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Continuous Improvement Culture

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  • #48855

    Michael Herskovitz
    Participant

    As six sigma practioners, we seek to transform our company to one with a “continuous improvement culture” (CIC). 
    The question is “what is CIC”?
    In other words, how will I recognize it when I have it.  What are the  KPI’s that I need to measure in order to determine if I am there or not there yet?
    What KPI’s do I measure to know how to adjust my progression towards this target?
    I would be interested in starting a dialog on this topic.
     

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    #165758

    Brandon
    Participant

    Michael, come on, there is no “there” – by definition.
    You will know you are living CIC as you see positive movement of your firm’s KPIs. As to discussing those, well too big a topic for a forum post. Plenty of stuff available for you read to determine how to set those.

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    #165778

    Michael Herskovitz
    Participant

    Brandon, thanks.  While there is no “there” since CI is a trip not a destination, even on a trip, there are mileposts to tell you where you are relative to the next destination.  What I find interesting is that non of the books define the KPI’s or even provide a roadmap of KPI’s by which to plan, execute and gage progress towards the CIC objective.   

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    #165785

    Abodorra
    Participant

    Micheal,
    if you insist, you can set some KPIs as number of CI ideas per person or per team per month or/and saving achieved by team per year due to these ideas.

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    #165786

    Aurum
    Participant

    Michael,
    In my opinion, one should be wary of conventional Six Sigma KPIs, and the reason I make this claim is because KPIs are usually dependent.
     Let me give you and example.
    In the optical retail industry it is common practice to measure an optometrist’s performance on the basis of a ‘conversion rate’ – how many people they saw and later bought new glasses. (Sometimes this is not even measured or reported correctly!)
    Now there is a balance between giving the patient a +025 or a -025 to spurioulsy change the prescription so the ‘patient’ has to buy new glasses and having a large number of people return; complaining their new glasses are no improvement over their previous pair.
    In practice, the senior optometrist has to sort out these problems and try to keep the patient happy, while at the same time suffering a low conversion rate themselves. In other words, KPIs based on conversion rate reward the worst performers and punish the best! In one case in theUK, a well-known optical chain did not even adjust the data based on the available input. This is like trying to measuring the performance of sales person when there is little or no demand! Clearly, in the case of this multiple, the price you see is not the price you pay!!!!
    Anyone interested in overprescribing in the UK’s Multiple Optical retailers may want to read more in the Reader’s Digest Special Report, Dec. 2007. My own advice would be to ask the optometrist to demonstate the difference between the old and new prescription and perform a i-test :-)
    But don”t be put off by the commercial pressures in optics, an eye-examination can provide early detection of numerous morbid diseases, not just diseases of the eye, which is why I always recommend patients try to see the same optmetrist each year, and one who balances the need for eye-care and eye-wear.
    I could give many other examples outside optics, but I defer to the other poster who put it quite succinctly. The only goal is to have a successful business and the appropriate KPI is usually a multivariate response.
    Adieu,
    Aurum

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    #165792

    Mike Carnell
    Participant

    Michael Herskovitz,
    There was an interesting post on here several years ago that went something like this: “We finished continuous improvement a couple years ago. We are looking for the next big thing.”
    I am not sure you question makes much more sense. How do you make a decision to use Continuous Improvement Cuture to transform your company when you do not know what a Continuous Improvement Cutlure is? I don’t understand how a person (or worse a leadership team – using the term leadership rather loosly) can make that decision. You would look pretty foolish if you guaranteed lifetime employment, announced that CIC was your strategy and then found out that the first step to CIC was laying off 10% of your workforce (a little extreme to make a point).
    Why don’t you ask a different question. I would start with something like “what are our core competancies?” or “what are our strategic products?” or “what support functions are critical to the previous two questions?” Those might be things that you want to continuously improve. Try focusing on a couple things and see if you can get those right and then continuously improve your continuous improvement process by picking a few other things to add to the portfolio.
    There is a story about someone asking Deming about instant pudding. You question is basically the same question with updated terminology. When TPS was created do you think anyone ran around asking for the key metrics to build a world class car manufacturing company? I don’t know for sure but I would put a months salary (if I had one) on the fact that they didn’t. I am guessing they probably spent a long time learning their business and figured it out for themselves. This stuff takes work and involvement. If it is something for you to do between herbal tea breaks then you need to try something else.
    Just my opinion.
    Good luck

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    #165797

    Brandon
    Participant

    OK, Michael, I’m surprised there is little about setting KPI’s available but then I’ve never looked for that info. Here’s a high level view.
    Most firms, I presume yours as well, have high-level strategic objectives (if you don’t then you need to develop those first). These objectives define who you are and who you want to be. Typically a firm will have 6 to 10 – no magic there though.
    From each of those objectives establish a or multiple baseline metrics. That’s where you are right now relative to each objective. Map the high level processes that support each objective. Then get more & more granular with each process setting metrics and baselines for each.
    This should begin to give you a picture of the most impactful areas of opportunity for improvement. Determine what skill sets are needed to address each opportunity and the “velocity” with which you want to address each – this will determine the magnitude of your improvement program – how hungry are you, what is the cost/benefit ratio for how quickly you create and apply the skill sets, what resources can you dedicate to the effort and so on?
    The continuous improvement program is then one of continuing to cycle though those, and other opportunities identified, getting more granular each time, as you progress and maintaining a metric tracking system to validate the results.
    The Balanced Scorecard is a good tool to track your efforts assuring (or at least making visible) whether you are touching all strategic objectives or not.
    Once you’ve identified the strategic objectives I suggest you do something on the order of what is offered in the Project Selection Packet in eBooks on this site. It is a facilitated brainstorming session with mngt. with the deliverable being a multitude of improvement opportunties – a project queue essentially.
    Look at the recent post by “Roger (not the same)” and see Mike Carnell’s post. You will see there is no end to opportunities for improvement…. thus CIC has merit.

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    #165800

    Mike Carnell
    Participant

    I did not ask the question.

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    #165804

    Brandon
    Participant

    I know Mike. I was replying to Michael’s original & subsequent posts.

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    #165809

    Bob K
    Participant

    I would suggest that KPI’s can be obtained without a CIC (brute force), and that KPI’s could be missed even with CIC (if not set correctly however I admit that this is less feasible).  I have always thought of KPI’s as more of the destination and CIC as the prefered method of transportation.

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    #165812

    Deanb
    Participant

    CIC may not be equated to managing physical attributes as one might find on a plant floor, but certainly are attributes all can sense as either being present or not present in varying degrees. Here is my list of attributes I would associate with CIC. If any organization merely discusses these issues openly, most will find lots of room for improvement:-commitment to addressing root causes
    -avoiding blame or scapegoating
    -respect for consensus and principled dissent
    -concern for all stakeholders
    -high participation and inclusiveness
    -openness and information sharing
    -teamwork and willingness to help others when needed
    -using data, logic, and ethics to support decisions
    -committed to customer satisfaction (internal and external)
    -a shared sense that processes are improving for the group as a whole
    -a willingness to hustle and change as needed
    -an absence of infighting and brawling
    -an absence of heavy handedness, double standards, deception, and false pretenses.
    -Fair recognition, compensation and advancement based on merit
    -a place where leadership is as concerned about how subordinates cope and succeed as results.
    -a place where one is proud to be a part of it.

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    #165814

    Michael Herskovitz
    Participant

    Even though many of these are “subjective” and six sigma teaches us to deal with measurable attributes, I like these as a great starting point.  Thanks.

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    #165815

    Michael Herskovitz
    Participant

    Here is my “challenge”.  At a corporate level, a strategy may be “become a company with a strong culture of continuous improvement”.  So, how does one measure “as is” so that as tactics are being implemented, one can show evidence of prgression towards achieving the stated strategy?

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    #165816

    Deanb
    Participant

    These attributes can be labeled as “subjective,” however, subjective does not necessarily mean unmeasurable, inconsequential or unimportant. The moment one or more people “sense” a critical absence, the escape becomes as objective as losing a car full of $1000 bills, especially when these escapes occur in patterns or in aggregate.These attributes can be measured in aggregate using surveys, FMEAs, and other tools, however the key is to know how to read the senses of others, know when applied cultural attributes are healthy or not, and prevent bad culture attributes all the time. I believe every six-sigma project needs to be bounded by cultural imperatives such as these, otherwise it risks its sustainability.

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    #165817

    Taylor
    Participant

    I have read through most of this post, some post twice, just so I can grasp what is being said, and the one thing that kinda jumped out at me was that I can’t think of any company or culture that is not in some form or fashion continuously improving. The one thing I think Michael did hit on was KPI’s. One set of a companies KPI’s may show significant improvement process performance and another set KPI’s for the same company may show horrible returns on these improvements. The jugleing act between process performance and project financial feasability is one that is at the core of any CIC. “How much do you want to improve?” “Here is the cost”. “Is it Feasible?” “What are the alternatives?” The unfortuanate thing is that many companies sacrifice product quality for the bottom line.

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    #165819

    Deanb
    Participant

    A project should not just be “costed” in hard dollars, but with respect to the needs of the supporting culture too. If the project costing is at the exclusion or expense of supporting culture, there is an accounting error at work IMHO, because continuous improvement depends heavily on a supporting culture. Good projects allow themselves to be culturally bounded in the planning stages. This may shave a tad from the projects total theoretical economic potential, but the results will be more bankable in the long run. Good six-sigma requires detailed attention to the supporting culture.

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    #165822

    Brandon
    Participant

    Michael – re: challenges. I suggest either of two approaches. Either rephrase corporate strategies such that they are definitive, measurable objectives OR translate a “subjective” objective into a measurable metric – to the extent possible.
    Keep in mind a SS edict – If it can’t be measured you know little about it. Therefore an unmeasurable objective is just words on paper – it means nothing.

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    #165832

    Venerable Bede
    Member

    There are some really insightful comments on this thread, but I need to add a few cents here.
    A culture (in this context) is the collective beliefs or behaviors of individuals in a group.  It is a stereotype since not all individuals believe the same things or behave the same way.  Consequently any definition of a culture is subject to debate.  Many people believe the US to be a democratic culture.  But not all people vote.  In many locations, most of the people don’t vote.  But then again, if nobody votes, the American system falls apart.  So defining the US as a democratic culture has nothing to do with a KPI of how many people vote, but rather by the systems and structures in place that make its existence as a culture dependent on democracy.Same goes for CI.  KPIs don’t define a CI culture, systems and structures do.  While the definition of a CI culture will always be debatable, the only way to create it is to make the fabric of your organization dependent on it.  It needs to be an integral component of your forecasting, planning, management and execution processes.  It needs to be a component of how work gets done and how people are hired, developed, rewarded and retained.  What you need to do is decide what those processes are and then create the structure that makes your company’s way of doing business dependant on CI.  Ultimately your CI culture will be defined by the beliefs and behaviors of the people in your company.  You can try to measure it and create KPIs but I am not convinced the numbers will tell you much.  What will make the culture evident is the existence of systems that force the culture to exist.

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    #165836

    Nimish
    Participant

    CIC is as the term goes, continuous. But in order to determine the KPI’s what more improtant to be understood is your companies core competencies. There has to be a diffrentiation between the core competencies & secondary / support activities. Then based upon your companies objectives & vision, prepare a roadmap. This Roadmap should guide you in preparing an improvement plan for the same.
    Just as an example if your firm is wanting to become most efficient service provider, then you should look at certifications according to their challenging nature (ISO, then BS7799 then TL 9000 & so on) this will ensure that if you are able to get certified on these certifications then you are going in the correct direction. Think about the best & the hardest certification which you can procure for your firm’s working domain. This should be your target. If & when you make your progress towards this certification through other smaller certifications you know you are on the right path & this can serve as a good Roadmap for your CIC. But if you think that, by getting the toughest certification your drive is over, would be foolish. Then you should aim to better the performances by diversifying your companies objective. Thus you can be on the path for continuous improvement.

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    #165839

    Tamlyn
    Member

    Venerable,
    I check in from time to time and read through the topics discussed in an effort to continuously learn from others – I just wanted to state that I truly appreciate your thoughtful, well worded and common sense postings.  You, Brandon, Robert Butler and a few others make returning to the site worthwhile despite the plethora of those who appear to visit solely with the intent of insulting others.  Thanks to all of you

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    #165844

    Michael Herskovitz
    Participant

    I could not agree more…good observation.  But, if you are the person in charge of convincing the BOD or CEO that you are either moving your company away from the “as is” to meet the “we are a continuous improvement company” culture, or you are asked to come back 3 years “in the future” to show evidence that the company that was not is now one with a strong culture of Continuous Improvement, what is it that you point to beyond anecdotal stories.  Or, may be this is all there is…namely, “tribal stories and anecdotes” that can demonstrate that different levels of the organization are pursueing CI, whether it is organized or not; whether it is measured or not, whether it is using Lean Sigma or not..
    Thanks for the intellectual discourse…refreshing.
     

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    #165847

    Deanb
    Participant

    Ven: Culture is much of what you say. However culture is also viewed in the field of organizational behavior as a powerful social system naturally created by the participants themselves to meet participant needs. According to this theory, cultures are processes that are capable of supporting organizational objectives in varying degrees, or resisting them altogether. Pfeiffer referred to culture as “the gap between knowing and doing.” Cultures are unique and highly variable as you indicated, yet they do have universal traits making them manageable, predictable, and improvable. To be effective practitioners we need to understand and respect how certain culture inputs improve or degrade our operating culture’s supportive capability. Juran, Deming and Crosby all subscribed strongly to the basic tenants of this theory, and we should too. To get the needed outputs, we need to engineer our inputs wisely. This is true in all process management, and culture management is no different.

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    #165856

    Brandon
    Participant

    Thank you Tamlyn. Very nice of you to say. Hope you visit more often.

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    #165857

    Brandon
    Participant

    Michael, the answer is here already. Create baselines metrics, decide priorities for improvement, track and graph the metrics. Data is your evidence – put it in pictures; words have far less impact.
    Use the Balanced Scorecard to show you are touching all corp. objectives.
    IF you have created a continuous improvement program it will be borne out in the data…and will be very easy to demonstrate. Graphs, graphs, graphs…..

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    #165859

    Brandon
    Participant

    Sorry, I’ve posted 3 comments to this string in a row. However, had to say this….
    Culture is driven by the incentive system of the firm. Define what you want from employees and reward them for accomplishing it. Make the objectives CLEAR – make the comp system CLEAR and assure they are aligned.
    Culture will follow.
    Culture is counterproductive when employees feel the comp program does not properly reward contribution. And recognition is improperly given. Do this part right and the rest will follow.

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    #165864

    Qbob
    Participant

    My first reply to any post…though I have read many, many messages.
    Culture…simply defined is “You get what you tolerate”.
    Any method, process, metric, etc. put into place does not, or will not, change a culture.  As I have previously seen in other posts, changing the culture means rewarding and repeating desired behaviors toward a specific goal.  Sometimes the advancement of a metric may mean suboptimizing another part of the system.  Scoreboard metrics, which roll into process metrics, will give an idication of movement in the right direction.  Any unmeasured behavior, which may not uphold the CIC, could thwart any sustainment of the desired culture.
    There is no “getting there” in the continuous improvement methodology.  The longer one tries to achieve continuous improvement, the distance to the goal line reveals itself to be a little farther than first realized.
    I enjoy reading this and many other discussion. Thanks for letting us all learn together.  Qbob.

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    #165865

    Brandon
    Participant

    Welcome Qbob – stick around – this gets interesting. Or, if not interesting, at least entertaining.

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    #165876

    Deanb
    Participant

    Rewards are very important, I agree totally on that, however, rewards are not the most influential factor. Many studies have shown that people are influenced more by risks than by rewards. Many participants view six-sigma as a risk
    mode to their jobs and work satisfaction. The double whammy is when both rewards and risks are unfairly allocated, resulting in risks being disproportionately born by the under rewarded. If a BB wanted to do ONE THING to improve their culture, statistically I would say “lower the participant’s risks.” The second thing would be to revisit how all rewards (monetary and non monetary) could be more fairly allocated.

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    #165887

    annon
    Participant

    I believe several models already exist that define and nicely quantify what world class perfomance looks like in regards to CI:  Malcomb Baldridge National Award, The Demming Prize, ISO certification (to a limited degree), various state and industry quality awards, etc. 
    Good luck.
     

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    #166072

    Sharma
    Member

    Hi Michael,
    I seem to understand what you are looking for. Being in Quality and continuous improvement field for 16 years, I have measured it with a couple of KPIs as follows:
    Employee involvement ratio : No of continuous improvement ideas implemented during a certain period / Total number of employees
    I have always shown this as a YTD (year to date) measure. For Eg: When one starts measuring for Jan, we had 10 improvements implemented by 10 different persons(need to define what would qualify as a continuous improvement – Generally ones that make the job easier to do, improve customer satisfaction, reduce risk of compliance etc.,) from 100 people in the team, the employee involvement would be at 10%. In feb, if one had another 20 different (not the same as the earlier 10 people) people implemented improvement ideas, then the employee involvement would raise to 30% (10+20)/100 – This 30% is a YTD measure.
    The other KPI would be to look at the YTD hard benefits (dollar) realized from continuous improvement activities. This would require structuring all the improvements under one umbrella.
    Hope this helps.
    SHASHI
     
     
     
     
     

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    #166081

    Michael Herskovitz
    Participant

    Sashi…thank you…I agree that this is one worthy KPI by which to demonstrate evidence of an organization that is moving towards becoming one with ingrained CI culture.
     
    mike

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    #166087

    Perryman
    Participant

    Agree totally.
    I would also recommend to Michael to look at the performance appraisals used in the company.  What are the criteria used to assess employee performance? Do any reflect the companie’s desire to have a CIC?  If not, why not? That has to change…If so, get the data.  You can then track it to see if there are any changes over time.  Working with HR is crucial and this is a perfect opportunity to integrate CIC with organizational development.  Imagine that, an integrated system that aligns visions, goals, priorities, reviews, and rewards.
    Hope this helps,
    Patch

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    #166112

    Lolita
    Participant

    Kaizen would  help  you,try  to  apply  it

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    #166692

    Priyavrat Thareja
    Participant

    Thank you Shashi,
    I too have prescribed these two KPI’s suggested in earlier post of 13th Dec  ( #s of Kaizens/ CQI attempts per employee, and/or the monetary outcomes of such endeavours per month), and that shows the state of alignment towards improvement. However if one wants to monitor the activity quantitatively, then it would be worthwhile using their product. i.e number and Value.
    One may counter that this will not spell the ‘Continuous Improvement Performance’ in right terms. But a single improvement, how so ever it may be, can not spell the continuous of Quality culture. Whereas many such not-very-productive /futile attempts may neither be considered up to the mark  nor indicative of a proficient improvement environment.
    Priyavrat Thareja http://www.thareja.com

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