Uniting the Religions of Process Improvement

• 3:07 PM Monday March 7, 2011

by Brad Power

When they set out to turn around processes that have become woefully
inefficient or ineffective, most companies choose one of four process
improvement "religions": Lean, Six Sigma, Business Reengineering or Business
Process Management (BPM). After hearing about its success at another
organization, many companies choose just one. For example, several
companies embarked on Six Sigma programs after their CEO heard about GE's
success with the approach, and many other companies have adopted Lean
because of Toyota's success. It's like adopting a diet or exercise program that a
friend has used and lost 50 pounds.

But some companies realize they need to go beyond making episodic

improvements. They try to institutionalize process improvement — that is, put in
place the right mechanisms in their management systems so that their business
processes don't become grossly unproductive in the future. That is, they try to
build continuous improvement into their DNA. It's like the difference between
going on crash diets every two years and fundamentally changing one's eating
and exercise habits.

But moving from episodic process improvements to having the wherewithal to

improve processes continually is a tall order because of five key challenges I
highlighted in a previous post: competing demands for attention, competing
mindsets and behaviors, strategic irrelevance, traditional management
processes, and the pain of disruption. If an organization tries to institutionalize
process improvement based on the tenets of just one process religion, it will run
into trouble because no single religion has all the approaches for sustaining
organizational attention to improvement. Lean has the most complete set of
approaches for continuous improvement among the four religions. But a
company that embeds Lean thinking into its DNA may occasionally need the
hard financial results that Six Sigma can produce. In addition, Lean converts
have a predisposition against adopting large, centralized IT solutions, which
may cause them to ignore useful approaches from the BPM religion.

The result: Organizations need to consider every possible approach, not just
those offered by one religion. To stay with the diet and exercise analogy, being
aware of multiple diet programs will help you pull out common themes and
arrive at a tailored program that works best for you.

Consider this example. Many companies adopted Six Sigma in the late 1990s.
They trained experts in improvement projects ("Black Belts") who then drove
initiatives that achieved large financial results. In some of these companies,
senior managers were dubious about the claims. They suspected there was
some backsliding or double counting because the results were almost too good
to be true. Many of those organizations then embraced Lean for different set of
tools for improvement projects, tools that helped them connect project results to
key strategic measures. They also stressed organizational learning (meaning,
capturing the methods of Lean so that other parts of the organizations could
adopt them). Adding another religion helped these companies embed
continuous improvement into their DNA.

If organizations want to keep their processes up to date continually, they need

to be able to use many approaches to embedding improvement in their
management systems. Let's review the distinguishing features of what each
religion has to say about sustaining improvement.

1. Six Sigma zealots say "Belts," lots of training, and performance

measures are what matter.

Motorola pioneered the Six Sigma statistical tools, but it was GE that built the
training programs and the hierarchy of accreditations or "Belts" (Green, Black,
Master Black) with which it is so strongly associated. People who have earned
these belts drive projects with clear financial targets set at the top organization,
with progress monitored by the CFO. Six Sigma zealots argue that if you train
enough people, you get a cultural transformation. You instill process
improvement into the corporate DNA.

2. Business Reengineering's high priest said core process owners,

process maturity, and performance measures are what count.

Reengineering focuses on radical changes in core, end-to-end processes. In

addition to laying out an approach for making one-time improvements,
Reengineering's high priest (the late Michael Hammer) had advice for
organizations wanting to sustain improvement. He implored their leaders to
create and track end-to-end process performance and establish an organization
— including process owners and councils — to support the processes. He also
advised them to continually assess their processes against a model of process
maturity — PEMM for short — which he unveiled in an HBR article.

3. Lean "senseis" (teachers) say strategy deployment, executives as

coaches, and front-line problem-solving sustain improvement.

Followers of Lean, which is based on the Toyota manufacturing approach that

made it the leader in automobile quality (the Toyota Production System),
believe top executives need to break down strategic objectives into implications
for process improvements to get everyone moving in the same direction. For
example, to improve customer satisfaction, an insurance company decided to
focus on reducing the number of service requests over 30 days old from 40% to
below 5%, which translated into activities in 30 departments. All organizational
levels must identify and solve problems, but senior managers must tell front-line
workers why efficiency is critical at all times, and then help them remove waste
and improve service to customers.

4. BPM missionaries say processes and process knowledge embedded in

software, an enterprise architecture, and a central process management
organization sustain improvement.

Most missionaries of the BPM religion come from a heritage in information

technology. They believe companies can sustain process improvements if their
people use a company-wide software system (such as an ERP application),
which has standard processes embedded in the software. They also advise
companies to use business process management software to map and
document process flows and how work should be executed and to monitor
performance. They also believe in building a BPM "Book of Knowledge" (a
codification of process improvement "best practices") and a BPM "Center of
Excellence" (a central organization where process experts reside and develop
guidelines and procedures for documenting and analyzing business processes).

A few companies that lead in sustained process improvement have drawn from
the best of each religion to embed continuous improvement in their
organization.

Shell Oil's downstream (refining and retail) businesses have rolled out a global
implementation of enterprise software SAP with standard global processes (as
the missionaries of BPM would preach). The company has trained its people to
be Shell Sigma Belts (following the precepts of Six Sigma), and appointed
process owners and established an elaborate process governance structure (as
Hammer would have recommended). What's more, the company helped
develop Hammer's PEMM concept and is now training Lean managers.

Chemical company Air Products has adopted nearly every approach for
sustaining improvement from all four religions. Sloan Valve appointed core
process owners several years ago following the Reengineering playbook. The
manufacturer has since introduced quality techniques ("kaizen" events), as well
as Lean strategy deployment methods and tools.

There is no reason that organizations wishing to sustain process improvement

should not draw on all these ideas, becoming "Unitarian Universalists" and
bringing together the best of each religion.

Request: What approaches have you seen companies adopt that have
kept their attention on process improvement? Have any of these
companies combined the approaches of different process religions?

Brad Power is a consultant and researcher in process innovation. His current

research is on sustaining attention to process management — making
improvement and adaptation a habit (even fun?). He is currently conducting
research with the Lean Enterprise Institute.
Overcoming the Disruption of Process Change
8:14 AM Monday February 21, 2011
by Brad Power | Comments (19)

It's against human nature to react favorably to the disruption of process change.
Continuous improvement means continuous change, and change takes people
out of their comfort zone. How have you seen people react to changes in their
work? The typical reaction is resistance. As Machiavelli pointed out in The
Prince roughly 500 years ago, there is no constituency for innovation: "There is
nothing more difficult to take in hand, more perilous to conduct, or more
uncertain in its success, than to take the lead in the introduction of a new order
of things." Let's look at the techniques that Intel, Google, and Toyota each use
to make it possible.

1. Be paranoid.

The pain of change must be less than the pain of not changing. Therefore, the
pain of not changing must be clear to all and there has to be a continuously
burning platform. An organization that wants to inculcate continuous
improvement needs to capture accurate customer and competitor information
and share it widely. Leaders need to demonstrate that they value high customer
satisfaction. The gap between current performance and what is needed to win
must be always visible to everyone.

In Only the Paranoid Survive, Andy Grove described his attitude as CEO of
Intel. "The prime responsibility of a manager is to guard constantly against other
people's attacks and to inculcate this guardian attitude in the people under his
or her management ... I worry about competitors. I worry about other people
figuring out how to do what we do better or cheaper, and displacing us with our
customers."

2. Encourage process experiments.

Most people have both an impulse to do what's familiar and comfortable, and an
impulse towards novelty and challenge. In many organizations, when pushing
into new territory that would be challenging, the organization is too quick to
punish less than perfect results; too reluctant to reward and celebrate people
trying new things; too unimaginative to help people see how some of what they
have mastered needs to remain even while trying new things. Many
organizations are only interested in short-term performance. It isn't that
performance doesn't or shouldn't matter, but there needs to be some margin for
experimentation that may not always lead to the right results. To overcome
objections to the expense and riskiness of process innovation, it should be
advanced through fast, inexpensive, and flexible experiments. The focus
shouldn't be on permission for resources but rather permission to behave
differently. Failure and iterative learning should be built into the improvement
process. Ideas should progress through stages of a lab (develop and test in a
simulated environment), to pilot (a small test in the real world to prove and
evolve the concept), to rollout ("global" implementation).

Google demonstrates many of the ideal practices that can weave innovation
and disruption into a company's fabric. One key approach is "20% Time" (also
called "Innovation Time Off") that encourages Google engineers to spend 20%
of their work time (one day per week in theory, usually weekends or evenings in
practice) on projects that interest them. Many of Google's services, such as
Gmail, Google News, Orkut, and AdSense originated from these independent
endeavors. The real value of "20% Time" is not the time, but rather the license it
gives Googlers to work on things that they are passionate about pursuing.

3. Embrace change as an opportunity for learning.

To overcome the discomfort and pain of disruption from process innovation,

changes have to be seen as opportunities for learning. People will embrace
change if it makes them feel more effective and is brought about with their
active participation. When the path is unclear, it will have to be discovered by
iteration. Leaders need to provide vision and engage with front line workers in
joint problem solving. Front line workers need broad empowerment to address
problems with a minimum of bureaucracy.

Toyota selects its people for their openness to learning, and then develops their
work habits through practice after they are hired. All managers are expected to
be involved in process improvement and adaptation. Problems are welcomed
as ways to help understand why things go wrong. There is a saying at Toyota
that "no problem is a problem." And there is a culture of no blame. Managers
are told "be hard on the process, but soft on the operators."

The value of these techniques is that they all contribute to reducing the
difficulty, peril, and uncertainty of change. They make it easier not only for
employees to engage in it, but to engage continuously and to establish
continuous improvement as the norm.

How have you seen the disruption of continuous improvement built into
organizations, or not?