Why Aren't We Getting Any Better?
DD Diana Davies
NC Nigel Clements
DD Hello and welcome to Process Perspectives, a podcast series produced by the Process Excellence Network. PEX Network is an online and events community dedicated to Lean, Six Sigma and BPM professionals. I’m your host, Diana Davies, Editor of PEXNetwork.com.
Coming up in today’s programme, the world of business contains a bewildering array of approaches to process improvement and process management, yet sometimes it can seem like we’re having hardly any effect at all on business operations. So how can we improve the business of improvement? Joining the programme today is Nigel Clements, an advisor with UK based non-profit, the Deming Forum, and an expert on the works of management theorist, W. Edwards Deming. He’s also a presenter at PEX Network’s upcoming flagship European event in London, and we caught up by telephone so he could explain to me how he thinks Deming’s work holds important lessons for businesses in the 21st Century.
Nigel, welcome to the programme, thank you very much for joining us today.
NC Thank you Diana, and thank you very much for inviting me to take part.
DD Now, we’ve got a lot of sophisticated modern process improvement methods that have been developed over decades by many, many smart people, but there’ve been those who claim that the majority of process improvement projects using these methods – as much as 60-70%, depending on to whom you listen – actually fail. Do you think that the failure rate is really that high, and where are we going wrong with process improvement?
NC Well, in my experience the failure rate is indeed that high. It’s clear to me that the majority of people want change, they want improvement, when they see what might be possible they get very excited and they want to be involved. But I believe that so many improvement efforts founder because the single most important aspect of improvement doesn’t change, and that is the way managers think, and I’m talking here about thinking beyond the boundaries of any single improvement project into the wider implications for the organisation. For example, Deming, in his theory, encourages us to look at the organisation as a system where work flows across the organisation, challenging in many instances the existing company structure, and in turn challenging what you might call the power bases of existing career paths.
So improvement requires the courage of a management team to stay the course and be really determined to make a real go at transformation, to overcome the structural obstacles like this.
DD Clearly there must be some difficulties in actually achieving this, otherwise I imagine that all companies would already be doing that. What is it, in your opinion, that gets in the way of achieving sustainable improvement?
NC Again, I think Deming summed this up very nicely in what he called the deadly diseases, and there are five of them for us in this country. The first of these is lack of constancy of purpose, for example, setting off on improvement and not seeing it through when the pressure comes on meeting production schedules or a squeeze on budgets.
The second of these is an emphasis on short-term profits, or indeed other types of short-term thinking. For example, and this is relevant really to the public sector in the UK in an era of job cuts, there can be a suspicion that becoming involved in delivering better value with fewer resources might simply be shining lights on your own inadequacies, and when the waste is removed you might simply lose your job.
The third of these is evaluation of performance, and in here is the issue of performance-related pay, and the danger here is that managers pursue the goal that will bring them the performance bonus rather than optimising the output of the organisation for everyone. For example head count reduction becomes more important than improving output, or more important than innovation, which might help secure the future.
The fourth of these is mobility of management, and I think this is quite an important one because it seems to me to happen quite frequently. And this is where you get, for example, a divisional head who is very keen to make a real difference, perhaps makes a lot of progress over a year or two, and then simply gets moved or promoted, is retired, the company is taken over or merged, or in some cases the divisional head is simply told to stop.
And the final one is management only using visible figures, and here you hear questions like, how much is this Lean project costing? How much are we spending on training? How much time are we spending on this process review and when will the benefits show through? I recently came across a story where one local authority department in the UK was doing some very important work collecting data and drilling deep for root causes of some really deep-seated problems. But their problem was they were behind schedule on their own milestones for the project, and it came up that they got an amber on the red/amber/green status that’s reported to the Chief Executive for how these things were progressing. And so the perverse consequence was to avoid this embarrassing meeting, they simply decided to abandon all their scheduled improvement work and by doing so actually turned that indicator to green, so that by managing by visible figures alone, they actually caused the improvement project to stop.
DD Let’s drill into this a little bit more at a practical level, can you take me through, say, a very real world example that can illustrate a lot of these points that you’ve already touched on?
NC Indeed, a UK public sector body I’ve recently been very close to actually had its very survival at stake and one of the things they were trying to do was undertaking a very intensive and focused improvement effort using Lean methods. And they took the courageous decision to get over 10% of the workforce engaged and through the pilots and studies and trials that these people were doing they were able to show massive potential benefit, including cycle time reductions of 90%, enormous increases in process efficiency. Perhaps more importantly than that, the people involved were extremely excited and delighted to, at last, not only be able to do the work but also to improve the work that they were doing. But it all came to a shuddering halt under this issue of short-term thinking, two fold really, pressure to implement solutions before they were ready, and pressure from what they call business as usual, to get resources back into the line to meet the existing service level agreements.
DD Interesting, now part of that challenge, it seems to me, is really ensuring that people from the wider business are involved within process improvement. How do you make the business of improvement work for everyone within the business or the organisation?
NC Yes, I think it involves taking this broader view of what we really mean as organisation as a system, and particularly including the future of the system, managing for the future as well as for the now. I was listening to a Russell Ackoff recording recently, and he was also talking about why improvement initiatives don’t work, and one of the things he said intrigued me a lot, that is there’s too much focus on what we don’t want and not enough focus on what we do want.
In the context we’re talking about here, we might focus on reducing waste and improving efficiency in the now, but not think enough about the implication for the future. So if you want people to join in and become involved across the organisation improvement, how do you assure them that they are not what you might call the proverbial turkeys voting for Christmas? How will people be redeployed? How are you innovating for new products and service that will take them into new areas of adding value for your customers? Do you have a long-term policy of education and training to help them secure their future? If you can overcome this particular issue, I find you can get service reviews and process redesign carried out by the people who do the work, the people who really know the ins and outs of where improvement is possible.
It draws people in, it really does excite about when the structural issues disappear and they can contribute to helping a system better achieve its aim, so let them strip away the current poor use of measurements and replace them with measures that can show how capable you are of meeting customer requirements and let them engage across boundaries to ensure that services and policies are all contributing to effective delivery of whatever it is that you do.
DD Now I’d like to pick up on a point that you made earlier, and I think it also ties into what you’ve just said, which is moving beyond that focus on short-term improvement and short-term thinking. Are there ways that you would recommend organisations move beyond this? Is this a leadership issue, does it need to start right from the top, or are there ways that say people who are leading process improvement and continuous improvement of the organisation might be able to help engineer that shift from short-term to a longer-term perspective?
NC I think that’s the key element of changing management thinking and if you’re lucky enough to be working with a company with managers that already do think like that then celebrate and contribute to others what you have learnt through such channels as this, the Process Excellence Network. Because for too many process practitioners, that’s not the case and if you are not so lucky to be involved in an organisation that isn’t learning and encouraging others to learn, then you’ve got to do whatever you can to build your network and then build your improvement influence, develop whatever allies you can amongst leaders. Why not take them to Toyota, who have been regarded as the epitomy of long-term thinking since probably the Second World War, you can go on their factory visits. I know a number of people who’ve been on these, including myself, and it’s wonderful to see people talk about what they’re doing, improvement of work and know from the factory tour that they actually mean it, you can see the evidence for yourself.
So, build allies, I think Deming gave us a useful list to help us think through your strategy when approaching leaders who might be willing or perhaps an open door to engage in this sort of thing, and that is first of all to do what you can to set an example of what is required. Listen well to these people but don’t compromise on your principles, teach at every opportunity you have and help people to pull away from the current practice and belief and move into a better way of thinking and acting.
DD I think one of the realities of the job of the process practitioner is that sometimes what you do is perceived as potentially unpopular. How do you influence change within a business, within process improvement without becoming regarded as the bad guy?
NC I think the bulk of process practitioners, you actually start out being regarded as the good guy, and it’s only really when you start to threaten some of the structures we’ve been talking about that this begins to change. It can be very difficult for process practitioners when this happens and I know many really committed and talented people who simply have had to leave the organisation when this entrenched thinking stops them making further progress.
But I believe that the first step in changing organisations is what you might call the transformation of the individual. So, a question I often ask myself is wherever I am in an organisation or wherever I am with people, how can I help the person in front of me right now? And it reminds me of a story one of my friends and colleagues in the Deming Forum, Dave Kerr, told me, and this was a story about a little boy who’s walking along a beach and it’s full of stranded star fish, and he was picking up the odd one as he walked along the beach with his father. He’d pick up the odd one and throw it into the sea, and then walk a little bit further and throw it into the sea. Eventually his father stopped and asked him the question, I don’t know why you’re bothering doing that, there are thousands of starfish here, you won’t make any difference. So the little boy looked at him and looked down, picked up another starfish and threw that back into the sea, and he said there, I made a difference to that one. And I think regard what you do as a big contribution to society. Every time, through doing these things, you can help one more person change the way they think.
DD Nigel, that’s a great way to end, thank you very much for joining us today.
NC Thank you very much, Diana, I’ve really enjoyed taking part.
DD And that’s all from us today here at the Process Excellence Network. Nigel Clements will be keynoting a session at PEX week Europe called Stepping Process and Operational Management up a gear, translating Doctor Deming’s renowned leadership systems into the 21st Century. The event itself takes place 23-27 April in London. To find out more about the event, Nigel’s session, or his organisation, the Deming Forum, go to www.processexcellencelondon.co.uk. And as always don’t forget that for additional Lean, Six Sigma and BPM resources including on-demand webinars, podcasts, articles and much more, go to www.pexnetwork.com.