Skip to content

{ Category Archives } Lean Six Sigma

John Bates, CTO of Progress

John Bates started with more of the Progress message on operational responsiveness, highlighting the importance of process and event management in this. He showed survey results stating that companies find it critical to respond to problematic events in real time, but only a small percentage are able to actually do that. Companies want real-time business visibility, the ability to immediately sense and respond, and continuous business process improvement in a cycle of responsive process management. Yeah, and I want a pony for Christmas. Okay, not really, but wishing doesn’t make any of this happen.

By adding BPM to their suite, Progress brings together process and event management; this makes is possible to achieve this level of operational responsiveness, but it’s not quite so easy as that. First of all, we need to hear more about how the suite of products are going to be integrated. Secondly, and more importantly, companies who want to have this level of operational responsiveness need to do something about the legacy sludge that’s keeping them from achieving it: otherwise, Progress (and all the other software vendors) are just pushing on a rope.

Bates then called up James Hardy, CIO at State Street Global Markets Technology, for an on-stage conversation about how State Street is using the Progress Apama CEP product in trading and other applications. They’re a Lean Six Sigma shop, and see CEP as a natural fit for the type of process improvement that they’re doing in the context of their LSS efforts: CEP allows for some exceptions to be corrected and resubmitted automatically rather than being pushed to human exception management. They’re also committed to cloud-based technology, but by building a private cloud, not public infrastructure, and have seen some speedy implementations due to that. They see operational responsiveness as not just about increasing revenue, but also about mitigating risk.

Bates then talked about 3Italia, an Italian telco that was having trouble dealing with the incremental credit checks and revenue generation required for their prepaid mobile customers: since their billing systems weren’t fully integrated with their servicing systems, they sometimes allowed calls to be completed even though a customer had run out of credit and their credit couldn’t be revalidated. They are also a TIBCO enterprise customer, but weren’t able to get the level of agility that they needed, so implemented Progress (this is Progress’ version of story, remember). They managed to stop most of that revenue leakage by providing direct links between billing and servicing systems, and also started doing location-based advertizing to increase their revenues.

He also spoke about Royal Dirkzwager, a shipping line, and how they were able to achieve millions in fuel savings by detecting potential issues with docking and loading before they occured, and avoid burning fuel getting to the wrong place at the wrong time.

He finished up the case studies with a couple of airline scenarios for maximizing profits using situational awareness: responding to crew or flight delays proactively rather than just responding to irate customers after the fact (this is a lesson that Lufthansa could definitely learn, based on my recent experience). To bolster this case, he introduced Joshua Norrid of Southwest Airlines – also a TIBCO customer – who discussed their journey from “Noah’s Architecture” (two of everything) to focusing on strategic products and vendor partners. They were an IONA customer, then Savvion, and recently started using Actional: having lived through two of the products that he used being acquired by Progress, he said that the acquisitions where done “in style”, which is pretty high praise considering the usual experience of customers of acquired companies. They’ve started to look at how they can be more operationally responsive: text messages when flights are delayed, for example, but also looking forward to how flight bookings might change during a weather event, or how local hotels might be pre-booked in the case of significant expected delays. They see reducing redundancies and inefficiencies in their architecture as a key to their success: lowered cost and better data integration helps in bottom line IT cost savings, operational savings and customer satisfaction.

After the customer stories, Bates discussed the future of responsive business applications: packaged applications evolving into dynamic applications; a control tower for business users to model, monitor, control and improve dynamic applications; and solution accelerators for pre-built industry-specific dynamic applications. Savvion’s strong focus on pre-built applications is an important synergy with the rest of the Progress suite. Their solution map includes these accelerators supported by a single control tower, which in turn provides access to BPM, CEP and other technology components. For example, their Responsive Process Management (RPM) Suite includes Actional, Apama and Savvion underpinned by Sonic, DataDirect Shadow and Enterprise Data Services, plus the common Control Tower and three vertical accelerator applications for finance, telecom and travel/logistics. They believe that they can continue to compete in their specialty areas such as CEP and BPM, but also as an integrated product suite.

RPM technical won’t be publicly announced until March 15th, but it’s already all over Twitter from the people in the room here in Boston.

2010 03 04 Sandy Kemsley BPM
CEP
Progress Comments (1)

LSS and PI Game Changers: The List!

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
Tagged
2010 02 24 Sandy Kemsley IQPC Comments (0)

LSS and PI Game Changers: High-Impact Ideas From The Conference Sessions

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. :)

Tagged
2010 02 24 Sandy Kemsley IQPC Comments (0)

Applying LSS And Process Reengineering To Achieve Consolidation And Organizational Restructuring

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.
Tagged
2010 02 24 Sandy Kemsley IQPC Comments (0)

Lean Sigma Tools Applied to BPM

Chris Rocke and Jane Long from Whirlpool presented on their experiences with integrating LSS tools into BPM practices to move beyond traditional process mapping. Whirlpool is a mature Six Sigma company: starting in their manufacturing areas, it has spread to all other functions, and they’ve insourced their own training certification program. Six Sigma is not tracked as separate cost/benefit within a project, but is an inherent part of the way every project is done.

They introduced BPM during to a large-scale overhaul of their systems, processes and practices; their use of BPM is includes process modeling and monitoring, but not explicit process automation with a BPMS outside of their existing financial and ERP systems. However, they are creating a process-centric culture that does manage business processes in the governance and management sense, if not the automation sense in all cases. They brought LSS tools to their BPM efforts, such as process failure mode and effects analysis (PFMEA), data sampling and structure methods, thought maps and control charts; these provide more rigorous analysis than is often done within BPM projects.

Looking at their dashboards, they had the same problem as Johnson & Johnson: lots of data but no consistent and actionable information. They developed some standard KPIs, visualized in a suite of seven dashboards, with alert when certain control points are exceeded. Their Six Sigma analytics are embedded within the dashboards, not explicit, so that the business owners view and click through the dashboards in their own terms. The items included in the dashboard are fairly dynamic: for example, in the shipping dashboard, the products that vary widely from expected and historic values are brought forward, while those that are within normal operating parameters may not even appear. Obviously, building the models underlying this was a big part of the work in creating the dashboards: for example, shipping dashboard alerts are based on year-over-year differences (because sales of most products are seasonal) with control limits that are the mean of the YOY differences +/-  two standard deviations for a yellow alert, or three standard deviations for a red alert, plus other factors such as checking to see if the previous year’s value was an anomaly, weighted by the number of units shipped and a few other things thrown in.

The analytical calculations behind a dashboard might include internal forecasts or market/industry values, include seasonal fluctuations or not, depending on the particular measurement. The dashboard visuals, however, conceal all the complications of the underlying model. Alerts aren’t necessarily bad, but indicate a data point that’s outside the expected range and warrants investigation or explanation. They’ve seen some success in reducing variability and therefore making their forecasts more accurate: preventing rather than detecting defects.

They’re also using SAP’s Xcelsius for the dashboard itself; that’s the third company that I’ve heard here that is using that, which is likely due in part to the large number of SAP users but also gives credit to the flexibility and ease of use of that tool. They’re using SAP’s Business Warehouse for housing the data, which extracts from their core ERP system nightly: considerably more up-to-date than some of the others that we’ve seen here, which rely on monthly extracts manipulated in Excel. Although IT was involved in creating and maintaining BW, the LSS team owns their own use of Xcelsius, which allows them to modify the dashboards quickly.

Tagged
2010 02 24 Sandy Kemsley BAM
BPM
IQPC Comments (0)

Identifying and Evaluating Performance in Transactional Environments

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.

Tagged
2010 02 24 Sandy Kemsley IQPC Comments (0)

Using Dashboards to Run the Business and Focus Improvements

David Haigh of Johnson & Johnson presented on how they’re using dashboards in their process improvement efforts; this is much further into my comfort zone, since dashboards are an integral part of any BPM implementation. He’s part of the consumer products division rather than pharmaceutical or medical: lots of name brands that we all see and use every day.

Their process excellence program covers a range of methods and tools, but today’s talk was focused on dashboards as a visualization of a management system for your business: to set strategy, track progress, and make corrections. Like many companies, J&J has a lot of data but not very much that has been transformed into actionable information. He makes an automotive analogy: a car engine typically has 43 inputs and 35 outputs, but we drive using a dashboard that has that information rolled up into a few key indicators: speed, RPM, temperature and so on.

They see dashboards as being used for governing the company, but also for informing the company, which means that the dashboards are visible to all employees so that they understand how the company is doing, and how their job fits into the overall goals and performance. Dashboards can – and should – leverage existing reporting, especially automated reporting, in order to reduce the incremental work required to create them. They have to be specific, relating jobs to results, and relevant in terms of individual compensation metrics. They have dashboards with different of levels of details, for different audiences: real-time detailed cockpits, medium-level dashboards, and reports for when a repeatable question can’t be answered from a dashboard within three clicks (great idea for deciding when to use a dashboard versus a report, btw). They used a fairly standard, slightly waterfall-y method for developing their dashboards, although did their first rollout in about 3 months with the idea that the dashboards would be customizable to suit changing requirements. One challenge is their wide variety of data sources and the need for data manipulation and transformation before reporting and feeding into dashboards.

They had most of their reports in Excel already, and added SAP’s Xcelsius to generate dashboards from those Excel reports. That provided them with a lot of flexibility in visualization without having to rewrite their entire ETL and reporting structure (I know, export to Excel isn’t the best ETL, but if it’s already there, use it).

One of the big benefits is the cross-departmental transparency: sales and logistics can see what’s happening in each others areas, and understand how their operations interrelate. This highlights their non-traditional approach to dashboard visibility: instead of just having management view the dashboards, as happens in most companies, they expose relevant parts of the dashboard to all employees in order to bring everyone into the conversation. They actually have it on monitors in their cafeteria, as well as on the intranet. I love this approach, because I’m a big believer in the benefits of transparency within organizations: better-informed people make better decisions, and are happier in their work environment. They’re able to weave the dashboards into their process improvements and how they engage with employees in running the business: being able to show why certain decisions were made, or the impact of decisions on performance.

Their next steps are to review and improve the metrics that they collect and display, and to start involving IT to automate more of the data collection by pushing information directly to Cognos rather than Excel. There were a ton of questions from the audience on this; some are using dashboards, but many are not, and are interested in how this can help them. I’m interested in how they plan to push the dashboard results beyond just human consumption and into triggering other automated processes through event processing, but I’ll have to catch David offline for that conversation.

Tagged
2010 02 24 Sandy Kemsley BAM
BPM
CEP
IQPC Comments (1)

Building a Lean Six Sigma and Process Excellence Culture

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.

Tagged
2010 02 24 Sandy Kemsley IQPC Comments (0)

Lean Six Sigma and Process Improvement, Day 2

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.

Tagged
2010 02 24 Sandy Kemsley IQPC Comments (0)

Ensuring Flexible Lean Six Sigma Process Improvement Culture

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.

Tagged
2010 02 23 Sandy Kemsley IQPC Comments (0)

TRIZ, Six Sigma and Transactional Processes

Tom Kling, who has the most magnificent mustache this side of the 19th century, talked to us about TRIZ: an acronym that most of us in the room had never heard of, much less used. I confess, I Googled it before the session, so knew that it was related to innovation – it’s also known as “systematic innovation – and is a Romanized acronym of the Russian phrase “Теория решения изобретательских задач”, or “theory of inventive problem solving”. Kling is from Dow Chemical, a company that knows a bit about innovation as well as chemistry. They’ve had a Six Sigma program since 1999, having trained more than 10,000 green and black belts, and having it fully integrated into all major improvement and innovation processes. I sat with him at lunch, and heard more about how Six Sigma can be applied to research and development areas such as his, as well as to more operational and manufacturing areas that are more common applications. This presentation turns that around a bit: taking a technique used primarily for research innovation, and applying it to transactional processes.

This gets past the issue that I referred to in the previous post, where Lean and Six Sigma are seen as only for incremental improvement, not disruptive change: TRIZ starts with a description of a perfect, hypothetical solution state, then applies a number of techniques such as importing solutions from other fields as well as more incremental improvement based on application of technology. Starting by envisioning an ideal solution can result in more out-of-the-box solutions than working forward from the current state; although the perfect solution likely won’t be achieved, at least it opens people’s eyes and gets them thinking about what’s possible. There are sets of TRIZ problems and solutions, with operators to map problems to solutions. This may allow a specific problem to be generalized to a TRIZ problem using contradiction characteristics, operated on to map to a TRIZ solution, then applied back to a specific solution. There are several methods for doing this, such as using contradiction characteristics such as Altshuller’s characteristics or Mann’s business TRIZ features, and examples of problem solving techniques such as Altshuller’s 40 inventive principles.

He used a very funny example of this: he uses a comb on his ‘stache during warmer weather but a brush during dry, cold weather, but doesn’t like that the combination of comb and brush don’t fit well in his pocket; using a contradiction matrix with increased area being a good thing but increased volume being a bad thing, the suggested set of solutions includes nesting, spheroidality or new dimensions, which leads to his actual solution, a folding brush/comb combo. A more realistic example for the rest of us is a survey where more questions increases the amount of information gathered, but worsens communications flow when not all questions are applicable to all respondents; the solution set includes having a dynamic survey that removes irrelevant questions based on earlier responses.

TRIZ, then, is an algorithmic approach to innovation. This departs from our somewhat fantastical notion of a scientist having an “a-ha” moment at some point in every innovation, or an unbounded brainstorming session generating all the new ideas; now, what’s necessary is a skilled facilitator who can explore how the inventive principles apply to the specific problem in order to generate possible solutions. There’s also a lot of skill required to map between the specific and general problem and solution spaces, as well as evaluating potential solutions (and even generating new hybrid solutions) using something like a Pugh concept evaluation matrix.

At Dow, they’ve embedded TRIZ into their Design For Six Sigma (DFSS) processes for designing chemical plants, allowing for better integration across designs of all the other processes surrounding the chemical plant, such as rail shipping. This doesn’t always result in a disruptive change, but sometimes results in a group of interrelated changes that make a big difference: in one case, reducing shipping transit times and costs, thereby increasing customer satisfaction.

There are many other TRIZ-related tools, applicable to both technological and transactional situations. Some of these, such as mind maps, didn’t originate with TRIZ but are commonly used during TRIZ innovation projects; many have been adopted into the TRIZ body of knowledge maintained by the Russian TRIZ group. It’s also possible to mix several of the TRIZ techniques with Six Sigma techniques to good effect.

Tagged
2010 02 23 Sandy Kemsley IQPC Comments (0)

Applying Lean Six Sigma Methodology to Transactional Processes

Next up was a panel discussion with David Haigh of Johnson & Johnson, Sabrina Lemos of United Airlines, and Gary Kucera of Kaplan Higher Education, moderated by Charles Spina of e-Zsigma.

United Airlines has a unique project going on in one of their freight-related operations: they decided to outsource the operation in order to be able to completely remake the process and have it meet specific KPIs, but also decided to allow the existing people to bid on their own jobs. This would have the effect of shifting them out of their current ways of doing things and proposing the best possible way to do it, since they will be in a competitive bidding situation with outsiders. Lemos also spoke about the importance of getting to the real data. She did an exercise of tracing a particularly biweekly report –which took several hours to compile – up to the VP and what he reports on, then tracked what he actually reports on back down to the reports and metrics that are being gathered at the lower levels. Not surprisingly, she found that there was zero alignment: nothing in the biweekly reports were used by the VP in his report, or anywhere else in the chain of command. She spoke about using gauge R&R, walk the process, and value stream mapping techniques to analyze processes, and the necessity of coming to agreement on the meaning of things such as process start points.

Haigh spoke about accounts payable processes at J&J Canada, and how an in-depth review of those processes was triggered by someone actually forgetting to pay the electricity bill, and showing up at the office one day to find a notice that the power would be cut if the bill weren’t paid immediately: not that they didn’t have the money to pay the bill, just that the process to do so wasn’t working. Accounts payable is often one of those processes in companies that is ignored when looking at major process improvement because it’s not revenue generating, but it’s important to recognize that enormous cost savings can be found through taking advantage of early payment discount levels, and avoiding any late penalties or service disruptions. They have found that doing some amount of the work onsite where the business processes are being done is helpful, since the process participants can see what’s involved in their process overall. They use the same techniques as discussed by Lemos, plus Kaizen Blitz and some activity-based costing.

Kucera spoke about aligning the corporate and executive goals with efforts at all levels, and how Jack Welch suggested making your bonus be some percentage of your process improvement savings in order to incent people to align their behavior and metrics with the ultimate goals. He spoke about some of the modeling and display tools that they use, such as fishbone and Pareto diagrams, and how doing these early and engaging with the business management can greatly speed the process improvement efforts. In many cases, since they’re dealing with simple transactional processes, they can use fairly simple analysis tools, but have some of the more sophisticated tools and techniques available as required.

They all had examples of process improvement efforts that have had a direct customer impact. Lemos had a great example of processing freight insurance claims, where they had a metric of processing five claims per day, resulting in the claims people cherry-picking claims in order to meet their quota; enforcing first-in, first-out claims processing resulted in an immediate and dramatic improvement in customer satisfaction. Listening to her stories of their paper-based inefficiencies, where emails are printed, signed and passed around, reminds me so much of the processes in some of my financial services and insurance customers.

In all cases – and I think that this is a key criticism of Lean and Six Sigma – they’re looking for incremental process improvements, not completely disruptive reengineering that would discover new ways to do business. However, in many of today’s standard transactional processes, incremental improvement is the only alternative.

Tagged
2010 02 23 Sandy Kemsley BPA
IQPC Comments (1)

Lean Six Sigma & Process Improvement: David Brown of Motorola

I missed the first morning of the IQPC Lean Six Sigma & Process Improvement conference in Toronto today, but with my usual impeccable timing, showed up just in time for lunch (where we had to explain the rules of curling to the American attendees). The first session this afternoon is with David Brown, a black belt at Motorola, where the term “Six Sigma” was first coined and is still used to make their processes more effective, efficient, productive, and transparent.

There has been a transformation for them in how they analyze their processes: ranging from just looking at transactions to high-level intelligence including complex simulations and forecasting. Since they run SAP for their ERP, they have a number of SAP business intelligence (Xcelsius and Business Objects) products, although their most complex analysis is done with Oracle Crystal Ball.

Brown’s presentation was short – less than 10 minutes – and the rest of the session was an interactive one-on-one interview with questions from Charles Spina of e-Zsigma, the conference chair. The Q&A explored much more about how Motorola uses business analytics tools, and opened it up to the (small) audience for their experience with analytics. Not surprisingly, there has been quite a bit of success through the introduction of analytics to process improvement teams: sometimes it’s the black belts themselves, sometimes it’s a separate analytics group that works closely to develop the reports, analysis, and more complex intelligence based on the large volumes of data collected as part of any process improvement project.

Reporting tools can be as simple as Excel – for simple needs – through more complex solutions that include ETL from multiple data sources and regularly scheduled reports, such as Crystal Reports and Xcelsius. Legacy systems can make that a bit of a challenge; often these end up as extracts to Excel or Access, which are then remixed with other sources. Extracts such as this can be really problematic, as I’ve seen first-hand with many of my customers, since there’s no way to keep the data completely in sync with the underlying systems, and typically any one legacy system doesn’t have all the relevant data, so there can be a real problem in matching up related data from multiple systems. Brown underlined that the key issue is to get all of your data into a central data warehouse in order to determine if your data is complete and clean, and to facilitate reporting and analytics. This is especially important for process engineers when trying to do time studies over long periods of time: if you don’t have some consistent representation of the processes over the time period in question, then your analysis will suffer.

Motorola is using their data analytics to improve operational processes, such as order shipping, but also what-if scenarios to inform salespeople on the impact of discount levels to the bottom line. In many cases, this is an issue of data integration: Sabrina Lemos from United Airlines (who will be on the panel following) shared what they were able to recover in late container fees just by integrating their container tracking system with a database (Access, alas) that generates their invoices. Interestingly, I wouldn’t have thought of this as a process improvement initiative – although it is – but rather just as an artifact of doing some clever system integration.

They also discussed the challenges with presenting the results of analytics to the less numerically inclined, which often entails rolling data up to some simpler charts that can be drilled into as required, or just presented in a PowerPoint or PDF file. The real ROI may come from more interactive tools, however, such as dashboards that show operational alerts, or real-time what-if analysis to support human and automated decisions. Since Lean and Six Sigma tools are inherently analytical, this isn’t a new problem for the people in this audience; this is a matter of building relationships early with the non-analytical business managers, getting some early successes in projects to encourage adoption, and using different presentation and learning styles to present the information.

Because of the nature of this audience, the analytics that they’re discussing are typically for human consumption; in the BPM world, this is more and more moving to using the analytics to generate events that feed back into processes, or to inform automated decisioning. Either way, it’s all about improving the business processes.

Tagged
2010 02 23 Sandy Kemsley BAM
BPA
IQPC Comments (0)

Forrester Day 1: Automating Business Processes panel

Connie Moore moderated a panel on automating business processes, featuring David Knapp of Ford, Pamela Rucker of Philip Services and Theo van den Hurk of ABN AMRO. The room is considerably less crowded than this morning, so I’m guessing that there’s some golfing going on (probably all the CIOs whose golf games were rained out last week at the Gartner conference in Orlando). I really like how they use the big projection screens to show live video of the panelists; I’m sitting way over on the side to score some power for the laptop, so can’t see two of the presenters directly.

Moore talked about Forrester’s BPM maturity framework, which I’ve never seen before but it’s similar enough to BPMM and others that I’ve seen: moving from process knowledge to process efficiency to process consistency to business optimization to business transformation, where most companies are in the efficiency stage, moving towards consistency.

Each of them told a bit about what they’re doing with BPM:

  • Ford is another Lombardi customer that’s just getting their implementation started (it’s sort of ironic, considering that Ford pioneered the concept of the assembly line, that they’re only now getting around to business process automation). They’re a big Six Sigma shop, and are looking at getting some automation and metrics in place, then drive towards optimization using BPM. They’re using BPM in large part for orchestration of their existing legacy systems.
  • Philip Services has a mandate to innovate, but no extra budget to do so, which is a common problem in organizations; they don’t use BPM software but are effectively building their own in code or within the enterprise systems.
  • ABM AMRO is using SAP and Oracle as their enterprise systems, and as far as I could tell, they’re not using a BPM suite to orchestrate that but are relying on the processes within those enterprise applications.

Knapp showed an interesting slide if how BPM bridges the gap between end user computing and full-on IT application development; I think that there’s also an overlap between mashups and BPM at some part of that spectrum. Ford has an enterprise process committee that looks at process management across the organization, especially focussing on the discontinuities (hand-offs between functional silos), and decides which processes to implement. However, they’re still narrowing down and deciding which processes to implement.

Rucker said that two major issues for them was having the business take ownership for business process management, and getting away from siloed process optimization (like the accounting department) to look at end-to-end processes (like order to cash). They even got the CEO involved to drive home these points home to people.

van den Hurk talked about the complexities introduced by having several outsourced vendors involved in their systems as well as their own IT people; just getting all the stakeholders to sit down together was a challenge. ABN AMRO looked at heat maps for operational budget areas to figure out where the money was being spent, as well as what the business reported as the pain points.

There was a question about metrics, monitoring and dashboards: Ford is designing it into their systems; Philip put it in after the fact when they realized that processes weren’t improving and had no visibility into why; ABN AMRO also is building it in based on the business needs.

As panels go, this was pretty conversational rather than a series of mini-presentations: good to attend, but harder to blog about in a coherent fashion.

2007 09 25 Sandy Kemsley BPM
Forrester Comments (0)

IQPC BPM Summit: David Haigh

Last speaker of the day — and of the conference — was David Haigh, Global Director of Continuous Improvement at W.E.T. Automotive Systems, discussing Lean Product Development. It’s actually refreshing to be at a BPM conference where I’m the only person that I heard (since I missed Jodi Starkman-Mendelsohn’s talk this morning) that talked about the technology.

They previously tried out a lot of different quality programs, including ISO 9000, Six Sigma, Lean, BPR and other techniques, but these were always initiated by the subsidiaries and didn’t really catch on, so in 2006 they started on a global program that included the shop floor, logistics and product creation. Whereas they had always focused on the production/fulfillment value stream previously, they expanded the scope to include the entire order-to-cash cycle, particularly to include the design portion of the cycle that has the smallest cost element but the largest cost influence.

I loved his analogy for hand-offs in the business process: it’s like the telephone game that we played as kids, whispering a message from one person to the next to see how message changes by the time it reaches the end; any hand-off results in a reduction in information clarity, as well as being a big time-waster.

Since he’s in an engineering manufacturing environment, there’s some interesting ideas that at first seem unique, but have value in many other areas: set-based design, for example, where you spend the engineers’ time researching and pushing boundaries on the technology that underlies customer solutions, rather than spending the time building one-off customer solutions. The equivalent in the BPM world would likely be having them focus on building out the service layer, not assembling the services using a BPMS. He also spoke about Toyota’s practice of streaming engineers up to higher levels of engineering rather than “promoting” them to sales or management — I always tried to do that when I ran a company, since there’s always some people who just want to stay technical, and don’t want their career to suffer for it.

They’ve built a “workflow” and project planning tool in Excel that has some interesting concepts: no dependencies between tasks, just points of integration, and the team sets the deadlines (can you say “collaboration”?). This helped them by providing tools for visualizing waste in the process, and driving to reduce the waste, which is the main focus of Lean.

This has been an interesting conference, although the attendance is quite a bit less than I had expected, but that makes for a much better environment for asking questions and networking. And speaking of networking, I think that I just have time to run home before the Girl Geek Dinner tonight…

2007 06 27 Sandy Kemsley IQPC Comments (0)

Is Six Sigma going the way of TQM?

Completely non-Enterprise 2.0, except for the fact that I heard this at lunch today from someone who works for a large financial services organization: 3M may ditch their Six Sigma program because they find that it stifles creativity. To quote Charles O’Reilly, a Stanford Graduate School of Business management professor, “If you take over a company that’s been living on innovation, clearly you can squeeze costs out. The question is, what’s the long-term damage to the company?” If this trend continues, Six Sigma training might join a list like this.

2007 06 20 Sandy Kemsley Comments (10)

Gartner Day 2: Bruce Williams

The second keynote speaker of the day is Bruce Williams of Savvi International, author of Six Sigma for Dummies (and the accompanying workbook) and Lean for Dummies, speaking on What BPM Means to Business Innovation. Funny, at last year’s Gartner BPM summit, everything was about Six Sigma; this year, this is the first time that I’ve heard it mentioned.

He points out one view of BPM, that it’s just a faster, better treadmill, but we’re still doing the same old things. BPM is more than that: not just operational efficiencies and defect reductions, but measurements and activity monitoring, process controls, and integration between systems and services. Furthermore, he goes on to say that the biggest value from BPM is in business innovation, not process improvement: the introduction of something new and useful and the process by which it is brought to life.

But why is innovation important? Why not just milk the cash cows? The answer is pretty obvious, although ignored by many traditional organizations: the lifecycle of every product or service eventually comes to an end, often because someone else introduces a disruptive product or service to the marketplace that obsolesces the old way of doing things. As James Morse of the Harvard Business Review said many years ago (a quote that I have referred to many times), “the only sustainable competitive advantage comes from out-innovating your competition.” Ultimately, innovation trumps optimization.

Bruce Williams' innovation dimensionsWilliams continues on with a lot of stuff about why the innovation cycle looks like it does, but there’s really nothing new here: this is just the classic stuff for why products or services pass their peak: fatigue, customer demands, market redirections, competitive pressures, technological changes, globalization effects, organizational changes, demographic shifts, regulatory constraints, economic effects, supply drifts and many other factors. He does point out, however, that most US firms have no program in place for fostering innovation, and don’t even have a clear idea of how to become more innovative. Tom Davenport did a study last year that showed that companies are focussing primarily on product innovation, and mostly ignoring things like business model innovation, or even business process innovation; Williams added some things that didn’t even make the list, like innovation in accounting practices or risk management.

He went through some of the different dimensions of innovation — reactive versus proactive; incremental/sustaining versus radical/disruptive; formal versus informal — and looked at how these dimensions mapped onto some specific cases. When he referred to Americans as the kings of innovation, however, it made me doubt his world view overall and left me with a bit of a bad taste: it came across as ethnocentric flag-waving that has no place at a business conference. I recognize that Americans lead innovation in a number of areas, but there are many other countries in the world that are leaders in their own areas of innovation. He’s also under the deluded notion that everyone wants what Americans have, driving SUVs full of consumer goods back to their monster homes in the suburbs, and laughingly pointed out a survey that he had done that concluded that if everyone in the world lived like he did, we’d need over 7 planets worth of resources to accommodate them. Yikes.

At the end of it all, although he had a pithy quote about how BPM is the grand unification theory for business (which is apparently trademarked?!), Williams had very little to say about BPM, but a lot to say about innovation: one of the prime motivators for why you might be considering BPM.

2007 02 27 Sandy Kemsley BPM
Gartner Comments (0)

Two disappointing BPM webinars

Maybe it’s the January blahs. Maybe I’ve seen too many of these things. Maybe they actually were as bad as I perceived. Maybe I’m just cranky because I’m missing Mashup Camp. In any case, I was not impressed by either of the two webinars that I sat in on today.

Making Your People More Effective Through Business Process Management (BPM) Technology

This was the 2-hour web marathon that included a keynote from Colin Teubner of Forrester, followed by several Microsoft partners who all have BPM technology that also ties into Microsoft in some way. I’ve enjoyed hearing Colin speak before, both on webinars and in person, but this time was definitely nothing special. The material seemed to be all retreaded stuff from past presentations by Colin or by Connie Moore: how human-centric BPM evolved from workflow, how integration-centric BPM evolved from EAI; I think I wrote that stuff already.

He did make a very cute analogy between between services and Lego for the (presumed) business-oriented audience. He also made the critical point “BPM doesn’t need SOA; SOA needs BPM” that really needs to be understood by everyone involved in both of these fields, especially as they start to merge into one (several years after Gartner called them all one when they actually weren’t).

Then he made an uncomfortable segue into using Microsoft Office applications as part of the whole BPM picture (I wasn’t convinced), as a prelude to what promised to be several vendor presentations; I lasted through part of the first one before I bailed out due to the double frustration of an over-large screen shared on the meeting (didn’t anyone tell the presenters to scale down to 1024×768?) and a fairly significant lack of content.

BPM 302: BPM and Six Sigma

This was one of the Appian webinars from the BPM Basics site. I’ve commented on these before: some good basic material if you’re just getting started with BPM, but today’s was an exception in that I would not recommend it due to the errors in definition around Six Sigma. If you can’t even define your subject matter accurately, then you shouldn’t be speaking about it.

It all started going downhill when the first speaker said “There are six levels of Sigma”, as if it were some sort of CMM-like certification. That shows such an incredibly fundamental misunderstanding of Six Sigma and statistical measures in general, I’m practically speechless. Not meaning to sound like too much of a techie snob, I should have figured that there could be a problem when she was introduced as having a arts degree, and I don’t think that statistics was her major or minor. She also said “sigma is the number of defects per million”, which isn’t at all correct either; sigma (for all of us who did suffer through stats class) represents standard deviation, and you can check any of number of other sources to find that Six Sigma’s goal is to have six standard deviations between the process mean and the specified limit. In other words, a higher value of sigma means that more of the data (whatever it is that you’re measuring) fits between the mean and the limit (beyond which things are classified as errors).

The second speaker was talking more about BPM technology and seemed to know what he was talking about, but was horribly unprepared and oscillated between overly-fast reading of a prepared script and pause-laden bits where he was either winging it or totally losing his concentration.

2007 01 18 Sandy Kemsley BPM Comments (0)

Six Sigma and Proforma

Day 2 of the Proforma conference included three additional customer presentations, one from a partner, then all the exciting stuff about the upcoming product release.

Following on the heels of the panel at the end of day 1, in which Paul Harmon and Geary Rummler slammed Six Sigma, Deb Berard from Seagate spoke about their successes with Six Sigma and Proforma. Seagate has been using Six Sigma since 1995, and has been seeing a lot of success with it and Lean — not surprising for a manufacturing organization, which is where Six Sigma originated. They use the Six Sigma framework in ProVision, and their initial process analysis and modelling efforts led to the improvement of some of their product development processes. Based on that success, they then pushed it out to an enterprise-wide initiative.

The only thing that I really had an issue with was her calling ProVision a business process management system (BPMS), which it’s not: it’s a modelling suite. Although BPM still doesn’t have a fully accepted definition, I believe that BPMS has a very specific meaning.

2006 10 16 Sandy Kemsley BPA
BPM
Proforma Comments (0)

Proforma Conference Day 1: Geary Rummler x 2

Our after-lunch keynote on the first day was by Geary Rummler, co-creator of the well-known Rummler-Brache methodology and author of Improving Performance: How to Manage the White Space in the Organization Chart. In case you’re not getting the significance of this, the original swimlane diagrams are more properly called Rummler-Brache diagrams.

Rummler retired from Rummler-Brache a few years ago, then after “failing at retirement” as he put it, went back into practice the Performance Design Lab. His talk was a bit rambling, and he had 84 slides for a one-hour presentation, but I’m quite sure that he’s forgotten more about process than most of us will ever know.

Geary Rummler speaking at Vision 2006 conferenceHe talked about how “as-is” process maps tend to drive out issues into the open, something that I have seen time and time again: management looks at what you’ve documented as their current process, and they say “We do that? Really?” One of the prime examples of this was a financial institution that I was working with on an BPM project a few years back. I documented all of their current processes on the way to the proposed processes, including their paper handling procedures. They sent the original of all transaction documents offsite in order by date, but made a photocopy of each document and filed it locally for reference by account number. Of course, we planned to replace this with a document scanning operation, but I felt obligated to point out a pretty major problem with their current process: since they were so behind in their local filing, the photocopies of the documents were just being boxed in date-order and stored onsite, which made the account-order files useless for any recent documents. Furthermore, they had stopped sending the originals offsite some months before that, so they now had both the original documents and a photocopy of each document, stored in the same order but in separate boxes, kept onsite. The management in charge of the area was truly shocked by what was going on, and I think that my fees were covered just by what I saved them in photocopy costs.

Back to Rummler, he showed a diagram of a business — any business — as a system, with financial stakeholders, the market, competition, resources and environmental influences as the inputs and outputs (since you can search the Proforma site and find the full presentation, I don’t think that I’m spilling the beans here to include one of the diagrams). I like this view, since it simplifies the business down to the important issues, namely the interactions with external people and organizations. He also spent quite a bit of time on the processing system hierarchy: the enterprise business model at the top, the value chain extracted from that, the primary processing systems derived out of the value chain, the processes from each primary processing system, and the sub-processes, tasks and sub-tasks that make up each process.

He went into organizational structure, specifically showing departments/resources on one axis and processes on the other, to illustrate how process cut across departments, but making the point that most organizations are managed by department rather than having true process owners.

There was one quote in particular that stuck with me: “Visibility is a prerequisite to optimizing and managing systems.”

We had a second dose of Rummler in the wrap-up panel on Day 1, where he joined Paul Harmon of BPTrends and one of the Proforma team who was filling in for the missing Aloha Airlines representative.

Harmon stated that none of the major business schools have any courses on process, but that they’re all function-based, and that most CEOs don’t see process as their primary concern. Rummler agreed, and made the point that being functionally-oriented, or siloed, leads to sub-optimization of the organization. Harmon’s initial comment led me to wonder if it’s necessary to have the CEO want to “do process”, or if a process approach is just an implementation detail, but Rummler ended up addressing exactly that issue by saying that it is necessary because methodologies are competing directly for the CEO’s attention, and it’s not always possible for the CEO to distinguish between the different methodologies at that level. Harmon made quite a rant against Six Sigma, saying that “Six Sigma people don’t understand high-level process”, blaming the widespread acceptance of Six Sigma on Jack Welch and GE strong-arming their suppliers into using it, and stating that Six Sigma people could be converted into a business process view, as if they were some sort of cult that had to be deprogrammed. I’m not sure that I would take such a hard line on Six Sigma versus a process-centric organization; “process” can’t be so easily pushed into an organization as Harmon implied since it’s not a methodology, it’s a pretty fuzzy concept that a lot of consultants like to bandy about.

At the end of the day, I’d have to say that I also disagree with Harmon’s assessment that BPMS is still very early market. Although it’s not a mature market, I think that to call it “very early” is ignoring the many successful products and implementations that have been done in this space over the past several years.

2006 10 16 Sandy Kemsley BPA
BPM
Proforma Comments (1)