Performance Acceleration Management: A Way to Change Your Culture

By Dr. H. James Harrington May 1, 2013

Typical Comment
"Every year we improve. I have data that proves this. Continuous improvement is a way of life in our company. Then why, oh why, do we continue to lose market share even though we are using the latest improvement methodologies and installing software like CRM?"

"Many organizations are improving but they are not winning the race."

Six Sigma Executive Overview

What is Six Sigma?

Quality Improvement and Customer Expectations

Quality

Time
Harrington Institute, Inc. ©Copyright 2009 All Rights Reserved

Confusion Reigns Supreme
• Philip B. Crosby’s 14 Steps • Dr. W. Edwards Deming’s 14 Points, or new and different 14 Points of “Profound Knowledge” • Dr. Armand V. Feigenbaum’s 10 Benchmarks for Quality Success • Dr. Joseph M. Juran’s Step-By-Steps Improvement • Dr. Kaoru Ishikawa’s Six Categories for Transformation
© 2007, Harrington Institute, Inc.

Lean Methodology
• • • • Today Lean is a very popular methodology. It focuses on the elimination of all wastes. You can't argue that waste is bad. My great-grandfather used to say, “Waste not, need not.”

© 2007, Harrington Institute, Inc.

A Streamlined Car

"If you change the way
the outside world views the organization, it is just a temporary fix. It becomes permanent when you change the way the organization views itself (its culture)."

• "If you don't change behaviors/habits, the organization’s culture hasn't changed. If you don't change culture, you won't have long-term performance improvement."

© 2007, Harrington Institute, Inc.

Typical Question
• "Why does my organization need to develop a performance improvement plan to improve? I know a lot of problems that we can start working on right now.” • Answer –. Our research shows that more than 1,300 different improvement tools exist today that will provide a positive impact upon an organization’s environment.
© 2007, Harrington Institute, Inc.

© 2007, Harrington Institute, Inc.

Process Improvement 8 ATE's
• • • • • • • • Eliminate Informate Automate Coordinate Innovate Replicate Cultivate Regulate

I. Define how the organization needs to change. II. Define what the organization needs to do and when to do it to change. III. Managing the organization’s change process.

The Three Parts to Performance Acceleration Management

Part I. Defining How The Organization Needs To Change.

To Change the Organization's Culture You Need to Define and Change the Things (Key Business Drivers) that Dictate the Organization’s Performance.

Business Drivers or Controllable Factors

The Organization Culture

New Improvement Program Impact

The Next Improvement Program Impact

The Total Impact

Typical Business Drivers
• • • • • • • Leadership and Support Customer Partnerships Business Processes Training Knowledge Management Measurements Supplier Partnerships

Part I. Defining How The Organization Needs To Change.
• Activity 1 – Assessment (as/is statement) • Activity 2 – Vision Statements (Should be vision)

Part I
Activity 1 – Assessment of Present State

• • • • •

As-is/Should-be Business Drivers’ Maturity Grid Historical Change Analysis Past Performance Initiatives’ Analysis Develop an organizational present cultural model

Part I
Activity 2 - Vision Statements

• Preliminary Vision Statements • Stakeholders’ Reviews • Final Vision Statements

Part I
Define What Will Change
Get a clear view of your Vision or what

you want the Future State to look like.

28

Typical Vision Statement for Operating Processes
Major processes are documented, understood, followed, easy-to-use, prevent errors and are designed to be adaptable to our stakeholders’ changing needs. Staff uses them because they believe they are more effective and efficient than the other options. Technology is effectively used to handle routine, repetitiveness, time-consuming activities, and remove bureaucracy from the process.

Part II. Defining What The Organization Needs To Do and When To Do It To Change.

Part II
Defining How to Change

Start with an Organizational Assessment to determine the

most critical change areas to focus on first.

31

Part II. Defining What The Organization Needs To Do To Change.
Activity 3. Set Performance Goals. Activity 4. Define Desired Behaviors. Activity 5. Develop Individual Improvement Plans. Activity 6A. Combine the Individual Plans. Activity 6B. Design the Change Management Plan.

Part II
Activity 3. Setting Performance Goals • • • • • • Return on Investment Customer Satisfaction Response Time Value-added per Employee Error-free Performance Dollars Saved

Typical Performance Improvement Goals

Measurement 1. 2. 3. 4. 5. 6. Customer satisfaction Return on investment from TIM Return-on-investment Defect rate improvement Value added/employee in $1000 New product cycle time in months 0 60% 1 65% 1:1 2:1 2X 50 53 2 75% 4:1

45 53

65

YEAR 3 80% 15:1 5:1 10X 70 30

4 85% 30:1

75

5 95% 40:1 10:1 100X 80 15

Part II
Activity 4. Define Desired Behaviors.
EMPOWERED EMPLOYEES • Wild ideas are encouraged and discussed. • Unsolicited recommendations and suggestions are often turned in. • Business information is readily available to all employees. • Management defines results expected, not how to get them. • Decisions are made at lower levels. • Less second-guessing.

Part II
Activity 5. Develop Individual Improvement Plans.

• • • •

One for each vision statement. Problems today. Roadblocks to move to future state. Select the right tools from the 1300+ toolbox.

There is a difference between planning and problem solving.

Part II
Activity 6A. Combine the Individual Plans.
Considerations: • Availability of resources • Other activities going on within the affected areas • Holidays and vacation periods • Seasonal and/or new product workload fluctuations • Interdependencies • Organized labor interventions • Change management timing

Total Improvement Management

Combined 3-Year Improvement Plan
Activity # P 0.2 BP 1.0 ML 1.0 2.0 5.1 5.2 3.0 4.0 6.0 SP 1.0 2.0 3.0 4.0 6.0

ACTIVITY
3-Year 90-Day Plan Develop Plans for Individual Divisions 4/19

2002

2003

2004

A M J J A S O N D J F

M 2 3 4 1 2 3 4

Person Responsible
H.I. - EIT EIT

Cycle 1

Cycle 3 Cycle 2 Cycle 4

Business Process BPI Management Support/Leadership Team Training DIT MBWA Employee Opinion Survey Strategic Direction Performance Planning and Appraisal Suggestion System Supplier Partnerships Partnership Supplier Standards Skill Upgrade Cost vs. Price Proprietary Specifications

EIT / Bob C. EIT / Tom A.

EIT / Task Team Dept. Mgrs. Division President H.I. Sam K. Joe B. Task Team

H.I. – Dave F. H.I. – Doug J. Bob S. Jack J. Division President

= Action

Activity 6B. Design the Change Management Plan

“Some 50% to 70% of reengineering attempts fail to deliver the intended dramatic results.”
Hammer & Champy

Reengineering the Corporation

Research confirms that as much as 60% of change initiatives and other projects fail as a direct result of a fundamental inability to manage their social implications.
GartnerGroup

Enterprises contemplating organizational transformation should first acquire formal change management competencies and develop the organizational discipline to perform cultural due diligence.

GartnerGroup
45

The Magnitude of IT Driven Change
First-Order Magnitude
Tasks Affected

+

Second-Order Magnitude
People Affected

+

Third-Order Magnitude
Structure/Culture Affected
Culture Technology

Culture

Technology

Culture

Technology

Structure People

Technology Tasks

Structure People

Technology Tasks

Structure People

Technology Tasks

Source: O’Hara, Watson & Kavan

46

Cultural Model

People, Process, Technology
PEOPLE

TECHNOLOGY

PROCESS

“More than any other contributing factor, many projects fail because executives don’t take the time to develop and
implement a Change Management Plan.”
Dr. H. James Harrington
49

Cultural MANAGEMENT TOOLS
Cultural management includes over 50 unique tools. Some of them are:
1. 2. 3. 4. 5. 6. 7. 8. 9. Cultural Assessment Landscape Surveys Change Agent Evaluation Change History Survey Change Resistance Scale Overload Index Predicting the Impact of Change Role Map Application Tool When to Apply Implementation Architecture

The Three Part III Managing the Organization’s Change Process.

ORGANIZATIONAL ALIGNMENT
Strategy
Rewards System People Capabilities

Processes Networks

Structure

Typical Organizations that Have Used PAM Methodology
• • • • • • • • • • • Lambda Novatronics Inc. Martin Marietta Manned Space Systems Matrixx Consumer Division US Air Force Systems Division LTV Missiles and Electronics Group State of Arizona Department of Transportation Eastern Space and Missile Center Earle M. Jorgensen Company Allied Supply Company Lambda Electronics Incorporated Accurate Inc.

Every day in Africa a gazelle wakes up knowing that
he must be the fastest gazelle in the group

or he will be eaten by a lion. Every day in Africa a lion wakes up knowing
that he must be the fastest lion in the pride or he will starve.

It doesn’t matter if you are a lion or gazelle.

When you wake up, you better be running!!!

Thanks for your attention. Do you have any questions?

Six Sigma Executive Overview

Have a quality day with a high degree of reliability.

What is Six Sigma?

Harrington Institute, Inc.

©Copyright 2009 All Rights Reserved

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