Category: Lean Six Sigma

I scored the “Keys to Success” list that Gary Kucera made for the wrap-up session (unedited):

Canadian Pacific Railway (Jeff Adams):  Cultivate Business Relationships:

• Create a 2010 “Relationship” strategy plan to build relationships with the “right” people who will help advocate and drive Process Improvement results
• Target “thought” leaders to cultivate process improvement influence
• Hand out free books
• People will only “trust” you when they have a positive relationship with you

Direct Energy (David During/Shiraz Bajwa):  Create a Change Management / Influence Strategy to improve engagement of key people:

• Y = f (x)
• Ability to influence = function (role, adaptability, coverage, status)
• Focus on people with political clout who influence people behavior
• Impact the “Inner Circle” people by spending more time with them or have your “agents” perform this function
• “Become a relationship Expert” to be an effective change-agent
• Key Takeaway:  Build an Influence Strategy “UPFRONT”
• Alternative tool:  Stakeholders Analysis tool

Bantrel (Chris Sandink):  Engage your Customer/Client

• Use a data based approach to improve KPIs to successfully influence customers/clients
• Build a process improvement plan by determining what measures can be improved which will result in improving a KPI
• Get customer/client engaged in building the business case to increase acceptance
• Key Takeaway:  Use data to make business cases to influence change and get stakeholder engagement as early as possible in this process

Create a Crisis (Multiple Speakers):

• Process Improvement change is accelerated when a crisis occurs
• Either “Create” a crisis or escalate an existing crisis to facilitate change
• Top leaders will “Rethink” business strategies
• Obtain dialogue among selected “thought leaders” to discuss what should be done “different”

Alignment of Goals within a business:

• From CEO to associate, goals need to be aligned to improve the probability of success
• Finance and Human Resources are key members to make this alignment occur
• Finance should pay bonuses and merit increases based on an aligned goal structure

People:

• Identify the skill sets needed to be successful for your team and try not to compromise with lower standards
• Before hiring a person, perform succession planning to build your exit strategy for each person on your team
• Best Practice Idea:  Have a person sign at the time of being hired a personal commitment to stay at least 2 years to reduce turnover

Project Success:

• Keep project scopes small and get many “small wins” versus one “big win” as it improves engagement and long term project success
• Make sure there is strong engagement, resources and commitment of Champion/Sponsor/Line Mgr prior to starting a project.  Planning upfront is critical to ensure project success.
• All projects should be signed off by a Finance and Operations Mgr to avoid future “fighting”.

Leadership Behavior (multiple speakers):

• Encourage leadership to change their behaviors to become more “advocates and teachers” to help motivate, encourage, and share their knowledge.
• When teaching leaders Six Sigma education, take it slow and make sure they fully understand to avoid potential future adversity.
• Need Leadership’s commitment to sustain long-term process improvement

Finance & Process Improvement Team:

• For Xerox, and Kaplan Higher Education, it has worked very well for Process Improvement team to be aligned under Finance.
• It has accelerated Process Improvement acceptance within the business since Finance controls the purse for the business and it improves Process Improvement’s accountability since Finance wants “Proof” of project savings.
• Align project savings with department budgets.
• A finance person is always recommended to sign off on project savings.

RBC Bank (Jennifer Thompson):  Continuous Certified Greenbelt/Champion Engagement 

• Goal:  Increase Effectiveness of Process Improvement Program by keeping people engaged
• E = f (Quality of change, acceptance of change)

Continuous Engagement Strategies:

• Bi-Annual Internal LSS Conference for GB’s
• Education
• Networking
• Celebration Certification
• Monthly Lunch and Learns
• Education
• Continuous Encouragement
• Champion Roundtable
• Program Tracking
• Continuous Feedback
• Continuous Encouragement

CLG (Annemarie Michaud) Improving Behavior Effectiveness To Drive Business Results

• Approximately 80% of behavior is driven by consequences
• Create positive and negative reinforcements to increase desired behavior
• Align desired behavior with desired goals
• Put in place consequences to drive behavior
• Behavior change environment will create long-term change

The final session was supposed to be a brainstorming session with Debra Yeager of Xerox Canada and Gary Kucera of Kaplan Higher Education, working with us to come up with a list of LSS and process improvement ideas that can have maximum impact within an organization, but was really the points that they gleaned from the presentations over the past two days. The lists went by past way too fast to transcribe, and I’m hoping that this will be posted on the conference website at some point (or maybe Gary will read this and send me his notes).

To wrap up the conference, it’s probably clear if you’ve read my posts that I found this worthwhile. I have a couple of local customers who practice LSS, and I can’t understand why they didn’t have someone here: a conference in your back yard is practically a gift in this economic climate, and there was definitely value here. This was a great opportunity for LSS professionals to exchange ideas and best practices with their peers – I think that I was the only non-black-belt in the room – and there was a great deal of interaction between the participants both in the sessions and at the breaks. Lots of practical ideas for everyone to take back and apply to their own projects, even for me. 🙂

Rick Hefner of Northrop Grumman gave the last full presentation of the conference before the brainstorming and wrapup. At this point in the schedule, a lot of the material that he was going to cover has already been said, leaving him free to ignore most of his slides and give more of an anecdotal talk about their journey with Six Sigma. He was originally part of TRW before their acquisition by Northrop Grumman, and acquisitions have continued to occur regularly; this meant that multiple implementations and cultures of LSS within the acquired organizations collided head on, and that constant restructuring necessitated a more consistent view of how LSS is to be applied across the organization.

Organizational restructuring, because it involves significant changes to goals, practices and operations, is a perfect opportunity for LSS and process improvement: although the initial goal of the restructuring is usually cost cutting, the long term goal is providing the greatest customer value for the least cost. LSS provides with a number of tools that can be used during restructuring, for everything from determining overall strategy to measurement and control to employee needs. The problem, however, is that everyone is caught up in the reorganization itself (or ensuring that they still have a job), and it’s difficult to get people’s attention for process improvement at the same time. LSS and process improvement teams can feel threatened by the lack of focus on their contributions, as well as not necessarily know where they’ll end up within the restructured organization.

They created a number of tools that could be used in the business areas for process improvement: value stream maps, process maps and flowcharts (similar ideas, different perspectives and level of detail, although it’s not clear where the distinctions lie). Some of this required defining “value” – which is really something that only the customer can define, and is usually something for which they are willing to pay – especially in their world of cost-plus contracts where they are not really financially incented to make processes more efficient. The cost-plus contract model is slowly being phased out in the defense industry, being replaced by fixed-price contracts; this will drive them to look for more process improvements in the future.

His summary:

• Current economic problems have caused many companies to focus on consolidation and organizational restructuring.
• Proper use of LSS tools (and LSS professionals) can help a company balance tactical cost-cutting with long-term strategic change programs.

Last up before lunch was Sarah Snyder, who works with the US Army, discussing how they use dashboards to measure and tune their performance. The examples that she showed were not about the actual “business” processes, however, but measures on LSS projects, such as initiated and completed projects, LSS training, LSS belt utilization, and other meta measurements that aren’t directly indicative of business performance. Although measurement of project execution efficiency can be used as something of one indication of how well the Army is running, and measurements like this are important for justifying and ensuring ongoing funding of LSS programs (over $100M to contractors alone over the last 4-5 years), it doesn’t seem all that useful for general operational process improvement. Am I missing something, or is this LSS navel gazing?

I will blame my crankiness about this presentation on my grumbling stomach, and head off to lunch.

Not surprisingly, this conference is as much or more about the cultural aspects of LSS as the techniques and tools, and Jason Schulist of DTE Energy (a US utility company) gave a presentation on their continuous improvement journey. They’ve been at LSS for more than 10 years, starting with Kaizen in 1998, moving into Six Sigma in 2004, then a performance excellence program more recently. They found some short-term benefits from Kaizen, but also found the usual shortcomings of no real vision or system in place for continuous improvement. As they added more tools and did some demo projects, they closed some gaps, but still didn’t have a comprehensive program in place: Lean was used as a bottom-up fire-fighting tool rather than a way of working.

Since they didn’t use Six Sigma until much later, they don’t use DMAIC, but have their own 4-gate, 9-step project methodology. In 2002, they developed their own Operating System to standardize continuous improvement, but found that this was a very complex, expensive and overwhelming undertaking. For those not familiar with this sort of operating system (e.g., those of us who think “Linux” or “Windows” when they hear that phrase), it’s a combination of mission statement, high-level goals and high-level methodologies, all wrapped up in a pretty internal marketing package. I’m all for getting everyone on the same page, but I sense a bit of frustration from Schulist on the amount of time spent crafting and wordsmithing this rather than actually implementing process improvement.

Adding Six Sigma in 2004, they introduced more statistical rigor in their process improvement, but had some issues with disengagement since the black belts tended to do the work that was previously done by business leaders, and also with the lack of an end-to-end process flow. The CEO was unhappy with the rate of improvement, which drove the introduction of the performance excellence program in 2006. This was driven from the top, with clear expectations and accountability, but didn’t have deep engagement with front-line employees: the business units tended to be reactive rather than proactive in the face of top-down process expectations. This was implemented using a lot of external consulting resources, which meant that the existing continuous improvement resources weren’t used all that well.

To break this cycle of just spending several millions every two years on external continuous improvement consultants to reinvent the wheel, they had to focus on constancy of purpose and engagement with the people in order to really institutionalize continuous improvement culture. They moved back to a focus on people by implementing a Lean learning organization in 2007/8: a behavioral transformation leading to cultural change rather than just a continuous improvement program.

With difficulty sustaining their own efforts, they looked at recognized reasons why other companies failed:

• Copying lean tools without making the work self-diagnostic
• Working around problems even when the problems are recognized
• Don’t share systemically what has been learned locally
• Don’t develop the capabilities of others to design work, solve problems and institutionalize new knowledge

To overcome this, they worked on developing the four capabilities of the operationally outstanding:

• Design work to see problems as they occur: all work is designed so best practices are captured and problems are evident immediately
• Swarm problems when they occur: problems are immediately addresses, both to contain their effects from propagating and to trigger problem solving
• Share knowledge where it is created: knowledge generated locally becomes systemic through shared problem solving
• Leaders develop people from teaching, coaching and mentoring: the most senior management has to own the capability development process (including actually teaching internal courses)

These four capabilities form the framework of the “how we work” section of their above-mentioned operating system, which provides goals for their process improvement program. The operating system also includes a “true north”, that is, their high-level business goals such as being defect-free at the lowest cost.

Their recent results have been impressive: from hard savings that crept up gradually over the course of their continuous improvement efforts, the last two years have seen significant and increasing ROI. Since they’re getting such great results, they’re encouraged to look at ways to make this even better through self-assessment, certification, and expanding their scope to address complex problems as well as environmental and social problems. One interesting example of that is what they’ve done to reduce the cost of cutting grass around their substations within the city of Detroit: they replaced the grass with community gardens, worked by the community, with the food donated to local food banks. Lower costs for them, while giving something back to the community and improving social engagement: a win-win all around.

I’m a bit better prepared for today’s conference: first of all, I showed up on time, and secondly, I have my iPhone tethering cable so that I can post even though there’s no open wifi here.

Today opened with a recap of yesterday’s session by Charles Spina of e-Zsigma, the conference chair, then he had an interview with two of the people who were on yesterday afternoon’s panel that was in the opposite track to that I attended: Audrey Maeren of Assiniboine Credit Union and Steve Hodlin formerly of DST Output, discussing how to move out of reactionary mode and into long-term sustainable growth of a LSS program within an organization.

The panel was in the form of a leadership forum with five questions posed:

1. Which strategic imperatives should be realized through LSS deployment and process improvement initiatives within the next 12 months?
2. How to maximize LSS deployment ROI particularly during this economic time?
3. What processes within the organization will be a top priority for process improvement/process reengineering projects?
4. How can companies turn recession-driven outcomes into business opportunities? How does this change the role of PE experts in a new business paradigm?
5. What organizational structure has proven to be the most effective for quality/process improvement teams?

There was a strong focus in the responses on using the economic situation to your advantage: improving processes, cutting fat and becoming more competitive rather than just cutting headcount in a panic. This isn’t necessarily about cost-cutting, it’s about focusing on your value proposition and key differentiators (e.g., customer intimacy, social responsibility), and engaging your customers, suppliers and employers as part of the initiative. Assiniboine, for example, has a 5-year KPI to become carbon-neutral, so is always looking at ways to contribute to that goal through any process improvement: sometimes reducing process waste can reduce real waste, too. Since they’re a member-owned cooperative, there is less of a focus on profits than in many other financial institutions, but these sorts of goals are not uncommon in today’s corporate environments, too.

They had a few pointers for maximizing ROI on LSS projects: keep people on the projects through the critical points rather than moving them around, have frequent management reviews so that they’re aware of what’s happening and can help to get past any roadblocks quickly, and identify opportunities to train your customers or partners in LSS to help them become more efficient as well as improving the efficiency of your interactions with them. Early in your LSS program, it’s important not to just focus on hard dollars in your ROI, but if resources are short, then you will need to set thresholds that determine which projects go ahead: if a project can’t show some process improvement ROI relative to corporate goals, then you may not be able to take it on.

There was a really interesting discussion including audience members, about how misinterpretation of laws and regulations creates an incredible amount of waste: people think that a regulation needs to be applied in a specific (inefficient) way, and blocks the implementation of a more efficient process that is equally valid. I saw this recently in a customer engagement where we were considering the uses of process and content management in the organization, and the HR department insisted that certain processes had to be done on paper and they needed to maintain employee files on paper, to the extent that they printed email messages to add to the employee file. Knowing that paper recordkeeping for employee files is not required (at least in Canada), I showed them the relevant sections in the Canada Labour Code as well as Revenue Canada regulations that govern recordkeeping, but it continues to be a long cultural battle for this particular piece of process improvement.

The issue of alignment keeps coming up: not as a hand-waving idea, but as a concrete link between corporate goals and what’s being done on the front lines of companies. As Maeren made clear, if your corporate goals are focused on customer satisfaction, but the front-line operational units are focused only on cost-cutting, there’s a misalignment.

We discussed yesterday at lunch about how most organizations need a crisis to motivate significant process improvement efforts; the recession just provides an external trigger for the crisis rather than an internal trigger such as a merger. If you’re already in the mode of being able to respond to all types of crises, then weathering the recession in a process improvement group is just more of the same. It might be a time, however, to highlight some key Lean tools, such as value stream mapping and Kaizen, for some quick wins and to show the value of the process improvement team. Also, focus on some cash-intensive process improvements such as reducing inventory and shortening accounts receivable times.

Management needs to become process-focused, not just goal-focused: as Hodlin pointed out, you don’t lose weight by stepping on a scale. We see this so much in the BPM area as well, where BPM initiatives will not succeed unless the organization becomes process-centric. In part, this means that management needs to cede responsibility for some of the process decision-making to others, which allows those with a different view on the process to bring in improvements wherever they might occur. It can also be facilitated by spreading the LSS training out to the business areas, where either green belts are embedded within business areas, or business people are trained in key techniques that allow them to push forward process improvements from inside a business unit. There’s a certain commitment required for this: at Assiniboine, they pull subject matter experts from operational positions to work on process improvement, and define those SMEs as top performers that will cause pain to the operation when they’re removed from their operational position.

Spina was a great moderator: low key but he kept things moving along, asking questions of the two panelists and involving the audience as well as adding his own experiences to the mix. The small audience size is really a bonus with this sort of session, too, since it really fosters participation.

As a matter of disclosure, I should mention that IQPC provided me with a free pass to the conference, although I paid my own $3 subway fare to get here.