do more with less.  There is no room for unaligned activities.  Pursuing a philosophy for its own sake is a luxury no company can afford.

We see this happening every day now.  Listening to the organization and being flexible produces more of the right gains faster than talking to the organization and forcing it to fit a prescription.  Individuals get more involved with something that produces relief instead of creating angst.  Pull is significantly more effective than Push.  Let the business needs and ability define the improvement program.

Contact me if you’d like to discuss this in more detail.

Last week I published a short article titled What about Lean in a Services Environment?.  It made the case for Lean’s applicability in a non-manufacturing environment.  My goal with that article was to dispel notions that Lean is a manufacturing paradigm.  Building on that, I thought I would talk about a specific services process, and what better place to look than IT ….

Our Lean QuickStart Presentation here.

Remember, Lean is first and foremost about the elimination of waste, and I would argue that there is plenty of waste in IT, hence there is applicability for Lean in IT.   To take things further, since IT is supporting the broader business needs, waste in IT can be magnified into bigger waste (and bigger problems) as it filters through the business.  Let’s look at the elements of waste and make the connection to IT ….

Waste of Defects.  Systems not meeting requirements, software bugs, missed deadlines, blown budgets, etc.  This clearly adds cost to IT, but I would argue that the impact to the business can be even larger in terms of $’s.  Incorrect handling of a single customer transaction can cost the business big in terms of cost, lost revenue, and potentially attrition.

Waste of Overproduction.  Here, overproduction means simply doing things that don’t need to be done, like working on low-impact squeaky wheel projects that really don’t provide value to the business.  This is the classic IT Alignment with the Business problem that has been talked about for years and years.  The cost to the broader business is that strategic projects offer real value don’t get worked.

Waste of Waiting.  Test teams waiting for the next load that’s running behind, development teams waiting for test results, waiting for new hardware, waiting for software upgrades and patches, etc.    But, again, the business impact can be bigger.  Think about slow application response times, inefficient problem escalation process, missed deadlines delaying product launches, etc.

Waste of Overprocessing (non-value add processing).  A good example here is IT keeping track of excessive amounts of technology metrics, and then reporting those metrics to business managers.  Again, the old business / IT alignment demon rears its head.

Waste of Transportation. On site visits to correct hardware/software issues, physical security, compliance, or software audits, vendor visits for equipment that might not really be needed, etc.  

Waste of Excess Motion. Firefighting creates excess motion, and I think it’s safe to say that firefighting is a way of life for many IT organizations and a productivity killer.

Waste of Excess Inventory.  Server sprawl, under-utilized hardware, software installed that no one uses, development and test teams benched, waiting for their next assignment

Waste of Underutilized Talent.  Failure to encourage and capture new ideas for innovation, retention issues, high-value employees used for mundane tasks that really require a much lower skill level, or possibly even automation (i.e. regression testing).   And I’ll add one more here … build vs. buy.  What is the impact when IT leverages its resources to build something inhouse, when a better and cheaper solution could have been bought?  This negatively impacts IT and the business heavily.

I think it’s pretty clear that there are many opportunities to use Lean to remove waste in IT organizations, lower IT costs and resource requirements.  I also believe that, due to most businesses’ increasing dependence on IT, the bigger value to improvements will likely be realized by the business, through smoother operations, better resource utilization, and happier customers and employees.   

Think about it and Contact me if you’d like to discuss how lean can be applied to IT organizations in more detail.

Everyone knows that Lean came from the manufacturing world, and many aren’t quite sure how, or even IF, it applies to more service oriented environments. Well, rest assured, it does.  I see countless examples of Lean success stories in a broad range of services/transactional domains. Financial close, claims processing, call centers, software development, enterprise software implementations, patient waiting times, logistics and supply chain, order fulfillment  …. The list goes on and on.

Our Lean QuickStart Presentation here.

Granted, adoption of Lean in services environments has been a little slow, but adoption is happening now at a rapid pace.  Why?  It could just be the natural progression of things, but I think it’s also a function of the business environment since the recession.  Internal efficiency and productivity, doing more with less, and cutting costs are now just the way business is done, the new norm …. And that, my friends, is what Lean is all about. 

Lean first and foremost is about the elimination of waste, and it defines 7 ( or 8 ) elements of waste. Any activity that doesn’t add value, from the customer’s perspective (internal or external), is by definition non-value-add and should be minimized (or eliminated).   Now, think about this … some very reputable research suggests that, in a typical services process, 80% of the activities are non-value add. 

Yet, all those NVA activities add time and cost, and opportunities for errors to the process. In the case of most back-office processes (e.g. Finance, Customer Service, HR, IT, supply chain, etc), any saving in cycle time / cost filter straight to the bottom line.  

80% NVA activities, savings straight to the bottom line … That tells me that there is ample room and opportunity for Lean in Service-oriented processes.      Think about it and contact me if you’d like to discuss in more detail.

As you may know, Lean is built on a foundation of continuous improvement.   And, do we not always want to strive for improving ourselves and the organizations we work for?  Ideas relating to Lean thinking and how it connects to everyday life are foundational to progress in thought and action.

An article on this very subject illustrates two examples on how the business transformation formula relates to everyday life.  Take a look and let me know what you think.

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