With Business Problems, Time is Not Your Friend
By Dale Lawrence
In most process improvement projects, when analyzing the business problem in advance of determining a solution, you typically look at a variety of data. Many Lean Six Sigma (and other methodologies) projects start out with a data collection plan and gather such things as number of defects, number of people, time duration, pass/ fail rates, length/ weight/ temperature, customer survey results etc. While each of these can lead to valuable insights to root causes and possible solutions, most projects miss a key metric… the duration for the actual project. This includes technology builds, large process transformation and relatively small LSS projects.
Missing time? Didn’t I just list time as one of the typical data types? What am I talking about?
First, a few stories.
A Vice President from a large engineering and construction business area was deciding whether to approve a significant technology replacement system. His team (probably 800 employees) had analyzed the operational costs and determined that the $2.5 million system would provide a 10% reduction in his operating expenses. It sounded good until you look at the underlying impact. The project required a large project team and the expectation was that the implementation would take ten months. Sound familiar? Here are some assumptions:
• His payroll is $64 million;
• A 10% savings is possibly $6.4 million;
• The project team is 30 employees;
• Salary for the project team is $2.4 million;
• The project launched late by two months;
• As with any change, there will be an impact to productivity immediately before and after the launch.
No, this isn’t a story about net benefit from the new software (although it should be). Obviously, a reduction of the expected savings would likely reduce the overall benefit, but imagine that the 10% actually happened and there was a financial benefit in year one and some savings in future years.
Even though there still is a reduced financial benefit, would you approve this project? Many organizations approve this every day. I can share that I wouldn’t approve the project, but maybe for reasons that are not obvious.
I recall another project that was managed by a less-experienced process improvement professional. He had defined the business problem, collected data, measured and then spent four months trying to solve the business issue. He even found a couple of solutions that appeared to improve the business process. That was until the project sponsor noticed a key stakeholder hadn’t been engaged. The new information from this new stakeholder caused a total shift and everything had to start all over.
Sounds simple… just begin again! What happened though, was the sponsor got frustrated with the lost time and looked to other solutions.
Both of these projects (and every single one you have ever been involved in), share one common attribute. Time.
Remember, your business doesn’t stop while the project team attempts to fix the problem. Time is not your friend, so you need to factor that the process exists in a different world than what it did when the project started. A 10% improvement is based on the day it was analyzed. In fact, it is based on the day the data was extracted. Think about the change to your business in a year. Have your customers changed? What about your competitors? What about a four-month failed project? The business would have been better served to do something else during the time. In fact, doing nothing can be better than doing something poorly, as there is a cost to do something.
The answer? Work smart and work fast.
At Propulo, we work hand-in-hand with organizations to understand the business problem, devise an approach and then work smart and fast. If your business is interested in generating a stronger, more cohesive strategy, or if you’re just struggling to figure out how to create an agile culture, we’d love to discuss our innovative ‘People Meet Process’ approach, and how we might be able to help you.