You can improve your processes all you like, but it's really about what people do....(Transcript)
Companies are having to deal disruptive change on scales not yet seen before. But it's not as simple as changing a process and expecting that the business will function better, says Steve Jacobs, Chairman and senior partner at CLG, in this Boardroom Perspectives interview.
Instead, he says, you must take a wider perspective towards change and explore how culture and behaviors contribute to results. Improved results don’t always follow from improved processes alone.
In his PEX Network interview, Jacobs also discusses key trends he sees shaping business operations and how process professionals can help to shift the behaviors within their companies.
Editor's note: This is a transcript of a podcast interview. It has been edited for readability. To listen to the original podcast, click here.
Processes are important....but don't forget the people
PEX Network: What do you think are some of the big trends that are defining business operations at the moment?
Steve Jacobs: I think there are five plus one. Three are driven as much as anything by the post recessionary period, the first being a renewed focus on reliability and operational excellence in a variety of industries. The second is a heightened awareness of the importance of the customer experience. And on the softer side, we’re seeing quite a bit of attention in companies around the globe focused on culture of ownership and accountability; there’s really an interest in transforming culture in that direction.
I think there are two others that are driven by larger structural issues. One of them is the intense focus on data analytics or, as Tom Davenport recently called it "analytics 3.0". Especially in the western hemisphere, there is quite a bit of emphasis on innovation and, if you look carefully at what companies are talking about in Silicon Valley, for instance, it’s not just innovation but it’s what they would call disruptive innovation.
Those are the big trends that we’re seeing day in and day out. Because of that, that set of trends, we’re seeing one more, which the one of the five plus one. Companies, more and more, are really looking for different and better ways of driving change through their organizations in response to these other trends.
PEX Network: Things like the customer experience and innovation were perhaps not things that process professionals really saw as part of their roles in the past. How would you say some of those five core trends that you were talking about and the plus one perhaps, how are they impacting the way that companies are approaching process excellence?
Steve Jacob: These changes are putting pressure process excellence approaches to bring, for instance, change to non-linear in addition to linear work processes. There are certainly linear aspects to innovation and certain types of the customer chain as it relates to the customer experience, but there are portions of the overall process that are less than linear. So bringing non-linear techniques to that is certainly important.
I think the biggest one, given the experience that we have, is that at the end of the day, any of these trends in and any of these needs that result from the trends in organizations, inevitably they require new behavior, ultimately, to get new results. Now, they very well may require improved process as well. As a matter of fact, they usually do, but new behavior and methodologies to really drive new sustainable highly engaged behavior is in fact one of the key needs that we’re seeing across many, many companies today.
PEX Network: What kind of things, then, would process excellence leaders need to do differently then to drive some of those behaviors and enable that cultural shift?
Steve Jacobs: Let’s start with what many process leaders are running into today in terms of challenges. First off, the success rate of many process excellence initiatives is reported to be something in the range of 40% or 50%, which means that there’s quite a bit of opportunity to be more successful. That certainly begs the question, what’s driving the lack of success when it’s occurring, and what will it take to address that?
Many of the studies that I see focus on three or four drivers that have a common root. One is the executive sponsorship. Many process excellence leaders are looking for ways of driving more consistent and more effective executive sponsorship.
The second is they’re looking for more engagement, more support and more effectiveness for line leaders during the implementation of process improvements. Much of the time they’ll focus on looking for a more supportive culture, and you hear that over and over again in a variety of studies. So if that’s the nature of the challenge in part, then some of the things that we’ve found are helpful for process excellence leaders are the following.
I’ll start with is a true confession myself. Years ago - about 23 years ago to be exact - I was in a process excellence leadership role myself. I loved to cite the saying that organizations and processes are perfectly designed to get the results they were getting, so if you wanted a different result you needed to redesign the organization and redesign the processes.
And the implication was, if you got the process design right, then results would follow and presumably the behavior that would drive those results would naturally follow. What I’ve learned since then is that’s not always the case. As a matter of fact, many times it’s not the case, and I think that, for instance, is one of the reasons that the studies that focus on executive sponsorship, line leadership effectiveness, the overall support of culture for process improvement, at the end of the day they’re really focusing on the need for behavior change that’s not driven by process improvement alone.
The second piece for process excellence leaders - beyond checking their beliefs – is to really look to integrate into their process methodologies behavior change methodologies as well. That’s highly doable and something that a number of our clients are actively engaged in doing today. But it also requires an awareness of what behavior change methodologies really look like and how they integrate with process excellence and, for that matter, project management methodologies as well.
The third and last I’ll mention here is, as they think about building the capability of their own staff, I think it’s important to point out that many times the very things that attract process excellence professionals – for instance, a Six Sigma black belt is one example – to that career, don’t necessarily correlate strongly with the attributes and the skill sets that are required to be effective at coaching line leaders as they implement the process improvements and, specifically, to foster the culture and the behavior change that is necessary for the process improvements to really get their full impact.
So there’s a different skill set and possibly, in some cases, a need for additional staff, whether that’s external or internal, selected for different attributes and trained differently. Certainly they need to perform different roles than the traditional process excellence professional today in most corporations.
PEX Network: I imagine that this would also have implications for senior leadership as well, you mentioned that engaged sponsorship was one of the key things that process excellence leaders really need to bring in to the mix. We recently did a survey with a number of C level participants, and one of the things that I found quite interesting was that, basically, all CEOs are aware of the importance of efficiency and quality. Nobody with argue with those objective. However, for many of them, something like a formal Lean Six Sigma program is not necessarily seen as the way of achieving it. Why do you think that the C level would agree with the aims of a process excellence program but not necessarily the means of it?
Steve Jacobs: Great question, and I think, paradoxically - in some companies anyway - there is such a focus by process excellence professionals on the means, that I think that does lead to a concerned suspicion or even "organ rejection" by some senior leaders.
I’ll give you just a simple, quick example. About a week ago I was with a medium sized company that has invested mightily with CEO support in Lean Sigma methodologies. Even though it’s a mid-sized company, they have close to 200 black belts, for instance, so it’s been quite a sizeable investment over the years.
That said, there is still only partial uptake amongst the C suite executives or line leaders. This is an organization that has about 80 plants around North America and only a portion of the plant managers are really fully engaged in utilizing the process excellence capability today.
So, in essence, we had a senior leader that truly wanted to move to another level of utilizing the process excellence capability. He was asking what, to my ear, were good questions. At some point the responses he received really boiled down to some of the process excellence professionals in the room discussing whether they should use Lean methods, Six Sigma methods, Kaizen methods, or perhaps some combination of all. I looked over at some point and he just had his head in his hands.
He was really trying, but there was such an emphasis on the means, and I think that he walked away saying, surely there’s got to be a simpler, more directly focused way of matching what the business needs with the methods. So I think it’s the complexity around the means – the apparent complexity anyway – that contributes to senior leaders’ rejection of these tools. Certainly, there are aspects to what senior leaders could bring that would help success as well, but I do think it starts with the need for simpler and more agile methods.
PEX Network: You’ve mentioned there are ways that the leaders themselves, the C-level can actually perhaps set their organizations up for success. What would you say are some of the ways that the C level can better equip their organizations to thrive in a world where, really, businesses are being driven some of these new trends like the need to be much more customer-centric, like the need to be a lot more innovative as the pace of market changes has really upped the game?
Steve Jacobs: Ideally, it starts with senior leaders looking at themselves first. I think it would be helpful for a greater number of leaders within the senior team have a true appreciation for evidence based decision making to create a critical mass or tipping point at the senior table. This would hopefully then pull in a greater appreciation for taking the time to do true root cause analysis where it’s appropriate and when it’s appropriate, and then take the time along with that to learn how do you use big data today, and quasi-experimental design in business and so forth where it’s appropriate. That’s one type of learning.
I think the second of two that I’ll name for senior leaders is really to more deeply ask and answer the question, what is it that drives behavior change. There is a science that underpins successful behavior change methodologies and I’d go so far as to say, understanding a bit of the science will have very practical value to senior teams.
For instance, with regard to supportive process improvement initiatives, many executives are prone to focus on, in effect, what gets things started, but not necessarily what gets things finished. If you peel that back one layer they tend to, as they think about their actions as executive sponsors, for instance, they’ll think in terms of "once and done" type of actions like at the quarterly town hall meeting in each region, they’ll write into their speaking notes to make sure that they comment on the process initiatives that are taking place and so forth.
That’s fine, but their day in, day out leadership practices across the year – in essence, if you will, their recurring leadership behavior – plays a much stronger role in whether those process initiatives are really being supported effectively by that sponsor in the "once and done" actions.
So having appreciation for both the evidence based decision making as well as the day to day leadership practice that truly drives sustainable behavior change are two things that would be helpful at the top of the house, and then from there, of course, their applications throughout the organization.