A Process for Improvement

Serve customers better by breaking down organizational barriers and looking at problems from a big-picture perspective

A popular modern-day mantra urges people to think globally and act locally. But in many organizations, employees operate with a much different mindset: think and act locally — as in no farther than the confines of their cubicle or department.

The result? Inefficiencies that may be apparent only through a big-picture look at operations and procedures instead become embedded into organizational culture. And too often, the biggest loser is the organization’s customers, says Brad Power, a consultant and researcher in process innovation and business re-engineering.

“Typically, employees identify with their local team, not the entire enterprise,” says Power, who blogs for the Harvard Business Review and currently conducts research for the Lean Enterprise Institute (www.lean.org). “If you work with sewer inspectors, for example, your identity lies in the sewer inspection silo. People naturally form tribes and communities that are local.

“It’s not necessarily a bad thing,” he continues. “But on the technical side, if you want competent sewer inspectors … you want them to think globally — get the big picture. It shouldn’t be global or local, but both.”

Generally speaking, localized, little-picture thinking is more prevalent in mature organizations, which tend to be more set in their processes, procedures and cultures.

“If we’re talking about an entrepreneurial startup company with five employees, they don’t need the insights we’re talking about,” Power notes. “When a customer order comes in, it’s all hands on deck. It’s only with scale and success that people fall into established ways of working and established ways of relating to other people, and lose sight of the big picture.”


Gain a customer’s point of view

For a good example, consider a company that processes insurance claims. A typical employee might be responsible for taking claims from Pile A, reviewing them and moving them into Pile B for transfer to another department. If, for instance, three departments are involved in the process, each typically operates with an error rate of 10 percent.

“That’s pretty much standard,” Power notes. “The units of work may differ, but the numbers (percentages) are the same.”

With a 10 percent error rate, each department’s employees probably think everything runs fairly smoothly.

“But that comes out to a combined error rate of 30 percent from the customer’s point of view,” Power points out. “So while everyone in each department thinks a 10 percent error rate is OK, it’s anything but OK from the customer’s standpoint.

“The employees in each department don’t realize they’re part of a broader value stream that serves customers,” he adds. “They don’t see the value to the customer because there’s no visibility of the full process from the customer’s point of view.”

Power notes that at one company he worked with, 10 minutes of actual work was spread out in a process that took more than 20 days.


Seeing the big picture

So how do organizations break down the departmental barriers and get employees to break out of their tribal loyalties? Power suggests a two-day workshop where key stakeholders from all relevant departments deconstruct a specific, problematic process by diagramming it on a wall from start to finish.

Or, as Power puts it: “You describe what happens in a process, with all its pains and warts, then get into redesigning it.”

The workshops are effective because people see the impact of their work on others downstream in the process. Moreover, seeing the process diagrammed as it works — not as it should work — objectifies the problem. That makes it easier for employees to sidestep blame games and instead focus on solving the problem.

“If two people discuss why something fails, they get into an argument,” Power says. “But if you put the process up on a wall and map it from end to end … people don’t get as defensive. Everyone rolls up their sleeves and agrees to fix the problem for the end customer.

“People who do this a lot understand the social dynamics involved,” he adds. “It’s really a magical thing. People get flashes of insight into how the whole process works, and how interconnected they are. It can be very moving, particularly if people care about their work and their customers.”


Getting buy-in from skeptics

It may not be easy to get jaded employees to buy into the process. But Power suggests two strategies to help pave the way. The first is to drive change through a top-down mandate, led by passionate management. Or they can use a bottom-up approach in which employees suggest ideas.

“Don’t try to make it a corporate program, necessarily, but let people in who want to opt in, and reward and recognize them,” Power says. “Build a groundswell of support from the bottom up.”

Power also cautions against expecting wholesale changes overnight. From his experience, organizations that strive for what he calls “transformational change” are like great baseball hitters: Their success rate hovers around 30 percent.

“But don’t be disheartened by that,” he notes. “You should realize it’s a daunting task when you embark upon it. But that shouldn’t stop you from trying. The people at Toyota believe that failure and problems are good … you try things and see what works. If it doesn’t work, it’s not a failure — it’s a learning opportunity.”


Keep momentum alive

In addition, it’s important to sustain the communication inroads and relationships developed during the workshop — enable employees to keep working across those naturally occurring organizational/tribal boundaries.

“You need to form a community,” Power says. “But people in different departments don’t naturally meet at the water cooler … they don’t have social relationships that span the process from end to end.”

While meetings, conference calls and email can help build an employee community, Power notes that organizations also can develop a social-networking platform — a Facebook for businesses — that helps communities develop. Organizations can also use such a platform to monitor and publicize performance measurements, which helps keep employees engaged.

“You want to keep it in front of employees’ faces, so they’re checking it every day … seeing how close they are to creating those ‘perfect orders’ for customers,” he says.

Along the way, a less tangible but equally important benefit often emerges: improved problem-solving abilities.

“Every problem you solve not only solves that problem with performance improvement, but it also improves your capability to solve the next problem,” Power explains. “So you’re building organizational capability, not just achieving process improvements. The process improvements you make along the way are rewards that encourage employees to continue organizational development.”

The improvements also keep employees thinking globally, past the local confines of their cubicle or workstation. F

To learn more about process innovation, visit http://blogs.hbr.org/cs/ 2012/04/building_a_team_across_organiz.html


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