Process Improvement

Training

Presented by:

12 Jackson Street Denver, Colorado 80206

720-581-3257 phyllis@lundyleadership.com

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Introducing Your Workshop Leader

Phyllis Lundy, President of Lundy Professional Development Resources, Inc., has over 25 years of experience in human resources, business management, training, facilitation and consulting. A resident of Colorado, she holds a Bachelor of Science degree in Psychology and has done graduate work in organizational behavior. Phyllis is a qualified instructor for the Myers-Briggs Type Indicator, and is certified in the Center for Creative Leadership’s Benchmarks assessment instrument, the ChangeWorks, Inc., Change Mastery and

Leading Change programs and VitalSmarts Crucial Conversations. She is also on the adjunct training staff for The Transportation Learning Network, The Western Management Development Center and a former adjunct trainer with The Graduate School of the USDA, where she was a recipient of the 2004 Faculty Excellence award. Phyllis has conducted training and provided facilitation for organizations in the private, public and non-profit sectors at all levels. She has designed, developed and presented workshops in over fifty topics for leadership teams, managers, supervisors and associates, including supervisory skills, team building, leadership, change management, performance management, customer service, communication skills, process improvement, problem solving and numerous other leadership and workplace skills. Phyllis’ prior experience includes positions as Human Resources Director/V.P. for organizations in both the public and private sectors; co-founding the Center for the Study of Psychiatry, a non-profit research organization; and management of a $4.5M division of Thomson/Reuters. Lundy Professional Development Resources, Inc., founded in 1991, has provided services to numerous clients, including The Library of Congress; The U.S. Army Corps of Engineers; The Social Security Administration; AORN; PSIA-AASI; WOW! Children’s Museum; Birdon America; 90octane; Chesapeake IRB; Qwest; Coldwell Banker; AlliedSignal, Inc.; Knowledge Learning Corporation; Serck Services, Inc.; The Women’s Transportation Seminars; The Montana Department of Transportation; The Wyoming Departments of Transportation, Employment, Family Services, Workforce Services and Administration and Information; The Transportation Learning Network (TLN); The Federal Highway Administration; Wyoming Retirement System; CGFOA, CMCA, CIMC, Colorado Local Technical Assistance Program (CLTAP); El Paso County D.O.T.; The American Public Works Association; Colorado Municipal Clerks Association; the cities of Arvada, Commerce City, Ft. Collins, Greenwood Village, Lakewood, Westminster and Wheat Ridge; the Town of Erie, Southeast Metro Stormwater Authority; The Health Districts of Northern Larimer County; Highlands Ranch Metro District; Arapahoe County; Garfield County; and numerous other public, non-profit and private organizations.

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What Is a Process?*

Process

A work process is a sequence of steps, tasks or activities that converts inputs to output, and has a beginning and an end. Using inputs, it produces either a tangible product or an intangible service as its output. A work process adds value to the inputs by changing them or using them to produce something new.

Input

The materials, equipment, information, people, money or environmental conditions needed to carry out the process. Output

The product or service that is created by the process; that which is handed off to the customer.

* From: Mapping Work Processes by Diane Galloway

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Sample Processes*

Sample Processes for External Customers

Providing a product or a service Repairing or maintaining a product Processing documents Delivering or distributing products Billing Answering customer inquiries Entering orders Managing projects

Sample Internal Support Processes

Conducting research Maintaining grounds, facilities Conducting training classes Distributing the mail Answering telephones

Sample Management Processes

Budgeting Strategic planning Approving travel Coaching/appraising employees Developing peoples’ skills Setting objectives Communicating Hiring/firing Obtaining resources: people, money, materials, equipment Creating reports and memos

* Adapted from: Mapping Work Processes by Diane Galloway

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Because That’s the Way We’ve Always Done It…*

Business professors Gary Hamel and C.K. Prahalad have written about an experiment that was conducted with a group of monkeys.

Four monkeys were placed in a room that had a tall pole in the center. Suspended from the top of that pole was a bunch of bananas. One of the hungry monkeys climbed the pole to get something to eat, but just as he reached out to grab a banana, a torrent of cold water doused him and got the other monkeys wet, as well. Squealing, he scampered down the pole and abandoned his attempt to feed himself. Each monkey made a similar attempt, with the same results. After making several attempts, they finally gave up.

The researchers removed one of the monkeys from the room and replaced him with a new monkey. As the newcomer began to climb the pole, the other three monkeys grabbed him and pulled him down to the ground. After trying to climb the pole several times and being dragged down by the others, the new monkey finally gave up his attempts to climb the pole.

One by one, the researchers replaced the original monkeys, and each time a new monkey was brought in, he would be dragged down by the others before he could reach the bananas. In time, the room was filled with monkeys who had never received a cold shower. None of them would climb the pole, but… none of them knew why.*

What processes can you think of that your team, department or organization may be implementing but…you are not sure why?

__________________________________________________________________________________________________________ _____________________________________________________ _____________________________________________________

*Gary Hamel and C.K. Prahalad, Competing for the Future (Boston: Harvard Business School Press, 1994)

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Change: Compliance or Commitment?

Awareness: I Know Something Is Changing!

If Change Is Imposed by Others

If I Am Involved in the Process

Detachment: I will wait and see how I feel about this change.

Engagement: I will do my best to understand this change.

Negative perception: I feel threatened by this change; I don’t like it.

Positive perception: I see the opportunity in this change. It could work.

Testing: I will try to resist this change. I may even try to sabotage it.

Testing: I will put myself on the line for this change; I will try my best to make it work.

Reaction: I will react to this change – if I must – but I’m not happy about it.

Action: I will take action to implement this change and make it work.

Compliance: I have to do it this way…but I still don’t like it. I’m an unwilling participant.

Commitment: I want to do it this way. I’m an enthusiastic participant.

*Adapted from Strategic Six Sigma by Dick Smith, Jerry Blakeslee and Richard Koonce, 2002.

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The Transition Curve

Responses to New Life Situation

Leve

l of A

djus

tmen

t

AwarenessSurprise

ShockDisbelief

Denial

EmotionsReactions

Grieving the Loss

RealizationRecognition

Understanding

Trying It OutTaking 1st StepsExperimenting

Forward FocusPositive Actions

Enthusiasm

Time

Avoidance Resistance Acceptance Exploration Commitment

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Process Improvement – It Takes a Team Issues to consider:

Level of quality needed

Buy in from others needed

Time available

Importance of team member development Quality

1. Does the process need to maintain high quality?

2. Do I have sufficient information and expertise to retain and improve quality on my own?

3. Who needs to be involved in the process to achieve a higher-quality process?

Buy In

1. Is buy in from others important for effective implementation?

2. If I were to change the process by myself, is it reasonably certain that the new process would be accepted by those who need to buy in?

3. Who needs to be involved in the process change to achieve maximum buy in?

Time

1. What is my deadline for making this change?

2. Do I have time to involve others? Team Member Development

Would this be a good opportunity to develop my team members’ process-improvement capabilities?

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The 80/20 Principle* Is it possible to achieve great gains by revamping just one process, or do we have to tackle all of our problems to really make a difference?

The 80/20 Principle, or the Pareto Principle, as it is also known, says “No!”

The 80/20 Principle states that a minority of causes, inputs or efforts, usually leads to a majority of the results, outputs or rewards.

Here are some examples:

In business, 20% of products account for 80% of dollar sales.

20% of customers account for 80% of dollar sales.

20% of criminals account for 80% of the dollar value of all crimes.

20% of your carpet gets 80% of the wear and tear.

20% of your clothes are worn 80% of the time.

80% of what you achieve in your job comes from 20% of the time spent.

80% of your sleepless nights are caused by 20% of your employees. (Think about it…)

The internal combustion engine is a good example of the 80/20 Principle: 80% of the energy generated is wasted in combustion and only 20% of the energy gets to the wheels. 20% of the input = 100% of the output.

And how about the movies? Two economists made a study of revenues and theatre life spans of 300 movies released over an 18 month period of time. Four movies (1.3% of the total) generated 80% of box office revenues. Here the percentage of movies contributing the most revenue is much smaller than 20%!

So, it is entirely possible that 80% of your inefficiencies, delays, customer complaints, or cost overruns are actually caused by only a small number of processes or factors within those processes.

*Adapted from The 80/20 Principle by Richard Koch

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The Eight-Step Process Improvement Method

The Process Improvement Method we will be using today consists of these eight steps:

1. Choose a process to improve. 2. Clarify the objective(s) of the process. 3. Define the process. 4. Flow chart the process as it currently exists.

5. Decide how you will measure success.

6. Analyze the process.

7. Improve the process.

8. Implement and evaluate the new process.

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The Process Improvement Method – Step One

Step One: Choose a Process to Improve

Factors to consider when deciding which process to work on: 1. Tackle only one problem/process at a time. 2. Find out what process, if improved, would make the biggest difference to your customers.

3. Focus on problems you can fix.

4. Concentrate on the problem or process whose improvement will produce the biggest bang for the buck – the most time-consuming or costly or cumbersome or morale-busting issue.

5. Pick the “low-hanging” fruit – what is the easiest

issue to work on? Where could you have a quick win?

List below some problems or processes in your department, division, or team that might fit one or more of the above criteria. _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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The Process Improvement Method – Step Two

Step Two: Clarify the Objectives of the Process 1. Remember the monkeys – why are you doing this process anyway? Why does it

exist? What is the purpose?

2. Ask yourselves: can this process just be eliminated? What purpose does it serve? What might be the benefits of eliminating the process altogether? Would there be any negative consequences if the process were eliminated?

3. Can you link this process to the overall mission, vision, values, goals or objectives of the organization, department or team? How does this process fit into the big picture?

4. List the benefits of improving the process – what do you hope to gain if the process can be improved?

Choose one of the processes you listed on the previous page and answer the following questions: What process have you chosen?

______________________________________________

What is the purpose of this process?

_______________________________________________________________________________________________________________________________________________________________ How does this process link to the mission, vision, values, goals or objectives of your organization, department or team?

_______________________________________________________________________________________________________________________________________________________________ What gains or benefits would you obtain if you could improve this process?

_____________________________________________________ _____________________________________________________

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The Process Improvement Method – Step Three*

Step Three: Define the Process

1. State the OUTPUT of the process.

2. List the CUSTOMERS for your output.

3. List your customers’ REQUIREMENTS of your output.

4. List the process PARTICIPANTS. 5. List the participants’ REQUIREMENTS.

6. Agree on who is the process OWNER.

7. List the process STAKEHOLDERS.

8. Agree on process BOUNDARIES.

9. List the INPUTS to the process and their SUPPLIERS.

* Adapted from: Mapping Work Processes by Diane Galloway

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The Process Improvement Method – Step Four

Step Four: Flow Chart the Process as It Currently Exists 1. Create a visual representation of the process. The flow chart or process map makes

it easy to see where bottlenecks and other problems occur.

2. Chart the process in detail from beginning to end.

3. Involve as many of your stakeholders as possible in this process – they are the ones who know how the process is really being implemented (not just how it was intended to be implemented).

4. Post your flow chart where others can see it and make suggestions.

List all the steps in your process below: With your team, flow chart your process.

Keep symbols simple Draw from left to right Include all steps

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The Process Improvement Method – Step Five

Step Five: Decide How You Will Measure Success Start by measuring how well your current process is performing.

Collect information on how you are doing with your current process.

Decide what you will measure. Look at the number of errors vs. the number of opportunities. What is the gap between what you are currently accomplishing and what you’d like to accomplish?

Three Major Process Measurements*

Effectiveness The extent to which the outputs of the process meet the needs and expectations of its customers. A synonym for effectiveness is quality. Effectiveness is having the right output, at the right place, at the right time, at the right price. Effectiveness impacts the customer.

Appearance Serviceability Timeliness Durability Accuracy Costs Performance Responsiveness Reliability Adaptability Usability Dependability

Efficiency The extent to which resources are minimized and waste is eliminated in the pursuit of effectiveness. Productivity is a measure of efficiency.

Processing time Percentage of value-added time Resources expended per unit of output Poor-quality cost Value-added cost per unit of output Wait time per unit

Adaptability The flexibility of the process to handle future, changing customer expectations and today’s individual, special customer requests. It is managing the process to meet today’s special needs and future requirements. Customers always remember how you handled or didn’t handle their special needs.

The average time it takes to get a special customer request processed, compared to standard procedures

The percentage of special requests that are turned down

The percentage of time special requests are escalated *Adapted from Business Process Improvement by H. James Harrington

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What to Measure The purpose of using a measurement is to determine where you are now, so that you will know for sure whether your process changes have created any real improvements. Measurements often focus on cycle time, throughput, quality, cost and responsiveness. What you decide to measure must be linked to the outcome or objective you are trying to achieve.

You could measure:

How satisfied are our customers?

How long does it take now, from beginning to end, to complete the process?

What is the time we spend actually doing the work vs. how long it takes to complete the whole process? (Cycle Effectiveness)

How many items go through the process, per hour, per day, per week?

How many of the items are 100% correct the first time?

How many items are waiting to begin the process (backlog)?

How long have the items been waiting?

How much does it cost to complete the process now?

How long does it take to process special requests?

What will you measure to see whether you have made a tangible improvement in your process? _____________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

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Targets Targets represent the desired result of a performance measure. Targets make meaningful the results derived from measurement and provide organizations with feedback regarding performance. By comparing actual performance results against a predetermined target, you receive information that has value and meaning. For example, knowing that your city can fill a pothole within two days of notice means very little until you know that neighboring jurisdictions can do it in one, and the best organizations can do it in three hours. Armed with this information, you might establish a target of filling potholes within two hours of notification. A survey of more than 500 studies indicated that performance increases by an average of 16% in companies that establish targets. Setting targets:

Trends and baselines National state, local or industry averages Other agencies Employees Feedback from customers or other stakeholders

Set SMART Targets

Specific

Measurable

Attainable

Results-Oriented

Time-Bound

Who will do what by when, and how will we know it’s been accomplished?

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The Process Improvement Method – Step Six

Step Six: Analyze the Process 1. Gather data – without good data, you can’t make good decisions.

Benchmark – measure the competition’s rate of success. What are other organizations doing; what results are they achieving? Benchmarking tells us what’s possible and gives us a reasonable goal.

Find out which elements of the process are “critical to quality” from the customers’ standpoint.

Identify any non-negotiables and constraints.

2. Examine the process in detail.

Identify what’s working well.

Identify any bottlenecks in the process.

Identify any process steps that do not add value.

Identify areas that could be streamlined or eliminated.

Where are your bottlenecks?

__________________________________________________________________________________________________________

What steps are not adding value?

__________________________________________________________________________________________________________

What could be streamlined or eliminated? __________________________________________________________________________________________________________

What other ideas do you have for making the process better?

__________________________________________________________________________________________________________

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The Process Improvement Method – Step Seven

Step Seven: Improve the Process 1. Engage a High Energy Action Team (HEATeam) to dedicate

time to improving the process.

2. Find a champion to head up the HEATeam and take responsibility for implementation.

3. Set S.M.A.R.T. targets or goals for the new process.

4. Brainstorm ideas for where and how to make the process changes.

5. Focus on improving “Critical-to-Quality” characteristics.

6. Look for possible unintended negative consequences of any changes.

7. Redesign the flow chart.

Who is a likely champion for your process improvement project? ______________________________________________

Who should be on the HEAT Team? ______________________________________________ ______________________________________________

What is a possible SMART target for the new process? _______________________________________________________________________________________________________________________________________________________________

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The Process Improvement Method – Step Eight

Step Eight: Implement and Evaluate the New Process 1. Implement the new process. Communicate with everyone who will need to be

involved in implementation. Make sure all are on board.

2. Set up a way to monitor the process. 3. Set milestones. 4. Set a time to assess and refine the process. 5. Encourage people to come forward with any

problems or issues concerning the new process. Listen carefully to what they say.

6. Look for and correct any bugs in the process.

Make adjustments as necessary. 7. Look for any unintended negative

consequences. 8. Measure the results. Is the process achieving

its intended objectives? 9. Make sure the process is repeatable. 10. Publish your positive results. 11. Celebrate!

How will you know if the new process is achieving its intended objective? ___________________________________________________________________________________________________________________________________________________________________________________________________________________

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Selling Your New Process Create a “Value Shop” by involving all stakeholders, including those who

are “up the chain of command”, from the very beginning. Use the “Accordion Planning” model*.

Flow Chart Existing Process

Define Problems &

Analyze Causes

Identify Solutions & Redesign

Flow Chart

IMPLEMENT And

Evaluate

Accordion planning is a model of a consensus-building process that engages stakeholders in a series of small agreements that build to a high degree of buy in to the implementation of the final decision. The fundamental premise in accordion planning is that representatives of various stakeholders should work together as a team (represented by the larger, lighter circles) and then interact with the other stakeholders they represent to get their input, feedback and agreement.

Know and be able to communicate “WIIFT” – What’s in It for Them.

Does it save time, decrease frustration, improve accuracy, improve customer satisfaction?

Know and be able to explain the expected cost/benefit or return on investment (ROI). Will the new process pay for itself over time?

Use your old and new flow charts to visually demonstrate the improvements and their benefits.

Fine tune your presentation skills and know your audience.

*Adapted from Managing for Success: Decision Making, Changeworks, LLC.

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Selling Your New Process (continued)

Conduct a benefits/concerns session before you make your presentation so that you will have thought of solutions for the most common concerns or objections ahead of time.

Benefits and Concerns Diagram: New Process:

Benefits Concerns 1. 1.

2. 2.

3. 3.

4. 4.

Ideas for Overcoming Concerns: 1.

2.

3.

4.

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Post Your New Flow Chart

Once you and your team have finalized the new process, post your flow chart or process map for everyone to see. People respond to and identify with the visual representation of their work process. Have a celebration with the flow chart as the focal point. The flow chart can also serve as a tool for training new employees who have to come in and learn your process. Sometimes it is even beneficial to share the flow chart with your customers so they understand how the process works. And in the spirit of continuous improvement, having the flow chart up where everyone can see it may actually inspire further suggestions for improvement! After all, all of our processes are really just “works in progress”. New technologies, new regulations and new customer demands always crop up, requiring us to reevaluate even our best processes over time.

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Process Improvement: Suggested Reading Brue, Greg, Six Sigma for Managers, McGraw-Hill, New York, NY, 2002. Chowdhury, Subir, The Power of Design for Six Sigma, Dearborn Trade Publishing, Chicago, IL, 2003. Collins, Jim, Good to Great: Why Some Companies Make the Leap…and Others Don’t, Harper Business, New York, NY 2001. Eckes, George, Six Sigma Team Dynamics: The Elusive Key to Project Success, John Wiley & Sons, Inc., Hoboken, NJ, 2003. Flanigan, Eileen M. and Jon Scott, Process Improvement: Enhancing Your Organization’s Effectiveness, Crisp Publications, Menlo Park, CA, 1995. Galloway, Diane, Mapping Work Processes, ASQ Quality Press, Milwaukee, WI, 1994. Goldratt, Eliyahu M., Critical Chain, The North River Press, Great Barrington, MA, 1997. Goldratt, Eliyahu M., The Goal: A Process of Ongoing Improvement, The North River Press, Great Barrington, MA, 1992. Harrington, H. James, Business Process Improvement: The Breakthrough Strategy for Total Quality, Productivity, and Competitiveness, McGraw-Hill, Inc., New York, NY, 1991. Kaplan, Robert S. and David P. Norton, The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press, Boston, MA, 1996. Koch, Richard, The 80/20 Principle: The Secret to Success by Achieving More with Less, Doubleday, New York, NY, 1998. Niven, Paul R, Balanced Scorecard Step-by-Step for Government and Non-Profit Agencies. John Wiley & Sons, Hoboken, NJ, 2003. Pande, Pete and Larry Holpp, What Is Six Sigma?, McGraw-Hill, New York, NY, 2002. Shim, Jae K. and Joel G. Siegel, Operations Management, Barron’s Educational Series, Inc., Hauppauge, NY, 1999. Smith, Dick, Jerry Blakeslee and Richard Koonce, Strategic Six Sigma: Best Practices from the Executive Suite, John Wiley & Sons, Inc., Hoboken, NJ, 2002. Ulrich, Dave, Steve Kerr and Ron Ashkenas, The GE Work-Out, McGraw-Hill, Inc., New York, NY, 2002.