Column 2

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

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.

Last session of the day is Jennifer Thompson of Royal Bank of Canada on process improvement culture within an organization: how to maintain a relevant Six Sigma culture in changing economic times, and how to keep people engaged in the program. RBC is Canada’s largest bank, with 80,000 people in 50 countries; they were a customer of mine for a couple of years in the past through a somewhat drawn-out BPM and process improvement project, so it’s good to see them getting a bit more rigor around this. They’ve embraced Kaizen, and the idea that you can make significant change in a short period of time, which created quite a bit of interest from the business, then followed this with a reworking of their Lean Six Sigma program into a business performance excellence program for their operations areas. More recently, they’ve taken these ideas and pushed them beyond the operations areas, deploying Six Sigma in areas across the organization, such as IT and finance. They maintain a small core group of trained LSS people: 3 master black belts and 20 black belts in the center of excellence, and 105 belts across the enterprise; they measured $35M in benefits in 2009, making this a definitely worthwhile undertaking.

Effectiveness of the program is a function of both the quality of what is produced, and the acceptance of the program, or E = f(Q,A). Their real challenge is in acceptance: becoming and staying relevant, especially considering that they’re applying what could be seen as a manufacturing technique within a financial services organization. Project metrics need to be relevant to the business that you’re in; in RBC’s case, that’s profits and savings, not green belt utilization ratios (which I can’t believe that they even considered as a useful metric). You need to engage and partner with the business, and read their feedback properly to fine tune the skills and offerings of your LSS program.

RBC came to the realization that one size does not fit all, and developed a flexible methodology that leads with Lean, then works towards the ideal methodology as the business needs are understood. It’s important to recognize the size and complexity of the project as you get into it, and adjust the governance to match the project effort. They’ve developed a toolbox of training courses for various stakeholders, from executive/champion training to green belt to Kaizen to their internal business performance excellence programs. They no longer have a separate black belt training, but only an upgrade from a green belt due to the high level of overlap in the required skills.

She covered some points on keeping people engaged in the LSS program: a bi-annual LSS forum and monthly lunch-and-learns for the belts; a monthly dashboard for executives for sharing best practices; and a champion roundtable for champions and sponsors. The LSS program at RBC is not driven from the top down; there is no unequivocal, from the top mandate for it, and some of their challenges are to get people to adopt it when they have no management-driven motivation to do so. That has required the LSS program to show value on multiple programs, then use that to motivate interest in other areas by showing it as a way to improve their business, not a corporate directive.

I’m glad that I dropped in on these sessions, and I’ll be back tomorrow to see more of the ones on wrapping this back into automated processes and BPM. The whole conference is really tiny, only about 30-40 attendees, but the quality of the presentations and conversations is really high. With no open wifi (grumble, grumble) but in my home data network area, I promise that I’ll remember my iPhone tether cable tomorrow so that I can post as I go.