Process improvement and operating models

I have been stimulated by an article by Craig Tickel of GoLean6Sigma that argues that there are only 5 ways to improve a process:

  1. Reduce Non-Value-Added Steps
  2. Improve the Measurement System
  3. Reduce Common Cause Variation
  4. Reduce Special Cause Variation
  5. Move the Mean to Improve Process Capability

I love people who simplify and Craig has some great exhibits in his article, so what follows is not meant to be a criticism of Craig, it is rather pointing out that a strategic/operating model approach to process design is different from, and probably should come before, a Lean6Sigma approach.

As I thought about Craig’s list, I came up with the following list of additional ways of improving a process that stem from taking an operating model view of the problem, as opposed to a waste and variation view.

  1. Digitize or automate steps in the process to reduce cost or improve value delivered
  2. Combine steps in the process with similar steps in other processes to get economies of scale
  3. Link steps in the process with similar steps in other processes to get good practice sharing or standardization
  4. Separate the process into two or more processes or sub-processes to enable better delivery of different value propositions
  5. Outsource steps in the process to suppliers with better skills or lower costs
  6. Change the suppliers or the contract with suppliers to get better supplier performance
  7. Change locations for some steps in the process to attract more skilled staff or to access lower cost labour or capital or other inputs to the process
  8. Change the people model or the people working on the process to get better people performance
  9. Change the decision authorities related to the process or to steps in the process to get better decisions made (e.g. centralize or decentralize or ..)
  10. Change the overhead activities supporting the process such as finance or HR or IT or … to reduce overhead costs or improve value delivered
  11. Innovate steps in the process to develop lower cost solutions or greater value or less variation (this last point is starting to overlap with Lean6Sigma work)

For those of you familiar with the Operating Model Canvas, I have been mentally working through POLIS (processes, organisation, location, information and suppliers).  I could go on (adding M for POLISM), but hopefully the point I am making is clear.  Lean6Sigma is for improving a process that has already been designed to fit with the strategy and operating model.  But often, what is really needed is a process redesign to get better alignment with strategy and operating model.  While Lean6Sigma goes some way to achieving this, an operating model approach followed by Lean6Sigma is more likely to get the job done right.

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About andrew campbell

Ashridge Strategic Management Centre Focus on strategy and organisation Currently working on group-level functions and group-level strategy
This entry was posted in Design steps, Lean, Op Excellence and Op Model. Bookmark the permalink.

2 Responses to Process improvement and operating models

  1. davidwinders says:

    The five points are good ones but certainly not the only ones,

    The problem is people comment on what they are familiar with and from the experience of their environment. In this case a Six Sigma protagonist makes highly valid comments for his world. Six Sigma experts often work in places where reducing variablity is the aim – so it is not surprising that these five points come out as they do.

    Six Sigma is appropriate for certain process environments (i.e. high volume, high repetability) as seen in manufacturing and high volume service environments.

    The five points do not include some lean principles such as creating flow in a process, ensuring pull through so that work in progress is reduced and work organisation allocation steps to balance the flow. I don’t see end to end measurement mentioned either. Since six sigma has become Lean Six Sigma this bias towards six sigma analysis in Craig’s list is interesting.

    Six Sigma was presented as the panacea 15 years ago but it has fallen out of favour in many industries. Many organisations found it too intense and “cult” based and inappropriate for their variable differentiating activities particularly in knowledge worker environments. Case management is a classic illustration.

    Lean Six Sigma came about as a rebranding probably caused by the decline in enthusiasm for Six Sigma. The combination is a paradox in itself as six sigma is about precision and following method to the nth degree, whereas lean is pragmatic,agile and pareto based. Hence six sigma isn’t very lean! In saying all that, six sigma has its place, and where applied correctly it is powerful.

    Perhaps the five steps should be labelled as “Five ways to improve high volume, repeteable processes” and for that – yes this are good ways.

    Andrew you are saying – in my interpretation – that process improvement is, or can be, part of a bigger picture, and it is not all about “tactical tweaks in the weeds”. I think you are entirely correct in this view.

    This gets back to my first point that it is all about familiarity and personal experience; as a strategist and organisational design expert you see many organisations giving you breadth of sight. Process to you is mainly a challenge of getting alignment with strategy rather than an optimisation challenge. Also you are often working on activities that are not precise repeatable work flows that can be statistically measured. We just need to remember that peoples experiences and environments are different and hence their emphasis is different too.

    One comment I would question though “Lean6Sigma is for improving a process that has already been designed to fit with the strategy and operating model”. Yes via DMAIC true – but what about DFSS approaches: DMADV define – measure – analyze – design – verify or IDOV (Identify, Design, Optimize, Verify)?

  2. andrew campbell says:

    Great post David. I agree. Just one comment about your last paragraph. DFSS (design for six sigma) and DMADV are more typically used to optimize a process rather than to ensure that it is aligned to the strategy and the larger operating model. I think this creates a problem. Sometimes the focus on optimization causes people to overlook the alignment with strategy and the operating model – the deck chairs on the Titanic problem.

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