Operational Improvement Has Improved

If you’ve had a bad experience with an operational improvement effort (like Six Sigma or Business Reengineering), or if you haven’t given it much attention lately, you should take a fresh look. Many companies and executives have been disappointed with these efforts when results weren’t sustained and inefficiency crept back in. But improvement has improved.

I see three forces behind this trend:

1. Greater awareness and experience in improvement approaches. Continuous improvement and quality have become part of the management lexicon. But it’s relatively recent that these practices have become widely adopted, at least outside of manufacturing, and outside of Japan and the U.S. About ten years ago they spread to financial services and, in the past five years, more deeply into health care and services. They’ve also moved into China, India, South America, and Europe. In addition, the many tools from the various methodologies (such as Lean and Six Sigma) are being combined by smart companies into a standard process toolkit.

Because of this increased diversity and scope of adoption, the learnings are deeper. It is easier to find best practices in a range of processes, e.g., in answering customer calls, improving the time it takes to treat someone with a heart attack, or reducing the waste in launching a new software update.

2. Greater information availability. Twenty years ago there wasn’t an Internet to allow companies to easily share information. Today, greater access to information makes the management of end-to-end processes easier, especially those that cut across organizational boundaries. For example, in arecent post I told the story of eight healthcare companies that pulled together as a team to map the current process for hip and knee replacements and redesign it to improve the patient experience. All care givers in the process now have better access to shared information about the standard patient pathway and shared measures. Upstream participants have access to downstream scheduling systems, and downstream participants can see the flow heading their way.

3. The growth of social technology for sharing and learning. New social technology has improved collaboration, sharing, and learning about process improvement internally and externally. Now conversations are happening globally, and experiences and points of view are being shared much faster. People and organizations have access to many more vehicles for learning about the latest in management practices. As I mentioned in a previous post, “New Ways to Collaborate for Process Improvement,” Avery Dennison, a $6.5 billion manufacturer of labels and office supplies, launched an internal online community in 2010 to improve collaboration and accelerate learning among its process improvement practitioners. When VP of Global Operations Greg Temple moved from Avery Dennison to be EVP of Supply Chain at $11 billion cleaning services provider Ecolab, he moved to implement a similar internal communications platform to accelerate learning around the globe.

And there are many examples of external collaboration and learning forums that didn’t exist even a few years ago. The Lean Enterprise Institute and Healthcare Value Network (a joint venture of over 50 hospitals organized by Thedacare and the Lean Enterprise Institute) provide extensive practical advice, tools, and techniques on their websites and hold webinars where improvement ideas and stories are shared without travel. LinkedIn has dozens of discussion groups on all aspects of different approaches, process management, customer experience, strategy, and change management. I host a group called Process Leaders. Blogs also provide expanded sources of information, and the comments sections, such as the one below my blog posts here on HBR, provide another opportunity for people to discuss issues and share experiences. And videos are being used to document a current process (at healthcare provider Kaiser Permanente they call it “video ethnography“), or as a way to float a new process idea (a popular approach at Google).

Several years ago, my friend Tom Davenport, author of Process Innovation and Competing on Analytics, looked at the waves of managerial enthusiasm for various process improvement “religions” and concluded it was hard to see any progress. It seemed that each generation of management in any organization was rediscovering essentially the same process improvement ideas, just with a different brand label. Today I see improvements in improvement: a stronger foundation of process improvement awareness and experience, a greater availability of information, and faster learning through social technology.

This article was firsts published on the Harvard Business Review.

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Categories: Continuous Improvement

Author:Brad Power

Brad is a consultant and researcher in process innovation. His current research is on sustaining attention to process management. He is currently conducting research with the Lean Enterprise Institute.

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3 Comments on “Operational Improvement Has Improved”

  1. October 22, 2012 at 7:13 am #

    Brad,

    The persistence of Operational Improvement reflects the underlying need of every business. The fact that “…results weren’t sustained and inefficiency crept back in.. ” reflect the underlying nature of the enterprise systems upon which these businesses attempt to run. We’ve all seen the ads of X Company Runs On SAP (or any ERP, WMS, DSD, FS, MES, etc.). This oxymoron is what thwarts the results and allow inefficiencies to creep back in to business.

    You’ve identified 3 forces that have improved improvements. All valid points. However, until companies start to Run their company the way THEY want too they will receive the same results. Bordering on the cliche definition of insanity. To that end I suggest 3 steps to break the insanity cycle and create sustained and on-going improvements in efficiency, accuracy and collaboration.

    1) Leave your legacy software alone (ERP, Homegrown, Best of Breed…whatever). Do not modify, upgrade, integrate or replace these systems. While they lack a great many things, most notably Operational/Process flexibility, they are the financial foundation of your business. They touch every corner of your company and often there a many different systems in use throughout segments or divisions. You lack the budget, time, IT resources and risk tolerance necessary to touch this layer of software; accept that and move on.

    2) Deploy a next generation enterprise solution that leverages the legacy software. These applications speak to your legacy software in their native language. They shield the legacy system and its out of date processes, data and technology from the dynamic environment Operational Improvement demands and the current business environment requires. The system you acquire must contain Translation, Rapid Process Agility and Creation, Logic, Ubiquity and ‘Self-Service’.

    3) Convene a small group of people and apply Lean, Six Sigma, Business Reengineering or any such Operational Improvement methodology. Use #2 to deploy a prototype in hours. Measure the results, refine as necessary and put the solution to full production use in a matter of days. Repeat this process as often as you’d like to improve the efficiency, accuracy, collaboration and financial performance of your Employees, Vendors and Customers.

    Until the underlying constraints of business are addressed and companies stop running their business ON their legacy systems; all the forces in the world will continue to deliver the same disappointing results. Operational Improvement is the nature of business: improve or perish.

  2. October 22, 2012 at 9:24 am #

    Steve,
    I like your approach!

    I speak with many end-users who don’t have the time or resources to re-do legacy systems!

    I use the phrase “don’t boil the ocean” when considering process imporvement. Take one process that’s causing headache, improve it, and repeat.

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