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Where Process Improvement Projects Go Wrong

December 28th, 2012 Comments off

While doing some general Christmas reading I came across this June ’12 article in the Wall Street Journal’s on-line edition by Dr. Statya S. Chakravorty, the Caraustar professor of operations management at Georgia’s Kennesaw State University.  While we can debate how to improve the application of the methodology or make recommendations how to address the cited breakdowns, I think Dr. Chakravorty wrote a great article detailing many places a project or program can go off track which I wanted to share with you.  If you’d like to discuss Dr. Chakravorty’s article, contact me.

Where Process Improvement Projects Go Wrong by Dr. Statya S. Chakravorty

What do weight-loss plans and process-improvement programs such as Six Sigma and “lean manufacturing” have in common?

They typically start off well, generating excitement and great progress, but all too often fail to have a lasting impact as participants gradually lose motivation and fall back into old habits.

Many companies have embraced Six Sigma, a quality-control system designed to tackle problems such as production defects, and lean manufacturing, which aims to remove all processes that don’t add value to the final product. But many of those companies have come away less than happy. Recent studies, for example, suggest that nearly 60% of all corporate Six Sigma initiatives fail to yield the desire results.

We studied process-improvement programs at large companies over a five-year period to gain insight into how and why so many of them fail. We found that when confronted with increasing stress over time, these programs react in much the same way a metal spring does when it is pulled with increasing force—that is, they progress though “stretching” and “yielding” phases before failing entirely. In engineering, this is known as the “stress-strain curve,” and the length of each stage varies widely by material.

A closer look at the characteristics of improvement projects at each of the three stages of the stress-strain curve—stretching, yielding and failing—offers lessons for executives seeking to avoid Six Sigma failures. The discussion that follows is based on what happened at one aerospace company that implemented more than 100 improvement projects, only to determine less than two years later that more than half had failed to generate lasting gains.

Stretching Phase

When a metal spring is pulled initially, the material stretches to accommodate the increase in pressure. In much the same way, the people involved in a process-improvement project generally find themselves stretching and willing to tackle all necessary tasks in the early going.

At the aerospace company, an improvement project typically began with the formation of a team consisting of 10 to 18 members from various departments. A Six Sigma or other improvement expert was assigned to the team to guide and train them. At this stage, teams were excited to learn and apply what they were being taught.

Team members collected data on their current working environment and, with the help of the Six Sigma expert, identified the changes they most needed to make to achieve their stated goal—say, a reduction in the rate of defects in manufactured parts or fewer mistakes in order writing and billing. The expert developed a “to do” list that included action items, responsibilities and deadlines and made sure needed resources were available.

Because top executives were paying close attention to the project at this stage, managers made clear to employees that the improvement initiative was their top priority. For example, producing error-free bills became more important than processing a certain quantity of bills each day.

While daily production slipped initially when the team transitioned to the new way of working, it improved when the group grew accustomed to the new process. When the team reached its goal—say it reduced billing errors by a certain percentage—the improvement project was declared a success.

The director who was spearheading the company’s Six Sigma initiatives shared the teams’ achievements with others in the company. Team members were given rewards such as gift certificates to restaurants, and their pictures appeared in the company newsletter. The division vice president reported on the team’s success to the company’s other vice presidents and to its top executives.

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Yielding Phase

Unfortunately, the story doesn’t end there.

If a metal spring continues to be pulled, there will come a point when the material yields as it struggles to support the increase in pressure. Though still intact, the spring becomes permanently deformed—stretched out, for example—as the bonds between atoms are broken and new ones formed.

Similarly, in the middle stage of an improvement project—when the Six Sigma expert moves on to another project and top management turns it focus to another group of workers—implementation starts to wobble, and teams may find themselves struggling to maintain the gains they achieved early on.

With the departure of the Six Sigma expert, the teams at the aerospace company lost their objective voice and the person who performed the sophisticated statistical analysis that allowed them to prioritize the tasks that most affected performance, thus needed fixing the most. Without the expert to rein them in, some team members began pushing agendas that benefited themselves and their departments, making it harder for the team to agree on new goals.

While teams at this stage continued to look for the flaws in their current working environments, they got bogged down trying to perform the statistical analysis previously handled by the expert. Some teams started spending too much time on the improvement project, which affected their ability to meet production quotas and other daily responsibilities.

Amid the confusion and facing pressure from managers to keep up with day-to-day duties, some team members started reverting to old habits in the much the same way a person who recently lost weight might start skipping gym sessions when work and family demands heat up. The team’s performance stopped improving and, in some cases, started to regress.

When reporting on the status of their projects, teams tried to make themselves look better by highlighting what they hoped to accomplish in the future, instead of what they were accomplishing now. Some team members became discouraged and started to doubt the benefits of the improvement strategies.

The improvement director, whose salary and bonus depended on the success of the company’s Six Sigma initiatives, highlighted projects that were showing great progress and ignored those that weren’t. As a result, company executives were unaware that some improvement teams were slowly starting to crack under the pressure.

Download “The Importance of Project Selection – Why Process Improvement Efforts Falter and How to Assure Success and Sustainability”

Failing Stage

Over time, pulling will cause the material in one area of the metal spring to narrow, creating a neck that becomes smaller and smaller until it is unable to sustain any pressure at all. At that point, it breaks into pieces. Similarly, in the final stage of a process-improvement project, team members find themselves unable or unwilling to tackle improvement tasks, and the effort ultimately collapses.

With the improvement expert long gone and no additional training in Six Sigma or other improvement strategies provided by the aerospace company, team members became increasingly discouraged by their failure to build on earlier success. They eventually stopped caring about the improvement project, partly because it wasn’t tied to their performance reviews.

As morale sagged, no one stepped forward to assume leadership of the improvement project, so the team lost interest in looking for ways to improve their current work environment. The company allowed newly formed improvement teams to poach people and resources from older teams, so the only improvements that were made were those related to safety—and even then, only the bare minimum was done. Members steadily regressed to their old ways of working, and the group’s performance returned to what it had been before the project began.

With projects failing miserably, many teams reported their achievements incorrectly, giving a false sense of success. Because the director continued to communicate only about projects that were showing excellent results, it took several months for the division vice president to become aware of the widespread failures and reluctantly inform the company’s top executives.

Lessons Learned

Four lessons from our research stand out.

First, the extended involvement of a Six Sigma or other improvement expert is required if teams are to remain motivated, continue learning and maintain gains. If the cost of assigning an improvement expert to each team on a full-time basis is prohibitive, one improvement expert could be assigned on a part-time basis to several teams for an extended period of one to two years. Later, managers could be trained to take over that role.

Second, performance appraisals need to be tied to successful implementation of improvement projects. Studies point out that raises, even in small amounts, can motivate team members to embrace new, better work practices. Without such incentives, employees often regress to their old ways of working once the initial enthusiasm for Six Sigma dies down.

Third, improvement teams should have no more than six to nine members, and the timeline for launching a project should be no longer than six to eight weeks. The bigger the team, the greater the chance members will have competing interests and the harder it will be for them to agree on goals, especially after the improvement expert has moved on to a new project. And the longer it takes to implement improvements, the greater the chance people and resources will be diverted to other efforts.

Fourth, executives need to directly participate in improvement projects, not just “support” them. Because it was in his best interests, the director in charge of the improvement projects at the aerospace company created the illusion that everything was great by communicating only about projects that were yielding excellent results. By observing the successes and failures of improvement programs firsthand, rather than relying on someone else’s interpretation, executives can make more accurate assessments as to which ones are worth continuing.

Six Sigma Methodology; Select Projects to Achieve Goals

December 11th, 2012 Comments off

It is the end of the year.  You look back and wonder where it went.  You look at your goals from a year ago and honestly face what a struggle it has been to move forward.  You believe they were and remain the right goals and yet execution is constantly hindered by the demands of daily chores.  How can you change it?

First, let’s face the fact that your enemy in achieving your goals is the daily cyclone of work.  Simply put, your goals and your daily work aren’t compatible.  And the daily work always wins because it is urgent.  You didn’t fall short on your goals because you’re stupid or lazy.  You were just busy.

It’s a new year.  How can you make it different?  Let’s start by redefining execution.  Execution is about achieving your goals while dealing with urgency of daily work. So how should your plan of execution change to deal with this reality?

Unless you are going to be a full time problem solver, you really can only focus on 1 or maybe 2 projects in addition to your daily work.  And since there are more good ideas than resources, learn to say “NO”.  And since there is only time for 1 or 2 projects, then you can only pursue that ones that significantly move the needle.  The little subprojects diffuse energy and should only be done if they ensure completion of the higher order project (and not simply align to it).

Our recommendation is to really pour your energy into your project selection decision matrix and pick the ideas that rank the absolute highest.

In addition, as you work on your projects, target moving the needle of a lead measure.  If you are in a process, don’t simply measure the output.  That is a lagging measure.  This sounds simple but is actually very difficult because lagging measures naturally get more attention and are supported with more data. Everyone wants to measure the result.

Our recommendation is to look at your process map and investigate upstream sub-processes for the most impactful items and then collect and target that data.

Finally, give your actions daily visibility with a compelling dashboard.  Make it simple.  Make it visible.  Show both the leading and the lagging indicators. Make sure that when you look at it you know if you are winning or losing against the urgency of daily work.  Winning begets winning.

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“The Importance of Project Selection – Why PI Efforts Falter & How to Assure Success”

Our recommendation is to have regular governance meetings to monitor all your teams’ progress on projects.  Have them set short term action items and report regularly on whether they have completed them or not.

So as you head into 2013, decide you will make this year different.  You will pick only the important projects.  You will target the leading measures.  You will make progress visible and hold yourself and team accountable for short term actions ensuring that progress.  You will fight back against the urgency of daily chores and move forward.  If you’d like to discuss, contact me.

Selecting the Right Projects…Not too Hot but Not too Cold…Just Right

June 1st, 2012 Comments off

Right fit project selection and definitionWe all know the story of Goldilocks who product tested the food and furniture of her neighboring bear population.  By trial and error, she bounced from too hat and large to too cold and small until she found “just right”.

Organizations go through the same process in finding what is right for their performance improvement initiatives.  Projects are sometimes so small that they aren’t worth management’s attention. And sometimes they are so large and complex that they can’t be supported by the available resources time and knowledge. And so the organization bounces from guardrail to guardrail trying to find the right level of effort, capability and results which in and of itself is a waste of time and effort.

So how do you get it right and bypass the time and effort?  How do you pick projects that fit your organizations goals?

Download Operational Governance Executive Brief

 an Executive Brief that describes a framework for operational governance that can help you drive real value (ROI) from your performance improvement efforts

We have written extensively about project selection.  We talk about North to South alignment from Dashboards to Improvement efforts.  People have reviewed our recommended path and said “I get it…I believe that process does align the efforts to the strategic goals…but the projects are still not right…how do we get it right?”

The answer is in defining “right”.  And a big part of the effort to define it is to be honest with yourself and your team.  As an example, if you are focused on productivity, don’t pretend otherwise by talking about innovation or the satisfaction of other stakeholders than the business.  And if you want long term growth, face the conflict with short term capital constraints.

Mechanically, where in our recommended roadmap does that mirror get held up?  It’s in the rankings and rating of projects.  Regardless of your priorities, you’ll always develop a project list by moving from the creation of a dashboard to conversion of those metrics to Critical to Stakeholder Requirements to process metrics within a Value Stream Map.  Performance gaps relative to those metrics produce the project list.

It is then that the honesty begins.  As you create criteria, they must be weighted and it is those weightings that determine which projects rise to the top. And it is the depth to which you drive those project definitions that determine the level of their impact.  You can steer the efforts to a few big, breakthrough projects or too many small incremental projects.

But continue to be honest with yourself –those big, high level breakthrough projects are often gnarly and require real enterprise wide capability and focus.  And for those many, small projects to cumulatively have a strategic impact your organization will require a long term vision and fundamental cultural change.

Our Roadmap to Operational Excellence is a practical approach to improving whatever you seek to drive whether it’s your personal golf scores and weight loss or your company’s customer satisfaction and cash flow.  You set measures for targets, understand how you get there, identify how you’re doing and target to improve your lowest performing activities.  But a big assumption is that you all agree on what you want and are honest about it with yourselves and the team including an assessment of your capabilities. Get your rankings right and using the framework for improvement, you’ll progress.

If you want to talk more about Project Selection or our Roadmap to Operational Excellence please contact me at jlopezona@ssqi.com.

Project Definition is Critical for Success – 5 Key Elements You Ignore at Your Own Peril

August 12th, 2011 Comments off

Project Charter | Project DefinitionWe have many discussions with organizations where Lean, Six Sigma, and other performance improvement efforts have outright failed, or maybe have just started to lose their impact.  In an earlier article, we talked about the importance of alignment and how important it is to have clear line of sight to the performance gaps that matter the most.  But, in some cases, scorecards and dashboards are there, with well-defined KPIs pointing to high-value targets, yet improvement efforts still yield less than desired results. Why?

Of course there can be many reasons, but lack of discipline around project definition, or project charters, is something we see consistently in these problem situations.  Poorly defined projects are without a doubt a recipe for disaster.  You may be focusing on exactly the right problem, but, if the project’s problem statement and objectives are not well-defined, your chances of success in making an impact fall dramatically. So what are the key elements of a good project definition and charter?  Here are 5 big things I think should be present in all improvement project charters / project definitions:

    1. A clear Problem Statement that defines the business problemin specific and quantifiable terms.  Done well, it will answer the following questions clearly and concisely:
      • What is the primary metric, or needle, that I’m trying to move?
      • What is the primary metrics current, or baseline, value?
      • How did I measure the primary metric’s baseline value, and over what period?
      • From the business’ perspective, what is the target value for the primary metric?
      • What is the gap between current performance and needed performance levels for the primary metric?
      • What is the value (in $’s if at all possible) of closing that gap?
      • What areas of risk do I need to pay attention to as I try to move the primary metric? These will become your secondary metrics. For example, if you’re trying to reduce costs in some customer facing area of the business, you need to pay attention to such things as attrition rates, customer satisfaction scores, etc.

 

    1. A clear Objective Statement for the project.  It is unlikely that a single project can close the entire gap for the business problem defined in #1.  It is more likely (and usually preferable) that a project focuses on a sub-process, or segment of the overall value stream, and it targeting only a portion of the overall gap.

 

    1. A clear understanding of the Start and Stop points for the project.  Related to #2, be very clear on exactly which segment of the value stream (subprocess) the project will be restricted to.  This is about scope, and avoiding the ever-present scope creep.  It may need to be adjusted as the project progresses (and/or evolves), but make an effort to define start and stop points up front.

 

    1. A clear definition of the Team that needs to be involved in the project.  Team members may be actively working on the project analysis, or they may just be subject matter experts that are called upon to gather information and feedback.  They may work in the process/sub-process being analyzed, or they may be customers of or suppliers to that process.  Take time to think through who really needs to be involved, and engage them early.

 

  1. Explanations of how things like are computed and derived.  For the gap values in problem and objective statements, how were those values derived?  There will always be questions of value, and it’s better to have explanations right in the project definition. The same goes for primary metric baseline values?  How were derived?  Show the data that was used, identify any assumptions that were made, identify any anomalies in the data, etc.

Project definition (project chartering), done well, takes time and effort, but I can assure you that your project outcomes will suffer if shortcuts are taken here.  I do realize that there is a lot of ground covered with these 5 elements, and that there is a lot of detail and nuance in each.  In an upcoming post, I plan to present an example and walk through each of the elements in some detail.

Download our Project Selection executive brief

a short presentation on project identification and definition ….

Feel free to contact me if you would like to discuss project chartering and project definition for your organization and its improvement efforts.