Using the Tools in Your Performance Excellence Toolbox: Part 20 Benchmarking Preparation

Using the Tools in Your Performance Excellence Toolbox: Part 20 Benchmarking Preparation

This is the twentieth in a series of posts on using performance excellence tools.  Benchmarking is a tool that can really help you determine the best solution to your problem.  This post will begin to cover more on the preparation for the benchmarking exercise.

First, set the date, time and place for the meeting.

To set the date and location requires you to determine the amount of time needed to cover the subject(s) and the number of people involved.

If the meeting will consist of a large number of people from the aggregate of total participating entities, you will need a room large enough to accommodate everyone.

Will you break out into sub committees? This means you may need additional rooms though in some cases just grouping in a corner of the room may be enough.

You need to determine the size and number of rooms required to see if there are rooms available at the time you are getting together.  Obviously, if not, you need to readjust the proposed date and/or time.

Do not forget that you have to match up each member’s calendar for the session(s) in which they are participating.

You need to calculate travel time.  Whether you are driving across town or flying across country, allow for delays.  I was part of a team flying from Corning, New York to Cincinnati, Ohio for a benchmarking sessions.  We were delayed for several hours at an airport where we had to change planes.  Three things happened during that layover.  One, they sent us to the wrong gate, two they failed to update the arrival and departure time for the aircraft and third, someone abandoned a briefcase in the waiting area and the bomb dog was brought in.  Fortunately, we had decided to travel the evening before rather than trying to get there in the morning.

Will this be a quid pro quo?   To set a time for this, each side should determine not only how long they intend to present but also more importantly how long they intend to ask and answer questions.

The formal presentation should be minimal if used at all.  People are not there for the sales pitch or feel good speeches that management and sales like to put out there.  They are there for specific reasons, have specific questions to ask not talk endlessly about irrelevant topics.  Allow for a brief introduction of the company, its markets, background etc.  There is no need for this to go for more than 5 minutes for each side.  As John Wayne said in Cowboys, “We’re burning daylight.”  The more time you waste on fluff the less time you have to get the data the data you came to get.

Once you have the logistics down, you can set the agenda that will be covered in the next post.

Oh by the way, if you do not need to see what they are doing, consider a phone call or teleconference/video conference call to save time and money.

Using the Tools in Your Performance Excellence Toolbox: Part 16 Developing Your Plans

Using the Tools in Your Performance Excellence Toolbox: Part 16 Developing Your Plans

This is the sixteenth in a series of posts on using performance excellence tools. You have narrowed your potential solution to hopefully one or at most three.  Your next step is to develop the plans required to test your potential solutions.

First did you answer the questions in my post – Using the Tools in Your Performance Excellence Toolbox: Part 15 Selecting Your Potential Solution – satisfactorily for each of the potential solutions?

• Do you have the required resources to implement the solution?
• Does it fit your business culture?
• Do you have the political backing needed to implement

If you read the standard works on Lean and Six Sigma on planning your solutions for testing, you will note that it is extremely heavily tilted to manufacturing particularly statistical analysis of the workflow.

For example control charts are generally set up to measure large amounts of data points, e.g. manufacturing 100 widgets an hour over 10 shifts a week or processing thousands insurance claims.

To use a control chart for low volume transactions requires some tweaking of design to help you track the performance of the process.  You have baseline data from your earlier stages post to start the measurement process.  Here is an example of a simple control chart using a MS Excel template.

Using a control chart

1. Determine what a defect (imperfection) is.  A sample can have several defects.  In this example a defect could be:

• Smudges
• Misaligned page
• Incomplete print/missing letters

2. Determine how big a sample size you are going to use.  Do you want to do a 100% sampling or a representative sampling?  The more you sample, the more accurate your results will be.  But the more it will cost you to do the research.

3. Determine the frequency of sampling.  How often you do you want to sample.

• Example for points 2 and 3.  You want to sample one item in 10 on each line.  Or one item in 10 on every third line.

4. Record the number of defects per sample.

5. The chart automatically calculates the mean (average) for all the samples in the daily sample period.

6. It then calculates the mean for all the daily means.

7. The next four steps calculate the various deviations from the norm.

Many of the tools you can use during the planning step have already been discussed in previous posts.  These include:

• Project Charter
• Gantt Chart
• Pareto Chart
• PDCA Cycle

Review your project charter.

If you did not create a Gantt Chart earlier, you need to do so now.  If you have one, it is time to update it to reflect the improvement plans steps.

Using the Tools in Your Performance Excellence Toolbox: Part 15 Selecting Your Potential Solution

Using the Tools in Your Performance Excellence Toolbox: Part 15 Selecting Your Potential Solution

This is the fifteenth in a series of posts on using performance excellence tools. You have created a list of ideas by brainstorming or other collective/group development methodology. You have narrowed them down to a few or perhaps one potential solution.  Now you need to figure out if it will work.

PDCA (Plan-Do-Check-Act) is used in the Improvement Stage starting at this point (Plan).  Let’s say you have 3 potential solutions.  You need to rank them as to the potential of their successful implementation AND SUSTAINABILITY of the solution.  Sustainable or Continued or Control or Maintenance whatever you want to call it, it must be one of the top selection criteria.  If the improvement is not sustainable it is not a solution to the root cause but only a Band Aid.

Ask the following questions of your potential solutions.  These are not necessarily straight forward components of solving the problem but are required to ensure success.

• Do you have the required resources to implement the solution?  It seems a simple question but you need to be sure that all the resources required are identified and are available.  For example, the solution requires that all the employees receive training on it.  Your team has all the time and expertise to create the training.  But do the employees have the time to take the training.  Remember that their time costs the company and will the training be seen as adding value to their work.
• Does it fit your business culture?  Note that just because it doesn’t fit your business culture, doesn’t mean you can’t select it.  You just have to be prepared to deal with any issues that come up.  Culture change (we’ll discuss change management in another posting) maybe a critical component of effectively eliminating the problem.
• Do you have the political backing needed to implement?  Are you going to be treading on someone’s turf?  Are you going to be perceived as building an empire or feathering your nest?

Remember that even after you have selected a solution, it is still only a potential solution.  You need to test it which is the subject of the next blog.

If you have narrowed your solution to only one choice, it doesn’t preclude this step completely.  You need to still do the basic work to verify that the potential solution is viable. If it doesn’t measure up, you need to go back to working on identifying potential solutions.  Implementing a bad solution is probable worse than doing nothing.

Using the Tools in Your Performance Excellence Toolbox: Part 13 Improving Your Process – Tools

Using the Tools in Your Performance Excellence Toolbox: Part 13

Improving Your Process – Tools

 This is the thirtieth in a series of posts on using performance excellence tools.  You know better than to slap a Band-Aid on a problem.  You must permanently fix the root cause(s) of the problem.  Here are a few tools to use.

First our old friends the Histogram, Pareto Chart and Brainstorming can be used in this stage.  The first two help you measure results of ideas that you come up with as part of Brainstorming potential solutions.  You use them the same way as covered in the earlier posts.

You may want to use the Plan-Do-Check-Act cycle to evaluate ideas that are generated.  This helps you systematically evaluate critique and determine the viability of a potential solution.  It allows you to accept as is, modify or reject a potential solution with the minimal amount of effort, e.g. time, money, staff.

Though you may have run into the issue of change management in earlier stages, it is in the Improve stage that you need to begin to seriously address the issue.  Change management is a complex issue requiring a serious of post of their own.   However, there are a few tools that come to hand in assessing the degree of difficulty or obstacles if you prefer, that you may encounter.  Forewarned is forearmed.

First you might have picked up from your VOC work inclinations of individuals towards the project.  Is there overt or covert negative reaction to the project?  Even initial positive reaction can be a potential change management issue, best summed up as too much, too soon or impatience of people wanting something before it is ready.  You can lose your support through delays or miscommunications.

Second is the Commitment Scale a simple looking tool that takes some practice and skill development to actually be used effectively.

You (royal YOU – team, sponsor, etc.) complete the Commitment Scale following the steps in  Figure 1.

Figure 1 – Commitment Scale

The need for skill comes in with the need to accurately determine the individuals’ or groups’ current level of commitment to the project and the level you need to move them to in order to be successful.

You then build the mitigation plan for moving them from their current position to the needed level.

The Commitment Scale can be used to assess the commitment of individuals or groups of people who are outside the team.  For example, there may be within the organization a person not on the team but who has the political capital to make you or break you and has direct or indirect interest in the project (stakeholder).  I have developed an Influence Level Scale that I feel does a better job when used in conjunction with (prior to) the Commitment Scale.

Identify who the stakeholders are that you will be dealing with.  They can be divided into five categories.

• Power broker – an individual who has the power to manipulate the information flow, budget, communication, etc. concerning the project under consideration.  They may or may not be obvious in the decision making process.
• Decision maker – an individual who has the decision making power.  This may be a single person with straight up Yes or No decision powers or one who has strong influence with other decision makers.  They may or may not be the process owner.
• Influencers – an individual who does not have decision making power but who can influence the decision makers.  Often these are subject matter experts.
• Advisor – an individual who may be asked for their advice and input.  They do not have any decision making power.
• Follower – an individual who follows the decisions being made.  They have no input into the decision making process.

Be certain that you are dealing with the right people.  If you do not have the ear of the power brokers and decision makers, you are not going to make any headway or at best waste an enormous about of effort in gaining headway.

Using the Influence Level Scale (Figure 2), determine the influence that each person has on the success of the project.

Figure 2 – Example of Influence Level Scale Developed by Process Improvement for Non-Profits

After you have identified and classified the stakeholders’ influence, determine what level of commitment to the project you will need them to be successful using the Commitment Scale.

Using the Tools in Your Performance Excellence Toolbox: Part 12 Improving Your Process – Fix it Permanently

 

Using the Tools in Your Performance Excellence Toolbox: Part 12Improving Your Process – Fix it Permanently

 

 This is the twelfth in a series of posts on using performance excellence tools.  You have Defined your process/problem that needs to be identified, established baseline performance Measurements, and Analyzed the data identifying the root cause(s) of the problem.  Now you must working on permanently fixing the problem.

 

The key phrase here is permanently fixing the problem.  Slapping a Band-Aid on the problem may temporarily hide the problem but it doesn’t fix it.

 

An example of slapping a Band-Aid on a problem you can experience nearly every day – road repairs.

 

It is April and the winter has created potholes in the roads you take to work.  Ah but relief is on the way, you see the highway department out filling in the potholes.  The problem is most likely they are using cold patch not hot asphalt.

 

• The work crew diligently shovels the cold patch into the pothole.
• They tap it down firmly.
• They mark the spot with cones so you don’t drive on it until it sets.

  

  English: A large pothole on a country road. (Photo credit: Wikipedia)

 

You are happen.  The problem was fixed. Yea right!

 

Two weeks later what do you see?  The pothole is coming back and it looks more like a sinkhole than a pothole.  What happened?  The highway department put a Band-Aid on the problem, they didn’t fix it permanently.

 

The proper method “… of repairing potholes in asphalt roads includes the following sequence of steps: a recycled material, created by an abraded material grinded off a surface layer of a used road, is preheated to 120-200 °C preferably to 150-180 °C; the surface of the pothole is heated to 120-200 °C preferably to 150-180 °C; the preheated recycled material is applied to the pre-heated surface of the pothole in the road and rolled into the pothole. With advantage the asphalt road pothole may be preheated with 50-100 cm of end lap from its boundary line. With advantage the applied recycled material may be charged with asphalt emulsion before it is rolled in. The device for repairing potholes includes a container (1) for the recycled material consisting of hoppers (6) between the adjacent vertical walls (9) of which there are exhaust-heat chambers (7) arranged for transfer of heat from vertically fed exhaust gas of the gas burners (8) coming in the bottom part (12) of the exhaust-heat chambers (7) and a heating panel (21) for planar preheating the surface of the asphalt road pothole. With advantage the planar heating panel (21), provided with heating bodies on one side, is arranged together with the container (1) of the recycled material on a mobile chassis (31) and pivoted in a tilting way around the axis o3 parallel to the transversal axis of the mobile chassis (31).”  http://www.sumobrain.com/patents/wipo/Method-device-repairing-potholes-in/WO2010121579.html

 

Too often, you find that the quick fix, instant gratification is the norm.  Why?  Time, money, clamor from the bosses to just fix it now, etc. are typical reasons for this.

 

Other times it is not understanding what fixing the root cause really means.

 

A few years back I was the program manager for implementing a corporate global initiative.  We knew that part of the solution would require software in a new field of products.  I started to investigate products.  In a meeting at one vendor, I was the company’s only representative present.  The vendor’s sales rep had several VP’s present.

 

The sales rep asked me to give a brief overview of the project.  When I stated it was a Six Sigma project, he let out, “Oh no not another one.  You’re the fifth one this month.”  He went on to say that if we only implemented their software right away rather than waste months of analysis we would be saving so much money.  I asked him how we would know we were solving the root cause of our problem.

 

He asked what I meant by that.  I explained root cause analysis to him.

 

That makes sense he said, no one else explained Six Sigma that way to me.

 

So when you start to work on improvements to your problem, remember the answer(s) have to permanently fix the root cause(s).  The next posting will start to look at how this is done.

Using the Tools in Your Performance Excellence Toolbox: Part 9 Scope Change

This is the ninth in a series of posts on using performance excellence tools.  It covers a critical component of project management Scope Change and the tools used to manage it.

Changing the requirements of a project requires a review of the project’s charter.  The charter is a living document.  As the project progresses, you will almost certainly have to make changes to the charter.  When changing the charter, be certain that the sponsor reviews the changes, approves them and signs the revised charter.  Also make certain that the team is aware of the changes.  Do not work in a vacuum.

A formal Scope Change process may be required and is an effective tool to use.  If you do not change the project scope, you may give your sponsor a nasty surprise when the project is late, over budget or delivers less than required.

In his article on scope change management Tom Mochal states, “Smaller projects can document the scope change in a short form or an e-mail. For larger projects, the scope change request should be formally documented using a Scope Change Request Form. The important thing is that you need to document the scope change in writing. Don’t act on scope change requests you receive verbally.”[i] Figure 1 is an example of a scope change sheet in MS Excel.

Figure 1 Scope Change Template

Why do you have to manage Scope Change?   When you agree with your sponsor and team on the project’s charter, you agree to a set of deliverables, the timeline for completing the project, and the resources that will be made available for it.  This is the scope of the project.  An easy visual for understanding this is the Project Management Triangle.  The Project Management Triangle is an equal lateral triangle that traditionally has three constraints “scope,” “time,” and “cost”.  You cannot alter one side of the triangle without affecting the others.

The time constraint is the amount of time you have to complete the project. The cost constraint is your project budget. The scope constraint refers to what you must do to meet the project’s requirements. These constraints often compete: if you increase the scope typically you will have to increase the time and/or cost. A tighter time constraint could mean increased costs and reduced scope, and a tighter budget could mean increased time and reduced scope.

Figure 2 is the balanced Project Management Triangle that you start the project with.  The Time, Cost and Scope are in equilibrium.  You have enough resources (costs) and time to deliver the deliverables (scope).

Figure 2

If any of the three sides change, that change will impact one or both of the other two sides.  Figure 3 illustrates that if the deliverables are increased then both costs increase and the time required to complete the project also increases in this example.

Figure 3

Figure 4 illustrates how if the timeline is reduced then the deliverables are reduced to offset the decreased amount of time available.  An alternative to reducing deliverables is to increase the resources available, obviously this increases costs.

Figure 4

A preventive method is to have the team conduct a risk assessment when setting up a project.  In nearly every risk assessment that I conduct at or near the top of the assessment is scope creep.  By addressing scope creep in the risk assessment, you are forced to determine the likelihood of the risk occurring and its potential impact on the project.  In addition, the risk assessment forces you to have a mitigation plan and a contingency plan in case the risk occurs.

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[i] Tom Mochal, Follow this simple scope change management process,

Sep 12, 2006, http://articles.techrepublic.com.com/5100-10878_11-6114134.html

Becoming a Performance Excellence Organization: Cost Reduction vs. Cost Cutting – Part I

Becoming a Performance Excellence Organization:

Cost Reduction vs. Cost Cutting – Part I

You need to reduce your budget because your operating expenses outstrip your income.  What are you going to do to get your budget under control? 

“CUT COSTS!” you cry out. 

                       

• How much do you have to cut? 
• Where are you going to cut? 
• What will it do to your organization’s ability to meet its objectives? 

 

Let’s start off answering these questions by answering a more important one: what are you trying to do, gain cost reductions or cut costs?  They are not the same thing.

Rather than just cut spending willy-nilly, let’s look at the difference between cost cutting and cost reduction.  When you decide to cut costs, you go looking for places in your budget that you can cut cash outlay.  In most organizations the two biggest cash outlays are people and facilities.  Usually it is easier to get rid of people than it is to get rid of a building.  So you start looking for heads to cut. 

• How do you select those individuals to cut? 
• Do you select those with the highest costs (salary and benefits), the last hired; push some into retirement, etc.? 

 

Here are a few things to think about:

• Examine the impact to your organization that letting individuals who hold key corporate memory (knowledge) go.
• Determine if the workload will be reduced in proportion to the headcount reduction.
• Have a plan to deal with slumping morale for those who remain.

 

There are alternatives to just cutting costs; find waste and variance in the process and remove them, thus reducing your costs but still maintain your core business functions.  You may or may not still have to reduce headcount but if you do, it will be done in a more controlled way.  It will leave your organization intact and functioning.  In a rather common vulgar way, you are getting rid of dead wood.

 

You have identified a process in your organization that needs to be improved.  You need to determine the type of improvement process to use.  Your choices are between two categories variance reduction and waste reduction.  Both variance and waste are destructive to any process.  They rob you of limited resources, increase your costs of operation and annoy or even anger your clients; some to the point of leaving you. 

To identify waste look at each component/step of a process and determine which one of the following it falls into:

• Value Added
  • The customer need it
  • It transforms the product or service to something they need i.e. from initial call – delivery of product/service
  • It is done right first time, every time
  • Non-Value Added
    • Not essential to produce output
    • Does not add value to the output
    • Clients are not willing to pay for it
    • Non-Value Added but required – legally required, financial activities, etc.

 

When looking at a process or a problem, ask “Does it add value to the client?”

By definition, non-value added steps are waste.

 

Since most non-profits do not charge for their services or only charge a minimal fee, the definition of Value Added may look more like this for them.  An activity, service or goods that the organization provides from which a client perceives receiving a benefit.  

 

Here is an example of waste.  The process is laid out in such a way that individuals do a segregated step in the process and then pass their output along to the next step that does their work and so on down the line (akin to an assembly line).  If the steps are not properly balanced for the amount of labor and time required to efficiently complete each one you create a bottleneck that causes people downstream in the process to wait for work while people upstream are overloaded.  In other words while some people don’t have time to breathe others are shooting the breeze waiting for a breathless one to give them work.

 

The other thing to consider in an effort to improve the performance of the process is to identify variances in it.  Variance can best be described as an error or defect.  If the process should be done by inserting A into B, B into C, C into D, D into E but somewhere along the line someone does it by inserting A into B, B into D, D into E, E into C, then you have a variance.  This increases your costs by perhaps requiring rework, additional time and materials. 

 

Though both these examples are simplistic and the definitions provide only 75,000 foot view of waste and variance, I hope you can see that there are ways to look at cost savings without having to just cut costs. 

 

The next few postings will provide more detailed examples.

 

Implementing Process Excellence: Achieving a Sea Change in Culture

You have determined that your SMB or non-profit organization is ready for the sea change in its culture that performance excellence can require.

The key to successfully transforming your non-profit into a performance excellence organization is that management – which includes middle management through the Board of Directors – must buy-in and support it with actions and resources and not just lip service.

Management cannot wave a magic wand and declare the organization to now have a performance excellence culture.  They must demonstrate their commitment to the changes that are coming by walking the talk.  If the organization has a history of management repeatedly “implementing” the latest business management fad (management by objective, management by walking around, Baldrige Award, etc.), they may well react with “Oh no here we go again, another flavor of the month.”  Everyone in the organization must understand that this is a process that takes a long time to complete, that management is aware of this and that they are going to stay the course.

Leading by example is the one of the best ways for management to show the organization that they are serious about change.  In 1983 Corning Incorporated (then Corning Glass Works) introduced Total Quality Management.  To train the employees, they created a Quality University that every employee had to attend.  To demonstrate their commitment to TQM, the first employees to go through the university were the CEO, Vice Chairman, CFO and the three presidents.  30 years later, Corning’s management still openly demonstrates its support for performance excellence.

Even with management’s support, you must have the support of the employees also.  They must be enabled and empowered to change the culture.  They need to have the resources necessary to be able to actually transform the culture.  These resources include training, tools and the environment that will provide employees with the ability to transfer management’s intent into real results.   Training and tools are something that management can buy and provide to the employees.  But the environment for successfully utilizing these resources must be created internally by management.  If you invest the resources of time and money into training the employees and then release them into the same old work environment, you will have wasted your efforts.

In my experience when it comes to change management, the basic approach to take is change people or change people. If you are confronted with an individual who just rejects the changes, you have to either change their attitude towards the new ways or replace them (let them go).  Neither of these is simple to accomplish.  Be prepared to have the necessary processes and resources in place to handle the situation when it comes up and it will come up.