Eliminate waste with process improvement
W. Edwards Deming, considered the father of TQM, said some provocative things about American management. Probably my favorite was that if American wanted to destroy its enemies, it should export its form of management. Deming saw that American management was focused on finding the right people; blaming employees for under-performance. His view was that employees will only deliver what the system (defined as the series of processes needed to produce products/services). Deming held that employee performance follows a bell curve, there are some peak performers and some at the low end. But, it’s the bell curve of human kind. You won’t defeat it with a strategy of trying to hire only peak performers.
Rather, the real payoff is in improving the systems (processes) that employees have to work within. Doing so enables all employees to perform at a higher level, thus raising the performance of the organization.
In Deming’s research, he found that all organizations suffer from at least a 20% “waste” factor. That is, 20% of the time, man hours and money in any given process does not add to the value of the product or service. In his view, if it was not adding value, it was waste. In our experience with process improvement, the waste factor is closer to 50% than it is 20%.
What are the sources of waste? Duplication of effort, effort that is not needed, work that must be redone because it wasn’t done correctly to begin with and/or waiting for a decision or for work to be completed before you can go to work on your part of the process.
I often ask employees in my sessions, what percent of your potential contribution to the organization is being realized now (meaning if you could eliminate barriers, having to wait for decisions, etc., what would be possible?). The answer averages about 70%. Meaning, 30% more could be gained from employees if the barriers were removed.
What’s it worth? What would it be worth to you and your organization to be able to produce the results you have now with 50% of the resource? Or, to be able to double your output without any increased cost?
Seems obvious what to do here, so why don’t more organizations invest in process improvement? Multiple contributors among them: they don’t know how, they have tried and failed (66% of these efforts fail nationally), don’t want to invest the time or money, don’t want to confront that the system they have designed isn’t optimal.
It has been our experience that the investment in process improvement, if done correctly, is the highest leverage investment you can make in performance improvement. If you want to learn more about how to do it right, view our library article on the Keys to Implementing Change.
I’m interested in your questions and experience with all of this, please e-mail us.