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Business Process and Performance Improvement – Strategic Initiatives to Tactical Actions?

March 8th, 2013 Comments off
For many companies, CI has has moved from a top-down strategic initiative to tactical activities focused on specific business problems

For many companies, CI has has moved from a top-down strategic initiative to tactical activities focused on specific business problems

I’ve written several articles that talked about how views on business process and performance improvement have changed over the last 3 years.   In the personal development world, there is a mantra that basically says that meaningful change comes only when the pain of not changing becomes greater than the pain associated with change. 

The economic downturn definitely created the pain that caused a lot of companies to change the way they look at their business, and at process and continuous improvement.  I see very few companies saying they want to launch a top-down, enterprise wide Six Sigma (or Lean or BPM) initiative, especially ones that focuses on investing big $’s on training and infrastructure up front.   Those days, for the most part, seem to be over and gone.  Certainly a big change from years past, but is it a bad thing?

Some purists might argue that it is a bad thing, that top-down, large scale change management and process improvement initiatives should be a fundamental part of any enterprise.  Theoretically, yes, but how many large-scale Six Sigma (or Lean or BPM) initiatives basically collapsed under their own weight in years past, after a great deal of money, time, and intellectual capital was spent?   A great many, I can assure you.  Why?   Well, I might argue that it’s because they took on a front-and-center life of their own, as initiatives, growing unbounded for the sake of the initiative when their place should have been in supporting the core value-generating processes of the business.

Download our short guide to project selection and definitiona short guide to project selection and definition.

I would argue that the change is not a bad thing, and was necessary to survive in this new normal.  Let’s think about where are we now?   Companies are lean and mean, operating in very much of a do-more-with-less mindset.  For many, big Six Sigma (or Lean or BPM) organizations have been disbanded.  Productivity is at record levels.  60 hour + work weeks are the norm for many.  But, you can only ask so much of your people for so long.   Sooner or later the business processes have to be looked at, right?

But, now, what I see is that many organizations are taking a very pragmatic and tactical approach to CI.  The competitive environment, the regulatory environment, or maybe even a very important customer is telling them EXACTLY where process problems are, and they are listening.  They then focus like a laser beam by identifying and rigorously defining good projects (see a recent article I wrote on the elements of good project definition) that solve real, specific business problems.  They then develop the process improvement skills in-house or work with a specialist partner to execute what are, by definition, high-impact improvement projects. No guesswork, no unnecessary overhead, no unnecessary infrastructure.

In essence, what I see is a fundamental shift from CI initiatives that are pushed into the enterprise to an environment where CI and process improvement are pulled in, as specifically needed by the business.  Of course, the pendulum has swung very far from the strategic to the tactical and the optimum is probably somewhere in the middle.  But, was this change a bad thing?   I think not.  I think it will serve to refocus CI on what really matters …. making the business more competitive and profitable in an ever-changing marketplace.

Feel free to contact me directly.  I’d like to hear your thoughts ….

What Can Yellow Belts Do … Really?

January 29th, 2013 Comments off

Yellow Belt TrainingAs a followup to my recent post titled Trained Yellow Belts Think Differently, I thought I would spend a little time talking about what yellow belts can actually DO.

In a traditional six sigma deployment, yellow belts play a critical role in supporting higher level black belt and green belt projects.  They are trained in the foundation of the DMAIC problem solving process and can speak the language of Six Sigma.  They can handle some of the lower level tasks of process mapping, data collection, setting up measurement systems, establishing and maintaining control systems , and may actually be subject matter experts. Basically, they allow the black belts and green belts to focus on the more complex analytical aspects of the project.  If yellow belts are used effectively, they can improve the productivity of black belts and green belts in a BIG way.

BUT, what can they do outside of supporting higher level belts?   What if you don’t even have higher level belts?  What can a yellow belt trained employee do for the organization?

Six Sigma purists might argue that Yellow Belts should not be trained, without Black Belts and Green Belts, and that their role is to support higher level belts.  I don’t agree with this at all.   Again, I have to hedge by saying that I’m talking about the level of capability that yellow belts trained by SSQ have (i.e. 4-5 days of training).   So, what can Mr. Yellow Belt do?

  • Characterize Processes.  Process mapping and characterization is a skill that should not be taken lightly.  All too often,  improvements are made to processes when we don’t know how the current process really operates, the current state.  These so-called improvements, in many cases, add unnecessary complexity and create more problems than they fixed.  We call this tampering and it is a sure-fire recipe for disaster.  A great example of where process characterization is an invaluable skill is with large-scale enterprise software implementations.   It seems common sense that we should understand exactly how a process works before we try to systemize/automate with software, right?  How often is there really a focused effort to characterize and optimize processes?   I would argue not enough of the time and this is readily apparent in the big $’s spent on configuration, customization, tweaks, etc.
  • Establish/validate measurement systems. Yellow belts learn the basics of Six Sigma and its focus on using data to understand problems and get to the root cause.  The learn the basics of what makes a good measurement system, and what does not.    The can certainly help establish measurement and data collection systems that are actionable, and validate (or invalidate) existing ones.
  • Establish Process Control Systems.  This is a key yellow belt skillset and its importance should not be overlooked.  Yellow belts learn how to set up process control systems to assure that processes function as expected by the customer.  Spec limits are establish, as are response plans when an indicator goes out of control
  • Execute small scale improvement projects in their own areas.   Will they have the deep statistical analysis skills that well-trained green belts or black belts have?  No, they will not.  But they will have a solid problem solving foundation around DMAIC and they will have a working knowledge of the basic tools in D-M-A-I-C.  They know what a well scoped project looks like, they know the basic measure and analyze graphical tools, they know how to use a structured approach to select improvements, and they definitely know about process control systems.   Let’s not lose site of the fact that these basic tools will likely be sufficient to address a significant portion of the process problems you’ll face.

Some may think of Yellow Belts as team members, data collectors, or assistants to Black Belts.  I strongly question this view and think, in reality, a Yellow Belt’s role should be much deeper than that.  Yellow Belts practice a Process Management approach (control and manage processes using metrics and data) and can solve real business problems using basic, but proven, quality tools and a systematic approach.

Yellow belt skills are valuable at any level of the organization, from managers to the lowest level process operators, and the processes they improve are usually the ones they work in day in and day out.  Many years back the term daily process management was in vogue.  The term has certainly faded a bit, but it’s hard to argue against the value of actively managing and improving processes on a daily basis.

Contact me if you’d like to talk about how yellow belts might be able to help your organization.  And, if you haven’t already, download our yellow belt training manual to see for yourself the rich skillset a yellow belt acquires.

Economically Delivering the Right Mix of Lean, Six Sigma and Business Process Management

January 17th, 2013 Comments off

The Right Mix

My colleagues and I have written about this subject from several angles I want to start bringing it togetter.  In my post On Demand Performance Improvement  and Lynn Monkelien’s, Senior Director of Enterprise Learning at the Apollo Group and SSQ guest blogger, post entitled Pull Learning in Business Process and Performance Improvement we discussed how to break the paradigm of training inefficiencies.  This was further supported in my white paper entitled On Demand Performance Improvemnt – Traditional Training Meets Social Media which is available on our website’s home page in the “spotlight” section.  Then my colleague, Eric Harris wrote Back to Basics where he introduced the various foundation aspects of Yellow Belt, Lean and Business Process Management.   Since then there have been numerous posts on each of these subjects.

Together we are all describing a new training paradigm that is emerging where with our clients we not only making better use of technology and social media standards but also of a contemporary and robust library of materials and broad capability of personnel to meet the contemporary needs of organizations.  Specifically, with so much pressure on costs and the limited availability of company personnel’s time, it’s not surprising that most companies are looking hard at how and what they delivery to their workforce.  The key is to define what is needed… nothing more and nothing less…in terms of both content and exposure.  And that is done by matching the depth of training to the problems the organization seeks to address and putting the information into the users hands in as many low cost forms as possible as close to the actual application as possible.

And here are some questions to ask when considering how to get the chosen information to the user:

* What sort of time is available from the targeted personnel? Can they spend a day in a classroom or is thier time limited to hours per day or per week? Will targeted candidates be in different locations or at one facility?

* Do you know exactly what thier problems require or will it evolve over time?

* Are they comfortable with technology and social media?

Overview of SIPOC & a 12-step process to build one

Here are some factors to consider when asking what training and coaching is needed:

* Are you addressing manufacturing, engineering or transactional processes?  In factories and laboratories where much of the improvement activity may focus on equipment, techniques such as Gauge R&R, Process Capability, Setup Reduction, Total Productive Maintenance and perhaps even Design of Experiments are invaluable.  But in transactional businesses, they can be substituted with more impactful subjects.

* Are you dealing with high-volume repetitive processes?  Much of the Lean training can be simplified and reduced if you are not.  Value Stream Mapping, for example, can be covered at a more general level.

* What is the objective and the environment?  Are you attempting to remove defects or reduce cycle time?  If you seek to reduce errors in a financial services company, the focus is on process analysis so Pareto Charts, Run Charts and the like, which are quick and easy to teach, become the focus.

The point is that you have choices.  You can follow a fairly standardized prescription for Lean Six Sigma training as described through the classic belt definitions or you can tailor your training to unique needs.  At the same time, you can perform standard instructor lead training or you can use various communication tools that leverage technologies and social media standards.

I have one note of caution –if you cut the content or instructor interaction too far, the price for the mistake doesn’t immediately show itself during the training.  Problems evidence themselves once the training is well underway or completed.  And the problems might be that projects get delayed, more coaching is needed to complete high value projects or certified candidates fail in follow-on projects.  The result is a general loss of confidence emerges for the whole process.  By the time you discover your mistake, the effort is deemed a failure.  We don’t say this to scare you into overbuying or overdesigning.  We believe the answer is to monitor the situation closely and maintain flexibility in both the training and support.  It is in this reaction time that modular content and flexible, technology enabled support tools and methods really make a difference.

If you would like to discuss this emerging model, contact me.

Trained Yellow Belts Think Differently…Ask Blue Eyes

December 30th, 2012 Comments off

Some folks think for themselves from the first day.  Frank Sinatra was one of them.  Others learn to think differently.  Yellow Belts are process owners and team members who have been taught to think differently.  We detail our highly popular Yellow Belt training on our website.  While it has been out for many years and reconstituted in many flavors, people remain genuinely interested in this foundation capability.

The Chairman of the Board

By way of history, we were the first to develop yellow belt training.  Six Sigma Qualtec is the renamed Florida Power & Light’s unregulated subsidiary Qualtec Quality Services.  Qualtec housed materials developed when FPL engineers studied under Deming and documented their work.  Qualtec was spun off and acquired Six Sigma training materials and client lists.  The renamed company developed Yellow Belt from the Deming based materials as a foundation for process owners and members that were part of Six Sigma teams and who were left to manage a process after any improvements were implemented.

Like any classic, the concepts embedded in Yellow Belt  remain the foundation for any process improvement program.   In fact, we have posted how companies remain devoted to the basics of Operational Excellence methodologies.  This devotion to the basics continues to deliver results to a broad base of the organization.

Yellow belt is a distinct and valuable skillset.  But a lot of people don’t have a good feel for exactly what a yellow belt does and how it can benefit the organization.  So, I’m going to provide some thoughts here and on some subsequent posts.

As a disclaimer, since we launched Yellow Belt, just like with Black and Green Belts, there have been many others that followed such that there is really no standard out there for a Yellow Belt.   So this description is addressing  Six Sigma Qualtec’s definition of a Yellow Belt.   Yellow Belts really should think and act differently after training so, let’s first talk about what yellow belts should be thinking about after training:

  • Analyzing real data to drive business decisions, analyzing root cause to drive implementation of the right solutions, and understanding that CI (Lean, Six Sigma, BPM, etc) is all about improving business performance in terms of voice of the customer.
  • Identifying and tracking the right metrics (primary, secondary, etc), really understanding process capability and process performance.
  • How to practically get and use data and a scientific approach to solve a problem?
  • Understanding what a problem is really costing the business, the real cost-of-poor-quality (COPQ)
  • Putting in the proper process control mechanisms to sustain improvements over time
  • The project selection and prioritization process of the company to assure that the right things are being targeted, things that will make an impact.

Download “Yellow Belts Play a Crucial Role”

The Yellow Belt skillset is a foundation set of quality improvement and process control tools.  It is something that can be applied anywhere in the organization and on any process to yield wide-ranging improvements.  It is one approach, and an effective one for many, to building a solid foundation for CI in their organization.

Contact me if you want more info or would like to discuss in more detail ….

Lean Paves the Road for Six Sigma…especially in Service Organizations

November 27th, 2012 1 comment

It was more than 15 years ago that our firm was first engaged to help a client implement Six Sigma. Along the way, Lean was integrated and the term of art became Lean Six Sigma.  Yet even today, we still begin many conversations with prospective clients who say “we want to do Six Sigma?”   We try to determine what Six Sigma means to them and why they want to do Six Sigma.  Definitions and motivations vary.  None are wrong.  They are individual to the person, the company and the situation.

But to determine the appropriateness of their conclusion, we ask about the nature of their business challenges and the state of their management system.  And at the end of that portion of the conversation we invariably begin to wonder whether the prospective client can benefit greatly by first paving the way with Lean.  And that is really most apparent in Service Organizations where so much of the waste is invisible and Lean’s visual tools brings the waste to light before introducing Six Sigma.

Lean Six Sigma for Services

our latest whitepaper, which discusses how Lean Six Sigma is different in a services environment, as compared to a traditional manufacturing environment.

Lean can be of great benefit before introducing Six Sigma for the following reasons:

  1. Lean makes the implementation of Six Sigma easier by eliminating non-value added activities.  Six Sigma, while robust, like any program that aims to drive change can be a challenge to implement.  You can make Six Sigma’s implementation simpler and more cost effective by first applying Lean.  This is for two reasons. First, you will enhance the effectiveness of the Six sigma tools by enhancing the rate at which information is fed into the Six Sigma problem solving exercises.  Secondly, you may discover after applying Lean, there is insufficient improvement available to merit a Six Sigma project.
  2. Lean develops a culture of improvement which makes implementing Six Sigma easier.  Lean can be implemented more quickly and easily than Six Sigma.  We facilitate workshops that by the end of a week introduce improvements.  People come out energized and feeling they made an impact.  Managers see an ROI on the improvement investment.  The result is a willingness by all levels of the organization to increase their commitment.
  3. Sometimes the problem isn’t going to be solved with Six Sigma tools…or at least not quickly.  When you prioritize problems, you try to separate them into buckets by their fundamental nature so as to gain some economies and structure to any allocation of resources.  Part of the reason is that Six Sigma efforts require more time and effort.  Failing optimize the problem to the applied tools, you may end up trying to apply Six Sigma to problems that can be easily addressed with a Lean exercise.  Even worse, you can work at reducing variation when all you need is to reduce your cycle time to capture the available gain.

We have written a great deal about both Lean and Six Sigma.  We don’t favor one methodology over the other nor do we see them as an “either or” decision.  In the long run, we encourage all our clients to gain proficiency and apply both Lean and Six Sigma.  However, to help our clients succeed in driving ROI and organizational change, we believe that there are advantages to Lean paving the way for Six Sigma, especially in companies just starting out as well as Service Organizations.

Now there is always an exception to a rule such as when prioritized projects clearly require Six Sigma tools.  The business should always “pull” the improvement efforts as outlined in “Let Your Business Define Your Improvement Program”.  But in the case of launching or re-launching a general program, allowing Lean to pave the way for Six Sigma increases the ROI of the continuous improvement effort by using the simplest and most applicable tools first while increasing the effectiveness of subsequent Six Sigma activities.

If you wish to discuss these points, contact me.

Yellow Belts – Worth a Fresh Look?

November 8th, 2012 1 comment

Is Yellow Belt training a good foundation process skillset?I’m going to start this little article off by opining that the need for basic process management and improvement skills in an organization is getting more acute every day.

Why?  Well, I really don’t think the need ever waned, but   there are a lot of new things happening, specifically with technology, that have the potential to put business process management and formal improvement at the top of both business and IT leaders’ priorities.  While beyond the scope of this article, spend a little time looking at the new generation of BPM software (BPMS), the interest and investment in BigData, and software trends like SOA and I bet you’ll come to the same conclusion I have … process skills are becoming more and more critical to the success of enterprise.

Based on what’s happened over the last few years, many companies are finding that those skills are simply not there, or have gone dormant.  So, how do you develop or re-energize the capability?  Now, here is where we have to stay real.

The way companies are willing to build out organizational capability has clearly changed, based on my experience.  Big, top-heavy initiatives that push broad knowledge into the enterprise (the firehose approach) have been largely replaced with agile, practical thinking that says you pull right-fit capability into the organization, at the right-time.  Deliver exactly what’s needed, exactly when it’s needed, and execute in a way that delivers immediate ROI in the form of quantifiable business performance results.  That’s the new reality.

Download lean, six sigma, BPM, VOC content

I whole-heartedly agree with the agile, pull-based approach to organizational learning.  That being said, when building anything, you still have to start with a foundation … a base that you can continue to build upon as needed.  So, what should that foundation business process capability be?

Do you really need a large segment of people to be certified Black Belts, or even Green Belts, that specialize in deep statistical analysis?   Does everyone need to be a Lean Expert?  Does everyone need to have process design and DFSS skills?  I think not.

This caused me to go back and took a hard look at our trusty old Yellow Belt skillset and, you know what … it just might serve as that nice foundation. Yellow Belts, in the not-so-old days, were thought of as supporters of Black Belts and Green Belts. But I think that skillset can stand and deliver on its own.

(As a disclaimer, there is really no standard out there for yellow belt.  I’m talking about our (Qualtec’s) definition of a yellow belt skillset.)

So, what should well-trained Yellow Belts be able to do?

  • Map out and validate as-is processes, from a variety of perspectives
  • Identify waste and excess complexity in the process
  • Understand VOC and how a process delivers (or doesn’t deliver) value from the customers perspective
  • Evaluate and quantify what a problem is really costing, the cost of poor quality (COPQ)
  • Define and scope projects
  • Use a structured, data-driven approach for problem solving
  • Recognize different types of data, plan for collection
  • Analyze a variety of data to get to root causes of problems
  • Support identification of right-fit solutions, and support implementation
  • Put in the proper process control mechanisms to monitor performance and sustain improvements over time
  • Etc, etc

Not bad.  It’s something that’s broadly applicable in the organization, in any process or area, and immediately usable for just about anyone in the enterprise.  It also establishes that nice, solid foundation that advanced capabilities can be built upon when needed.

So, you may want to give Yellow Belt a new look, if you’re looking to establish process capability in your organization.  Contact me if you want more info or would like to discuss in more detail ….

Design Thinking and Operational Excellence Problem Solving

October 29th, 2012 Comments off

Design Thinking and Operational ExcellenceThere is a lot being written about Design or Design Thinking.  So where does it fit within Operational Excellence.  Where does design fit into problem solving?

Well at its foundation, design is a form of problem solving.  The first step is to identify a gap.  The designer then produces a problem statement usually in the form of why the user of the product or service has a gap which includes what is actually expected.  Alternatives are then defined, explored and evaluated.  After a solution is selected, a plan to produce the produce or perform the service is determined.  After the item is produced or the service performed, the user’s previous gap is checked to see if it has been closed or not.  Note at this point the similarities to the Shewhart Cycle (P-D-C-A).    Design, like P-D-C-A, is an iterative problem solving methodology.

One of the differences of design though is that it is encouraged to jump between the stages as frequently as is seen fit.  If you were to once again use the Shewhart Cycle as an example, design would happily tolerate P-D-C-D-C-A-D-C-A as an example.  There are several messages in this jumping in and out of the various stages.  There isn’t an assumption and maybe not even an effort to find the optimal solution.  Quick improvements may be acceptable versus finding the optimal solutions.  There is no doubt there is a tendency to act.  What does this focus of improvements with each design v. finding the ultimate solution mirror?  Don’t Kaizen events have similar characteristics?

 

Download lean, six sigma, BPM, VOC content

 

Design is, in fact, a problem solving methodology.  However, there is a lot of problem solving that isn’t design.  Improving an existing system isn’t normally considered design.  Nor is tuning an existing system.  Yet both are problem solving events.  And “just do it” activity is certainly not design.   The term design is normally reserved for new products and services, solving chronic problems where stakeholder interests are at odds or even choosing and optimizing among a series of alternatives to replace an existing process (think about selecting a new AP package among a group of vendors).

So Design Thinking and OpEx problem solving aren’t two different lines of thinking.  Design is a subset of problem solving with practices very similar to past problem solving methods such as the Shewhart Cycle or Kaizen events.  If you’d like to discuss any of this, please feel free to reach out to me.

The Face of Operational Excellence – 2020 and Beyond …

October 23rd, 2012 Comments off

Recently I wrote about the history of Operational Excellence.  Now let’s turn around and talk about its future.  Where are we going?  What will it look like in the year 2020 and beyond?

First, as I noted in my last article, there are certain elements, such as the construction of the original control charts, which have been the same for nearly one hundred years.   The foundations of Operational Excellence, expanded upon by Deming and refined by today’s companies to consistently drive productivity gains and market share growth, are timeless.  We will continue to express goals in the form of scorecards.  Enterprise level value streams will continue to exist as they are simply the expression of an organization’s value creation process.  And improvement methodologies with roots dating back to the 1920’s will continue to be applied to performance gaps identified by customers and stakeholders.

So what will be new?  First, the evolution of many of the deployment philosophies will race ahead. As the pace of change in business accelerates, so too will the pace of change in change models.  We have written extensively about Alignment, Pull Don’t Push, Go Broad Before Deep and Pay As You Go.  These philosophies yield a very different deployment model than what evolved from the late ‘80’s to about midway through our first decade of the new century.  We deconstructed a very heavy change model we helped to create.  And we think it will go further as a modular and quick iterative workstyle will race ahead. To allow it to happen, we will “chunk” problem solving methodologies to how they are used and develop new ways of making them faster and lighter.

Download lean, six sigma, BPM, VOC content

Another force that will accelerate the application of Operational Excellence activities will be technology as enterprise software collects hordes of data, business process management software uses that data for alignment, dashboard reporting of aligned metrics is constructed to lower level processes where projects can be scoped and everyone has mobile access to the reporting and to rich media libraries of improvement methodologies in consumable “chunks” addressing specific performance gaps.  Everything we do over extensive periods of time, will be real time.

Operational Excellence has become a fundamental aspect of every company’s management systems.  But it diminishes its usefulness by being slow and cumbersome.  What everyone has come to call the “New Normal” doesn’t have the patience for that sort of speed, or lack thereof.  It will come because many, many good professionals will work at pushing it forward bit by bit, just as it happened in the past.  And, like so many other professions and businesses, it will happen on the back of technology.

If you’d like to discuss, feel free to contact me at jlopezona@ssqi.com.

Lean, Six Sigma and Formal Process Improvement … Yesterday and Today

October 16th, 2012 3 comments

History of Process ImprovementA confession – I’m a history geek.  I read history books, watch the history channel and am fascinated by arcane entries on Wikipedia.  History provides understanding.  If you ever wonder why something is like it is, find its origins.  Sometimes, what is commonly accepted clearly no longer merits application.  And likewise, the confusing which is about to be discarded suddenly makes so much common sense that it is retained.  And so I think it is worthy to pause and look back on our profession and examine our origins.

Without going back to the Stone Age, I’ll start the discussion by citing Carl Frederick Gauss (1777 – 1855) who introduced the concept of the normal curve.  Aha….if you look hard enough, you realize you don’t always get the same outcome from an action.  And in fact, there are patterns to the distribution.  It was only a matter of time before someone asked “Why?”

Fast forward to the Roaring 1920’s, a decade marked by urbanization and strong industrial growth in the United States.  Phones were offered in every home and cables had to be laid underground in growing cities.  Western Electric, an engine of innovation not unlike today’s Silicon Valley based technology companies, wrestled with the Young Ma Bell’s reliability.  And Walter Shewhart measured performance using the concepts of distribution of results like with a normal curve.  Shewhart postulated that three sigma from the mean was where a process required correction and demonstrated that “tampering” with a process in reaction to non-conformance actually increased variation thus degrading quality.  Gauss’ normal curve is tipped on its side and an SPC control chart is born.

Download Six Sigma History

a short Powerpoint overview of the History of Six Sigma …

It is during World War Two and Post-War Japan’s reconstruction that we see today’s modern thoughts about quality management, later to be framed more broadly as Operational Excellence, take shape.  America’s still primarily agrarian economy is reshaped to supply the war in a very centralized fashion allowing for broad distribution of best practices. Then the ideas are transported to an ailing Japan in what becomes a huge laboratory for their application.

Deming rises to the top of the mountain in this period as he combines Shewhart’s Statistical Process Control with ideas about Transformational Change formed as he saw two economies repositioned.  He forms his System of Profound Knowledge asserting that managers must have (i) an appreciation of a system, (ii) an understanding of variation, (iii) the theory of knowledge and (iv) knowledge of psychology or human nature.  He has linked the numbers with the individuals and the organization and it is all sewn together in his book “Out of Crisis” which could serve as any OpEx leader’s handbook.

It is in the ‘70’s that Motorola, a company at the very leading edge of a seemingly invincible industrial America, recognizes it has a quality problem and begins its search for improvement adopting Deming’s postulate that a focus on quality decreases cost while increasing customer satisfaction while a focus on cost leads to decreased quality and eventually increased costs and decreased customer satisfaction.

As Galvin focuses Motorola, Bill Smith comes forward with his Latent Defect Theory connecting variation to defects and waste.  Eliminate the variation and you’ll increase quality, decrease costs and increase customer satisfaction.  It is at Motorola that the problem solving methodology of M-A-I-C  (later expanded to DMAIC) is assembled to address variation. Six Sigma, or zero defects, becomes the mantra.  When Motorola is bestowed with the Baldridge Award, corporate America takes note and seeks to replicate the success.

It is from the late ‘80’s through the mid-‘90’s that elements of a deployment strategy for Six Sigma form.  At Unisys, the term Black Belt is coined denoting an expert specialist in Six Sigma. At Motorola’s Six Sigma Institute, a part of Motorola’s trend setting corporate university, a knowledge transfer system is developed to broadly disseminate the practice.  At ABB, the terms Champions and Green Belt are added to denote the different levels of knowledge required for different roles and populations.  And at Allied Signal, the efforts pivot to improving processes with specific business goals in mind giving rise to criteria for project selection. The capstone is added at GE when Welch drives the program to new heights demonstrating what a Top Down approach can produce.  And he adds the kicker of immense publicity.

Much has happened since the mid-‘90’s.  Lean has been incorporated to create LSS.  The ideas have spread from manufacturing to services (although one could argue services were always part of Deming’s work as well).  Application has gone around the world.  And the term Operational Excellence has taken shape to emphasize the business goal versus simply the project or process goal.

But wherever we are today, the elements established by Gauss, Shewhart and Deming, brought together by Motorola and popularized by modern companies lead by GE are still the same.   Reading Deming today is as pertinent as fifty years ago.  Putting together the numbers, individuals and the organization to improve processes, products and services to lower costs and improve customer satisfaction remain appropriate goals and the elements that developed to do so remain relevant.

Whatever criticism exists, this history should demonstrate how well founded each of the contributions were at their time and how the conditions that gave rise to them still exist today so as to validate their continued application.  If we understand from where they came, we will do a better job of properly applying them today.    If you would like to discuss any of this, please feel free to contact me.

Continuous Improvement Programs Done Right – 4 Lessons Learned

August 29th, 2012 3 comments

continuous improvement playbookWe’ve recently had several discussions with companies who have dismantled their continuous improvement (CI) programs during the economic downturn and are now reviving them as their businesses stabilize.  It’s a pretty common theme of late.  As is natural, the tendency is to turn to the old playbook as a starting point. In almost every case, this is not a good idea.  We’ve learned a tremendous amount since those pre-crisis days.  Most of it was already in process and, as happens in every economic cycle, the downturn simply accelerated the learning cycle.

The old playbook and approaches for continuous improvement programs had some successes for sure but for most companies things are different now and approaches to continuous improvement need to align with the new reality.  Here are 4 simple things to keep in mind as you consider rolling out a new, or restarting an old, continuous improvement program:

      1. Alignment. More than ever, an initiative’s success depends on its activities link to the enterprise’s real priorities. This common sense notion always got lip service, but lip service isn’t enough these days.  Prioritize projects as a function of “if” and how much they move the needle on these priorities.  Make sure every single activity is linked, visibly. Don’t waste time, energy and resources on unaligned activities or your continuous improvement efforts will likely be short-lived.
      2. Business Focus. Drive the business and not the CI effort.  When you place the improving the business as the goal, it will pull the projects which, in turn, pull the knowledge needed to successfully solve problems. When you drive the CI program, you are building knowledge and capability simply for its own sake and trusting the demand to show up … a bad strategy.
      3. Right Fit, Right Now. Get everyone involved and give them right-fit knowledge and tools to improve their processes today.  Most people really do want to improve their workplace and the service or product they deliver their customer, so give individuals useful knowledge and tools, that they can use right now, not 6 months down the road. There is a massive body of methodologies, tools, knowledge, etc. you can push into the organization, but just because you can doesn’t mean you should.  Think “right-fit”, “useful now” ….
      4. Results, results, results.  Keep the organization focused and engaged by producing a positive return from the beginning.  Organizations need to see a return on the things they do.  Where they have a return, they invest more and do so with confidence and conviction.  Don’t expect organizations that are measured quarterly to think about CI in terms of multiple years.  It may be theoretically correct but it is unrealistic.

There are lots of things in the old playbook that violate these basic lessons.  The lessons had to be learned the hard way.  It’s why so many CI programs were dismantled during the crisis to begin with, instead of being part of what got organizations to the new world.  As we rebuild again, let’s apply what we learned right from the beginning.  CI programs did many good things pre-crisis. But we now have an even better opportunity to do improve and help our organizations drive forward.

As always, if you want to discuss any of this, feel free to contact me.