Lagging, Keeping Up, or Leading?

Basic Business Cents

A System for Enterprise Excellence

Competition today comes not just from the competitor across town, across state, or even across the country. With the improvement and innovation in transportation and communications, we are faced with competitive forces from all over the world. Many organizations have built on this global reach and even outsourced some manufacturing and service functions. In truth, to remain competitive, many of our organization’s key processes must be refined, improved, innovated, and streamlined to remove redundancy, waste, rework, and unnecessary steps as well as add value. Since the national average of productivity improvement is 4.5% per year, we must exceed this pace if we are to become leaders in our field. As Dr. W. Edwards Deming said, “If we want to be ahead, we have to get ahead.”

To do this, we need the brainpower, commitment, and skills of every employee. This cannot be accomplished by fiat, threat, or extrinsic motivation. It must come from within each individual who has an understanding of what it takes to succeed. To ensure this positive commitment, however, there needs to be effective performance improvement processes and a management improvement system, which integrates these improvement processes to remove barriers, prevents the damaging effects of organizational silos, destroys ineffective bureaucracies, and releases the innovative potential of each individual.

Most of us have looked at our operations and have decided there is a significant gap between where we are and where we want to be. The question is what to do?

In determining an improvement system, we need to do the following:

• Create Real Results:  Improve the bottom line on the income statement.  Simply using a method that cuts expenses is good but does not go far enough.  What is needed is a system that also increases revenue – the top line. For non-profits, the management improvement system must significantly improve the operations of the organization as judged by the users, employees, and the owners.

• Ensure Commitment:  Increase morale and ensure awareness, understanding, and/or commitment of everyone. The system must engage all employees in a quest to obtain a vision that is accepted to all and provide the methods to achieve it.  It must foster a sense of accomplishment and pride of work.

• Is Action Based:  Provide solutions in response to real needs, not to a pre-ordained solution. The resulting system must effectively integrate all of the process improvement initiatives.

• Create a Culture of Excellence:  Recognize the need to address the human side of action, not just the technical issues. It has to make sense not only to top management, but also to all employees. Clearly, people function best in an atmosphere of mutual trust and respect without fear of making a mistake.

·      Is Easy to Enter and Embrace:  Must allow different organizations that are at different stages of maturity in their improvement journey to use the management improvement systems to achieve similar results.

A proven comprehensive improvement system is named ADAMS for the acronym, Assess, Discover, Act, Manage, and Sustain.

Phase 1. Assess--Before we can take the first step in improving our organizations, we need to truly assess the current situation. We need to know where we are before we can decide how to get where we want to go.

Phase 2. Discover—With a clear vision of our current performance, the next phase of ADAMS allows us to gain a more comprehensive understanding of the underlying problems and issues preventing our organization from closing the performance gap.

Phase 3. Act—Assessment and discovery are fine, but what counts in the final analysis are resulting actions. If we do nothing with our information, we have failed.

Phase 4. Manage—Once we have determined our assessment, direction, and deployed our improvement initiatives, the most important function is to successfully manage all of these activities. This is an iterative process where we often return to review our assessments and verify our approach and progress.

Phase 5. Sustain—Finally, the major challenge we must face in completing these deployments is the real possibility of the trailing-off of performance improvement. We can be successful with assessment, discovery, action, and management, yet still run the real risk of seeing initial success but long-term failure.  If we want to be world-class leaders, we must master the phase of sustainability.

All organizations have gaps in where we are today to where we want to be tomorrow. The ADAMS system provides a disciplined method for closing that gap.

The next column will address details of how to deploy ADAMS in your organization.

Nuggets of Knowledge

Basic Business Cents

Advanced Strategic Improvements Practices

2014 Conference

Dr. Charles Liedtke, owner of Strategic Improvement Systems, hosts the Advanced Strategic Improvement Practices Conference each year in the Twin Cities where representatives from selected organizations present their performance improvement initiatives, results obtained, and lessons learned. It is a great day of sharing and learning from each other. Presenters at the conference this year were from Hennepin County, MN Office of Continuous Improvement, MN Department of Human Services, Mayo Clinic Health Systems, IBM, Buckman Associates, Hormel Foods, Cargill, Strategic Improvement Systems, Toro, Process Management, and Seagate.

This year was the best yet as the activities appeared to be more complete, well rounded, and focused on the leadership and people aspects as well as process improvement.

Some of the nuggets of knowledge that resonated with me are:

·      Tap the power of hidden influencers. In every organization there are untitled leaders at all levels, who demonstrate that they can get things done beyond what their title on the organization chart might indicate. Enlist the aid of these hidden leaders to further the improvement activity.

·      Leaders may provide direction, but do they provide leadership? Are they modeling the way? Do they recognize that they have work processes that they perform and do they work to improve those processes? Perhaps we are not doing enough to help senior leadership become effective change agents. Training and coaching are important for both formal and informal leaders. They need to become role models by improving their own processes. Leaders lead!

·      Government entities do not share knowledge improvement lessons learned internally as well as industry. Promotional opportunities are fewer and individuals sometimes hoard knowledge learned to increase their chances of advancement. Unfortunately, this is true in industry as well.  Improvement lessons learned must be shared openly and applied across the organization.

·      Provide education and coaching for all employees to understanding and obtain commitment for performance improvement and innovation.

·      Improvement ideas can come from anywhere; sometimes the best ideas come from the front-line staff. Everyone in the organization has a brain and do not overlook any resources.

·      The following quote from Roger Milliken was shared, “Operational Excellence secures the Present.  Innovation Excellence secures the Future.”   The world is changing so fast that we must continue to innovate products and processes.

·      One organization gave the Baldrige Explorer Survey to 200 employees and discovered that there was very little understanding of what their work systems were. As a result, the feedback on strategic improvement had marginal utility.

·      Create current Value Stream Maps for Engineering (and other departments) first and then create future Value Stream Maps for review for all employees. Once these maps are developed, they will generate ideas for improvement and innovation. As the ideas are generated and maps redrawn, more ideas will emerge.

·      Make sure improvement changes are sustained and do not slip back to the old way of doing things. Building a sustainable enterprise needs to be integrated with the Strategic Planning Process as an explicit strategic intent. Business needs to completely incorporate sustainability action in the way of doing business; it needs to permeate every decision and every part of the operation.

This sharing of knowledge learned in the various strategic improvement practices added useful knowledge to all the attendees. The presentations get better each year and this year was no exception. It was a privilege to attend and learn.