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When Leaders Overlook Process in Service Organizations …

March 16th, 2012 Comments off

Leadership…we want to be leaders and want leadership.  When you have a leadership role you personally grow and you can help the organizations in which you work and the individuals with whom you work.  When we are group members, leadership sets a vision and inspires us.  Leadership, like great architecture that conceives of a soaring skyline, can be magical.

Process…a series of operations which bring about a result.  It is a logical, nearly mechanical algorithm devoid of emotion.  You unemotionally define the inputs, suppliers, required actions and desired outcome in terms so you can measure.  You strive for stability so you can then improve capability as measured by customers.  Defining each brick and how they are assembled might not sound so inspirational, but you’re kidding yourself if you think it’s any less important.

Leaderships’ vision of that skyline and processes’ preoccupation with laying bricks can seem far apart and disconnected.   Yet when leadership looks past process, the results are eviscerating to any vision and corrosive to the leaders themselves.

In service organizations, processes are always driven by people, and managing the people for each process is the work of a process owner.   The process is the service and the people are the process.  So the people are the service, trying to be productive each and every day within their process.  Getting processes to work as a system is about getting people to work together toward a final objective.

When leaders ignore process they ignore the people that are the service.  And that never turns out well with your customer.  A current TV show has CEO’s come down from their lofty perches to work ordinary jobs to get a feel for the people and what they do day in and day out.   In a recent episode, the CEO was stunned at the impossibility of work processes.  Workers were stressed out, fought with each other and delivered poor service to customers.  As you can well imagine, no one believed in the CEO much less the CEO’s vision, as he soon found out!

Download Service Design - Service Blueprinting

this short .ppt overview of customer-focused process design and Service Blueprinting …

A smart CEO might hand the problem over for process redesign.  He might also say with empathy that this is just the wrong way to treat these people and the customer, and do what is necessary to make it right for both.  Theoretically, the two statements lead to the same place.  But the former continues with the same disconnected state between leadership and people while the latter begins a transformation.

The point of all this is to remind ourselves that working with processes in a services organization is about working with people.  That when we see leadership disconnected from the concerns of process we probably see leadership disconnected from people.  And when we find that situation we’ll probably find dysfunctional teams and dissatisfied customers.  BUT,  when we see leadership concerned with making processes work we will see people who find their jobs fair and who are dedicated to their mission, which should lead to more satisfied and loyal customers.

So all of us as leaders and members of a team need to think about the processes upon which our vision is built because, in so doing, we think about the people in the organization and the customer of our service.  And everyone in that chain will notice the attention, how their work is made easier and thus buys into the larger vision.  If you’d like to discuss the points in this article, contact me.

Reshoring – An Opportunity to Redesign Processes to Lower Total Cost of Ownership

March 7th, 2012 1 comment

Reshoring - Process Redesign to Lower TCOThe drive to reshore goods, and services, for the US market builds every day.  Growth in emerging markets is driving up local wages.  The decline in the value of the dollar has increased the cost to produce abroad for import back to the US.  The need to provide faster AND better delivery makes for a increasingly powerful competitive advantage.  The ability to manage shorter supply chains increases quality.  These and other factors are driving more ompanies to look at reshoring opportunities.

A critical element in a reshoring decision is a Total Cost of Ownership analysis.  Made popular by the Gartner Group when attempting to capture all the costs of software and IT systems over the product’s life, it is an excellent concept to apply to reshoring as it goes beyond a simple vendor price or internal transfer price by looking at overall system costs.  At a personal level, think how we apply it when comparing cars for purchase. We incorporate costs to maintain, operate, insure, finance and, eventually, what we get back when we dispose of the car.  Total cost of ownership …. not just purchase price.

Reshoring to Lower TCOReshoring provides a unique opportunity to lower the Total Cost of Ownership as the existing supply chain and internal production processes can be designed with a blank slate.  The iterative redesign that first occurred when it was offshored and then occurs again when reshoring can leverage past experience, and work with a blank slate.

For example, we have a client which offshored a production line to capitalize on lower direct labor costs.  After a severe fire in the offshore facility, they decided to bring the line home.  They performed a Design for Lean analysis on the entire process and lowered the cost to a level significantly less than the pre-fire offshore line.

Download Lean Overview  this executive brief for a short, practical overview of Lean

Another client brought back its customer service operations.  Again, through a redesign process and armed with clear Voice-of-the-Customer (VOC) about their offshore facility, they were also able to lower its costs and increase customer satisfaction, thus significantly lowering their Total Cost to Service.

Redesigning a production line or a service delivery process are great opportunities to really pour through VOC and design the value streams and supporting processes with a clean slate.  Clear VOC, strong design capability and application of lean skills can collectively be used to take advantage of declining costs in the U.S. and better meet customers’ needs thus lowering the Total Cost of Ownership.

If you would like to discuss these topics, feel free to contact me.

Compliance – A Driver for Business Process Management and Improvement?

October 27th, 2011 2 comments

Organizations that choose one-off solutions to react to regulatory and compliance requirements on a case-by-case basis, as they are impacted by them, will spend 10x as much as those who choose to design and implement business processes that have measurement, visibility, and proper controls built into them from the start ….

I believe it was Gartner that made this assertion some years back, and it has proven to be true for many.  Organizations with a solid process infrastructure already have much of what they need deal with compliance requirements. The fundamental tenets of good process management include measurement, visibility, predictability, consistency, and repeatability, and business practices implemented with these elements in place can easily be transferred into specific controls that can be measured and reported on a regular basis.    Organizations that do not have a good process infrastructure in place may find themselves expending huge resources to redesign bad processes and systems when new requirements come down the line, as they always do.  Ouch.

Download executive brief on compliance and process management our short executive brief that discusses the importance of process management in meeting compliance challenges

If your company is like most, you face growing regulatory and compliance demands that absorb time, money, and other valuable resources and, ultimately, sap your competitiveness. However painful, this is reality and faced with these realities, you want to find a way to meet compliance requirements that is objective, reliable, and efficient. Merely managing the issue by opinion can be very dangerous and expensive. Opinions, not matter how smart the “opiner”, have a tendency to not match reality. A better answer is to drive compliance to an objective, measurable specification.  Management by fear can be even more expensive, inducing you to greatly overspend on compliance and to shy away from reasonably acceptable risks that could mean far better business results.

And, let’s be clear, policies and procedures are not controls. A policy merely states an intention to do something; a control ensures that it is done, done repeatedly, and done up to standard. Moreover, policies have to be read, understood, and remembered, all of which opens many possible routes to failure.

Bottom line — work is accomplished through processes – and in no other way.  To reliably achieve compliance you must be able to improve those work processes or design new ones. In other words, the way in which you meet a requirement must be embedded in the work itself, not merely displayed on a policy document. In order to sustain compliance, you must be able to establish measurements and controls within those processes. Certainly, you may have policies that apply, but the way in which you build, operate, and control work processes constitutes how we meet a requirement.

Contact me if you’d like to discuss how basic process management and improvement approaches might help with your compliance challenges.


Change Management – Is it as Simple as Just Seeing Clearly?

September 29th, 2011 5 comments

Change management - Use VOC and VOB to objectively identify performance gaps that matter mostWe’ve been working with a number of customers of late that are trying to improve service delivery processes, and move into the differentiating realm of service innovation.  In these very large enterprises, it’s always a challenge to get organizations to change behavior.  Immediately, voices start rising, touting the need for change management.

This is another of those terms that can have a lot of different meanings to a lot of different people.  Wikipedia defines change management as a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state. If you google “change management”, you really enter the swamp.   Even if we narrow change management to the business / process improvement world that we at SSQ live in, there is still a lot of confusion.  How do you sort it all out?

Download Business Process Management (BPM) Overview

our BPM Overview presentation

In the CI world, companies want and need to markedly improve their value-generating processes (value stream), but the question becomes how do you get people to embrace the changes that come as part of improving?  How do we get them to embrace the overall effort to improve processes, and theoretically improve service delivery?  Do we really have to indoctrinate them into some new philosophy of change?

Personally, I don’t think so.  I think that many times change management becomes a problem because people don’t have a clear picture of 3 simple (not really) things:

  1. where they are now,
  2. where they need to be
  3. why they need to get there.

Most organizations have plenty of smart people (I know … there are exceptions!)  .  The fundamental trick to change management really boils down to getting all those smart people pulling in the same direction.   If you can get clarity around the 3 simple things above, you might be surprised to see that change management is not the big issue you thought it was.

I’ve used the term simple to describe these three things above, but getting there can be anything but.  With our engagements, we spend significant time on the front ending trying to get these answers, and I can assure you that it can be challenging.  But, we get there, and I firmly believe our success rates with business improvement efforts are better because of it.

There are other ways I’m sure, but we use a structured approach that attacks the problem by:

  1. Understanding, for both the customer (voice of the customer) and the business (voice of the business), what constitutes high-performance and turning that into clearly defined metrics (efficiency and effectiveness).  We are looking for gaps in these indicators, between current state and where we need to be.
  2. Understanding the top-level value stream from a process perspective (not function), the things that have to happen to deliver your services or products, and create customer and business value
  3. Identifying metrics at the process level (VOP), and making sure they are aligned with top level VOB and VOC (#1).  Like #1, we are looking for the gaps.
  4. Defining an objective prioritization scheme based on voice of the customer and voice of the business.
  5. Identifying improvement ideas from the gaps, and evaluating and prioritizing those ideas objectively based on #4.  A prioritized project pipeline.
  6. Turning high-value project ideas (business cases) into tightly scoped improvement projects that are clearly aligned with very visible objectives (#1)

Of course, this is over simplified. There’s a lot of work happening between the spaces, but think about it and ask … Is change management really as simple as being able to see clearly? As always, I welcome your thoughts on this.  Comment or contact me directly if you prefer.

Yellow Belts Can Help Sustain Your Gains

May 5th, 2011 1 comment

Over the past 20 years of experience, we’ve learned the key to sustaining performance improvement gains rests on process management.  This role is entrusted to a broad group of employees who are often the process owners and, when not the process owners, are still the most affected by large scale improvements.  Providing them the proper skills forms a critical component of a robust quality management system.

Some have dubbed this person and the required skills Yellow Belt but that term hasn’t done the role justice.  Yellow Belts are often thought of as data collectors or Black Belt assistants.  But a Yellow Belt’s ability to control and manage processes using metrics and data as well as solve problems using basic quality tools gives them far more impact.  Their power doesn’t come from their place in a tiered pecking order of Master Black Belt, Black Belt and Green Belt but in their numbers, demographics, foundational skills and role.

Download our executive that discusses how Yellow Belts play a crucial role in sustaining process improvement efforts

our executive brief that discusses how Yellow Belts play a crucial role in sustaining process improvement efforts

Yellow Belt training introduces the majority of individual contributors to the concepts of process improvement and management and their position in their organizations make a direct connection to improvement efforts.  Yellow Belt training can be fit to how people will be expected to operate.  If positioned to assist Black Belts, they have little need for project selection or analytical tools.  However, if Yellow Belts are expected to sustain gains long after Black Belts have left, a more complete set of tools is required.

Many organizations have active Operational Excellence programs that consistently execute projects through to implementation successfully.  But to make it stick, drive it wide and take care of low hanging fruit, they should look at process management which forms the core of Yellow Belt capability.  If you’d like to see the core concepts covered in Yellow Belt training, contact us or go to our website’s Yellow Belt webpage where you can download complimentary Yellow Belt training materials.

Process Improvement Goes Back to the Basics for Many…

March 18th, 2011 2 comments

Process Improvement BasicsThe last few years have witnessed big changes in the business climate, and continuous improvement (CI) efforts have certainly seen their share of change. I talk with companies every day and, without a doubt, there has been a fundamental shift in thought on how to best make meaningful process improvement happen.

Prior to 2008, there was significant interest and buy-in for large-scale, top-down initiatives. There was a willingness to set aside large budgets and free up significant resources for the CI initiative.

Training increasingly large segments of the workforce was front and center. Detailed, multi-year plans were put in place. The CI initiative was heavily promoted, internally and externally, and employees were strongly urged to participate.

But, did those big initiatives deliver results? Undoubtedly some did. But, many more, when you really check the numbers, did not. There are many distinct causes why they didn’t work, and I won’t try to dive into that here. But, with the meltdown in the business climate, many leaders took a look in the rear view mirror and didn’t like what they saw …. big dollars and resources consumed with little evidence of concrete results.

Now, does this mean that CI and process improvement is useless and should be abandoned? Of course not. Businesses live and die today based on the strength and adaptiveness of their processes, as compared to their competitors. Does it mean that the tools and methodologies used (Lean, Six Sigma, BPM, etc) are not good and should be replaced with something new? I think not. The tools and methodologies can certainly be improved and expanded (and are), but they are proven to work.

So what’s happened? I believe that, for a lot of companies, there was too much focus on the initiative and not nearly enough focus on results. And based on conversations I have with business leaders every day, I think many have drawn the same conclusion.

So, when smart people see the error in their ways, it typically leads to change. The change that I’ve seen happen for CI is a move back to the basics, and a focus on bottomline, business results. It may return, but for now I see very little interest in big change initiatives whose results are measured over the very long term, if ever truly measured. I see a much more tactical view of CI, focusing on solving specific business problems quickly, as opposed to general quality improvement. CI programs are more likely to be looked at from a bottom-up or grass-roots perspective.

Smart leaders are now letting the specific needs of their business drive what the CI program looks like, what methodologies and tools are applied, how results get measured, what technology platforms are deployed, etc. To borrow from Lean, the business is pulling CI capability, as opposed to it being pushed into the business. In the real world, what does this mean?

Download our executive brief that outlines the basics of Lean a short executive brief that provides a good overview of the basics of lean

Well, I can only give you my perspective from talking with leaders at companies of all sizes and in many different domains, but what I see is a clear move back to the basics of business and process improvement. Basic quality and process tools as employed in Business Process Management (BPM), Lean, and basic quality tools (Yellow Belt) are getting a second look.

Why? Because, for many businesses, the basics will help solve 95% of the real business problems, get results fast, and they can be introduced into the organization for a very low cost and very low risk. The basics also build a solid foundation on which advanced capabilities like Six Sigma and DFSS can be effectively built and deployed to deliver even more dramatic business results, with much less risk.

So, what do you think? Is this just a reaction to circumstances and will large-scale, top down change initiatives return. OR, is this the new normal for companies when it comes to business and process improvement? Feel free to Contact me if you’d like to discuss.

Business Process Management (BPM) = Robust Project Pipelines after the Low-Hanging Fruit is Harvested

March 10th, 2011 1 comment

BPM and Improvement Project selectionSo, what does Business Process Management (BPM) mean to you if your organization has already gone headstrong into lean,  six sigma or other improvement efforts?    What does it mean to you if the efforts have really produced some good results?  Think you don’t need it and should move on?   You may want to think again ….

I constantly talk with people and hear some variation of ….

“We got a lot of great results from our program (Lean, Six Sigma, Quality, CI, etc) for the first couple years, everyone was excited and motivated, but now the program seems to be running out of steam.  Results and participation are falling, interest in waning, and we can’t figure out why”.

There are, of course, many potential causes for this, but one of them seems to be pretty consistent.  There is no real project pipeline and project prioritization approach. What happens?  People don’t really know what to work on so they don’t do anything or, maybe worse, they start working on squeaky wheel projects that have little or no impact on the business, and may even have a negative impact.  If this happens, I can assure you that it is a recipe for disaster for any business improvement program.

Download our whitepaper that discusses using BPM and scorecards to align improvement efforts Download our whitepaper that discusses using BPM and scorecards to align improvement efforts

If you build that BPM framework, you will have a clear view of what really matters to the business and metrics to gauge your success in improving those things.  A pipeline of business cases and projects can be built based on measurable performance gaps and those projects will, by definition, have clear line of sight to things that really matter.  A clear prioritization scheme then keeps things practical and real.

If you have a clear list of projects that are absolutely aligned with the things that matter most to the business and you have a way to prioritize improvement efforts, do you think an improvement program is likely to fizzle?   I think not.

So, give BPM a second look, even if you’re well into an improvement program.  It doesn’t have to be a complicated, drawn out task.  If you’re just getting started, you can and should build it in stages, while you’re picking up some of those low hanging fruit projects.   If you have a mature effort, you can still build it in manageable stages by prioritizing the different areas of the business.  In the medium to long run, it might be the difference between your improvement program being a flavor of the month initiative and a long-term, strategic value-add component of the way you do business.

Contact me if you’d like to discuss BPM and your organization in more detail.

VOC and Lean Value Stream Mapping – A Simple, but Powerful Equation

March 2nd, 2011 Comments off

It sounds so simple. Lean eliminates waste defined as any activity that does not provide value to the customer. Eliminate the waste and you will bring products and services to customers better, faster and at a lower price. Finally, combine it with Six Sigma to reduce variation and defects, and you make breakthrough results.

We all start by understanding that value is defined solely by what the customer actually desires and for which they are willing to pay and that value enabling activities, while not adding direct value, are necessary. We all then look for the true non-value added activities that add waste in the form of unnecessary time, effort or cost. We learn to seek and eliminate those non-value added activities. That is the essence of a lean project.

So what is the lynchpin that makes this elegant equation work? Identify what your customer considers of value and how you deliver it. Once you have that line of site, if you maintain efforts to continually improve, you’ll get there. But without that clarity, your improvement efforts are a march to nowhere.

It is important when developing that line of sight to define value from the perspective of the customer, the Voice of the Customer (VOC). Understand clearly and exactly what product or service the customer desires, when it is to be

delivered, and at what price.

Download a VOC training module dealing with Critical to Customer Requirements, a key element of VOC

Download a training module dealing with Critical to Customer Requirements, a key element of VOC

To understand how your company actually delivers what the customer considers of value, leverage lean tools to precisely map the set and sequence of all specific actions done to bring the product or service from conception to final delivery. This provides a visual display of exactly how a particular process is carried out. Mapping this “value stream” enables you to identify value-adding and non-value adding activities from the customer’s perspective thus setting the stage for improvement.

Along with providing a sense of alignment between your goal of delivering value and your opportunity for improvement, this exercise also carries the message of how problems and solutions are cross-functional in nature. If process owners participate in this process with an open mind, they will learn the futility of looking for a solution from someone else independent of their efforts. Thus, not only does value stream mapping provide alignment from the customer to performance improvement opportunities, but it continues through to an individual’s actions.

Yes it can be a simple equation – understand what your customer values (VOC), eliminate waste (Lean) and be more competitive. But to do that, make sure you get the front end right using VOC and value stream mapping to get the target and alignment to individual actions.

Feel free to contact me if you’d like to discuss ….

Process and Change in Service Industries – The Survivor Challenge

February 1st, 2011 Comments off

Outwit…Outplay…Outlast.  Wow, that says it all doesn’t it?  Reality TV is a kick. Throw a bunch of strangers onto an island and watch them dwindle down based on how well they can play to the desires of a group in a winner-take-all battle. Lots to learn from watching. How well and quickly can a player understand the group’s requirements? How well can they meet those requirements in a highly competitive situation? Each elimination changes the group’s dymanics so the requirements, competition and strategy all have to be adapted continuously and quickly. One slip up and you could be out. How does this relate to Service Industries?

Download our critical to customer requirements module

our critical to customer requirements VOC module

In previous articles, I’ve discussed how business and consumer patterns have gone through massive changes and how understanding the Voice of the Customer is the key to adapting to the new environment. The nascent recovery is providing an opportunity to survive and, for some businesses, to flourish. But the competition is still in the elimination phase and I believe that is very much the case for service businesses of nearly every nature.

It’s important to understand why things are different in services so as not to be lulled by more macroeconomic headlines. Before the crises, manufacturing went through years of driving productivity while services accelerated right up to the edge. The Federal Reserve’s strategy of depreciating the dollar and growing demand in emerging markets has helped the global competitive position and demand for manufacturing products while services are more tied to the domestic economy. Finally, we have a political environment that ramped regulation or restructured entire service industries such as banking and health care. And if that weren’t enough, services are going to be the start-ups of all the unemployed as they require less capital and can use the internet to gather and distribute information, the very essence of a services business, at a very low cost.

Change is not over in service businesses. Like Survivor, listening and adapting quickly to an ever changing customer is still the only protection from elimination. Several key points we consider imperative to driving alignment are:

  1. However you capture VOC, keep improving it. We propose a five level maturity model that goes from what you need to simply stay alive to what you need to be innovative.
  2. Balance how you respond to VOC with how you respond to other stakeholder demands. We have a checklist of behaviors that will give you the ammunition to point to an imbalance.
  3. Segment your VOC. Meeting every item your customer sets out for you will not yield a purchase while some will yield tremendous results. We offer a framework for segmentation.
  4. Convert what you hear to something you can measure. To make science out of art we use industry case studies and benchmarking as the best guide.
  5. Align process metrics to the chosen customer measures in #4 above. Again, use industry benchmarking and cases to apply knowledge and experience and avoid the alchemy.

Now you are ready to drive change. But there is one more thing. Let’s return to the scenario painted at the start of this article…it’s not enough to just do this. You must do it fast. We are rebounding but demand for services isn’t returning to 2006 levels…at least not until around 2016…and competition is increasing. During that time, businesses will fail, be acquired or be rationalized. But there will also be winners and, like Survivor, they will win big. We urge you to recognize what is coming and act.  Outwit…Outplay…Outlast.

If any of the pieces above would help you, let me know our thoughts.

Join Us on Twitter for Thoughts and Announcements

September 2nd, 2010 Comments off

First, we want to thank all of you that have subscribed to our blog. We have over 1,000 subscribers and the list grows every day, week and month. We hope we are providing you relevant information. If there is anything you’d like us to bring to you, let us know. If we don’t have the content, we’ll recruit guest bloggers that do.
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Thanks for your support and have a great Labor Day weekend. See you on the other side.