Process Control and Improvement

Last week I wrote about sustainability from the perspective of organizational members and leadership. In response to my blog, a friend and former manager, Tom Floodeen, wrote, “Another aspect that needs to be considered is the stability of the processes the organization follows. If the processes are correct, stable and sustainable, the people can change but the end result stays the same. It also allows new people that join the organization and come up to speed faster, if the processes are well defined and documented. I agree you have to groom your replacement, but if your replacement changes everything, or if my success was solely based on my abilities, sustainability is at risk.”

This is a great point and a good lead into the topic I want to write about today: process and systems theory. I’ll actually approach them in reverse order.

Ludwig von Bertalanffy and others developed systems theory from the study of living organisms. Systems theory has not been applied to a wide range of topics, including organizational theory. This theory includes the idea that there were two kinds of systems, open and closed. An open system interacts with its environment, is affected by it, and also affects it. Closed systems exist with no external feedback loop. There are few if any completely closed systems; even systems typically given as examples of closed systems (a watch for example) require some external input to sustain them. I won’t discuss the concept here more fully.

I, and most systems thinkers, envision organizations as open systems. As such, they have the characteristics of an open system: 1) elements of the system interact with each other in such a way they can only be fully understood within the context of that interaction; 2) understanding the parts in isolation is not sufficient to understanding the whole; 3) parts of the system are more than a fraction of the overall system – they have an existence on their own; 4) to fully understand the system it has to be examined from an external or meta perspective; 5) it must change input resources into output products or services; and, it posses structure and processes.

My experience with and research about high performing organizations indicate a couple of characteristics apropos this discussion. First, high performing organizations have, as one of their primary foci, an emphasis on productivity. Concern and effort is shown to ensure that the organization operates effectively. As Tom implies in his comment, that includes a focus on processes to ensure they are “correct, stable, and sustainable.” I would modify Tom’s list to note that processes need to produce results that meet or exceed customer/client requirements. I believe Tom would include that in “correct”, but it is an important enough point that I wanted to highlight it.

Today, in order to ensure their processes meet the customers or end users needs, and they are stable and sustainable, many companies are implementing some form of process control. Six-sigma, lean manufacturing or production, TQM [total quality management], SPC [statistical process control] and Kaizen all have at their heart an effort to create and maintain processes that meet the criteria that Tom identified. These process control methods are all valuable because they help organizations systematically examine their processes and identify where there are opportunities for improving, quality, speed, or cost savings. I believe these process control activities can be effective, particularly in manufacturing settings. Their use can become more problematic in services based organizations but here too, if care is taken, I have seen successful application of principles of process control.

There is another characteristic of high performing teams that seems, at least on the surface, to be in conflict with the goal of creating of stable processes. My research shows that high performing organizations have an outstanding awareness of both external conditions and constituencies, and internal capabilities. To maintain that awareness, they continually scan the environment for threats and opportunities, and scan internally for strengths and weaknesses. Based on those scans, excellent organizations make changes, including changes to processes. Some managers believe that once best practices are determined and processes implemented they should not be changed. However, I believe that in excellent organizations processes are subject to continual change and improvement.

Earlier I mentioned Kaizen, which is a Japanese word applied to a method of process control and improvement. However, the word itself has a broader meaning, continuous improvement with the implication that the direction of improvement is towards perfection (See Kaizen: The Key to Japan's Competitive Success, by Masaaki Imai). Although, as applied in the workplace, it uses many of the typical tools of process control such as statistical analysis and the scientific method, its foundational meaning offers a broader meaning of striving for perfection in all aspects of life. I believe that Kaizen offers the opportunity to engage people in a more thoughtful, organic, and holistic manner. This characteristic makes Kaizen an appropriate approach for a broader range of organizational types, including human services, and for all levels of the organization.

Sustainable Excellence

There is a lot of discussion these days about sustainability. Usually when sustainability is invoked, the subject is environmental sustainability. Not without cause, there is a great deal of discussion about and effort expended towards trying to make organizations and our society environmentally sustainable.

Not too many years ago, environmental sustainability was not an issue on most people’s minds. Then, if someone spoke of organizational sustainability, they were more likely thinking in terms of the financial audit assumption of "going concern": an organization’s ability to survive as an ongoing entity; that it will be able to enjoy its assets and meets its obligations. This view is also too narrow, although it begins to get at the issue, at least as expressed in the organizations financial statements.

Without diminishing the importance of either of those meanings, today I would like to focus on a different aspect of sustainability, that of the organization itself.

What I am thinking about is an organization’s ability to sustain itself through its people. Jim Collins spoke to this point in his book Good to Great. He noted that a characteristic of great organizations is the ability to sustain themselves, and outstanding levels of performance, beyond the tenure of a given leader or even leadership team. I am concerned that too few organizations pursue this aspect of sustainability thoughtfully and purposefully.

Again drawing on Collins’ metaphor in Good to Great, if an organization has achieved excellence, it is safe to assume they have the right people in the right seats, at least for the most part. That is a great and notable accomplishment but insufficient. That coveted state can be changed in an instant through illness, accident, retirement, or a key person leaving to join another organization. In order to sustain greatness I believe two things have to happen. First, the culture of excellence has to be so ingrained, so fully and organically absorbed that it is not dependent on the efforts of any one person or few people to sustain it. Excellence has to have become embedded in the organizational DNA. Second, there needs to be a well thought out plan of succession and building of redundant skills, knowledge, and aptitude. I believe focusing on the second characteristic can help an organization develop the first.

The first step in this process is to identify potential successors for key organizational members. I have charged organizational leaders with identifying two or three possible successors to their role. This can be threatening, if sufficient trust has not been established. Some people may feel that asking them to identify possible successors is akin to asking a condemned man to dig his own grave. On the contrary, I believe it is an important aspect to leadership. Leaders train and nourish future leaders. How can you do that effectively if you have not identified who those future leaders are? One caveat: although I think it is important to identify possible successors, I would not tell a person he or she was next in line for a given position unless such a change was imminent. There are too many possible ways that knowledge could lead to problems.

Once the possible successors are identified for each key position, it is important that a well thought out development plan be implemented. Although, as stated above, I would not tell any of the individuals that they have been identified as the successor for a given person, I would tell them that they are viewed as particularly important current and future leaders for the organization. As such, the organization is going to specifically invest in their development.

Now comes the fun part: creating and implementing development programs for those identified. This is more art than science but the range of possible actions could include things as: formal training and/or education, special assignments, participation in select committees or task forces, mentoring, coaching, even lateral assignments to build professional breadth. The best action or set of actions will be different in each case. The goal of the plan will be to develop/ensure the values, skills, knowledge, traits the individual will need to successfully assume the target position.

It is possible that certain individuals will be identified as successors for more than one position. In that situation, careful discussions can ensure that there are not too many development resources applied to any one person or that gaps in experience are left because both parties thought the other was covering that area. Likewise in a large enough organization, cohorts of people who all need exposure to the same concepts or training in the same area could be formed to undergo the experience together. This has the added benefit of building vertical relationship networks that can pay untold and unexpected dividends to the organization over time.

In contrast to what I am proposing, spending time and money on developing people for a future eventuality that may never arise may seem foolish to some. There are those who have adopted a similar just-in-time attitude towards the people in the organization that they have for spare parts: don’t pay to keep them on hand, we’ll buy it when we need it. In this model, it is believed that little time or effort should be spent on developing people. Individuals should be brought in to do a specific job. If they do that well, fine - they should stay in that role until the organization either doesn’t need them anymore or until they are needed more in another role. In either case, promotion or discharge should be based on inherent goodness of fit with the job. Organizational resources should not be spent on development. If a person’s skills become outdated or no longer fit the needs of the organization, they should be discharged and a new person with the right set of skills should be brought in.

This type of transactional relationship between an organization and its members is the antithesis of organizational excellence. There may be short term gains, even flashes of brilliance that brings temporary success but sustaining excellence on the long term is not possible through that approach.

When we think of sustainability, let’s think of our organization, its culture and people, as well as the environment and profitability.

The Power of Trust

Today I want to write about a social lubricant that makes all aspects of creating a high performing organization easier – trust.

It seems as if we live at a time or at least in a society in which trust has broken down to a great degree. In what or in whom do you place your trust? Opinion polls indicate that we have little trust in government; nor do we place much trust in traditional pillars of our society such as doctors, bankers, attorneys, business leaders, or even in the clergy. With half of all marriages ending in divorce, can we even say that as a society we have trust in our personal relationships?

What is the cost of this lack of trust? Stephen M.R. Covey in his book The Speed of Trust: The One Thing That Changes Everything, wrote about the importance of trust and the cost when it is lacking. He makes the point that trust is more than a “nice to have social virtue, a so-called hygiene factor.” He presents a formula for trust: as trust increases, speed of transactions also increase and costs go down; likewise, as trust decreases, the speed of transactions decrease and costs go up. He says the lack of trust creates an unseen tax on organizations; it increases an organizations cost without any increase in productivity.

This is a good metaphor for the unseen cost of a lack of trust. I also like to use the example of an engine; this is an idea most of us can easily visualize. The engine in our car runs smoothly and efficiently, in no small part due to the oil that circulates through the engine lubricating key parts, reducing friction and thus reducing heat. If we don’t care for the oil properly: we let it run low or we fail to change it as directed, the effectiveness of the oil begins to diminish. As that happens, the benefits provided by the oil are also diminished. Friction increases, the engine begins to run inefficiently, wear and tear on parts increase, and ultimately, if the situation is not corrected, the engine will stop altogether.

Ideally in an organization, things would begin with trust levels high and clean. Honest, open discussion and actions would maintain the state and the engine of the organization would run smoothly and efficiently. Unfortunately, we do not live in an ideal world and there are no ideal organizations. People may come into an organization with mistrust towards others or those who have, or are perceived to have, authority. The trust level of the organization may already be compromised from the beginning. On the other hand, the trust level may have started out high or at least adequate but over time, actions and decisions taken by members of the organization have tainted or reduced the level of trust. The organizational engine begins to run a little rough. Perhaps it keeps running but not efficiently. Perhaps it gets rougher and rougher, begins to knock, and finally seizes up and stops.

What can be done to either clean and restore the level of trust or increase it, if it was not sufficient to begin with? Are we doomed to suffer from a lack of trust on an individual or an organizational basis?

It is possible that the lack of trust is so severe that major personnel changes are required. These are situations in which the level of trust is so low that a transfusion of trust is needed through changing organizational members. This is a relatively quick fix and it may solve the problem. However, unless underlying issues that caused the loss of trust are corrected, it is more likely that the organization will continue to, at a minimum pay, the “low trust tax”.

Often an effective “filter” can restore and maintain at least an operational level of trust. Carrying forward the engine metaphor, as the oil pumps through the engine, in addition to reducing friction and heat, it also carries away bits of debris, dirt, and contaminants. These get cleaned from the oil as it rushes through the filter. Likewise in organizations, bits of doubt, misunderstanding, anger and frustration are bound to arise. If a sufficient level of trust exists, these concerns are usually easily dealt with. However, even in excellent organizations, these bits of interactional debris can build up. The filter that can remove these potential toxins is open honest communication, which has the same effect in relationships and organizations (which can be seen as an extended matrix of relationships) as an oil filter has in an engine.

Honest, open communication through and between all levels of the organization will keep the oil of trust clear and running freely throughout the organization. As the oil filter restores the oil’s capacity to do its job, effective communication can restore trust and enable the organization to run more effectively.

As I said in a previous post, organizational culture develops naturally, even organically, from the actions and decisions of organizational members, especially those perceived as leaders. Trust is an important element of organizational culture and it develops in just the same way. If organizational leaders and members act with integrity, honesty, and openness with each other, with customers and vendors, and with the general public, trust will be high. People in and outside the organization can have confidence in the intent as well as actions of organizational members. However, especially given the low level of trust that exists in our society today, it is easy for an organization to lose the culture of trust. Once lost, repairing the loss will be harder than maintaining it in the first place.

What is the state of trust in your organization? Are you paying a low trust tax? If so, how much is the lack of trust costing in terms of extra staff, cumbersome procedures, missed work, lost opportunities, poor morale, and lack of motivation?