As I argued in my last post, the biggest challenge to sustaining process improvement in an organization is getting and retaining the attention of top executives. Without it, investments in process redesign, training, and systems changes won't get funded. Worse, turf issues between departments and functions — critical to cross-functional process improvement — won't get resolved.
In particular, I've found that four traditional mindsets and behaviors get in the way:
- Work Harder — the urge to fix service problems by creating workarounds (fire fighting, adding complexity) or placing blame.
- Keep Wall Street Happy — an expedient, short-term focus on quarterly (or monthly or weekly) financial results.
- Stress Functional Excellence: — a narrow, hierarchical tendency to design work from the inside-out by starting with functional or local optimization.
- Compete on Bold Moves — focus on blockbuster products, sales innovations, or big deals; in other words, put a premium on heroes and heroics.
But what's to replace those mindsets? Unless we can clearly articulate what executives should support, we can hardly blame them for not supporting it. Here are four alternatives:
- Work Smarter: When we have service and delivery problems, we should work smarter — not necessarily harder — to redesign processes and eliminate problems permanently (often called "root cause problem solving"). When service and delivery problems occur, we should think twice about solving them by heroic efforts, working longer hours, putting more people in the problem area, and working around the problem. And we should also watch out for tendencies to believe that people doing the work are the source of all process problems. Too often we use the "Five Whos," looking for who caused the problem and blaming them, rather than the "Five Whys," looking for the systemic source of the problem.
- Be a Steward of Operational Capabilities: Senior executives must own the long-term development of organizational capabilities and customers' experiences, operational strategy, and process innovation (changing how we work). Some managers link process improvement with cost reduction. So when times are good, they aren't interested in it. When times are bad, they look at quicker fixes such as reducing travel, squeezing suppliers, cutting back on marketing, freezing wages and headcount, or layoffs. Operational capabilities are built over time, and require ongoing commitment. Jack Welch, former CEO of GE, who is regarded as the father of the "shareholder value" movement, has said the obsession with short-term profits and share price gains that has dominated the corporate world for over 20 years was "a dumb idea."
- Listen to the "Voice of the Customer": Defining how we organize our work starts with listening to the customer — not with studying how we are organized today. Delivering the experience our customers want (and even demand) should ultimately guide how we work as a team across functions and departments. Most senior executives believe that work is organized and delivered by functions and departments, and that functional and departmental excellence therefore ensures performance. They don't reflect on the big picture — that while each function and department may be doing a good job, the overall (cross-functional, "end-to-end") process may not work well at all; it might even be dysfunctional, so to speak.
- View Process Innovation as Strategic: Superior financial performance comes not just from excellent products and services, but also excellent processes. This is especially so when a company isn't a leader in product innovation. Through the relentless pursuit of improvements in time, cost, quality, service and the removal of waste, process innovation can give us competitive advantage. Some senior managers believe that if they get the right people in a few key roles, process improvement will follow. They believe that their elite professionals (such as doctors in hospitals, traders in trading organizations, and software engineers in software companies) drive the performance of the organization. These senior managers don't consider that the processes that people work within play a critical role in their potential effectiveness and efficiency.
How can you change executive mindsets to propel process improvement? Here are two examples of companies that have:
- Grainger, a $6 billion distributor of industrial supplies, wanted all of its managers to buy into continuous improvement. It defined seven clear behavioral expectations, including "Leaders determine performance metrics from the customer's perspective", and "Question or stop non-value added work." Each manager assesses himself or herself against these behaviors, is also assessed by his or her boss and a coach, and prepares an individual development plan.
- E-Z-GO is the world's largest golf cart manufacturer and won the Shingo Prize for Operational Excellence in 2009. E-Z-GO explicitly works with managers on such behaviors as integrity, managerial courage, trust, driving for continuous improvement, business acumen, and peer relations. The company uses film clips, quotes, parables, and stories to drive those points home.
Have you seen executive mindsets and behaviors that enabled — and disabled — continuous improvement?
Brad Power is a consultant and researcher in process innovation. His current research is on sustaining attention to process management — making improvement and adaptation a habit (even fun?).