April 2015: Executive Corner

Execute change with process focus

Columnist Reg Carter

Columnist Reg Carter

We last discussed our “Top 5” operational drivers that are most impactful on daily business success. The five concepts we believe essential to operate any business or organization, large or small, for-profit or nonprofit, public or private, are: customer focus, process focus, employee involvement, data analysis and leadership commitment.

This brings us to “process focus.” Successful businesses have processes in place that run well. Less successful businesses have processes that run “not so well.” Running well means that you consistently satisfy customer requirements while hitting revenue and profitability targets.
“Not so well” means that you miss customer expectations or, if you meet their expectations, you do so inefficiently, which eats into profit. The message is simple. Anytime a process goes astray, you pay the price with customer dissatisfaction, inefficiency, or both.

First, realize that everything is a process or a system. Whether it’s a manufacturing assembly line, the intake of patients to an emergency room or the paper flow of your customer billing process – everything is a process. Accepting that premise, the technique we use to improve a process comes from the Lean Manufacturing System used by most successful manufacturers.

Developed by Dr. W. Edwards Deming, the father of Total Quality Management, it is based on the concept of Plan-Do-Check-Act. The philosophy of continuous improvement is to embrace “finding problems” as opposed to implementing a “work around” and other temporary solutions that do not address the root cause of a problem. The concept is a simple, effective way to solve problems and find the root cause.
It is a continuous cycle, one that should never end. We live and operate in a world that continuously changes and is doing so ever more rapidly. What works best this year may not work best next year.

Columnist Bill Murray

Columnist Bill Murray

Here’s the process in more detail:

Step One: Plan — Define the process you wish to analyze. A common mistake is to select a process that is too large. For example, in our organization we wanted to analyze our customer support system from the first time we meet a potential customer through project completion and final billing.

We quickly determined that this was too broad. We asked ourselves what subsections of this process are causing us, or our customers, the greatest issues? We realized that the majority of our problems were hiding in the system we used to process a client project. Together, we created a Value Stream Map, a visual representation of every step in the process. Many lean practitioners see value stream mapping as a fundamental tool to identify waste, reduce process cycle times and implement process improvement.

Step Two: Do — By seeing each step of our process through value stream mapping, we determined where opportunities exist for improvements. We work to implement changes that develop from our value stream mapping exercise: the “Do” part of Dr. Deming’s cycle. Before you implement change, it’s important to define how you’ll measure the change. An old mantra in continuous improvement states that “you cannot fix what you cannot measure.”

Step Three: Check — Once you have implemented change, you need to know how effective it was. Rarely does a change correct a process 100 percent, nor is it expected to. Analyze results using measurements you defined in the previous step. If it didn’t work, why didn’t it? Can you tweak the process and continue forward or should you step back and re-analyze the process?

Step Four: Act — Implement the changes that you identify in the previous check phase. What did you learn during this first cycle? What worked? What didn’t work? What percent improvement did you realize? Then start the process all over.

The key word in process focus is continual. As change in the world around us continues to escalate, so must we continually and vigilantly focus on our business processes so we successfully achieve another important aspect: customer focus.

Reg Carter & Bill Murray are executives with CITEC Business Solutions, a Canton-based nonprofit economic development consulting organization, with more than 60 years of business and management experience between them. Their column appears quarterly in NNY Business.