Icebergs Lead to Titanics, Part 1

A successful process or business improvement movement can be its own tiger trap. How do we reconcile doing what we could fix with what we should fix?

By ALAN NICOL, Executive Member, AlanNicolSolutions LLC

Alan Nicol, Executive Member, AlanNicolSolutionsSo, we have a process improvement program installed. Our people are trained or are getting trained. We have a list of prioritized improvement efforts and we are attacking that list concertedly. We are tracking our improvement benefits and the numbers are good. What could possibly be wrong?

Hopefully, nothing is wrong. Sometimes though, process improvement success leads to grumblings, and not just the grumblings that come with change — honest people discouraged grumblings. Where does this come from?

There are, in my experience, two common sources of genuine pain and morale depletion that occur when we start to have improvement success. The first generally comes from those who are responsible for driving the changes and making the improvements. They begin to perceive an enormous quagmire of never-ending problems.

The second source of pain comes from those witnessing the changes and improvements that are taking place around them, but their own problems are left behind or are made worse. Coincidentally, one phenomenon leads to both pains. It is the proverbial “iceberg” effect.

We start digging into opportunities to improve our business and the more we dig, the more we find. As we begin investigating root cause, we find that many processes and business elements are connected. If we allow, we could chase chains of interconnected improvement opportunities forever. What started out as a simple process improvement problem, whichy maps out to a titanic endeavor if we try to address everything that is related.

The most common filter that is put on the iceberg problem is the “hard dollars” filter. If fixing the problem won’t show a savings to the business bottom-line taxable profits, we don’t solve it; for example, if a process improvement leads to increased production for fewer resources we do it. If it leads to reductions of paid personnel, leased space or equipment, reduced materials or processing costs we do it. If, however, we make life easier for personnel, but we won’t reduce the workforce, and therefore our bottom-line costs at the end of the quarter remain unchanged, we don’t bother.

The “hard dollars” filter is a nice way of keeping our improvement personnel focused on real opportunities and preventing them from chasing minor issues when there are “bigger fish to fry” — but it is limiting and somewhat crude. There are a great many beneficial and meaningful improvements that can be difficult for the certified public accountant to quantify.

Suppose that we reduce the number of man-hours personnel spend filling out work orders or other “red tape” activities. Suppose that, over the course of a year, we save our personnel several thousand man-hours of “red tape.” That’s several thousand man-hours that were probably used for genuine value-added work or could have been at least, but because we can’t prove it, and because we didn’t reduce the work force, we can’t calculate it. But, we all know that several thousand man-hours gained back is a good thing.

I could go on about this particular challenge for many pages, but my point is that the “hard dollars” filter is not the only one we should use. In fact, if problems that are important to enough people don’t get solved, the business culture can, and often does, turn on the process improvement program.

Worse still is when one process solution causes something to get worse for another process. If the affected process is next on the list to be fixed, we can endure the pain for a short while. However, if the owners or followers of the affected process get a message that their problems, newly created by the “process improvement” program, are not going to be addressed, they can revolt.

Dissent against further improvements or revolt doesn’t happen as often, and struggles to put a pragmatic boundary on any given process improvement. When the ideal way to fix a process involves making changes to process inputs or outputs, we can easily get swept away addressing an entire chain of processes and potential improvements. We don’t want to get carried away, but we don’t like to accept sub-optimal solutions either. How do we draw the line?

Please tune into the Chemical Equipment Daily for part two of this two-part series. What’s your take? Please feel free to comment below! For more information, please visit www.bizwizwithin.com.

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