First Friday Book Synopsis

"…like CliffNotes on steroids…"

What the C-Suite Needs to Do for Process Improvement


Brad Power

Here is an excerpt from an article written by Brad Power for the Harvard Business Review blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.

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As I said in a previous post, not all companies need to improve the same processes to the same degree. But every company has some processes that are more important than others, and history has shown time and again that improving those can bring big increases in competitive advantage. Yet many companies make major investments to improve the right processes, but fail to realize the benefits.

Why?

From my experience with dozens of companies over the last 30 years, I see three factors that contribute much more than others to the failure of process improvement initiatives. The first is that organizations naturally tend to optimize within functions and departments, rather than across them. The second is that, without information on the impact of their work on company goals, frontline workers can’t properly contribute to improving them.

The third process improvement killer is this: If top managers issue edicts for improving an operation, they can achieve some short-term payback, but they can’t realize the more substantial benefits that workers can generate if they identify changes themselves.

These conditions will fester unless senior management takes three deliberate actions:

[Here’s the first.]

1. Listen to how well your organization meets customer expectations.

Because of the way they are organized, most companies are naturally good at optimizing performance within functions — marketing, sales, and operations, for instance. But substantial process improvement can’t occur unless it cuts across these functions. By focusing on the customer experience and looking for ways to improve it, managers can compel the organization to find problems and solutions which transcend the vertical boundaries.

For example, at amazon.com, the $25 billion online retailer, every new senior executive must spend time in the firm’s fulfillment centers in his first year. And every two years they — including CEO Jeff Bezos — must spend two days in customer service dealing with shoppers’ problems and issues.

To focus on end-to-end customer needs, senior leaders should spend time with customers asking about service to uncover problems and solutions. However, since they usually don’t have much time for process improvement, senior leaders need to identify the company’s four to eight core processes (e.g., order fulfillment, service request resolution, product development) as seen from the customer’s perspective and assign process owners to manage them. Companies such as Shell, Sloan Valve, and Air Products have done so. Overlaying the process dimension on the functional organization creates a matrix that mitigates the dominance of the functional view. Request: How have you gotten your organization to listen for customer problems across functions, define customer-centered process performance measures, and encourage behaviors for process improvement?

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Brad Power (bradfordpower@gmail.com) 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?). He is currently conducting research with the Lean Enterprise Institute.

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Tuesday, December 21, 2010 - Posted by | Bob's blog entries | , , , , , , , , , , ,

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