Awareness Lecture Series - Continuous Improvement Transformation

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IQPM Consulting Creating Sustainable Performance
Continuous Improvement Transformation: Rethinking How You and Your Organization Work to Create Value and Generate Revenues Aristide van Aartsengel & Selahattin Kurtoglu
ISBN 978-3-642-35901-9
ISBN 978-3-642-35904-0

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Creating Sustainable Performance
Nothing New Under The Sun
•Improvement is about “change (i.e. deviation from an expectation) in form, quality, or state, over time” that add value.
•A change (or deviation from an expectation) in form, quality, or state, over time is characterized by its characteristic rate, rhythm, or pattern of work or activity. It can be episodic (i.e. conceived to be “infrequent, discontinuous and intentional”) or continuous (i.e. conceived as “ongoing, evolving and cumulative.”).
•Not all changes result in improvements, thus we use metrics on the background of time for assessing: when changes occur, the rate of change, the extent of change, and also to establish the opposite of change – stability.

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Improvement Is A Notion As Old As The Creation
•“Improvement” is a notion as old as the “Creation” and the full history of the skills, knowledge and competencies used to improve specific technical activities in organizations is certainly not one that originated with contemporary quality professionals.
–It may have started with the building of the pyramids, which must clearly have involved some understanding of organization, team work and execution of tasks among the Egyptians.
–It may have also started earlier back in the days of cave men and women who struggle together and allocate tasks with the common goal of survival.
“Amazing what a little teamwork can accomplish.”

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Contemporary Production Improvement Practices
MOTOROLLA GENERAL ELECTRIC
TOYOTA MOTORS CORPORATION
Adam Smith, 1776 Frederick Taylor, 1911 Henri Fayol, 1916

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Improvement Initiatives Are In Poor Shape In Most Organizations
•Drastic performance improvement initiatives in most organizations is a mess! Nearly 20 percent of a survey respondents will rate their performance improvement initiative as effective or very effective.
•Most executives today are making do with legacy initiatives and systems that warp and distort their business strategies toward a Continuous Improvement Transformation.
•As you move down in the organization, you will find that often over 50% of the activities been performed have little relevance to the organization intended strategy, with functions pursuing their own self-interest and often working at cross-purposes.

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Overcoming Scepticism in Continuous Improvement Transformation
•Embracing a Continuous Improvement Transformation strategy seems to be threatening to businesses due to the high rate of implementation & deployment failure (nearly 80% of industry respondents)
–Implemented programs fail to accomplish their goals of: lowering expenses, improving productivity, boosting customer satisfaction, raising revenues to stakeholders’ expected levels.
• As a manager, business executive, master black belt, etc…, it is imperative that you develop an understanding of the drivers of your organization capabilities to improve continuously and then, close the gap against the top industry performers.

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•These are scary times with disruptive changes for every organization and the track record of business performance improvement programs is a sorry one.
•Budget Restrictions: In today’s businesses, approximately 80% of the budget needs to go to pay salaries, buy materials, pay taxes, pay shipping costs, etc. Less than 20% of the budget can be set aside for performance improvement practices.
Why Consider A Continuous Improvement Strategy?
"Our short-term goal is … MONEY! Our long-term goal is … MORE MONEY!"

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6s
LEAN
BPM
TQM
BPR
AGILE
•Most organizations have talented managers and specialists, strong product portfolios, first-rate technological know-how, and “deep” pockets.
•What they lack is a habit of thinking about and acting upon the capabilities to improve continuously as carefully as they think about individual people’s capabilities.
Why Consider A Continuous Improvement Strategy?
•If an organization faces major changes, the worst possible approach to adopt may be to make drastic adjustments to the existing organization capabilities.
•In trying to transform an enterprise, managers can destroy the very capabilities that sustain it.

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•A consistent practice of patterns of thinking and action, and adaptation
How Do You Realize a Continuous Improvement Transformation?
ARE WE DOING THE RIGHT THINGS? Look at drivers of success! Improve strategic thinking & social environment concerns!
ARE WE DOING THINGS RIGHT? IMPROVE EXECUTION Generate outcomes within the Social environment and act upon!!!

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•Continuous Improvement takes place in almost everything we do in life, even if we are not explicitly aware of it. Common examples includes: human development, all human activities and their products.
•We spend our lifelong time throughout a complex process of enormous change (in form, quality, or state) and growth toward a mature steady state. During this process, we adapt, develop skills, attitudes and values that guide our choices, relationships, and understanding.
Continuous Improvement is Ubiquitous

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•As organization grows and approaches the ceiling of maturity, it often exhibits a generally applicable characteristic of volatility before settling down to a “mature”-phase steady state.
•At maturity state, an organization will exhibit the general characteristic of maximum strength, effectiveness and efficiency.
•This steady state will only end when one of its determining factors changes.
Continuous Improvement is Ubiquitous
DISASTER
LEARNING
STRUCTURED VOLATILE
MANAGED
TRANSFORMED
WINNING
CONTINUOUS IMPROVEMENT

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. Increased
Maturity
Improve
Leadership
Improve
Culture &
Values
Improve
Strategic
Planning &
Management
Improve
Performance
Measurement
Improve
Performance
Management
Improve
Alignment &
Commitment
Improve
Process
Improvement
&Management
Improve
Sustainability
Determining Factors for Continuous Improvement
• A set of factors (drivers), that matter the
most, characterizes the pattern
and process of growth and
development toward the
“mature”-phase steady state:
– Leadership
– Culture & Values
– Strategic Planning & Mngt
– Performance Measurement
– Performance Management
– Alignment & Commitment
– Process Improvement & Mngt
– Sustainability

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Determining Factors for Continuous Improvement
•These Eight (8) determining factors that matter the most were compiled by the “Balanced Scorecard Institute” in order to:
–Help enterprise business leaders – from CEOs to supervisors – perform a quick assessment of where their organization stands in terms of strategic management;
–Monitor progress in improving maturity of their organization; and
–Allow benchmarking across organizations, or departments within one organization, in order to identify best practices.
“Peter ! Jansen ! Get back in here !
The performance of our strategy and the sales graphs were upside-down!”

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Understanding Where Your Capabilities Reside
•To embrace a C.I.T. strategy, you need to be able to continuously assess how the RPV – Resources, Processes, Values – that affect what your organization can and cannot do, might affect the drivers of your organization’s capacity to improve.
–Resources – both the tangible ones like people, equipment, technologies, and cash, and the less tangible ones like product designs, information, brands, and relationships with suppliers, distributors, and customers. Without doubt, access to abundant, high-quality resources increases an organization’s chances of coping with change.
–Processes – the patterns of interaction, coordination, communication, measurement, and decision making employees use to transform resources into products and services of greater worth. Some processes are formal, in the sense that they are explicitly defined and documented. Others are informal: they are routines or ways of working that evolve over time.

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Evolution Toward The “Mature-Phase” Steady State
•Maturity is about movement to a higher stage of development, whereas improvement in each driver is about “change in form, quality, or state, over time.”
•Making progress toward the maturity stage requires improving simultaneously each of the eight determining factors (drivers) along the growth stages.
•Your organization maturity stage is a matter of both breadth and depth:
–Breadth indicates completeness of the determining factors (drivers of c.i.);
–Depth indicates the level to which the determining factors (drivers of continuous improvement) are performed, relative to a “world-class” standard.

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. Increased
Maturity
Improve
Leadership
Improve
Culture &
Values
Improve
Strategic
Planning &
Management
Improve
Performance
Measurement
Improve
Performance
Management
Improve
Alignment &
Commitment
Improve
Process
Improvement
&Management
Improve
Sustainability
2. Determine
Improvement
Maturity Gaps
3. Improve
Determining
Factors
4. Incorporate
New Learning
1. Assess
Level of
Maturity
Evolution Toward The “Mature-Phase” Steady State
• Making progress toward the maturity stage requires ongoing balancing of: (1)
The need to look backward in order to maintain the existing business and its
current customers, and (2) The need to look forward
in order to explore and achieve performance
breakthroughs and to identify and attract
new customers and new sources of value.
3
4
5
Leadership
Culture & Values
Strategic Planning &
Management
Sustainability
Process Improvement
& Management
Alignment & Commitment Performance Measurement
Performance Management
1
2
0
Current maturity Continuous Improvement maturity Target maturity potentials

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Overcoming The Leadership Gap Needed In C.I.T.
•Leadership here is the art to influence, not coerce nor manipulate, people and to gain their genuine commitment to accomplish common goals.
•Leadership is a learn-by-doing art form, reciprocal and occurring among a group of people within a defined context.
•Leadership is NOT necessarily a position in the hierarchical structure
•We all approach leadership from our own psychological make-up, intelligence, training, and experience.

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Understanding Organization Values in C.I.T.
•Values carry an ethical connotation and define the nature and character of an organization; what it cannot do.
•They define the standards, the criteria, by which members (employees) set priorities and make decisions.
•They can be identified by looking for proxies within an organization: financial statements, costumers’ roster, history of past investments.
•Organization values tend to evolve in a predictable fashion on at least two dimensions: (1) acceptable gross margin and (2) size of acceptable customers or markets.

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•In the early stages of your organization growth, resources (flexible, both tangibles and intangibles) are the most visible factors that contribute to what your organization can or cannot do.
•Over time, your organization capabilities shift toward its processes and values. Processes are not nearly as flexible as resources are – and values are even less so.
•Trust in those processes and values that have been used successfully come to constitute the foundation of your organization culture.
Understanding The Foundation of Organization Culture
DISASTER
LEARNING
MANAGED
TRANSFORMED
WINNING
CONTINUOUS IMPROVEMENT
FOCUS ON PROCESSES & VALUES PRONE TO EVOLUTIONARY CHANGE NOT PRONE TO DISRUPTIVE CHANGE
FOCUS ON RESOURCES. PRONE TO EVOLUTIONARY AND DISRUPTIVE CHANGES
STRUCTURED VOLATILE

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Understanding Organization Culture in C.I.T.
•That character of genuine commitment and order in employees, teams and groups that allows people to trust in those processes and values that the organization has used so successfully so often that they give direction to its daily life and allow people to trust each other enough to work together.
–To whatever degree trust is lacking, the source of the gap can always be traced to specific behavioral characteristics.
–So long as those trusted behaved in line with expectations, trust would be reinforced as a result of experience and built progressively over time.
–Trust does not need to involve belief in the good character or morality of the individuals and groups involved, merely it needs their conformance to agreed action.

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Understanding The Strategic Planning & Management
•Intended strategies are the means by which an organization intends to achieve its objectives.
• They provides the framework for decisions and define the key areas of competitive advantages (i.e. value creation) and how to exploit those advantages to satisfy shareholders demands during the time horizons to which they are working, in order to achieve their objectives.
•Strategy should be focused on making best use of the value drivers to create optimal value from resources for stakeholders.

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Understanding The Strategic Planning & Management
•Formulation of an intended strategy often take into account Mintzberg 5Ps (Henry Mintzberg, 1978):
–Perspective – Basic business concept or idea, and the way in which that concept or idea is put into practice.
–Plan – A direction, a guide, or a course of action from now (or from the past) into the future, however that “future” is defined and whatever the time horizons associated with it.
–Pattern – It is the consistency of the decision-making over time.
–Position – Indication by which the organization “locates” itself within its external and competitive environments and the market segments it serves.
–Ploys – These are the competitive moves or competition strategies de-signed to maintain, reinforce, achieve, or improve the relative competitive position of the enterprise business within its sector and markets.

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Overcoming The Performance Measurement Gap
•In practice, an intended strategy is realized to a lesser or greater extent. How well an organization realizes its intended strategy defines the organization performance. Implicit in this are a criterion of success and an actual measure of success.
•A “performance measure” is “a criterion of success stated in relation to the realized strategy or in relation to its intended strategy.” It is the lens through which we “see” an organization.
•The goal of a “performance measure” is to enable improvement. It must reflect how value is created and destroyed in the organization.
•A “performance measure” should not be confused with a “performance indicator,” which is an actual specific measure (quantity or quality) of success.

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•The purpose of Performance Measurement is not to collect data! It is not about numbers and calculations; it is about understanding outcomes, drivers, trade-offs, etc. and how to use this understanding for continuous improvement of the organization as a whole.
•For example, for the following commitment in an intended strategy:
•“Prepare the assembly business unit for the transition to a continuous improvement maturity stage by ensuring the executives at all levels understand their new responsibilities and accountabilities.”
•The performance measures are:
•Training is provided to executive managers across the assembly b.u.
•A communications plan is created for the assembly b.u. and is used to educate managers and employees on continuous improvement maturity.

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•Management is based on Performance Measurement, and all other organizational activities and drivers for continuous improvement are dependent on the Performance Measurement.
•“No organization can be any better than its performance measurement system.”
OPERATION
MANAGEMENT
PERFORMANCE MEASUREMENT
RESULTS
HR & TRAINING
INFORMATION TECHNOLOGY
QHSE
CUSTOMER SERVICE
R & D
MATERIALS
MANUFACTURING
LOGISTICS & DELIVERY

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•Effective performance measurement serves many functions important (Dean Spitzer) for realizing a continuous improvement transformation. It:
–Motivates improvement
–Clarifies performance expectations
–Increases the visibility of performance
–Enables goal-setting (goals are targets set on measurement dimensions)
–Forges increased strategic alignment and commitment
–Increases the holistic perspective at all levels
–Focuses attention on what is most important
–Promotes accountability (without performance measurement there can be no accountability)
–Increases the frequency and accuracy of feedback
–Provides timely early-warning signals and facilitates prompt and appropriate corrective actions
“Let's not look at it as failure. Let’s look at it as a chance to do better.”

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Overcoming The Strategic Alignment & Commitment Gap
•As you move down in the organization, you will find that often over 50% of the activities been performed have little relevance to the organization intended strategy, with functions pursuing their own self-interest and often working at cross-purposes. You will notice:
–High turnover and low morale
–Passive-aggressive behavior
–Inability to articulate strategy
–Reduced accountability
–Sub-optimal teamwork
–Little upward information flow
–Fragmentation and duplication of activities
–Inappropriate or misguided initiative
–Short-term focus on results
–Etc…
C’mon, put some muscles into it… We are not getting anywhere!

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•If you want sustained growth & profit you must know how to align the components of your organization.
•Alignment relates to “the degree to which the components of an organization are arranged and focused to optimally support the realization of its intended strategy.”
•The components that must be “aligned” include:
–The performance measures, goals, skills and capabilities, and the hearts, minds, and behaviors of both the people doing the work and organizational leaders;
–The work being completed (i.e. operational work, key business projects and processes); and
–The plans (e.g. learning and development/human capital plans), tools and technologies, and resources that support the work being completed.

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•Commitment relates to the human involvement through innate willingness to follow and contribute to achieving alignment plans.
•It is the employees at every organizational level who will ultimately determine the effectiveness of an organization strategic alignment, because alignment is of no value without human involvement.
•It is the employees, as human beings, not machines, who act upon the technical specifics resulting from translation of the intended strategy demands.
•Without people, alignment plans would just be kept in a repository or in a report and not be executed at all. The human involvement brings crucial factors like attitudes, motivation, capabilities, and commitment into implementation of alignment plans.

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•Effective strategic alignment and commitment serves many functions important for realizing a continuous improvement transformation. It:
–Reduces operation costs by ensuring efficient use of scarce resources
–Focusing efforts towards achieving the intended strategic goals: there is no point of executing activities that should not be there in the first place.
–Clarifies performance expectations, especially since members of the organization have a keener sense of how they contribute to the results as a whole.
–Motivates execution of improvement efforts
–Increases the holistic perspective at all levels
–Focuses attention on what matter the most
–Promotes accountability and commitment

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Overcoming The Process Improvement & Management Gap
ORGANIZATIONS ARE DROWNING IN PROCESSES & DATA
•Processes are the patterns of interaction, coordination, communication, and decision making through which employees create value for an organization by transforming inputs of resources into products and services of greater worth.
–Processes include not just manufacturing processes, but those by which product development, procurement, market research, budgeting, employee development and compensation, and resource allocation are accomplished.
•Processes are defined or evolve de facto to address specific tasks. This means that when managers use a process to execute the tasks for which it was designed, it is likely to perform efficiently. But when the same seemingly efficient process is employed to tackle a very different task, it is likely to prove slow, bureaucratic, and inefficient.

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•One of the dilemmas of management is that by their very nature, processes are established so that employees perform recurrent tasks in a consistent way, time after time. To ensure consistency, processes are meant not to change – or if they must change, to change through tightly controlled procedures.
•The principle that the resources that support the work being completed, the quality, and the execution time associated with process steps can be optimized methodically is the basis of “Process Improvement” philosophy.
•And the principle that a methodic management of resulting processes could de-sign the best rational way of performing any activity within organizations, which would lead to enhanced productivity and profitability, is the basis of “Process Management” philosophy.

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•Four keys to transforming “Process Improvement & Management”. The extent to which an organization can make effective use of the four keys is the extent to which it can tap into the true prospective of potential stage of process improvement and management, which will enable “Projects & Operations work excellence,” and which will, in turn, enable “outstanding enterprise business performance” – the ultimate goal of “Continuous Improvement” maturity stage.

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Understanding The Sustainability Driver for C.I.T.
•Here, sustainability relates to the degree to which an organization incrementally and in an ongoing basis creates value to its customers and shareholders, captures value from its diverse assets (tangible and intangible), and attracts investors.
•Organizations that do not create value, by definition, destroy it; and unprofitable organizations are wasting both the money of their shareholders and the organization resources and assets.
•Value is created when the right actions are taken and the right investments are made. Value is destroyed when the wrong actions are taken and the wrong investments are made. Value leaks or evaporates when nothing is done.
“The committee's decided to ban further research until it can be proven your 'wheel' poses no threat to customers and shareholders needs, society or public health.”

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Reference: ISBN 978-3-642-35904-0
•This book enables enterprise business leaders - from CEOs to supervisors - to understand what “Continuous Improvement” is, why it is probably the best answer to improved business performance in years, and how to put it to work in the unique environment of a specific organization.
–The book examines what is at the core of "Continuous Improvement" and delves deeper into the elements and constituents necessary to take an organization to the next level to ensure its continued, long-term existence.
–It provides guidance to enterprise management and to professionals engaged in the implementation of a "Continuous Improvement" initiative and enables them to structure and manage its implementation successfully.

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Executing The Activities Necessary To Achieve A C.I.T.
•For an organization not just to perform excellently, but to perform excellently consistently there must be improvement efforts in both the “Continuous Improvement” philosophy and break-through improvement in execution.
•Even those who truly understand the essence of “Continuous Improvement” transformation and “Do The Right Things” often struggle when it comes to execution – “Do Things Right”.
•Execution requires a framework and a systematic methodology for executing rigorously the activities associated with the determining factors (i.e., drivers) of “Continuous Improvement” transformation considered: discussing the “How’s” & “What’s”, questioning, tenaciously following-through and ensuring accountability.

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•An organization creates value as it transform inputs of resources into products and services of greater worth to its customers. The processes, i.e. the patterns of interaction, coordination, communication, and decision making, through which an organization accomplish these transformations are executed within projects and operation work.
•The patterns of interaction, coordination, communication, and decision making are not goals in themselves within an organization, but they are mean to achieve operations and projects work.
SCARCES RESOURCES
DRIVERS OF CONTINUOUS IMPROVEMENT
PROJECTS AND OPERATION WORK
CUSTOMER VALUE
CONTEXT
FOCUS
INTEGRATION
INTERACTIVITY

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•By their very nature, processes are established so that employees perform recurrent tasks in a consistent way, time after time. They are defined or evolve de facto to address specific tasks.
•Inefficient or ineffective processes increase operational costs within organizations. To ensure consistency, processes are meant not to change, although the outcomes of their execution will exhibit variations as results of variations inherent in the input of resources.
• One of the objective of management is to remove inefficiencies in processes and optimize methodically the resources that support the work being completed through those processes, the quality of their outcomes, and their execution time.

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“I can feel it! We are about to make a huge breakthrough.”
•Process improvement, is a complex undertaking requiring a number of different technical skills, knowledge, tools and competencies. It must be carry out as a well specified project within the organization.
•A process improvement project serves three functions important for realizing an organization intended strategy.
–It focuses attention on one goal or purpose that must be completed by a specific time, within budget, and according to specifications.
–It brings together people committed to a common purpose and working interdependently to produce exceptional and synergistic results for which they hold themselves mutually accountable
–It provides the structure for learning and building both knowledge of customer value and knowledge of the means of production for customer value simultaneously

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•There are three operational aspects that form the basis of a process:
–THE PURPOSE, which provides a sense of direction and focus to the resources that support the activities being completed. It also provides a sense of discovery and a sense of destiny. These add a social edge to the process and are an objective that the people resources perceive as being inherently valuable. Any situation in which the purpose remains unspecified will rapidly deteriorate into chaos.
–THE METHODOLOGY, which relates to a constructive generic plan and guidelines for achieving the defined purpose. It may entail a description of generic discrete elements (tasks, actions, or steps) or, metaphorically, may be extended to explications of philosophically coherent concepts or theories as they relate to a particular project or operation work. Until the methodology has been established, the “purpose” aspect is merely nothing more than wishes and hopes.
–THE PERFORMANCE MEASURE, which is a criterion of success stated in relation to the activities being completed by the process or in relation to its purpose. The goal of a “performance measure” is to enable improvement.

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1. What is intended to be accomplished?
2. How will it be recognized as is an improvement?
3. What alterations to the system can be made?
•Within the context of project management, these three operational aspects also form the essence of both (1) how to get things done and (2) the systematic methodology for process improvement.
•The PDSA model for improvement is intended to drive all process improvement projects through its Plan – Do – Study – Act (PDSA) Cycle, and by persistently asking a set of fundamental questions around the three operational aspects.
•The PDSA model is a framework for application and generation of knowledge, application of skills, tools and techniques to “process improvement” project activities to meet the “process improvement” project requirements.

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•Five key phases with corresponding processes govern the management of a “process improvement” project within the PDSA model:
–“Initiate” Process Group
–“Plan” Process Group
–“Do” Process Group
–“Study” Process Group
–“Act” Process Group
•These five Process Groups have clear dependencies and are performed in the same sequence on each “process improvement” project.

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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Initiate
•The “PDSA Initiate” lays out the foundation for the “process improvement” project.
•It defines the project by formulating preliminary answers to the three fundamental question of the PDSA model and by obtaining authorization to start the project.
•The answers to these three questions become the foundation for making all project decisions because they describe the cost-schedule-quality equilibrium and keep the project aligned with the organization intended strategy.

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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Initiate
•There are two activities involved in the “PDSA Initiate” groundwork:
–Determining the purpose, goals, and constraints of the “process improvement” project by answering the three fundamental questions of the PDSA model.
–Establishing basic project management controls.
•Get agreement on which people and business functions or external organizations are involved in the project and what their roles will be.
•Clarify the chain of command, communication strategy, and project alteration control process.
“Whoever pulls the sword from the stone will lead this project.”

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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Plan
•The “PDSA Plan” Process Group puts together the details of how to meet the project’s goals, given the constraints.
–Common estimating and scheduling techniques will lay out just how much work the “process improvement” project entails, who will do the work, when it will be accomplished, and how much it will cost.
–Along the way, risk management activities will identify the areas of greatest uncertainty and create strategies to manage them.
•The “PDSA Plan” constituent project management processes help gather information from many sources, with each having varying levels of completeness and confidence, establish baseline measurement, and develop the project management plan.

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•Effective planning of the “process improvement” project within the PDSA framework is based on a foundation of effective data collection system, and almost everything else done during the planning phase is based on that.
•Data collected (V.O.B., V.O.C., & V.O.P.) determines what the constituent processes used during the planning do, and data collection works through these constituent processes to touch every part of the “process improvement” project.
•The right sets of collected data (V.O.B., V.O.C., & V.O.P.) trigger the right planning activities – because they represent factual information from many sources with each having varying levels of completeness and confidence and from which baselines are established.

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•The data collection system is the engine that drives the “process improvement” project planning.
•The goals that a “process improvement” project sets will depend on what data (V.O.B., V.O.C., & V.O.P.) the project team collects.
•These goals, however, are really nothing more than “target values” established on a particular data collection scale.
–The data collection scale can be net profits, customer satisfaction, reduce cost, reduce cycle time, improve productivity, reduce defect rate, decrease potential risk level, stakeholder influence and interest, etc...
•If the collected data (V.O.B., V.O.C., & V.O.P.) are not reliable, the established “process improvement” project baselines and everything else will be as well.
“D.N.A. data collected show that the fuel pump doesn’t belong to this car.”
???

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•No data have meaning apart from their context: it is fundamental to understand and record the context of the data during the planning phase.
•It is the context of your data that determines how you should organize and summarize the data and plan execution of the “process improvement” project.
•The context of the collected data is everything that surrounds and affect the data and its background. It refers to the circumstances that form the setting for the project, statements, ideas, constraints, social climate, or human factors, and in terms of which it can be fully understood and assessed, and within which the data (V.O.B., V.O.C., & V.O.P.) are been collected.
“Now, keep in mind that these numbers are only as accurate as the fictitious data, ludicrous assumptions and wishful thinking they're based upon.”

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•During the data collection process, the context of the collected data should be completely and fully described. This would include answers to the questions:
–Who collected the data?
–How were the data collected?
–When were the data collected?
–Where were the data collected?
–What do the collected data represent? etc...
•Data cannot be separated from their context without risk of distortion:
–The organized and summarized data should always be presented in such a way that preserves the evidence in the data for all the subsequent decisions that might be made based on these data.
–They should not mislead the decision maker into taking any action that the he/she would not take if the data were presented in a time series.

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•Summarizing the collected data (V.O.B., V.O.C. & V.O.P.) & displaying their patterns serve two major purposes:
–To help get the “process to be improved” into a “satisfactory state,” which one might then be content to monitor if not persuaded by arguments for the need of improvement.
–To provide preliminary route to investigate what can be accomplished by operating the current “process to be improved” up to its full potential.
•Process characteristics and behavior charts (Control Charts, Run Charts, Scatter Diagrams, Frequency Plots, Pareto Charts, etc...) will help to:
–Measure what the “process to be improved” is doing and to determine when the “process to be improved” is not operating up to its full potential.
–Identify opportunities for process improvements and provide a way to continue to operate a “process to be improved” up to its full potential in the future (i.e. to control it).

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•In order for the full power of data collection system, hence project planning, to be realized:
–There must be an optimal environment for effective use of collected data (V.O.B., V.O.C., & V.O.P.).
–There must be considerable interaction, and effective and robust dialogue at each use of planning constituent processes leading to new insights about what data to collect, how to collect it, how to establish baselines, and what are the subsequent right planning decisions.
•Performing the constituent processes of the planning phase should include highly interactive and iterative (ongoing) dialogues, which are the most important aspects of a data collection system.
•These dialogues should be built on the foundation of a positive context, focus, and integration.

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•“Dialogue” is the basic unit of a “process improvement” project work. You cannot plan a “process improvement” project well without robust dialogue with customers and stakeholders.
•How people involved in a “process improvement” project talk to each other, talk to customers and stakeholders, absolutely determines how well the “process improvement” project will progress towards its objectives.
•“Dialogue” should be understood in the sense of “sharing collective meaning” or understanding, and it should be strongly differentiated from “discussion.” The word “discussion” comes from the same root word as percussion and concussion and has to do with beating one thing against another.
“This is not third grade, Jurgen. You can speak candidly and openly.”
“Remember, guys, there is no ‘I will kill you before I ever budge an inch’ on any position in TEAMWORK.”

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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Do
•The “PDSA Do” project phase is typically the longest phase of the “Process Improvement” project. It is the phase within which:
–The defined project management plan is carried out;
–Analysis of data (V.O.B., V.O.C., & V.O.P) collected during the planning phase starts.
–Deliverables are physically built and presented to selected groups of stake-holders and customers;
–Problems and unexpected observations are documented;
–In-process data (V.O.B, V.O.C., & V.O.P.), resulting from prototyping and piloting a solution, that are useful for answering the questions asked in the project plan and that can be compared to the predictions, are collected and analysis of these data starts.

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•Effective building of the “process improvement” deliverables within the PDSA framework is based on a foundation of effective analysis of data (V.O.B., V.O.C., & V.O.P) collected and summarized during the planning phase.
•To gain the maximum insight with the least effort, analysis of data (V.O.B., V.O.C., & V.O.P) collected and summarized can be done by:
–Identifying and quantifying assignable causes of variations from the process behavior charts and interviews.
–Exploring cause-and-effect relationship of assignable causes of variations
–Verifying identified assignable causes
–Examining the process steps and tasks, and operational assumptions
“Ladies and gentlemen, today we are going to get down to the nuts and bolts.”

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•Following analysis of data (V.O.B., V.O.C., & V.O.P) collected and summarized, the steps undertaken to generate improvement solutions and build each deliverable will vary depending on the type and complexity of the “process improvement” project been undertaken.
•It is critical to remember that employee buy-in is essential to success in improving the “process to be improved.”
•Employee buy-in is important to gaining agreement and acceptance of the current state of the “process to be improved,” and it is vital to the generated solutions to the “process to be improved” underperformance problems if the change process is to move forward.

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“Big surprise. The cost/benefit analysis of the potential solution cost us more than any benefit we have ever gotten from this process.”
•Once assignable causes of variations have been identified, the associated cause-and-effect relationships explored, the identified assignable causes verified, and the process steps and tasks analyzed and summarized, the project team can begin with generating and prioritizing improvement solutions to guide positive change in the days and weeks ahead.
•Subsequently, regardless of how good the hierarchy of decision criteria used to select potential solutions is, there is no substitute for developing a prototype “improved process” and piloting it; i.e. putting a solution out in front of a broad array of selected employees, customers and stakeholders to observe and measure their experience.

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•The complete prototype, as its name suggests, should model most, if not all, the required characteristics of the potential “improved process” outcomes.
•Some insights for piloting a prototype solution include, but are not limited to:
–Understanding the relationship between prediction of the potential “improved process” outcomes and knowledge of the system being affected and how these predictions build knowledge;
–Understanding the temporal effect of the potential “improved process” in the organization or system considered;
–Understanding how to integrate the potential “improved process” in the social system considered within the organization, especially when planning for implementing a prototype solution.

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•To reduce the risk of failure, piloting a prototype solution should be carried out in sub-phases, with each sub-phase growing in number of employees and customers affected by the potential “improved process” and the distribution of users throughout the organization.
•The whole purpose of such sub-phases is to slowly roll out to employees and customers throughout the organization and externally to validate that the prototype solution and assumptions are accurate and that they can be successful in the live environment with minimum risk.
•Typically, each successive sub-phase broadens user involvement (e.g., pilot first to a team, then to a department, and then to a division).

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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Study
•The purpose of the “PDSA Study” project phase is to:
–Provide an answer to first and the second fundamental questions of the PDSA model.
–Sustain the deliverables built, over the long term; and
–Build new knowledge through learning from the deliverables built.
•It is not enough to determine that development and piloting of a prototype solution resulted in improvement during particular pilots.
•As the project team builds knowledge about the new “improved process,” it will need to predict whether the change introduced by the new “improved process” will result in improvement under the diverse conditions it will face in the future.
1. What has been built and accomplished?
2. How will it be recognized as an improvement?

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•The “PDSA Study” project phase, brings together and synthesizes the base-line data collected in the “PDSA Plan” project phase and the in-process data resulting from the pilots conducted in the “PDSA Do” project phase.
•This synthesis is done by comparing the results of the V.O.B, V.O.C., and V.O.P. data analysis to the established baseline data and to the predicted results.
–If the results of the pilots match the predictions made in the “PDSA Plan” project phase, the project team’s degree of belief about their knowledge is increased.
–If the predictions do not match the data, there is an opportunity to advance their knowledge through understanding why the prediction was not accurate.

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•The key activities required to study each deliverable are carried out through the following key constituent project management processes:
–Collect Retrospective Data – V.O.B., V.O.C., & V.O.P.
–Summarize Overall Data and Display Patterns
–Analyze Data and Validate Process Performance
–Develop Process Control Plans
–Reinforce a Positive Context of Improvement
–Continuously Monitor New “Improved Process” and Context
•The “PDSA Study” step is also the phase within which the built deliverables are sustained and presented to the customer for acceptance.

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•The “PDSA Study” project phase retains a deep focus on learning throughout its range of activities.
•It takes on a fresh perspective through the use of a set of systematic observation techniques and activities, focused on ongoing monitoring and control techniques that will help the organization continually collect performance data that can be amassed in order to continuously operate the new “improved process” predictably and on target.
•As the project team builds knowledge about the new “improved process,” it will need to calculate whether the change introduced by the new “improved process” will result in improvement under the diverse conditions it will face in the future.
“This prediction from the prototype has a margin of error of plus or minus fifteen...”
“…fifteen class-action law suits that would be brought against the company.”

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Executing The Activities Necessary To Achieve A C.I.T. – PDSA – Act
•The “PDSA Act” Process Group encompasses the processes needed to:
–Act upon the built and studied deliverables
–Implement the new “improved process” permanently or stop its implementation
–Determine what modifications should be made to the system affected, and
–Formally close the project.
•Of all the PDSA project phases, the “PDSA Act” phase is the most crucial in the life of a “process improvement” project as it can determine whether, ultimately, the project is a success or failure.
1. The deliverables have been built and accomplished 2. The new process has been recognized as an improvement 3. What alterations to the organization can be made?

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“We need to write some kind of health and safety policies and procedure to go with this thing.”
•Once improvements have been validated, practices and procedures that act as a model or guidelines need to be established to ensure that the change in form, quality, or state, over time from the original “process to be improved” to the new “improved process” becomes the normal way the business is run.
•Organizations that effectively create standard practices and procedures and use these standards exhibit many of the following conditions:
–Management requires the use of standards, especially to document improvement efforts.
–Different employees and shifts use the same standards and expect similar results.
–Employee training focuses on the documented standards for materials, methods, and equipment.
–Critical elements and impact on internal and external customers are discussed.

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•The constituent project management processes, used to perform these activities during the “PDSA Act” project phase, include the following:
–Implement “Improved Process” and Install All Deliverables;
–Complete Project Documentation;
–Reinforce Mechanisms and Build Capability;
–Create Standard Practices And Procedures;
–Release Resources;
–Settle Contractual Aspects And Final Accounting
–Conduct Post-Implementation Review;
–Write Final Report;
–Celebrate Success and Share the Wealth.
•Once the improvement is in place and the organization is reaping its benefits, it is important to celebrate its success.
“And right there, the ‘improved process’ was implemented and rolled out...”

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•By celebrating success as it happens, no matter how big or how small, everyone involved will not only feel appreciated and important, but motivated and driven to succeed further.
–Celebrating success brings optimism and helps improve the context of the system affected by the implementation of the new “improved process.”
–Acknowledgment of a job well done promotes the spirit we all want to see in our employees and co-workers, it instills pride in their work, and it fosters a sense of worth that culminates in a workforce that looks for problems and willingly brings forth solutions.
–Participation on a team will no longer be viewed as an added burden to an already heavy workload, but an honor and a responsibility.
“I want to thank each of you for coming through in the clutch, putting in some overtime and seeing this process improvement project through to completion.”

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Reference: ISBN 978-3-642-35901-9
•This handbook provides a comprehensive and detailed framework for the implementation of "Continuous Improvement" and Lean Six Sigma in a professional project management environment. For this purpose the book brings together Lean Six Sigma and the PMBOK standard for project management.
•It provides an integrated approach, which can be used for both transactional and manufacturing businesses to better define ways to reduce costs, enhance processes ,and achieve faster implementation and new product or service development.
•The reader is guided carefully and reliably through the detailed procedures introduced in this book using a comprehensive, conceptual and practical well-balanced approach.

Awareness Lecture Series - Continuous Improvement Transformation

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