The Best Way to Improve Business Performance
By Deb Miller | Apr 10, 2012
“What’s the best process improvement approach you’ve ever seen?”
I have answered that question differently over the span of my career and suspect you may have as well. In this article in my adaptive case management series, I reflect on the different business process improvement approaches and tools I have seen and share which one I think has the right stuff.
Our perspective is influenced by changing external factors like markets and technology, shaped by the operational model of the businesses and agencies where we’ve worked, and informed by what we have learned along the way through actual experience.
Quality as a Key Driver — Reducing Mistakes
Over the years I have watched Six Sigma evolve from a problem-solving technique and quality strategy to cult status and even television satire (30 Rock).
Early on in my work at GE I embraced Six Sigma as a tool to remove product and service defects and drive costs out of the business. Reducing variation and mistakes makes all the sense in the world when building airplane engines, medical equipment and nuclear subs. But as the story goes, our GE CEO was not an instant believer.
Then in 1995 GE conducted a cost-benefit analysis on Six Sigma implementation that showed if we were to raise quality from our current three to four Sigma to six Sigma, the cost saving opportunity was somewhere between US$ 7 billion and US$ 10 billion. This amounted to a huge number — 10 to 15 percent of sales. The rest is history, with CEO Jack Welch launching a far reaching global program and becoming THE promoter of Six Sigma at GE.
There is no doubt in my mind that Six Sigma methodology can be of great assistance to improve business performance. My mathematics degree makes me predisposed to the statistical foundations of this approach, and the analytical side of my brain appreciates the rigor of DMAIC.
But after time I found that too many of the improvements, including those I was personally involved in, focused on isolated processes — even fragments — and were too disconnected from the overall improvement that might be achieved by looking more holistically at a business from the eyes of the customer.
Focusing on the Customer — Eliminating Waste
So as my career progressed and I spent more and more time with customers, I embraced Lean methodologies (including lean manufacturing ) with their focus on reducing waste, defined as anything that has no added value in the eyes of the customer. Then, as many did, I quickly turned to the combined management approach of Lean Six Sigma (LSS).
As a self-admitted recovering Green Belt, I find the customer focus ensures “outside-in thinking,” and emphasizes value streams rather than isolated process. By combining the two, I can leverage the strengths of each and also minimize the weaknesses of each approach when used alone.
For these reasons, most companies, including GE, choose to use Lean Six Sigma (LSS) rather than just one or the other methodology. I see LSS as the “fit for purpose” approach that works well not just for the core manufacturing sector but for distribution and retail as well.
In a Supply Chain Leaders discussion group I participated in a few years back, we conducted a detailed discussion of the advantages of LSS and some of the most vocal proponents were in the retail sector. I recommend these Accenture whitepapers for those who are interested in learning more.
LSS will always be a favored approach of mine, incorporating as it does the elements of Six Sigma rigor and the more human “Zen” aspects of Lean. I especially like the way Lean thinking can be applied to a wide range of industries in a way that not only eliminates waste but also adds value. As my journey continued though and I looked increasingly at producing tangible business performance improvements, I turned to approaches that promised agility and speed to results.
Speed to Deliver Top Performance — Applying Agility and Automation
One approach I found especially interesting to help drive speed and add relevance to results is Lean Startup. Sometimes described as “lean thinking applied to the entrepreneurial process,” Lean Startup looks at starting small, designing with the smallest set of features to please a customer base, and moving into the marketplace quickly to test reaction and make more changes after that.
Lean Startup processes reduce waste and add value by increasing the frequency of contact with real customers, therefore testing and avoiding incorrect assumptions as early as possible.
Applying this approach to business process improvement brings with it an interesting dimension of agility to Lean, and so it has joined other methodologies in my toolkit, especially as I look at improving elements of the value stream closest to the customer.
SCRUM is another approach that I find toolkit worthy because it promises, and most often delivers, increased speed. One of my insurance industry customers at OpenText Business Process Solutions (formerly Global 360) shared a success story with me about their use of SCRUM followed by automation using our Business Process Management (BPM) suite.
Because SCRUM is a people-centered approach, using it not only brought agility but also facilitated the adoption. The BPM tool assured that repeatable activities could be automated to drive productivity by removing the burden on manual processes.
Perhaps at this point I might have considered my personal toolkit full and my journey might have taken me no further. But I began focusing more and more on the unstructured, unpredictable aspects of business, searching for an addition to my toolkit to help drive improvements there and retain the elements of lean thinking and speed to results.
Dealing with Business as it Happens — Using Adaptive Case Management
It became clear to me that with the rise in significance of knowledge work to business, I would need an improvement approach that addressed the ability to deal with business as it happens.
As I’m sure Gordo Cooper would agree, all the best pilots have this ability to deal with events and information as they unfold and to handle the unexpected with a combination of systems and judgment.
Further, while every process might benefit from Lean thinking and every project might be improved with approaches that facilitate adoption, relevance and speed to results, not every activity can be mapped and then automated. However, many process improvement efforts can benefit from creating an environment that enhances knowledge workers’ ability to do their work.
Adaptive case management enables knowledge workers to interact with information and perform work in their own unique ways to best respond to changing circumstances. That means the ability to manage error exceptions as well as unusual circumstances.
This is one of the distinctive elements of adaptive case management — the concept that in many instances the process participants are involved in defining specific actions for a case and at other times need to respond to the course the case takes. Rather than modeling the entire business process ahead of time, you have an environment that supports access to information and progression through tasks as needed to achieve the goal.
For one community bank I worked with recently, adaptive case management proved to be a cornerstone of their improvements across more than 200 processes.
While what emerged is perhaps not the same as the unique personal interactions that community banks once had with their customers, it does enable more personalized and personal service to occur in today’s environment. And the added advantage is that these interactions are now less costly and more streamlined because they are no long bogged down in a paper chase or manual efforts. Thus fees and rates can be more competitive without sacrificing profitability. And, guardrails are in place to balance compliance with personal judgment to best serve the customer and ultimately, the business.
Adaptive case management is one of my favorite legs along my journey in search of process improvement. I have encountered use case after use case where adaptive case management has helped to ensure that knowledge workers can benefit their organizations by avoiding waste in the way they perform their work by doing only those things that create value for customers, giving them flexibility to respond quickly to new customer needs.
The Best Approach
My journey is of course personal to me and (hopefully) is not over yet. While many of you may have experienced a similar journey, I’m equally sure that others have found a different way. So when I’m asked which approach is THE best to drive business process performance improvement, I don’t hesitate to say “you’re lookin’ at ‘im” — it’s the one that works best for you.
P.S. Just make sure it has a strong and immediate impact on the people and moments that define business performance to your customer.
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