Leveraging Lean Six Sigma - RESULTS in Business Process Reengineering

It does not seem all that long ago that business process reengineering (BPR) was sweeping most industries. Actually, it was nearly 20 years ago. The 1990’s and new century saw the ascendance of Lean, Six Sigma and more recently the fusion — Lean Six Sigma (LSS). Operational Excellence (OpEx) has seen the popular press in recent years. More recently Business Process Management (BPM) and Business Process Optimization (BPO) have been popularized — especially in the ever-increasing areas of finding information technology enabling lines of thinking where melding process thinking first with an overlay of technology to provide workflow support, and better exchange of information and business intelligence (BI) has delivered excellent results.

Recently I have seen a resurgence of interest in BPR. Organizations are redefining it as something much different to traditional thinking around BPR, which often involved an expert/engineer/consultant-driven process and organizational changes that quickly changed the landscape in business — sometimes to its detriment. We have all heard the stories or worse, lived the life of organizations that re-mapped processes and made wholesale changes to the way business is done without involving all stakeholders in the process, and later wonder why they fail.

I keep hearing the same stories about misguided, “experts” attempts to provide silver-bullet solutions. Forward-looking organizations are rethinking BPR and alignment of their IT strategies at a furious pace. I am working with a Forbes Top 100 Best Companies to Work For an organization that is grappling with how to move forward in modernizing its IT infrastructure, maintain their connection to their people, and re-invent processes at the same time. Outperforming their competitors is something they have done well over the years. To their credit, they know that new approaches are now required to maintain and expand their edge. They acknowledge that today they achieve it through excellent people and brute force, something hard to sustain over time.

Organizations are looking to pick the right business drivers and metrics, build better processes to deliver what customers want, leverage the best of technologies and marketing, and finally, aligning their people to make it happen. I am introducing an acronym that may serve your organization well, taking in all these issues I have outlined. The phases of a never-ending wheel of action I suggest following the letters of the word “RESULTS”:

R = Reflection and Vision

Driving improvements is a top-down, bottom-up affair. It’s amazing how many smart organizations struggle to articulate what they should look like in the future, in terms easily understood and embraced by the stakeholders. This is not too hard for things like market share, positioning in benchmarking results by research companies, and the many different financial metrics that stock analysts toil over for publicly traded companies. Top management must reflect and develop a vision of the future. This vision needs balance. For example, customers first, employees second and the company last is a valid way to address this. The harder part is putting some specific measures to these things.

E = Expectations and Alignment

I believe that 80% or more of the success of any organization comes down to our ability to develop and empower people to support its vision. It’s top management’s job to say where we are going and what that looks like when we get there in measured terms. It’s the organization’s people who must figure out the how. For them to do that it is necessary to share information, provide training on how processes work (classic LSS and BPR tools), and provide adequate support for them to own and make the necessary changes.

For this to succeed we must make sure expectations are set, and we have aligned all stakeholders to buying in to the vision. It seems really simple — answering the “what’s in it for me?” (WIIFM) for each group of stakeholders, but in practice, it is devilishly hard to do. The bigger and more complex the organization, the harder it is.

This problem is exactly why the traditional BRP approach is the default — especially in turn-around situations when there is no time to on-board the stakeholders. Experts design the new processes and tell everyone what they will now do. Then later wonder why no one will support the changes and results wither.

S = Selection of Opportunities

Only after knowing where we are going, what that looks like in a way stakeholders can buy in to, and being able to truly handle those WIIFM questions should we continue on to selecting where to apply the gigantic toolbox of BPR, LSS, OpEx, et.al. methods. Before we can do that there must be a careful assessment of the organization, identifying the specific current and future performance gaps with metrics, and the compilation of a portfolio of potential projects. This must be capped with a few balanced and measurable outcomes, so that we can definably say we are successful in terms of measured results after completion of the initiative.

I guarantee that a careful assessment that examines IT, people, processes, current and future customer requirements, supply chains, and future market shifts will generate far more potential projects than you can possibly undertake all at once. Do we modernize technology first? Which technologies? Do we attack and improve core value-adding processes independent of IT first? Or some kind of hybrid? This is an area where those outside consultants can earn their keep by providing competitive intelligence (what other companies out there are doing) and expertise in the best ways to tackle these projects - whether you do it yourself or use outside help.

One last thing - make sure your approach to mapping processes and identifying the priorities is done in an inclusive manner. This will pay huge dividends later in alignment and change management.

U = Understand and Plan

The power of a plan comes from people understanding it — and being empowered and held accountable for execution. Since most organizations are pretty effective at planning — once we have the right initiatives selected — I assume you are able to create a good work breakdown structure and resourcing it with adequate program management support. An inclusive approach is critical in developing the plans and making absolutely sure that there is clarity for ownership. People would rather put up with a problem they cannot solve than accept a solution they don't understand. We must embrace this truth.

One more technique I have found to be quite helpful in the planning phase is to insist that each major action item, in addition to RACI assignments has one more element: How the success of this action will be measured. I am not talking about tracking the completion of the task, that's obvious. What we need to know is the effect of implementing this action item. Specifically, what will be improved after this action is completed? Faster, cheaper, better are typical outcomes, but exactly how will we know in measured terms we got the benefit we expected? This is a great final acid test to validate selected action items are worth doing. If we can't show a solid case for the action, we must question why we are burning scarce resources and time to do it.

L = Leverage, Influence and Change

Once the plans are taking shape and before wholesale implementation begins, I strongly recommend that the team takes an inventory of the stakeholders affected by the action items selected. In a typical OpEx/Lean Six Sigma effort there usually is a SIPOC diagram completed early-on to support mapping and understanding the processes. This involves suppliers, inputs, process (mapping), outputs and customers for the business and progressively for the major business processes. In highly regulated or legislated industries such as finance, pharma, healthcare and government you are likely to also include R - for Requirements as a part of the diagram. This analysis is helpful — and not nearly enough!

Once you have your plans and are ready to write the supporting project charters I recommend at the project/project task level an assessment of the stakeholders affected. Identify the stakeholder groups involved in the inputs and outputs of the process. Universal ones are customers, suppliers, employees, stockholder/owners and depending on the industry several other constituencies including unions, political groups and the community where we operate.

For this project/project task as a few critical questions. First - to what degree does this group affect success? If high, we must ask more questions. Will they support this action and provide the resources willingly to make it happen? If no, why? An often overlooked and fatal mistake in poor change management is lacking the discipline to do this final set of gut-checks before launching into implementing the changes. Doing it may not uncover any issues — if so, full steam ahead. But, if we do uncover issues - we must go back to the planning phase to address them fully. Being lazy here will be very expensive later — guaranteed.

T = Transform Continually

Finally, we get to the all-important action phase in implementing our portfolio of projects over time. One of the great strategies I recommend is a steering committee or guiding coalition being formed throughout the lifecycle of a major improvement initiative. Whether this is handled by a steering committee, program management office (PMO) or a leadership team, what must happen early and often is careful review of progress and adjusting the plans. Too often the planning process is seen as a one-and-done task, when in reality it is an integrative and never-ending step of the change process. The Shewhart Cycle/Deming Wheel of plan, do, check (or study) and act suggests a never-ending loop of validation and reaction to results from our change initiative. With this RESULTS methodology I am sharing with you here there is a framework to do the PDCA cycle more effectively and methodically than most organizations do today.

Measure and report the results with hard data early. Celebrate where progress is seen to build momentum and keep the energy high. If results are lagging, do not punish or vilify the teams responsible. That ensures fear and retreat from re-planning and recommitting to getting results. Accept the fact that we, as top managers and influencers have likely failed in doing our job! Commit to lessons learned review in a non-accusatory learning fashion and re-commit to getting it right going forward.

In the recent book Extreme Toyota, the authors shared an interesting insight. At Toyota, what percentage confident do they expect us to be before acting on an idea? 99 percent? 90 percent? Less? The authors explain that assuming the risks are manageable for failure they only expect a 60 percent confidence factor! This sends the message that taking action is valued and that as long as we are willing to learn from failures and forge ahead, there is no shame in failure. This tiny insight into Toyota's culture of continuous improvement is one to consider as we seek the edge in building the right change culture in our organizations.

S = Sustain and Reinvent

In our pell-mell rush to make things happen and see results we all-too-often fall into two major traps. First, to sustain and nurture progress, organizations must elevate standardizing on the new methods and approaches and build-in the mechanisms to make sure gains don't slip-away. Old habits die hard, and if we are not insisting on making new ways permanent, things will backslide.

Borrowing from the Theory of Constraints (TOC), we also must not fall victim to another fatal flaw: being successful. It's very easy and human nature to do high-fives all around and rapidly become complacent when we are winning. Two cases. Not that long ago the book Good to Great featured some high-flying successes and touted what they did to be successful. Some of those organizations essentially don't exist or have fallen on hard times today. Why? I think complacency and entropy (don't fix what is not broken) are partly to blame.

Getting back to the tie-in to TOC, the final step is to . . . go back to step one. The biggest universal constant in business is change. Even though the great actions and methods we took today got fantastic results, there is no guarantee they will continue to in the future.

In TOC thinking the new processes we have standardized on as the new way can become future constraints to success. As time passes we must continually remind ourselves that the thinking that got us to today's successes won't be sufficient to deal with the problems of the future. Continual re-invention is required. There are some successful organizations out there that are sustainably doing that - one of my former employers, Disney, and General Electric come to mind. Both of these organizations seem to have the formula for re-invention, while maintaining their core culture and core competencies as they go. While I don't suggest slavishly following their formula, I do suggest reflecting on what worked for them and then poly-morphing the ideas to work for us as we endeavor to get and keep the edge.