Here’s another good article from Harvard Business Review. Brad Power talks about the five factors to avoid in process improvement:
- Competing demands for attention (as with Honeywell’s potential deal with GE)
- Competing mindsets and behaviors (such as work harder vs. work smarter)
- Strategic irrelevance (other more important levers for competitive success)
- Traditional management processes (Legrand’s cost accounting)
- The pain of disruption
8:58 AM Friday September 3, 2010
by Brad Power
Does your organization suffer from subpar operational performance? Have your costs, response times, or reliability slipped relative to competitors or versus customer expectations? (I find this to be very important.)
Maybe your organization has Process Attention Deficit Disorder. If it has, symptoms will likely show up in three areas: incentives, behaviors, and organization.
Incentives. In organizations suffering from PADD, people aren’t motivated financially to pay attention to process improvement. Process improvement isn’t a role in the “C-Suite.” It’s not a path to the top. People are recognized for growing new markets, launching new products, or doing deals. The best and brightest go into marketing, sales, or finance, or they run a profit center. They don’t go into process improvement. Process performance isn’t measured, tied to financial results, or tied to compensation. Most measures are tactical or transactional. They do not capture the full needs of the customer or the relative health of a process. Resources are managed by functions, or markets, or products — not by processes.
Behaviors. Judging by what they spend time on and talk about, senior managers show they don’t value process improvement. They don’t make room for it in their communications, as they might for financial results, new product launches, deals, safety, or compliance. Senior executives don’t spend time reviewing process performance, teaching about process improvement, or nurturing projects or individuals involved in it.
Organization. There is no organizational unit, or only a low-level unit, that manages processes. Without an organization, there is no power, no focal point for attention.
In my last post, I argued that many companies have tried process improvement approaches at times or in places in the organization. But few have built it into their DNA. I suggested that competing demands for executives’ attention is one of five key factors that get in the way of sustained process improvement. For example, if a new leader comes to a company from GE and brings Six Sigma — as Jim McInerney did when he joined 3M — then the company may launch a process improvement program.
But the program may not outlive the leader’s tenure. I told the story of Allied Signal, led by Larry Bossidy, which had great success in improving its performance through their Six Sigma program. Yet when Bossidy departed in 2000 and was replaced by Mike Bonsignore, the company dropped its Six Sigma attention to focus on a GE-Honeywell deal instead.
As the 3M and Allied Signal stories demonstrate, a leader can launch a process program and drive significant benefits. But executives can change or their attention can shift. There are always many competitors for an executive’s attention. Only when process improvement is on the top management agenda can a company make the often large investments in process redesign, information technology, training and education that are required. Senior executive knowledge of his or her company’s strategy is a key driver of the way that work should be designed or redesigned. Only senior management can resolve turf issues between departments and functions — issues which can torpedo cross-functional process improvement. Redesigning work from a customer’s point-of-view and the ongoing pursuit of operational excellence implies changes not only in IT and processes, but also in organization, attitudes, and behaviors. The biggest execution challenge is shifting the mindsets of people within the organization. Therefore, any major process improvement program must have the active engagement of the top team.
In my research, I have found that one of the main causes of Process Attention Deficit Disorder is that the topic of “process” — how work is organized — is not part of the background, education, or career advancement of most executives. Senior managers don’t know what process improvement is or don’t believe it matters. Senior executives believe they are responsible for strategy and achieving quarterly (or monthly or weekly) financial results and growth. Middle managers, supervisors, and staff manage how work gets done.
In a magnified culture of personality, where senior leaders draw 500 times what front line workers earn, too many leaders see themselves, implicitly or explicitly, as superheroes. In the tension between the personal and the institutional, many leaders see themselves as personifying the organization, rather than serving as stewards. In this guise, they often don’t see the value of investing in strengthening core capabilities, institutionalizing process competence, or building innovative cultures. Their egos get in the way of them seeing this. They focus on themselves and their strategy, not their company’s operational capabilities. By thinking only of their results now, they pay less attention to their firm‘s outcomes later.
Please let me know what you have seen capture the attention of leaders. What is it about the nature of process improvement that turns off most senior executives?
- Harvard Business: Keep Your Eye on Process Improvement (blogs.hbr.org)