Last week’s blog, ‘2 Challenges with Best Practices’ generated a lot of very thoughtful and interesting feedback and interest so I thought I would take the opportunity to continue this discussion. This seems to be a topic that many people have thought about and I am very happy to continue down this path. I thought I would start with a statement that I think clearly, and simply, defines what many have agreed to be the challenge with ‘Best Practices’ and highlights the necessity to view this as a ‘Best Guidelines Business Process Improvement Program’! When everyone in the industry is doing it, then something new and better has already come along!
These Business Process Improvement initiatives are usually started as a result of some type of impact to the business. These business impacts can come in many shapes and sizes; from a desire to reduce cost to a merger / acquisition. No matter what the initiating factor, it provides a great opportunity for strategy, process and objectives alignment from the executive leadership with all levels of the operation. The Business Process Improvement program is a critical piece of a successful continuous improvement program. The Business Process Improvement program provides the mechanism to institutionalize a continuous improvement process and methodology. It is important to understand that there can be no ‘industry standard best practices’ that can be implemented ‘as is’ in any organization. Many people in the discussion agree that the ‘best practices’ are simply guidelines, or a starting point, to use in developing the business process improvements that are a best fit for the individual organization.
In addition, the continuous improvement process itself also provides the mechanism to measure strategic decisions and assumptions in order to revise as necessary to promote a continuous improvement culture. Joris Claeys provided a link to a McKinsey study on behavioral strategy with some surprising statistics. The article stated that a survey of over 2,200 executives found that 60% of the respondents felt that bad decisions were about as frequent as good decisions! I think that this statement provides the most compelling reason for an organization to initiate a business process improvement program based on a measurable continuous improvement initiative. Without a continuous improvement program to identify and correct the bad strategic decisions there is a very high probability that the strategy will be ineffective or detrimental to the enterprise!
I think there are some critical factors to consider and include in a successful improvement initiative.
- Culture is a critical ingredient to a successful continuous improvement initiative (I am focused here on successful continuous improvement initiatives and it goes without saying that culture is a critical ingredient to the success of any initiative.) It is critical to recognize market, enterprise and departmental cultural mores in order to develop an effective process improvement mechanism. In fact, a successful initiative very often involves cultural changes as a requirement for success.
- Clear, concise and measurable Service Levels (SLAs) must be defined as a method to measure the impact of the modifications. In addition you must define the Key Performance Indicators and their metrics as the means to measure the SLAs.
- Clear and measurable strategic objectives must be defined and agreed starting with the leadership to ensure alignment across the organization. These objectives should have success factors defined so that the organization can determine when they have achieved the objectives. In addition the strategic objectives should be regularly reviewed to ensure that they are appropriate and achievable.
- A change management procedure is critical to ensure that the improvements take into account organizational and procedural requirements for validation, training and scheduling.
In addition to providing a mechanism to align the organization, objectives, measurements and culture, this program provides a mechanism to document the business processes that will act as a tool to support operations process training and new employee on-boarding in addition to the improvement definition. This documentation provides a means to overcome the challenges involved with ‘tribal knowledge’ sharing and utilization. This is a key benefit so that the organization is not dependent on the memory and participation of specific resources that retain the ‘tribal knowledge’ for how a process or operation works.
Now for the audience participation portion of this program……
What is your experience with the benefits, risks and costs of continuous improvement programs?
Do you view ‘tribal knowledge’ as a hurdle in your organization?
Do you have strategic objectives defined and metrics to identify when you’ve achieved the objectives?
How do you currently align your organization?
How do you account for your cultural requirements?