A study conducted by Industry Week a few years ago indicated that 74% of companies are not making good progress with Lean – they simply are not achieving desired results. Other studies suggest that about 60% of all Six Sigma initiatives fail to yield desired results, and I imagine that failure rates are similar with other process improvement methods. This is occurring, all the while, as organizations are facing accelerating levels of change, increasing customer demands, and an ever-increasing need to improve (see my column last month on the need for change).
So what gives? Why are so many organizations trying to improve but so few actually making sustained gains? Why are improvement methods falling short, and what can organizations do about it? I believe there are several reasons why improvement efforts aren’t working, but I also believe there are solutions…
In a Wall Street Journal article last summer, Satya Chakravorty posed an insightful question: “what do weight-loss plans and process-improvement programs such as Six Sigma and ‘lean manufacturing’ have in common? They typically start off well, generating excitement and great progress, but all too often fail to have a lasting impact as participants gradually lose motivation and fall back into old habits.”
Chakravorty studied process improvement programs at large companies over a five year period to gain insight into how and why so many of them fail. What he found he described in a metaphor – that when confronted with increasing stress over time, these improvement programs react in much the same way a metal spring does when it’s pulled with increasing force; that is, they progress through “stretching” and “yielding” phases before eventually failing entirely. Here is a paraphrase of how Chakrovorty’s metaphor goes…
When a metal spring is pulled initially, it stretches to accommodate the pressure – just like how employees eagerly tackle new tasks and challenges early in a process improvement project. Improvement experts (Master Black Belts, Lean Sensei’s, and the like) are assigned to projects, guiding and training a team. And senior leaders pay close attention to initial projects, giving the organization signals of the importance of these initiatives. Processes are changed and results often immediately improve as employees begin to transition to a new way of operating. Leaders celebrate the accomplishments by rewarding improvement teams, success is declared and widely communicated.
But then something usually happens: attention gets diverted. The Six Sigma (or Lean or XYZ process improvement) expert moves on to another project, and senior leaders begin to turn their focus onto another process to be improved and other work groups to tackle it. Organizational priorities shift (or at least appear to have shifted), and the employees involved with the initial improvement effort begin to struggle to maintain their original gains. Why? Chakravorty asserts that it’s because they often lack the skills themselves to analyze and implement additional improvements (now that experts have moved on) and they lack the direction from senior leaders on what to do next as well as the support to make things happen. Inevitably, some – perhaps many – employees begin reverting back to old habits, much like the individual on a weight loss program begins to skip workout sessions when other priorities demand attention.
Process performance stops improving, and in some cases, starts to regress. Team members get discouraged, and they eventually stop caring about the improvement effort (especially if it’s not tied to their performance goals). Team members are unable or unwilling to tackle improvement challenges, and the effort – much like the metal spring after much stretching and yielding – ultimately collapses.
Have you seen this sequence of events in your improvement efforts? Unfortunately, it’s all too common, if 60-74% of process improvement efforts fail. But Chakravorty’s research also gives us hope: he identifies four powerful insights on how to improve process improvement efforts. Here are his (plus some of mine own at the end):
* First, organizations definitely need a process improvement skillset, either in-house or from hired consultants. And those experts need to be involved for longer periods of time, as knowledge and expertise is transferred to managers and employees within the process. Certainly, cost is a consideration, but perhaps part-time experts dedicated to several improvement efforts/teams could spread this investment over additional processes and over a longer period of time.
* Second, incentives need to be fully aligned in making the process improvements stick: performance appraisals need to be tied to successful implementation of process improvements for managers, process improvement teams, and for workers directly involved in the new process. And rewards need to be longer-term, focusing not just on the activity of making the process changes and on early wins, but also on sustaining performance over the long-term. This is the only way changes will be “hardwired” into the organization.
* Third, keep the improvement teams small (Chakravorty recommends six to nine members) and the improvement project timeline tight (Chakravorty recommends six to eight weeks). In Chakravorty’s research, the bigger the team, the greater the chance members will have competing interests and the harder it is for them to agree on goals. And the longer it takes to implement, the more opportunity there is for distraction – organizations lose focus, and people and resources can (and will) get diverted to other projects.
* Fourth, leaders need to directly participate in improvement projects, not just support them or sponsor them. Not only will this give executives a firsthand look at what’s working and what’s not (and therefore the ability to make quicker course-corrections and resource adjustments, as needed), but his/her involvement sends a stronger signal to the organization of the importance of their work and the importance of the changes.
In addition, I offer six more factors that increase the odds of success with improvement efforts:
* The organization needs to recognize that successful, sustained improvements require cultural changes, not just changes to process steps and systems. They usually involve people, and therefore require all of the principles of effective change that I referenced in last month’s column:
Give people control
Ease people into change
Make change relevant
Acknowledge that change takes effort
Let go of the past
Mobilize the crowd
Be aware of unintended consequences
* Organizations need to focus not just on specific process improvement projects and initiatives but on hardwiring the changes to processes, systems, and behavior. This is why frameworks like the Baldrige Criteria for Performance Excellence are so valuable: they put process improvement projects in the context of the larger organizational system, helping leaders to identify alignment and integration points, gaps in resources, and tradeoffs between various parts of the system. I’ve often said: Lean and Six Sigma can get you to pretty good, but they won’t get you to excellent because they only focus on certain parts of the whole.
* Chakravorty suggests having shorter project cycles (and I agree), but at the same time, organizations need to keep a long-term view of improvement. Indeed, improvements may be a series of short-term interventions in the context of a much larger change effort. This is challenging, because Americans (and maybe it’s all people) are way too focused on the short-term – this quarter’s financials, 90-day action plans, and so forth. While short-term focus is good at building momentum and accelerating action, sustained improvement initiatives need to be managed over a longer time horizon. For example, don’t just reward improvements over the first 90 days or even first year, but reward improvements several years into the future – reward people for sustaining the gains. Organizations will find that momentum builds, and a culture of improvement will germinate.
* Pick the right process improvement tool(s). Lean is good for eliminating waste; Six Sigma for reducing variation; scorecard for monitoring performance against strategy; ISO for ensuring minimum standards of performance; and so forth. You’d rather not have a screwdriver when you need to pound a nail. Appreciate the strengths and limitations of each tool, and use the right tool to make the type of improvements that you desire.
* Learn from other organizations that are making similar improvements – there are literally tens of thousands of other organizations using the same improvement tools to make similar process changes. With today’s technology and social media, we have greater information availability and much more accessible insights to process improvement. And with powerful networks (such as our own Performance Excellence Network), you can much more easily participate in knowledge exchange, best practice sharing, and learning through benchmarking. Visit our Improvement Clearinghouse (for hundreds of articles, whitepapers, and links), join our blog discussions on LinkedIn, attend our knowledge forums (or reach out to us and/or our partners directly) to get access to other great ideas that could be used to improve your processes.
* Finally, process improvement methods need to be evaluated and improved themselves. After each Six Sigma deployment, after each Kaizen event, after each Lean 5S project, and after each PDSA cycle, gather some data on how the improvement effort itself worked. How did the team work, what process results were achieved, how did the tool(s) work, how did training go, how effective was communication, and so forth? Those insights should be incorporated back into improving the improvement method itself, so that future projects, future improvement efforts are done with more precision, more effectiveness, and more efficiency. Indeed, this close-loop thinking creates a culture of accelerating, more sophisticated improvement. In fact, it creates a learning organization.
The question all organizations face in today’s environment of accelerating change is not whether your processes need to be improved, but rather which ones, by how much, and by when. And given that 60-74% of process improvement efforts fail, the issue is not just WHAT to improve but HOW to make the improvements. A little bit of effort up front to select the right improvement tools and to build the right improvement infrastructure and supporting culture will help organizations considerably in the downstream execution of improvement initiatives. In other words, it will improve how your organization improves.
BTW, if you’re interested in a half-day discussion on best practices related to training and deploying Lean Six Sigma, consider our Lean Six Sigma Forum December 5 in Rochester.
Yours in Performance Excellence,
Brian S. Lassiter
President, Performance Excellence Network (formerly Minnesota Council for Quality)