awareness lecture series - continuous improvement transformation
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IQPM Consulting Creating Sustainable Performance
Continuous Improvement Transformation:
Rethinking How You and Your Organization Work to
Create Value and Generate Revenues
Aristide van Aartsengel
&
Selahattin Kurtoglu
ISBN 978-3-642-35901-9 ISBN 978-3-642-35904-0
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IQPM Consulting Creating Sustainable Performance
Nothing New Under The Sun
• Improvement is about “change (i.e. deviation
from an expectation) in form, quality, or state,
over time” that add value.
• A change (or deviation from an expectation) in
form, quality, or state, over time is characterized
by its characteristic rate, rhythm, or pattern of
work or activity. It can be episodic (i.e. conceived
to be “infrequent, discontinuous and intentional”)
or continuous (i.e. conceived as “ongoing,
evolving and cumulative.”).
• Not all changes result in improvements,
thus we use metrics on the background of time for assessing: when changes
occur, the rate of change, the extent of change, and also to establish the
opposite of change – stability.
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IQPM Consulting Creating Sustainable Performance
Improvement Is A Notion As Old As The Creation
• “Improvement” is a notion as old as the “Creation” and the full history of the
skills, knowledge and competencies used to improve specific technical
activities in organizations is certainly not one that originated with contemporary
quality professionals.
– It may have started with the building of the
pyramids, which must clearly have involved some
understanding of organization, team work and
execution of tasks among the Egyptians.
– It may have also started earlier back in the days
of cave men and women who struggle together
and allocate tasks with the common goal of
survival.
“Amazing what a little teamwork can accomplish.”
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IQPM Consulting Creating Sustainable Performance
Contemporary Production Improvement Practices
MOTOROLLA
GENERAL
ELECTRIC
TOYOTA MOTORS
CORPORATION
Adam Smith, 1776
Frederick Taylor, 1911
Henri Fayol, 1916
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IQPM Consulting Creating Sustainable Performance
Improvement Initiatives Are In Poor Shape In Most Organizations
• Drastic performance improvement initiatives in most organizations
is a mess! Nearly 20 percent of a
survey respondents will rate
their performance improvement
initiative as effective or very effective.
• Most executives today are making do
with legacy initiatives and systems
that warp and distort their business
strategies toward a Continuous
Improvement Transformation.
• As you move down in the organization, you
will find that often over 50% of the activities been performed have little
relevance to the organization intended strategy, with functions pursuing their
own self-interest and often working at cross-purposes.
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Overcoming Scepticism in Continuous Improvement Transformation
• Embracing a Continuous Improvement
Transformation strategy seems to be
threatening to businesses due to the
high rate of implementation & deployment
failure (nearly 80% of industry respondents)
– Implemented programs fail to accomplish
their goals of: lowering expenses, improving productivity,
boosting customer satisfaction, raising revenues to stakeholders’ expected
levels.
• As a manager, business executive, master black belt, etc…,
it is imperative that you develop an understanding of the drivers
of your organization capabilities to improve continuously and then,
close the gap against the top industry performers.
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IQPM Consulting Creating Sustainable Performance
• These are scary times with disruptive changes for every
organization and the track record of business
performance improvement programs is a sorry one.
• Budget Restrictions: In today’s businesses,
approximately 80% of the budget needs to go to pay
salaries, buy materials, pay taxes, pay shipping costs,
etc. Less than 20% of the budget can be set aside for
performance improvement practices.
Why Consider A Continuous Improvement Strategy?
"Our short-term goal is … MONEY!
Our long-term goal is … MORE MONEY!"
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IQPM Consulting Creating Sustainable Performance
6s
LEAN
BPM
TQM BPR
AGILE
• Most organizations have talented managers and specialists, strong product
portfolios, first-rate technological know-how, and “deep” pockets.
• What they lack is a habit of thinking about and acting upon the capabilities to
improve continuously as carefully as they think about individual people’s
capabilities.
Why Consider A Continuous Improvement Strategy?
• If an organization faces major changes, the
worst possible approach to adopt may be to
make drastic adjustments to the existing
organization capabilities.
• In trying to transform an enterprise,
managers can destroy the very capabilities
that sustain it.
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• A consistent practice of patterns of thinking and action, and adaptation
How Do You Realize a Continuous Improvement Transformation?
ARE WE DOING THE RIGHT THINGS?
Look at drivers of success!
Improve strategic thinking &
social environment concerns!
ARE WE DOING THINGS RIGHT?
IMPROVE EXECUTION
Generate outcomes within the
Social environment and act upon!!!
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IQPM Consulting Creating Sustainable Performance
• Continuous Improvement takes place in almost everything we do in life, even if
we are not explicitly aware of it. Common examples includes: human
development, all human activities and their products.
• We spend our lifelong time throughout a complex process of enormous change
(in form, quality, or state) and growth toward a mature steady state. During this
process, we adapt, develop skills, attitudes and values that guide our choices,
relationships, and understanding.
Continuous Improvement is Ubiquitous
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• As organization grows and approaches
the ceiling of maturity, it often
exhibits a generally applicable
characteristic of volatility
before settling down to a
“mature”-phase steady state.
• At maturity state, an organization
will exhibit the general characteristic
of maximum strength, effectiveness
and efficiency.
• This steady state will only end
when one of its determining factors changes.
Continuous Improvement is Ubiquitous
DISASTER
LEARNING
STRUCTURED
VOLATILE
MANAGED
TRANSFORMED
WINNING
CONTINUOUS
IMPROVEMENT
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.Increased Maturity
Improve Leadership
ImproveCulture &
Values
Improve Strategic
Planning & Management
Improve Performance Measurement
Improve Performance Management
Improve Alignment & Commitment
Improve Process
Improvement &Management
Improve Sustainability
Determining Factors for Continuous Improvement
• A set of factors (drivers), that matter the
most, characterizes the pattern
and process of growth and
development toward the
“mature”-phase steady state:
– Leadership
– Culture & Values
– Strategic Planning & Mngt
– Performance Measurement
– Performance Management
– Alignment & Commitment
– Process Improvement & Mngt
– Sustainability
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Determining Factors for Continuous Improvement
• These Eight (8) determining factors that matter the most were compiled by the
“Balanced Scorecard Institute” in order to:
– Help enterprise business leaders – from CEOs to
supervisors – perform a quick assessment of where
their organization stands in terms of strategic
management;
– Monitor progress in improving maturity of their
organization; and
– Allow benchmarking across organizations,
or departments within one organization, in order
to identify best practices.
“Peter ! Jansen ! Get back in here !
The performance of our strategy and the sales
graphs were upside-down!”
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Understanding Where Your Capabilities Reside
• To embrace a C.I.T. strategy, you need to be able
to continuously assess how the RPV – Resources,
Processes, Values – that affect what your
organization can and cannot do, might affect the
drivers of your organization’s capacity to improve.
– Resources – both the tangible ones like people, equipment,
technologies, and cash, and the less tangible ones like
product designs, information, brands, and relationships with
suppliers, distributors, and customers. Without doubt, access
to abundant, high-quality resources increases an organization’s
chances of coping with change.
– Processes – the patterns of interaction, coordination, communication,
measurement, and decision making employees use to transform resources into
products and services of greater worth. Some processes are formal, in the sense that
they are explicitly defined and documented. Others are informal: they are routines or
ways of working that evolve over time.
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Evolution Toward The “Mature-Phase” Steady State
• Maturity is about movement to a higher stage of
development, whereas improvement in each driver
is about “change in form, quality, or state,
over time.”
• Making progress toward the maturity
stage requires improving simultaneously
each of the eight determining factors
(drivers) along the growth stages.
• Your organization maturity stage
is a matter of both breadth and depth:
– Breadth indicates completeness of the
determining factors (drivers of c.i.);
– Depth indicates the level to which the determining
factors (drivers of continuous improvement) are
performed, relative to a “world-class” standard.
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.IncreasedMaturity
Improve Leadership
ImproveCulture &
Values
Improve Strategic
Planning & Management
Improve Performance Measurement
Improve Performance Management
Improve Alignment & Commitment
Improve Process
Improvement &Management
Improve Sustainability
2. Determine Improvement Maturity Gaps
3. Improve Determining
Factors
4. Incorporate New Learning
1. Assess Level of Maturity
Evolution Toward The “Mature-Phase” Steady State
• Making progress toward the maturity stage requires ongoing balancing of: (1)
The need to look backward in order to maintain the existing business and its
current customers, and (2) The need to look forward
in order to explore and achieve performance
breakthroughs and to identify and attract
new customers and new sources of value.
3
4
5
Leadership
Culture & Values
Strategic Planning &
Management
Sustainability
Process Improvement
& Management
Alignment & Commitment Performance Measurement
Performance Management
1
2
0
Current maturity Continuous Improvement maturity Target maturity potentials
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Overcoming The Leadership Gap Needed In C.I.T.
• Leadership here is the art to influence, not
coerce nor manipulate, people and to gain
their genuine commitment to accomplish
common goals.
• Leadership is a learn-by-doing art form,
reciprocal and occurring among a group of
people within a defined context.
• Leadership is NOT necessarily a
position in the hierarchical structure
• We all approach leadership from our
own psychological make-up, intelligence,
training, and experience.
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Understanding Organization Values in C.I.T.
• Values carry an ethical connotation and
define the nature and character of an
organization; what it cannot do.
• They define the standards, the criteria, by
which members (employees) set priorities
and make decisions.
• They can be identified by looking for proxies within an organization: financial
statements, costumers’ roster, history of past investments.
• Organization values tend to evolve in a predictable fashion on at least two
dimensions: (1) acceptable gross margin and (2) size of acceptable customers
or markets.
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• In the early stages of your organization
growth, resources (flexible, both
tangibles and intangibles) are the
most visible factors that contribute
to what your organization can or
cannot do.
• Over time, your organization
capabilities shift toward its
processes and values. Processes
are not nearly as flexible as resources
are – and values are even less so.
• Trust in those processes and values
that have been used successfully come
to constitute the foundation of your organization culture.
Understanding The Foundation of Organization Culture
DISASTER
LEARNING MANAGED
TRANSFORMED
WINNING
CONTINUOUS
IMPROVEMENT
FOCUS ON PROCESSES & VALUES
PRONE TO EVOLUTIONARY CHANGE NOT PRONE TO DISRUPTIVE
CHANGE
FOCUS ON RESOURCES. PRONE TO EVOLUTIONARY AND
DISRUPTIVE CHANGES
STRUCTURED
VOLATILE
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Understanding Organization Culture in C.I.T.
• That character of genuine commitment and order in employees, teams and
groups that allows people to trust in those processes and values that the
organization has used so successfully so often that they give direction to
its daily life and allow people to trust each other
enough to work together.
– To whatever degree trust is lacking, the source of
the gap can always be traced to specific behavioral
characteristics.
– So long as those trusted behaved in line with
expectations, trust would be reinforced as a result
of experience and built progressively over time.
– Trust does not need to involve belief in the good
character or morality of the individuals and groups
involved, merely it needs their conformance to agreed action.
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Understanding The Strategic Planning & Management
• Intended strategies are the means by which an
organization intends to achieve its objectives.
•
They provides the framework for decisions
and define the key areas of competitive
advantages (i.e. value creation) and how
to exploit those advantages to satisfy
shareholders demands during the time
horizons to which they are working, in order
to achieve their objectives.
• Strategy should be focused on making
best use of the value drivers to create
optimal value from resources for
stakeholders.
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Understanding The Strategic Planning & Management
• Formulation of an intended strategy often take into account
Mintzberg 5Ps (Henry Mintzberg, 1978):
– Perspective – Basic business concept or idea, and the way
in which that concept or idea is put into practice.
– Plan – A direction, a guide, or a course of action from now
(or from the past) into the future, however that “future” is
defined and whatever the time horizons associated with it.
– Pattern – It is the consistency of the decision-making over time.
– Position – Indication by which the organization “locates” itself
within its external and competitive environments and the
market segments it serves.
– Ploys – These are the competitive moves or competition
strategies de-signed to maintain, reinforce, achieve, or
improve the relative competitive position of the enterprise
business within its sector and markets.
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Overcoming The Performance Measurement Gap
• In practice, an intended strategy is realized to a lesser or greater extent. How
well an organization realizes its intended strategy defines the organization
performance. Implicit in this are a criterion of
success and an actual measure of success.
• A “performance measure” is “a criterion of
success stated in relation to the realized strategy
or in relation to its intended strategy.” It is the
lens through which we “see” an organization.
• The goal of a “performance measure” is to enable
improvement. It must reflect how value is created
and destroyed in the organization.
• A “performance measure” should not be confused with a “performance
indicator,” which is an actual specific measure (quantity or quality) of success.
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Overcoming The Performance Measurement Gap
• The purpose of Performance Measurement is not to
collect data! It is not about numbers and calculations;
it is about understanding outcomes, drivers, trade-offs,
etc. and how to use this understanding for continuous
improvement of the organization as a whole.
• For example, for the following commitment in an
intended strategy:
• “Prepare the assembly business unit for the transition to
a continuous improvement maturity stage by ensuring the
executives at all levels understand their new
responsibilities and accountabilities.”
• The performance measures are:
• Training is provided to executive managers across the assembly b.u.
• A communications plan is created for the assembly b.u. and is used to educate
managers and employees on continuous improvement maturity.
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Overcoming The Performance Measurement Gap
• Management is based on Performance Measurement, and all other
organizational activities and drivers for continuous improvement are dependent
on the Performance Measurement.
• “No organization can be any better than its performance measurement system.”
OPERATION
MANAGEMENT
PERFORMANCE MEASUREMENT
RE
SU
LT
S
HR & TRAINING INFORMATION
TECHNOLOGY QHSE
CUSTOMER
SERVICE
R & D MATERIALS MANUFACTURING LOGISTICS &
DELIVERY
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Overcoming The Performance Measurement Gap
• Effective performance measurement serves many functions important (Dean
Spitzer) for realizing a continuous improvement transformation. It:
– Motivates improvement
– Clarifies performance expectations
– Increases the visibility of performance
– Enables goal-setting (goals are targets set on
measurement dimensions)
– Forges increased strategic alignment and
commitment
– Increases the holistic perspective at all levels
– Focuses attention on what is most important
– Promotes accountability (without performance
measurement there can be no accountability)
– Increases the frequency and accuracy of feedback
– Provides timely early-warning signals and facilitates prompt and appropriate corrective
actions
“Let's not look at it as failure.
Let’s look at it as a chance to do
better.”
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Overcoming The Strategic Alignment & Commitment Gap
• As you move down in the organization, you will find that often over 50% of the
activities been performed have little relevance to the organization intended
strategy, with functions pursuing their own self-interest and often working at
cross-purposes. You will notice:
– High turnover and low morale
– Passive-aggressive behavior
– Inability to articulate strategy
– Reduced accountability
– Sub-optimal teamwork
– Little upward information flow
– Fragmentation and duplication of activities
– Inappropriate or misguided initiative
– Short-term focus on results
– Etc…
C’mon, put some muscles into it…
We are not getting anywhere!
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Overcoming The Strategic Alignment & Commitment Gap
• If you want sustained growth & profit you must
know how to align the components of your
organization.
• Alignment relates to “the degree to which the
components of an organization are arranged and
focused to optimally support the realization of its
intended strategy.”
• The components that must be “aligned” include:
– The performance measures, goals, skills and capabilities, and the hearts, minds, and
behaviors of both the people doing the work and organizational leaders;
– The work being completed (i.e. operational work, key business projects and
processes); and
– The plans (e.g. learning and development/human capital plans), tools and
technologies, and resources that support the work being completed.
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Overcoming The Strategic Alignment & Commitment Gap
• Commitment relates to the human involvement
through innate willingness to follow and contribute
to achieving alignment plans.
• It is the employees at every organizational level
who will ultimately determine the effectiveness of
an organization strategic alignment, because
alignment is of no value without human involvement.
• It is the employees, as human beings, not machines, who act upon the technical
specifics resulting from translation of the intended strategy demands.
• Without people, alignment plans would just be kept in a repository or in a report
and not be executed at all. The human involvement brings crucial factors like
attitudes, motivation, capabilities, and commitment into implementation of
alignment plans.
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Overcoming The Strategic Alignment & Commitment Gap
• Effective strategic alignment and commitment serves many functions important
for realizing a continuous improvement transformation. It:
– Reduces operation costs by ensuring efficient
use of scarce resources
– Focusing efforts towards achieving the intended
strategic goals: there is no point of executing
activities that should not be there in the first place.
– Clarifies performance expectations, especially
since members of the organization have a keener
sense of how they contribute to the results as a whole.
– Motivates execution of improvement efforts
– Increases the holistic perspective at all levels
– Focuses attention on what matter the most
– Promotes accountability and commitment
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Overcoming The Process Improvement & Management Gap
ORGANIZATIONS ARE
DROWNING IN PROCESSES & DATA
• Processes are the patterns of interaction,
coordination, communication, and decision making
through which employees create value for an
organization by transforming inputs of resources
into products and services of greater worth.
– Processes include not just manufacturing
processes, but those by which product
development, procurement, market research,
budgeting, employee development and
compensation, and resource allocation are
accomplished.
• Processes are defined or evolve de facto to address specific tasks. This means
that when managers use a process to execute the tasks for which it was
designed, it is likely to perform efficiently. But when the same seemingly efficient
process is employed to tackle a very different task, it is likely to prove slow,
bureaucratic, and inefficient.
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Overcoming The Process Improvement & Management Gap
• One of the dilemmas of management is that by their very nature, processes are
established so that employees perform recurrent tasks in a consistent way, time
after time. To ensure consistency, processes are meant not to change – or if
they must change, to change through tightly controlled procedures.
• The principle that the resources that support the
work being completed, the quality, and the
execution time associated with process steps
can be optimized methodically is the basis of
“Process Improvement” philosophy.
• And the principle that a methodic management
of resulting processes could de-sign the best
rational way of performing any activity within
organizations, which would lead to enhanced
productivity and profitability, is the basis of
“Process Management” philosophy.
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Overcoming The Process Improvement & Management Gap
• Four keys to transforming “Process Improvement & Management”. The extent to
which an organization can make effective use of the four keys is the extent to
which it can tap into the true prospective of
potential stage of process improvement
and management, which will enable
“Projects & Operations work
excellence,” and which will,
in turn, enable “outstanding
enterprise business
performance” – the
ultimate goal
of “Continuous
Improvement”
maturity stage.
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Understanding The Sustainability Driver for C.I.T.
• Here, sustainability relates to the degree to which an organization incrementally
and in an ongoing basis creates value to its customers and shareholders,
captures value from its diverse assets (tangible and intangible), and attracts
investors.
• Organizations that do not create value,
by definition, destroy it; and unprofitable
organizations are wasting both the money
of their shareholders and the organization
resources and assets.
• Value is created when the right actions
are taken and the right investments are
made. Value is destroyed when the wrong
actions are taken and the wrong investments
are made. Value leaks or evaporates when
nothing is done.
“The committee's decided to ban further research until it
can be proven your 'wheel' poses no threat to customers
and shareholders needs, society or public health.”
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IQPM Consulting Creating Sustainable Performance
Reference: ISBN 978-3-642-35904-0
• This book enables enterprise business leaders - from CEOs to supervisors - to
understand what “Continuous Improvement” is, why it is probably the best
answer to improved business performance in years, and how to put it to work in
the unique environment of a specific organization.
– The book examines what is at the core
of "Continuous Improvement" and
delves deeper into the elements and
constituents necessary to take an
organization to the next level to ensure
its continued, long-term existence.
– It provides guidance to enterprise
management and to professionals
engaged in the implementation of a
"Continuous Improvement" initiative
and enables them to structure and
manage its implementation successfully.
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IQPM Consulting Creating Sustainable Performance
Executing The Activities Necessary To Achieve A C.I.T.
• For an organization not just to perform excellently, but to perform excellently
consistently there must be improvement efforts in both the “Continuous
Improvement” philosophy and break-through improvement in execution.
• Even those who truly understand the essence
of “Continuous Improvement” transformation
and “Do The Right Things” often struggle when
it comes to execution – “Do Things Right”.
• Execution requires a framework and a systematic
methodology for executing rigorously the activities
associated with the determining factors (i.e., drivers)
of “Continuous Improvement” transformation
considered: discussing the “How’s” & “What’s”,
questioning, tenaciously following-through and
ensuring accountability.
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Executing The Activities Necessary To Achieve A C.I.T.
• An organization creates value as it transform inputs of resources
into products and services of greater worth to its
customers. The processes, i.e. the patterns of
interaction, coordination, communication,
and decision making, through which
an organization accomplish
these transformations are
executed within projects and
operation work.
• The patterns of interaction,
coordination, communication, and
decision making are not goals in
themselves within an organization,
but they are mean to achieve
operations and projects work. SCARCES RESOURCES
DRIVERS OF CONTINUOUS IMPROVEMENT
PROJECTS AND OPERATION WORK
CUSTOMER VALUE
CO
NT
EX
T
FO
CU
S
INT
EG
RA
TIO
N
INT
ER
AC
TIV
ITY
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Executing The Activities Necessary To Achieve A C.I.T.
• By their very nature, processes are established so that
employees perform recurrent tasks in a consistent way,
time after time. They are defined or evolve de facto
to address specific tasks.
• Inefficient or ineffective processes increase
operational costs within organizations. To ensure
consistency, processes are meant not to change,
although the outcomes of their execution will exhibit
variations as results of variations inherent in the
input of resources.
•
One of the objective of management is to remove
inefficiencies in processes and optimize methodically
the resources that support the work being completed
through those processes, the quality of their outcomes,
and their execution time.
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“I can feel it! We are about to
make a huge breakthrough.”
Executing The Activities Necessary To Achieve A C.I.T.
• Process improvement, is a complex undertaking requiring a number of different
technical skills, knowledge, tools and competencies. It must be carry out as a
well specified project within the organization.
• A process improvement project serves three functions
important for realizing an organization intended strategy.
– It focuses attention on one goal or purpose that must
be completed by a specific time, within budget, and
according to specifications.
– It brings together people committed to a common purpose
and working interdependently to produce exceptional
and synergistic results for which they hold themselves
mutually accountable
– It provides the structure for learning and building both
knowledge of customer value and knowledge of the means
of production for customer value simultaneously
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• There are three operational aspects that form the basis of a process:
– THE PURPOSE, which provides a sense of direction and focus to the resources that
support the activities being completed. It also provides a sense of discovery and a
sense of destiny. These add a social edge to the process and are an objective that the
people resources perceive as being inherently valuable. Any situation in which the
purpose remains unspecified will rapidly deteriorate into chaos.
– THE METHODOLOGY, which relates to a constructive generic plan and guidelines for
achieving the defined purpose. It may entail a description of generic discrete elements
(tasks, actions, or steps) or, metaphorically, may be extended to explications of
philosophically coherent concepts or theories as they relate to a particular project or
operation work. Until the methodology has been established, the “purpose” aspect is
merely nothing more than wishes and hopes.
– THE PERFORMANCE MEASURE, which is a criterion of success stated in relation to
the activities being completed by the process or in relation to its purpose. The goal of a
“performance measure” is to enable improvement.
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1. What is intended to be
accomplished?
2. How will it be recognized
as is an improvement?
3. What alterations to the
system can be made?
Executing The Activities Necessary To Achieve A C.I.T.
• Within the context of project management, these three
operational aspects also form the essence of both
(1) how to get things done and (2) the systematic
methodology for process improvement.
• The PDSA model for improvement is
intended to drive all process improvement
projects through its Plan – Do – Study –
Act (PDSA) Cycle, and by persistently
asking a set of fundamental questions
around the three operational aspects.
• The PDSA model is a framework for
application and generation of knowledge,
application of skills, tools and techniques
to “process improvement” project activities
to meet the “process improvement” project requirements.
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1. What is intended to be
accomplished?
2. How will it be recognized
as is an improvement?
3. What alterations to the
system can be made?
Executing The Activities Necessary To Achieve A C.I.T.
• Five key phases with corresponding processes govern
the management of a “process improvement” project
within the PDSA model:
– “Initiate” Process Group
– “Plan” Process Group
– “Do” Process Group
– “Study” Process Group
– “Act” Process Group
• These five Process Groups have clear
dependencies and are performed in the same
sequence on each “process improvement”
project.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Initiate
• The “PDSA Initiate” lays out the foundation for the
“process improvement” project.
• It defines the project by formulating preliminary
answers to the three fundamental question of the
PDSA model and by obtaining authorization to start
the project.
• The answers to these three questions become the foundation
for making all project decisions because they describe the
cost-schedule-quality equilibrium and keep the project
aligned with the organization intended strategy.
1. What is intended to be
accomplished?
2. How will it be recognized
as is an improvement?
3. What alterations to the
system can be made?
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Initiate
• There are two activities involved in the “PDSA Initiate” groundwork:
– Determining the purpose, goals, and constraints of the
“process improvement” project by answering the three
fundamental questions of the PDSA model.
– Establishing basic project management controls.
• Get agreement on which people and business functions
or external organizations are involved in the project and
what their roles will be.
• Clarify the chain of command, communication strategy,
and project alteration control process. “Whoever pulls the sword from the stone
will lead this project.”
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• The “PDSA Plan” Process Group puts together the details of how to meet the
project’s goals, given the constraints.
– Common estimating and scheduling techniques will lay out just how much work the
“process improvement” project entails, who will do the work, when it will be
accomplished, and how much it will cost.
– Along the way, risk management activities will identify
the areas of greatest uncertainty and create strategies
to manage them.
• The “PDSA Plan” constituent project management
processes help gather information from many sources,
with each having varying levels of completeness and
confidence, establish baseline measurement, and
develop the project management plan.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• Effective planning of the “process improvement” project
within the PDSA framework is based on a foundation of
effective data collection system, and almost everything
else done during the planning phase is based on that.
• Data collected (V.O.B., V.O.C., & V.O.P.) determines
what the constituent processes used during the
planning do, and data collection works through these
constituent processes to touch every part of the
“process improvement” project.
• The right sets of collected data (V.O.B., V.O.C., & V.O.P.) trigger the right
planning activities – because they represent factual information from many
sources with each having varying levels of completeness and confidence and
from which baselines are established.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• The data collection system is the engine that drives the “process improvement”
project planning.
• The goals that a “process improvement”
project sets will depend on what data (V.O.B.,
V.O.C., & V.O.P.) the project team collects.
• These goals, however, are really nothing
more than “target values” established on a
particular data collection scale.
– The data collection scale can be net profits,
customer satisfaction, reduce cost, reduce cycle time,
improve productivity, reduce defect rate, decrease potential risk level, stakeholder
influence and interest, etc...
• If the collected data (V.O.B., V.O.C., & V.O.P.) are not reliable, the established
“process improvement” project baselines and everything else will be as well.
“D.N.A. data collected show that the fuel pump
doesn’t belong to this car.”
???
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• No data have meaning apart from their context:
it is fundamental to understand and record the
context of the data during the planning phase.
• It is the context of your data that determines how
you should organize and summarize the data and
plan execution of the “process improvement” project.
• The context of the collected data is everything that
surrounds and affect the data and its background.
It refers to the circumstances that form the setting
for the project, statements, ideas, constraints,
social climate, or human factors, and in terms of
which it can be fully understood and assessed,
and within which the data (V.O.B., V.O.C., & V.O.P.) are been collected.
“Now, keep in mind that these numbers
are only as accurate as the fictitious data,
ludicrous assumptions and wishful thinking
they're based upon.”
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• During the data collection process, the context of the collected data should be
completely and fully described. This would include answers to the questions:
– Who collected the data?
– How were the data collected?
– When were the data collected?
– Where were the data collected?
– What do the collected data represent? etc...
• Data cannot be separated from their context
without risk of distortion:
– The organized and summarized data should always
be presented in such a way that preserves the evidence in the data for all the
subsequent decisions that might be made based on these data.
– They should not mislead the decision maker into taking
any action that the he/she would not take if the data were presented in a time series.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• Summarizing the collected data (V.O.B., V.O.C. & V.O.P.)
& displaying their patterns serve two major purposes:
– To help get the “process to be improved” into a
“satisfactory state,” which one might then be content to
monitor if not persuaded by arguments for the need of
improvement.
– To provide preliminary route to investigate what can be
accomplished by operating the current “process to be
improved” up to its full potential.
• Process characteristics and behavior charts (Control
Charts, Run Charts, Scatter Diagrams, Frequency
Plots, Pareto Charts, etc...) will help to:
– Measure what the “process to be improved” is doing and to determine when the
“process to be improved” is not operating up to its full potential.
– Identify opportunities for process improvements and provide a way to continue to
operate a “process to be improved” up to its full potential in the future (i.e. to control it).
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• In order for the full power of data collection system,
hence project planning, to be realized:
– There must be an optimal environment for effective
use of collected data (V.O.B., V.O.C., & V.O.P.).
– There must be considerable interaction, and effective
and robust dialogue at each use of planning constituent
processes leading to new insights about what data to
collect, how to collect it, how to establish baselines,
and what are the subsequent right planning decisions.
• Performing the constituent processes of the planning
phase should include highly interactive and iterative
(ongoing) dialogues, which are the most important
aspects of a data collection system.
• These dialogues should be built on the foundation
of a positive context, focus, and integration.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
• “Dialogue” is the basic unit of a “process improvement”
project work. You cannot plan a “process improvement”
project well without robust dialogue with customers and
stakeholders.
• How people involved in a “process improvement”
project talk to each other, talk to customers and
stakeholders, absolutely determines how well the
“process improvement” project will progress towards
its objectives.
• “Dialogue” should be understood in the sense of
“sharing collective meaning” or understanding, and
it should be strongly differentiated from “discussion.”
The word “discussion” comes from the same root
word as percussion and concussion and has to do
with beating one thing against another.
“This is not third grade, Jurgen.
You can speak candidly and openly.”
“Remember, guys, there is no ‘I will kill you
before I ever budge an inch’ on any position in
TEAMWORK.”
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Do
• The “PDSA Do” project phase is typically the longest phase of the “Process
Improvement” project. It is the phase within which:
– The defined project management plan is carried out;
– Analysis of data (V.O.B., V.O.C., & V.O.P) collected
during the planning phase starts.
– Deliverables are physically built and presented to
selected groups of stake-holders and customers;
– Problems and unexpected observations are documented;
– In-process data (V.O.B, V.O.C., & V.O.P.), resulting from
prototyping and piloting a solution, that are useful for answering
the questions asked in the project plan and that can be
compared to the predictions, are collected and analysis
of these data starts.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Do
• Effective building of the “process improvement” deliverables within the PDSA
framework is based on a foundation of effective analysis of data (V.O.B.,
V.O.C., & V.O.P) collected and summarized during the planning phase.
• To gain the maximum insight with the least effort,
analysis of data (V.O.B., V.O.C., & V.O.P) collected
and summarized can be done by:
– Identifying and quantifying assignable causes of
variations from the process behavior charts and
interviews.
– Exploring cause-and-effect relationship of assignable
causes of variations
– Verifying identified assignable causes
– Examining the process steps and tasks, and
operational assumptions
“Ladies and gentlemen, today we are going to get
down to the nuts and bolts.”
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Do
• Following analysis of data (V.O.B., V.O.C., & V.O.P) collected and summarized,
the steps undertaken to generate improvement
solutions and build each deliverable will vary
depending on the type and complexity of the
“process improvement” project been
undertaken.
• It is critical to remember that employee buy-in
is essential to success in improving the
“process to be improved.”
• Employee buy-in is important to gaining
agreement and acceptance of the current state
of the “process to be improved,” and it is vital to the generated solutions to the
“process to be improved” underperformance problems if the change process is
to move forward.
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“Big surprise. The cost/benefit analysis
of the potential solution cost us more
than any benefit we have ever gotten
from this process.”
Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Do
• Once assignable causes of variations have been identified, the associated
cause-and-effect relationships explored, the identified assignable causes
verified, and the process steps and tasks analyzed and summarized,
the project team can begin with generating and prioritizing improvement
solutions to guide positive change in the days and
weeks ahead.
• Subsequently, regardless of how good the hierarchy
of decision criteria used to select potential solutions
is, there is no substitute for developing a prototype
“improved process” and piloting it; i.e. putting
a solution out in front of a broad array of
selected employees, customers and
stakeholders to observe and
measure their experience.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Do
• The complete prototype, as its name suggests, should model most, if not all, the
required characteristics of the potential “improved process” outcomes.
• Some insights for piloting a prototype solution
include, but are not limited to:
– Understanding the relationship between prediction
of the potential “improved process” outcomes
and knowledge of the system being affected
and how these predictions build knowledge;
– Understanding the temporal effect of the
potential “improved process” in the organization
or system considered;
– Understanding how to integrate the potential
“improved process” in the social system
considered within the organization, especially
when planning for implementing a prototype solution.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Do
• To reduce the risk of failure, piloting a prototype solution should be carried out in
sub-phases, with each sub-phase growing in number of employees and
customers affected by the potential “improved process” and
the distribution of users throughout the organization.
• The whole purpose of such sub-phases
is to slowly roll out to employees and
customers throughout the organization
and externally to validate that the
prototype solution and assumptions
are accurate and that they can be
successful in the live environment
with minimum risk.
• Typically, each successive sub-phase broadens user involvement (e.g., pilot first
to a team, then to a department, and then to a division).
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Study
• The purpose of the “PDSA Study” project phase is to:
– Provide an answer to first and the second fundamental
questions of the PDSA model.
– Sustain the deliverables built, over the long term; and
– Build new knowledge through learning from the
deliverables built.
• It is not enough to determine that
development and piloting of a prototype
solution resulted in improvement during
particular pilots.
• As the project team builds knowledge about the new
“improved process,” it will need to predict whether the
change introduced by the new “improved process”
will result in improvement under the diverse conditions
it will face in the future.
• typically the longest phase of the “Process Improvement” project. It is the phase
within which:
– The defined project management plan is carried out;
– Analysis of data (V.O.B., V.O.C., & V.O.P) collected
during the planning phase starts.
– Deliverables are physically built and presented to
selected groups of stake-holders and customers;
– Problems and unexpected observations are documented;
– In-process data (V.O.B, V.O.C., & V.O.P.), resulting from
prototyping and piloting a solution, that are useful for answering
the questions asked in the project plan and that can be
compared to the predictions, are collected and analysis
of these data starts.
1. What has been built and
accomplished?
2. How will it be recognized
as an improvement?
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Study
• The “PDSA Study” project phase, brings together and synthesizes the base-line
data collected in the “PDSA Plan” project phase and the in-process data
resulting from the pilots conducted in the “PDSA Do” project phase.
• This synthesis is done by comparing the results
of the V.O.B, V.O.C., and V.O.P. data analysis
to the established baseline data and to the
predicted results.
– If the results of the pilots match the predictions
made in the “PDSA Plan” project phase, the
project team’s degree of belief about their
knowledge is increased.
– If the predictions do not match the data, there is an opportunity to advance their
knowledge through understanding why the prediction was not accurate.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Study
• The key activities required to study each deliverable are carried out through the
following key constituent project management processes:
– Collect Retrospective Data – V.O.B., V.O.C., & V.O.P.
– Summarize Overall Data and Display Patterns
– Analyze Data and Validate Process Performance
– Develop Process Control Plans
– Reinforce a Positive Context of Improvement
– Continuously Monitor New “Improved Process”
and Context
• The “PDSA Study” step is also the phase
within which the built deliverables are sustained
and presented to the customer for acceptance.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Study
• The “PDSA Study” project phase retains a deep focus on learning throughout its
range of activities.
• It takes on a fresh perspective through the use of
a set of systematic observation techniques and
activities, focused on ongoing monitoring and
control techniques that will help the organization
continually collect performance data that can be
amassed in order to continuously operate the
new “improved process” predictably and on target.
• As the project team builds knowledge about the
new “improved process,” it will need to calculate
whether the change introduced by the new
“improved process” will result in improvement
under the diverse conditions it will face in the future.
“This prediction from the prototype has a margin of
error of plus or minus fifteen...”
“…fifteen class-action law suits that would be
brought against the company.”
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Act
• The “PDSA Act” Process Group encompasses
the processes needed to:
– Act upon the built and studied deliverables
– Implement the new “improved process”
permanently or stop its implementation
– Determine what modifications should
be made to the system affected, and
– Formally close the project.
• Of all the PDSA project phases,
the “PDSA Act” phase is the most
crucial in the life of a “process
improvement” project as it can
determine whether, ultimately,
the project is a success or
failure.
1. The deliverables have been
built and accomplished
2. The new process has been
recognized as an improvement
3. What alterations to the
organization can be made?
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“We need to write some kind of health and safety
policies and procedure to go with this thing.”
Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Act
• Once improvements have been validated, practices and procedures that act as
a model or guidelines need to be established to ensure that the change in form,
quality, or state, over time from the original “process to be
improved” to the new “improved process” becomes the
normal way the business is run.
• Organizations that effectively create standard practices
and procedures and use these standards exhibit many
of the following conditions:
– Management requires the use of standards, especially
to document improvement efforts.
– Different employees and shifts use the same standards
and expect similar results.
– Employee training focuses on the documented
standards for materials, methods, and equipment.
– Critical elements and impact on internal and external
customers are discussed.
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Act
• The constituent project management processes, used to perform these activities
during the “PDSA Act” project phase, include the following:
– Implement “Improved Process” and
Install All Deliverables;
– Complete Project Documentation;
– Reinforce Mechanisms and Build Capability;
– Create Standard Practices And Procedures;
– Release Resources;
– Settle Contractual Aspects And Final Accounting
– Conduct Post-Implementation Review;
– Write Final Report;
– Celebrate Success and Share the Wealth.
• Once the improvement is in place and the organization
is reaping its benefits, it is important to celebrate its success.
“And right there, the ‘improved process’ was
implemented and rolled out...”
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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Act
• By celebrating success as it happens, no matter how big or how small, everyone
involved will not only feel appreciated and important, but motivated and driven to
succeed further.
– Celebrating success brings optimism and helps
improve the context of the system affected by the
implementation of the new “improved process.”
– Acknowledgment of a job well done promotes the
spirit we all want to see in our employees and
co-workers, it instills pride in their work, and it
fosters a sense of worth that culminates in a
workforce that looks for problems and willingly
brings forth solutions.
– Participation on a team will no longer be viewed
as an added burden to an already heavy workload,
but an honor and a responsibility. “I want to thank each of you for coming through in the
clutch, putting in some overtime and seeing this
process improvement project through to completion.”
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Reference: ISBN 978-3-642-35901-9
• This handbook provides a comprehensive and detailed framework for the
implementation of "Continuous Improvement" and Lean Six Sigma in a
professional project management environment. For this purpose the book brings
together Lean Six Sigma and the PMBOK standard for project management.
• It provides an integrated approach,
which can be used for both transactional
and manufacturing businesses to better
define ways to reduce costs, enhance
processes ,and achieve faster
implementation and new product or
service development.
• The reader is guided carefully and
reliably through the detailed procedures
introduced in this book using a
comprehensive, conceptual and practical well-balanced approach.
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