Overview of Process Improvement

Basic Business Cents

People never seem to have enough time to do things right, but they always have time to do things over. This does not make sense on the surface, but it is what I have observed over time working with many organizations. It is true that performance improvement activities take time, which is precious to the small business, but that time can be found by simplifying systems and processes.

A process improvement activity has three elements, simplify, improve, and sustain.

Simplify

The performance improvement objective is to reduce waste, rework, and redundancy. The first step is to take an overview of the organization and draw a chart of the main systems, starting with the entering to your organization of the goods from your suppliers to the exiting of your goods/services going out the door to your customers. You may have parallel paths of product lines A, B, C or services A, B, and retail. Examine the chart yourself, observe how it works in the actual work area, share it with employees actually working in the systems, and look for ways to reduce cost, minimize time, and improve the quality of the system. Eliminate unnecessary steps, distance traveled, redundancy, wait time, obsolescence, and stockpiles of inventory.

When you are satisfied you have done what you can to simplify the overview, go down to the next layer of detail until you get to the detail of individual items for each worker in their work processes. The more you streamline your systems, the more time you and your workers will have to further improve the operation. Eliminate rework by doing it right the first time. Improve processes to the point that they cannot make defective products/services.

Improve

Two types of activities are needed, solve problems and improve processes. In both cases, workers need to be trained and given authority to act. Problems should be identified and resolved and not allowed to hang over the heads of the workers. Processes should continually be improved; there is always a better way. Collect data to show the problem is real or the process is improved and make decision on facts whenever possible. Tools and methods are available for conditions, where data is available and where it is not. Involve all the employees in the performance improvement quest.

Sustain

Not to be overlooked is the importance of sustaining improvement progress. Changes should be documented and communicated throughout the areas affected. Follow-up by observing adherence to the new ways and not allow backsliding into the comfortable way of “that is the way we have always done it”.

In order to be ahead, you have to get ahead. Keep reducing waste, rework, and redundancy as a way of life. Organizational performance improvement effort must be continued relentlessly forever in order to survive and prosper.

Introducing Process Improvement

Basic Business Cents

Business is tough and necessary performance improvement is a never-ending quest.  We cannot ever rest on our laurels and stand still; we are either continually improving or we are losing ground to competitors.

When introducing a process improvement program into an organization, there are many do’s and don’ts. This type of program begins and ends with leadership. There is no point in introducing performance improvement measures where the top leader does not lead. No one else can do, it must be the top person leading the way, setting the example, and motivating others to the cause. Leaders cannot merely stand on the sidelines and cheer on the employees. They must have more zeal and enthusiasm than any other employee and lead the way. The manager’s enthusiasm for work should never be less than subordinates.

The leader must then work on obtaining the same excitement for process improvement in each employee. This improvement activity requires a new way of thinking for the entire organization so that everyone is aligned in his/her thought processes. Simply driving it from the top will not get the desired results; in a one-man autocratic organization, the people will only do what they are told. The organization needs the combined knowledge, experience, and creativity of all employees. This will require a humanistic type of management that builds mutual trust and respect throughout the organization. Employees treat each other as equals in true teamwork.

Lip service or good intentions at all levels do not get results. Implementing measures to improve processes does. First, everyone must understand his/her work processes and then seek to simplify and improve them.

The leader should attend seminars and then teach lessons learned to the employees. Armed with this new knowledge, the leader should improve his/her own processes and then lead improvement teams personally to work on other key processes. The leaders need to be familiar with the true state of the organization. By observing the way employees answer questions and examine data, managers can see the real problems.

Employees sometimes hesitate to have leaders in the same training or on their improvement team because they are reluctant to state problems in front of them. This is indicative of management problems that need to be addressed before the improvement results are optimum. People need to feel secure stating the truth about conditions.

No company, system, or process is perfect and problems always exist. From the top leader to the most recent hire, all need to work together to improve the work processes and solve problems, little by little, better and better. Enthusiasm and excitement for this new journey, coupled with training and teamwork, make the work more satisfying, productive, and even enjoyable.

Quality-Centered Management

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There is no great secret to success; it is simply the supply of quality products and services at a reasonable cost that consumers will buy. Successful companies have a quality-oriented management approach which results in survival and growth in a competitive world full of problems. Without a systematic approach, fatal problems will invariably arise. As stated by Dr. W. Edward Deming in his famous four-day seminars, we are in a new age of economic competition. Those who cannot continuously improve their quality and productivity will fall by the wayside.

A quality-centered management approach encompasses a customer-oriented management philosophy and a set of specific objectives, systematic methodologies, and management practices.

Management has the responsibility of clearly stating the aim of the organization and setting specific objectives. They need to understand the true needs of the customers, not just their wants, and to anticipate future needs.

Internally, management needs to understand quality tools and methods in order to lead the way to quality improvement throughout the organization. They are the role model for quality improvement and should lead the improvement activities. Managers also have processes of their own and can demonstrate their achievements with their own work.

Many systematic methodologies exist to improve work processes like Company Wide Quality Control, Total Quality Control, Total Quality Management, Six Sigma, Reengineering, and Lean Thinking. Toyota refers to their methodology as, “Just the way we do business.” These application methods are useful in advanced situations, but it is best to start with the basics.

The first step is to understand the work processes. Just follow the trail from the time the supplies are received to the time the product is handed off to the customers and chart or list the activities step by step. The more detailed you make the list or chart, the better. Then, take a close look at the chart and opportunities will invariably jump out at you to simplify your processes. The goal is to reduce waste, rework, and redundancy in your system.

A seven-step system, The Improvement Journal, is useful to solve problems or improve processes. The steps are to identify the process or problem, examine the current situation, analyze the causes, take a corrective action, check the results, standardize the changes, and draw conclusions.

All employees have experience and knowledge and play a role in quality-centered management. They need to be enabled to take quality improvement action, which means training in not only their job skills but also in the quality tools and methods. They need to be enabled to take action because they are closest to the work and also want to perform better. Some organizations use methods like Quality Circles or Improvement Teams to allow workers work as a team to solve problems or improve their work processes. This might sound like extra work for all involved but it will eventually result in simpler and easier work.

Quality-centered management will, in the long term, lead to lower cost, better on-time delivery, higher productivity, more business and a higher standard of living.

The Servant Leader

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Leaders of organizations can be portrayed in two ways, the commanding leader and the servant leader.

Typical organization charts show the chain of command with the leader shown at the top, followed by the direct reports, and lower down the people reporting to them. This forms a triangle. The leader at the top of the triangle can be called the commanding leader.

The commanding leader arrives at the top of the triangle through various ways. Some are often selfish, dogmatic, and arrogant as they claw the way to the top. Some are eloquent and persuasive and use their charisma and guile to win promotions. Some are short-term outcome focused to the demise of long-term objectives with their overriding attention to “the bottom line.” And always there are those who make use of “who they know”.

It is better to turn the triangle upside down and depict the servant leader supporting the organization. This can be likened to the sculpture of Atlas holding up the earth or other heavenly body. The servant leader has the organization on his/her shoulders and supporting it with all of their ability.

The servant leader understands the responsibility of supporting the organization and making it better. They make sure the employees receive proper training, tools, and material and give employees the authority to make decisions to improve their processes. They provide positive reinforcement with credit for victories shared among people. They provide clear direction and ensure all employees understand communications. The servant leader is the one who serves best, who supports the employees and helps them to perform better. They get results through others.

The world is changing. We have moved from a commanding leader over an assembly line making all the decisions and the workers leaving their brains at the door and doing what they are told. We now are more likely to see a servant leader supporting the organization, using the brainpower of all employees to optimize both short and long-term results. People today are more informed, knowledgeable and able to contribute. Give them a chance.

Servant leadership is truly a win-win for all parties in that all resources of the organization are used, results are improved, and everyone receives more satisfaction and pride in their work.

Turning Knowledge Into Action

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“Don’t look back. Something might be gaining on you.”

Satchel Paige, Hall of Fame Baseball Pitcher

Paige knew that you cannot stand still, you have to keep moving forward. In business, if you are content to rest on your laurels, the world will pass you by. It is not always easy to know what to do to improve but a method of assimilate, cogitate, and activate is helpful.

Knowledge is available everywhere and it is up to us to gather ideas and information from various sources and assimilate it into our body of understanding. Sources of information can be found on the Internet, in books, trade journals, customers’ experiences, returns, results, consultants, and even newspapers columns. You are reading the Basic Business Cents column where thoughts are presented that might trigger useful ideas for you in the areas of leadership, strategy, process improvement, marketing, and culture. It is easy to get an overload of information so it is up to you to select what is useful and relevant.

It is undesirable to copy what others are doing as situations, talent, conditions, and timing is different so the knowledge must be studied and carefully thought about with the intention of how it can be applied to your organization. This cogitation of knowledge inputs meshed with your knowledge of your business can be meshed into a plan for implementation. Reflection of how this new information compares with your experience should fine-tune your plan.

Knowledge without action is useless. Armed with your deep study and observation, you can implement the plan developed. Challenge your beliefs and way of doing things. Be willing to try new ways. Ensure that any changes are documented and followed up upon to see that the implementation is correct and to understand the results of the change.

It is preferable to try new ideas on a pilot basis and compare results with previous action. If the results are positive, then do more of it and document the new method to share with other parts of the organization. If the results are negative or do not show measureable results, then forego that plan and try another improvement idea. Make something happen.

Satchel Paige was right. Don’t look back at what might have been; look forward at what might be.  Continually, relentlessly strive to improve work processes. It is not necessary to make giant strides forward; baby steps, little by little, are the most important in making progress, which will lead to success. Assimilate, cogitate, and activate over and over continually.

A Process is a Process is a Process is a Process

Basic Business Cents

We have previously discussed that all work is a series of processes. I suppose we can say all activity is composed of a series of processes. It is how we do things. No process is perfect; all processes can be improved. The worker strives to perform the best they can within the processes they are given and the manager’s job is to improve the processes. When viewed in this manner, it does not matter if the processes are in a manufacturing company, service, or government. It does not matter if the processes are in a large conglomerate or a small mom-and-pop business. A process is a process is a process is a process.

The first task in performance improvement is to understand the work processes. Start with the material coming in the back door and draw a sketch of all of the processes leading up to the product going out the front door with the customer. The more processes you can identify, the better.

Then take a look at your flow diagram and identify any waste, rework, and redundancy. Does the flow make sense or should processes be rearranged. In other words, simplify where you can. When you are satisfied with the diagram, show it to others, especially those involved in each process. They may be doing something different than what you think is happening. Make corrections with their input always seeking to streamline and simplify the system of processes.

When a problem is identified or a process is selected to improve, a simple system to follow is P-D-C-A, plan, do, check, and act. First, plan a solution or change, then do it on a trial basis if possible to check if the process is improved. Does the data confirm your theory of a better way. If the results are positive, then document the change so it becomes the standard way of acting or doing the process across the organization. If the results do not show improvement, then plan another change. You can continue rolling through P-D-C-A, continuing to improve. Remember no process is perfect and all can be improved.

When checking for improvement, be sure to check on the impact of the change on other processes and especially the total system. Remember, for every action there is a reaction from other processes and you want to be sure you achieve the result you desire on the total system.

Process thinking may be the most important breakthrough in your management style. No matter what size or type of organization you are in, a process is a process is a process and it can be improved.

Know Your Market

Basic Business Cents

It goes without saying that you need to focus your marketing efforts where you can succeed but it is easier said than done to define that focal point.

First, you need to define your niche or area where you are a dominant force. This can include geographic boundaries, product/service offerings, price range, etc. In order to dominate you need to be better than anyone else in product, service, delivery, and timeliness. This niche needs to be something that you enjoy in order for you to put forth your best effort. And, it needs to satisfy your financial needs.

With the niche identified, the next step is to understand the wants and needs, not necessarily the same, of the customers and prospects.  The best way is to talk to a sample of them in person so that you can read their body language as well as what they are saying. When an interesting point is brought up, you can delve further into their thoughts and dreams. A good question to open a conversation is what is not now available, but you would be enticed to purchase if available? With on-line sales, ever-increasing technology, and mobility, market niches change rapidly. Existing organizations may have to reinvent themselves to cope with the changing market.

Armed with your thoughts on your desired niche and needs/wants of buyers and yourself, it is time to gather data to support your theories. You want to get facts on the size of your market niche, buying habits, and preferred approach to promotions. Many sources are available and you will want to be familiar with several. I can give an example. These columns are targeted for small businesses. Last month I contacted Dun & Bradstreet and requested the number of businesses under 100 employees in the United States. Immediately, I received an email that said that as of that moment there are 17, 297, 156 US businesses under 100 employees. I know that this article does not reach that wide of an audience, but it was interesting to find out how large the population is of typical small companies.

Other sources of demographics are University/College Marketing Professors who can direct you to available help. Your local library can possibly help or direct you to available sources such as on-line services at large city libraries. Examples are Hennipen County Library, www.hclib.org and St. Paul Public Library at www.wppl.org. You may want to register your local library card with St. Paul Public Library at www.sppl.org/services/library-cards and Hennepin County Library at www.hclib.org/about/library-cards to use their services.

Other good resources are Economic Development Centers, Chambers of Commerce, Small Business Development Centers (SBDC), and SCORE, www.SCORE@hubbardcountyedc.com.  And, of course, you can surf the web.

Armed with data to support your research, you can focus your efforts to where you can be successful, enjoy your work, and be rewarded appropriately.