THE EXECUTIVE FUNCTION
Along with a companies Board of Directors (if they have one), company executives create goals for the organization, and devise strategies to ensure that progress on these goals continues. There is an inherent assumption that anything happening in an organization supports the higher level goals. But it isn't surprising (at least to those working in operational and support roles) that there are clear gaps between the things we do day-to-day, and the goals that should be supporting our mission statement.
If you question this fact, sit down at a table with a copy of your companies mission statement. Now list all of the activities and tasks that you perform on a regular basis. Next to the items on this list, write down why you perform these activities. Then write down how they directly contribute to the mission of your company. For many of these items, you may justify them by stating, "Every company has to do this (for tax purposes, due to industry regulation, or even 'just because').". Hopefully, this is easier if you are one of the few lean or six sigma resources in the organization. This should connect you directly to the C-suite, but does it really?
The real question here is what company execs know about what your are directly doing for the company. If you meet with them regularly, you are one of the lucky few. If they barely know who you are, it's not likely they are going to be leveraging lean or six sigma in any significant way. And that is what a proper executive perspective on lean and six sigma can yield: A BETTER PERSPECTIVE.
Before we can discuss the need for and benefits of any 'continuous improvement' certification, we need to put a framework around continuous improvement in general, which can be illustrated by certain organizational characteristics:
- Individuals 'dabbling' in CI tool usage: This is characterized by no formal CI organization or discussion, no CI goals. Certain individuals use various CI tools to help themselves or their departments improve efficiencies (or other short-term metrics).
- Consultant studies or initiatives: Consultants are brought in to quantify opportunities, identify challenges. They may even stay on for special projects, aimed at obtaining some of the larger opportunities.
- Identification of internal resources: Consultants are always an expensive alternative, so many companies identify a few internal resources, to carry on what the consultants started.
- Improvements assigned to a department: Sometimes Engineering, sometimes Facilities, and sometimes an independent Project Management Office (PMO) is established. The focus is on inititiatives which provide large returns for relatively small costs.
- Culture-based improvements: Once the larger initiatives seem to be exhausted, some backsliding is noticed. This is because we've only looked at short-term factors, and not how a culture of CI can not only provide larger gains. Other factors such as capacity and sustainability are considered as well.
- 100% Involvement: The only way to establish a culture is to ensure everyone is involved. It isn't about the tools, but about overall business performance, from the customer perspective.
By the time an organization begins to formalize continuous improvement efforts, it is time the execs begin thinking about the CI resources in an entirely different way. CI has got to be 'organic' to the company, part of the way it goes to market. Executives need to know how CI can significantly impact not only operations, but how we support those operations. And they need to know this in real terms, not just by theory. Executive certification (either internally, or externally) should be able to put the effects of any CI program in terms that can be translated not only to the bottom line, but to every measure our customers use to evaluate a purchase. Cost is certainly one of them, but it isn't always the deciding factor. Quality, Service, Availability, and many other factors are used at the customer level.
WHAT EXECUTIVES NEED TO KNOW
If you bumped into your CEO, CFO, or other executive on the elevator (or in a hallway, etc...), could they tell you the real value of your CI efforts? Not just the standard, "They help us hit our bottom line!", or "To ensure we don't stop improving!". Can they tell you how CI is affecting sales? Capacity for new business? Sustainability? Safety? Company growth? Well, they should be able to tell you this, in very specific terms. And any good CI certification program should be able to show them how to develop goals around CI, not only for the CI team/department, but for every department in the organization.
The challenge is that there are really very few executives that can detail what CI means to their organization. For many, despite how much investment they've made in CI, it comes down to a simple cost-benefit calculation. Once the hard benefits from a CI effort start to wane, the resources begin to be pulled from it. It's simple math to them. There is no real benefit, in their minds, to a 'cultural' transformation. People come and people go, and few executives look beyond a 3 to 5 year window. And even if they do, CI rarely is one on the primary drivers.
This becomes one of the primary challenges of those in CI positions - Ensuring success by ensuring company execs understand the true value of CI efforts. This is very difficult if you're a lone lean or six sigma practitioner. It is extremely difficult if you're company is focused on CI tools, instead of CI culture. And it is almost impossible if the company only recognizes improvements in terms of savings.
WHAT YOU NEED TO KNOW
There are plenty of articles, books, and seminars that focus on lean and six sigma tools. For the most part, these are red herrings, in that most of these tools are just 'trick shots', designed to provide specific types of improvements, in specific situations. Many people now recognize that CI isn't really about the tools. But our challenge is that the 'tools' are the only way we know how to identify actual improvements. And 'savings' is like any drug: once you get some, you want more, and more, until you can't get any more! By then, the damage is usually done, in the form of layoffs, equipment sales, and facility closures. It is the easy way, and the wrong way.
One skill that is never really taught in CI training is how to manage upward, how to set constructive expecations that allow the company to embrace a CI culture, and become a CI powerhouse as a result. But like any skill, it can be learned. Take it on like any other lean or six sigma challenge:
If you are one of the few lean or six sigma resources in an organization, it is your responsibility to ensure your leadership, as well as company executives, understand how the CI effort can transform the company, and what they can do to support these changes. If you don't, you risk becoming one of the many organizational horror stories, a data point supporting statistics about lean and six sigma failures. If you can, you can be a major player in a CI success story!
- Define the current state: What characteristics define the companies culture? What characteristics could be changed, and what benefits would that provide?
- Objectively measure the culture: How much time is spent in meetings? What is the cost of turnover? How long does it take to come to decisions? How long does it take to implement change?
- Use your skills to analyze the data: Are there trends that can be illustrated? Are there undeniable facts to be revealed? What does the data actually say?
- Pilot change by implementing improvements within your sphere of influence: What can you do to prove what you see? Who can you influence to change how business is done, even in small ways?
- Track the true effects of changes made: This is what is sorely missing from many change initiatives, a 'control' phase. Tracking the true effect of change over time yields great insights!
Keywords: certification, continuous improvement, executive, lean, organizational improvement, six sigma
ABOUT THE AUTHOR
Bill Kluck is the Founder and Director of Operations for The Northwest Lean
Networks, a professional society which connects the community of lean professionals worldwide.
Bill has over 20 years of experience implementing lean in a wide variety of industries, both public and private. He has trained thousands of team members in various lean strategies and techniques, and has overseen financial impact in the hundreds of millions of dollars. Bill's main focus is building transformational change and evolving business culture.
Bill earned his Bachelor of Science in Industrial Engineering from the University of Washington, an MBA from Seattle University, and holds several continuous
improvement certifications (including a Six Sigma Master Black Belt, and a Masterís Certification in Lean Methods).
Click here for a SNEAK PEAK at next months article...