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




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.




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.”




Contemporary Production Improvement Practices

MOTOROLLA

GENERAL

ELECTRIC

TOYOTA MOTORS

CORPORATION

Adam Smith, 1776

Frederick Taylor, 1911

Henri Fayol, 1916




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.




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.




• 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!"




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.




• 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!!!




• 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




• 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




.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




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!”




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.




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.




.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




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.




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.




• 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




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.




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.




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.




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.





• 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.





• 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





• 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.”




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!





• 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.





• 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.





• 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




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.





• 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.





• 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.




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.”




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.




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.





• 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





• 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.




“I can feel it! We are about to

make a huge breakthrough.”


• 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





• 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.




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?


• 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.





accomplished?




system can be made?


• 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.




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.


accomplished?




system can be made?




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.”




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.





• 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.





• 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.”

???





• 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.”





• 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.





• 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).





• 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.





• “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.”




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.





• 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.”





• 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.




“Big surprise. The cost/benefit analysis

of the potential solution cost us more

than any benefit we have ever gotten

from this process.”


• 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.





• 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.





• 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).




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?


as an improvement?





• 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.





• 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.





• 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.”




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


organization can be made?




“We need to write some kind of health and safety

policies and procedure to go with this thing.”


• 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.





• 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...”





• 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.”




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.

awareness lecture series - continuous improvement transformation

Leadership & Management

iqpm consulting

express authority

creation improvement

rate of change

extent of change

organization work

opposite of change stability

pattern of work