These days, the word “entitlement” tends to have a negative connotation; however, in the Lean Six Sigma context, “process entitlement” is a good thing because it gives leaders a sense of possibility.
Another way to think of process entitlement is the process performance the organization is entitled to based on the current investments in the process.
Overview: What is process entitlement?
Process entitlement is the optimum process performance or resource utilization without making any changes. Process entitlement is the best performance a process can deliver given the current configuration. In other words, process entitlement defines the possibilities. For example, imagine your process makes widgets, and on an average day, the process produces 100 widgets. The 100 widget performance is based on capacity, downtime, employee variation, etc. But, one day, everything worked out exactly as planned: no unplanned downtime, the employees were on their game, and the process performance was 120 widgets.
If one day the process created 120 widgets instead of 100, this higher production value is the process entitlement because the organization invested no additional resources such as a process improvement team or systems expenditures, and the process was still able to produce at a higher-than-average rate.
3 benefits of using process entitlement
On the surface, measuring process entitlement may feel like a waste of time or energy. After all, you will measure the process during the project or the normal course of business; however, understanding and measuring process entitlement will give you a valuable data point as you evaluate your process performance or capability.
1. Objective baseline metric
While process entitlement is helpful during the measure phase of a DMAIC project, process owners and business leaders can benefit from understanding the entitlement of a specific process to support process management. In addition, process entitlement can serve as an internal benchmark for teams to strive for in their day-to-day work, and managers can use this metric to guide Harada method goals.
2. Setting realistic project goals
One of the challenges for Lean Six Sigma practitioners in the define phase is setting appropriate project objectives, or targets. On one hand, the team needs to challenge themselves to strive for perfection. On the other hand, setting unattainable project goals sets the team up for frustration and undermines confidence in the team and methodology.
3. Clear picture of process drift or instability
Northcote Parkinson famously said, “work expands to fill the time available for its completion”; I would argue that work expands to fill the capability available because we know that time isn’t the only resource consumed by processes. Understanding process entitlement provides managers and practitioners with a measure of how much the process has expanded or drifted from the current ideal state.
Why is process entitlement important to understand?
While calculating process entitlement is not always easy or efficient, understanding the process entitlement allows the practitioner to understand the process capability when setting objectives and goals for improvement.
Gives you a view of the best performance from a process
Another way to think of this is that process entitlement quantifies what is possible from the current process. For example, sports coaches use a variation of process entitlement with their athletes to push for consistent improvement based on current training routines. Process entitlement gives teams and managers a place to start coaching conversations about consistent improvement without changing the process.
Provides powerful insights for project selection
Imagine you’re prioritizing the organization’s processes for improvement and observing a process. While observing this process, you note that the process creates an average of 250 widgets per day.
Based on this observation, you follow up with a data review of past performance and note the historical production rate of 260 widgets per day, indicating there is potentially a little margin for improvement. However, if the historical production rate was 500, this process should be prioritized for review because potentially waste, variation or hidden factories are embedded in the process.
A word of caution
Process entitlement is closely intertwined with the Hawthorne effect, or when employees perform at an above-average standard because the process is being observed. A classic example of the Hawthorne effect is when drivers pointedly drive the speed limit if they know a police officer is following them. In addition, the Hawthorne effect is a form of researcher interference or when the subjects of a study modify their behavior because they are the subjects of an examination.
You may be asking yourself, wouldn’t the Hawthorne effect be a good thing since this will quickly demonstrate the process entitlement? In theory, yes; however, we need to be conscious of the Hawthorne effect because of the risk for process manipulation, such as cutting corners or skipping steps if the employees know you measure cycle time or throughput.
How to measure process entitlement
Lean Six Sigma practitioners are no strangers to measurements; using statistical analysis is our standard work. However, measuring, or more specifically determining process entitlement, is slightly counterintuitive.
Generally, Lean Six Sigma practitioners ignore individual data points in favor of the aggregate results from the sample data (except for outlier or special cause variation). Thus, when determining process entitlement, you are looking for the optimal unit of measurement for the process. For example, suppose production rate is the measurement. In that case, you will identify the process cycle with the highest production rate, or if cycle time is the measurement, look for the cycle with the shortest start to stop time duration.
To determine process entitlement, you will need the historical data (look-back or lagging indicators). Ideally, you will want to look at this data from the last process change to current because process changes may (should) change the process entitlement.
Once you have collected the process measures, review each data point as a unique metric and identify the highest performing data point. Remember, highest-performing is relative to the process and measurement you are evaluating; the target for time-based measurements is usually nominal is best (or smaller is better), but production or capacity measurements might be bigger is better.
If you performed (or will perform) a descriptive statistical analysis on the data set, an easy way to determine process entitlement is looking at the maximum or minimum value in the data range. The maximum or minimum values can be a fast and easy way to identify the best performance, but if your ideal process measurement is process performance related to USL or LSL, using the maximum or minimum values will not be helpful.
The best practice when thinking about process entitlement
While all of this conversation about peak performance and getting benefits without having to invest in improvements seems like using process entitlement is a magic bullet (of sorts) for goal setting, the use of process entitlement is slightly more complicated. Process entitlement is one data point in assessing a process performance and should be considered along with standard deviation, special and common cause variation, and organization stressors (e.g., employee well-being, equipment changes, staffing levels). Measuring and tracking process entitlement is vital to understanding current process performance capability, but it’s not the only consideration in goal-setting and project selection.
Critics of using process entitlement will challenge process entitlement in goal setting by arguing that process entitlement implies the historical performance was (a) good enough and (b) the best the process can ever do. These arguments are examples of why Lean Six Sigma practitioners need to advocate using multiple data sources for goal-setting and project selection.
Frequently Asked Questions (FAQ) about process entitlement
1. When should I use process entitlement?
While helpful during a DMAIC project, process entitlement should be determined before the process improvement project because process entitlement can help with project selection and goal-setting. If used during the DMAIC project, process entitlement can be helpful during the define phase to develop project objectives.
2. How is process entitlement calculated?
Process entitlement is the best-case scenario, so to calculate or determine process entitlement, you will review past performance and identify the optimal performance.
Imitation is the most sincere form of flattery
Using process entitlement as an input to develop metrics and objectives identifies the ideal process performance and demonstrates the best-case scenario that provides the organization’s targets to emulate.
Similarly, much like athletic coaches use examples of previous performance to develop training programs, Lean Six Sigma practitioners can use process entitlement to determine which processes in the organization have the highest potential for improvement.
Ultimately, process entitlement is vital for the Lean Six Sigma Practitioner to understand because process entitlement measures current state process capabilities.