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January 6, 2009
Make Operational Improvements Stick in the New Year
Making operational improvements last requires not only a change in processes, but a change in mindset as well. Companies must ensure their employees are on board and provide support to keep them from reverting to their old ways.
Implementing operational improvement strategies such as Six Sigma, lean and kaizen, could be a great boost for business. Ensuring that the initial successes turn into lasting success, however, is the challenge. The key to making real progress in improving operations comes not only with implementation but with sustaining these strategies.
As noted by Raphael Vitalo and Joseph Vitalo of business consulting firm Vital Enterprises:
Without sustainment, you simply run in place. ... [D]ecade after decade we seem to re-discover and re-apply a newly branded version of problem solving methods to get better at what we do. We have many tools and lots of energy for uncovering opportunities and making improvements, but we seem to have few if any tools and little excitement for ensuring that the improvements we develop sustain.
According to The McKinsey Quarterly's recent report, From Lean to Lasting: Making Operational Improvements Stick, one of the reasons many organizations fail is because they take on too much, "often by launching a frenzy of loosely related kaizen projects across many operating units."
By having so many programs going on at once, workers may get confused or come to view them as distracting or contradictory. Instead, McKinsey Quarterly advises implementing operational changes in a coordinated fashion, starting with just one or two operating areas, completely transforming them and thus creating a building block that can be duplicated throughout the company.
"We suggest choosing areas with about 100 to 200 employees, as projects of this size are small enough to manage effectively yet large enough to generate the high levels of enthusiasm and organizational energy that help sustain large-scale change," the report concludes.
Just as important as the technical aspects of any improvement program are the soft skills associated with it. Without ensuring the organizational aspect is handled appropriately, the initiative's odds of survival are slim. Managers and line workers must be prepared to lead and work using the new way. Otherwise, "initiative fatigue" may set in and efficiency gains could fizzle out as the black belts move on to other projects.
Organizational change and process change can be unsettling for manager and line workers, of course, and neither party's concerns should be taken lightly. As George Eckes, a former practicing psychologist and the author of Making Six Sigma Last: Managing the Balance Between Cultural and Technical Change, puts it, many people are resistant to change because "human nature resists that which is not understood." Six Sigma and other such processes and philosophies can cause big changes to a person's work environment.
To make the transition easier, Eckes suggests companies do the following:
- Demonstrate what value the new improvement philosophy brings to the company;
- Shape the new behaviors required for success;
- Manage resistance by showing how the new tools and techniques benefit the worker;
- Hold personnel responsible for keeping up with training and adjust performance assessments to match the process; and
- Tie recognition and rewards back to the improvement culture implemented.
"Be certain that performers for the improved process derive a benefit from doing it. This benefit should be intrinsic to the process," the Vitalos have said. "Everyone affected by a new process must be continuously informed about it, otherwise they will be blind-sided at some point and that will undermine their support."
Additionally, the Vitalos stressed the importance of alignment to long-lasting success.
Everyone upper management, middle management and line workers must focus on common goals. Operational improvement must not be left to the black belts, lean senseis and other change agents, though they are necessary as well. "Large-scale change requires all employees" because "once the low-hanging fruit is gone, such efforts often lose steam as employees slip into old habits; experts may convey the new language or technical tools but rarely the desire to change behavior," McKinsey Quarterly adds.
After the experts train the workforce, it is up to the managers to lead the change efforts with the experts taking on the role of counselors. Managers and workers need physical and intellectual support, which could come from experts, training and having the proper resources to get their job done, the Vitalos advised.
Once everyone is on board, the Vitalos have recommended that companies make "certain that expectations about performance targets for results are explicit and that feedback is valid and regularly provided. ...Make sure that sustaining performance of improvements is an explicit expectation of [managers'] jobs and that an accurate feedback system is in place."
To make operational improvements stick, companies must combine both the technical aspects of the improvement program and the soft skills needed to keep everyone on track.
Related
Resources
From Lean to Lasting: Making Operational Improvements Stick
by David Fine, Maia A. Hansen and Stefan Roggenhofer
The McKinsey Quarterly, November 2008
Making Six Sigma Last (and Work)
by George Eckes
Ivey Business Journal, November/December 2003
Making Six Sigma Last
by George Eckes
Wiley, May 3, 2001
Sustaining Lean Initiatives: Lessons Learned
by Raphael L. Vitalo and Joseph P. Vitalo
Vital Enterprises, April 2006
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