For the past two decades there has been a push among Western companies to implement Continuous Improvement programs in order to support the bottom line. This push has consisted of a plethora of programs such as Total Quality Management, SPC, Lean/ Six Sigma and many other programs. Unfortunately, most CI programs fail to create any positive impact because of misunderstanding of the role of such programs, lack of focus in the deployment of CI resources, and misalignment of the goals and rewards of performance improvement.
In majority of the cases, the CI push comes from the executive level and is pushed down through the organization. This is fine as long as executives understand that effective CI programs are not limited to deploying problem-solving and process-improvement techniques. They require a major cultural shift that takes time, resources and direct involvement from all levels of the organization. Management needs to display clear commitment to continuous improvement, follow up on the progress in implementing the program, and hold people accountable for their performance.
In reality, for most organizations the sequence of events takes a different path.
- An executive realizes that the organization needs a CI program and convinces the management team to launch a program of their own.
- Next, the company hires a CI manager, typically with a Lean/ Six Sigma background, and charges him/ her with the program.
- Good CI managers recognize that culture is change required to implement an effective CI program. However, CI managers typically have no formal authority, and influence alone is insufficient to overcome the culture change pains.
- The CI manager tries to leverage the executive’s formal authority to drive culture change, which proves helpful. But as the executive’s interests shifts, the formal authority is lost and everyone goes back to business as usual.
- The CI manager is disillusioned. Some CI managers start doing “busy work” while others find different jobs. The program falls apart.
- Most dangerously, the organization becomes “immune” to other CI programs as everyone watches as another program meets its demise.
In some cases, there is commitment on the part of management and they are willing to see the program through. However, the implementation of the CI program focuses more on the resources and techniques rather than on the strategic culture change required. In these cases, companies focus on training as many Lean/ Six Sigma Champions, Green Belts and Black Belts and having them implement improvement projects as part of their training. However, these capabilities are not deployed in a way to maximize the return on investment. Easy projects with low returns end up getting the highest priority because the management focus is on developing the capabilities rather than the returns.
The misalignment between the goals and rewards of the CI programs also plays a major role in the inefficient use of the CI capabilities. Employees who go through Lean/ Six Sigma training are typically rewarded based on their attainment of different “belt” levels rather than on the impacts resulting from the improvement projects they lead. So in addition to choosing simple projects to attain the desired belt level, most employees have no incentives to start any further projects to improve performance. When I speak with clients who have implemented a continuous improvement program in their organization, I typically ask how many active improvement projects they have. They are usually surprised at how few the projects are compared to the number of “belts” in the company.
The lack of proper performance management renders most Continuous Improvement programs ineffective. At some point it becomes clear that these programs are too expensive for the little improvement they generate and they are dropped. But since their raison d’etre remains in existence, a new incarnation is adopted, only to repeat the mistake of the earlier programs.
The next installment will deal with the characteristics of successful continuous improvement programs.