What is Process Improvement?
In commercial terms, successful process improvement is almost invariably associated with the exploitation of an opportunity of one kind or another. This opportunity can be identified or recognized by a manager, a member of his or her team, or anyone who has an idea of what could be improved or could be run/operated more effectively.
Opportunity for improvement is typically all around us. What every individual and team needs to do is to make it stand out from the background into which it so readily merges. It is therefore important to distinguish between the various opportunities which may arise, so that the greatest or highest potential idea is developed. Once an opportunity has been identified, the changes suggested need to then be couched in process improvement terms.
To take an example, an opportunity to reduce the bureaucracy in a particular part of the organization needs to be described in the specific process terms in the area to which the opportunity refers. For instance, this may be to: redesign employee expense forms to be simpler and more understandable (and therefore save time and reduce the chance of error).
It is critical to ensure that the improvement sought is described not only in terms of processes and tasks, but as accurately and succinctly as possible. In other words, vague language at such an early stage will not only confuse the people involved in looking to make the improvement but, potentially, see a considerable amount of misdirected effort and energy. A useful test is to check that the people in the chosen work area have a clear understanding of the identified improvement idea, directly from the words and phrases used by the improvement team.
It is also critical to appreciate that if any process improvements are to occur in an organization (especially if they are major changes) they must be supported by individuals who have influence and credibility. In this respect, every significant improvement opportunity needs at least two supporting people—a sponsor of the change (usually senior enough to create the impetus and budget for it to happen) and a process owner (or the team leader or manager in the department which manages most of the tasks). The sponsor is someone who has the authority and influence to ensure that an identified opportunity can be investigated further and subsequently improved. He or she does not need to be somebody that works with a team on a process improvement project. However, they do need to be capable of influencing parts of the organization that may need to change their method or approach as a result of the process improvement analysis that will be undertaken.
Once the opportunity to improve a process has been identified, the team should review the opportunity with the sponsor. Once convinced of the project viability, it is the sponsor’s role to promote its usefulness throughout the department or the wider organization. The aims of the sponsor are to:
- Provide support for the project
- Influence management to approve the project commencement
- Assist in providing the required resources
Unlike the sponsor, the process owner is likely to work closely with the improvement team and is directly involved in the tasks or processes that are likely to undergo change. A process owner is likely to be a supervisor or manager but it may be an experienced or expert person in some circumstances. This ensures that he or she has a good overview of the whole process (not just part of it) and has the capacity and authority to make the adjustments and changes to the existing process progressively when required.
Practically making process improvement happen
Before any improvements can be made, the team needs to thoroughly evaluate the current effectiveness of the tasks or process as a whole. To do this well, a systematic approach needs to be undertaken where accurate facts and data about current performance can be collected. What is functioning well and what is not functioning well needs to be defined and careful analysis needs to be undertaken at each task level to determine where the scope for improvement might lie.
The relative ‘health’ of the current process is often determined by simple analysis of the following:
- Cycle time: The time taken to complete the process is calculated to evaluate whether some tasks are taking too long or by reviewing whether some steps or actions are held up by other tasks (that need to be completed first) also taking too long.
- Error rate: The errors or mistakes that occur in a particular process are counted and assessed to evaluate how much it might be costing to fix any resulting problems.
- Process outcomes or results: Each of the intended outcomes of a process are compared to the actual outcomes in order to determine where the greatest gaps are occurring.
- Cost: The cost of the process (usually in both fixed and variable terms) is evaluated to see whether opportunity exists for significant reduction due to process redesign or process simplification.
The analysis ideally to be carried out is not restricted to the above. However, consideration of these issues will cover most processes in most types of organizations. The aim in analyzing existing processes is to identify where the greatest problems may exist. This can save a lot of time for the team by helping to focus the attention on those parts of the process that provide the most potential for improvement.
Developing the “As is” and “To be” models
Baseline performance is a measure of how a particular process is performing on an overall basis at the present time. It is, therefore, the performance level upon which improvements should occur. Baseline performance needs to be established for the whole process. This will usually entail looking at sub-processes or groups of tasks that make up the process. This is often called the ‘As is’ stage of process improvement as we need to have a clear appreciation of how things are operating at the moment before we can apply any changes and measure whether our future improvement efforts have been successful.
The ‘To be’ stage of a process improvement project should always follow the ‘As is’ stage. This is because any estimation or projection of what might be better in the future must be based on the problems, difficulties or inefficiencies in the process as it exists at the moment. ‘To be’ modeling, therefore, is most often a projection of how efficient and effective the process could be once the existing problems and known difficulties have been eliminated. In fact, this might be almost an ‘ideal’ process to deliver the expected outcomes and, as such, one that will be difficult to achieve. However, even where this is the case, the “to be” state is the ‘target’ redesigned process to which the team can aspire.
The key to ‘visioning’ a better performing future process in the ‘To be’ stage is often to involve independent people. Independent people will not only be drawn from the various phases of the process, but may be drawn from parts of the organization where people have a different perspective—i.e. a view that is not necessarily colored or restrained by the way things are done at the moment.
For example, if a bank were to attempt to redesign the process for people to withdraw money from their bank accounts more quickly and efficiently, they may see the opportunity for considerable process improvement work in the areas of better queuing, redesigned counters and new forms. However, the major change may be just as likely to come from people outside the bank (suppliers and technology partners for instance) and its customers who may suggest completely new technology. Automatic Teller Machines in the 1970’s for example was an idea pushed by suppliers that started slowly (resisted initially by banks and customers) but became widespread on an international basis very quickly.
When assembling a team of people to think about how an existing process might be improved, great care should ultimately be taken to involve a variety of individuals with as wide a range of perspectives as possible. The ideal mix of people has creative individuals who are not limited by knowledge of the current process to individuals who can quickly assess what ideas might work better through their detailed hands-on knowledge.