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Barry Johnson

Management

From the Gridiron to the Boardroom

The performance improvement cycle

Published: Monday, October 5, 2015 - 16:56

The adage “if you aren’t moving forward, you’re falling behind” is true more often than not. Regardless of the type of business, all organizations need to improve to survive. The last words uttered by managers in failing organizations are, “We’ve always done it this way.”

The key to long-term viability is continuous improvement. Of course, improving means different things for different types of organizations. The organization’s leaders get to define what improvement means for them.

Define, measure, analyze, improve, and control (DMAIC) has been used to reduce defects and sustain improvement since W. Edwards Deming developed the methodology in the 1950s. DMAIC works particularly well for project goals, and it has been embraced by Six Sigma practitioners and performance improvement professionals alike. The following performance improvement cycle is based on DMAIC and is applicable to an organization rather than an individual employee.

Start by asking five questions

This performance improvement cycle consists of five questions, and as these questions are answered, performance improves. Successful football coaches often employ methods similar to this model, so we’ll use football as our example.

The questions are as follows:
1. What is important?
2. How do we measure it?
3. How are we performing?
4. How do we close the gap?
5. How do we sustain?


Let’s examine each question closer.

What is important?

Leaders must be able to verbalize their vision and the purpose for their organization’s existence. What do we as an organization want to be? What do we want to achieve?

Members of a football team understand this principle well. A player is recruited or drafted because the coach believes he will fit into the scheme that the team owners want to run. Some teams succeed by being a run-first offense; others succeed by emphasizing the passing game. Some defenses excel by being aggressive and taking risks, and others use a bend-but-don’t-break mentality to outclass their opponents.

What’s important is to understand what the stakeholders want your organization to be, and what they want you as a leader to accomplish. You must also be able to articulate your organization’s goals and objectives. Document and share this information. Once you understand the goals of your organization, you can move to the second question of the performance improvement cycle.

How do we measure it?

How do we measure what is important to know how we are performing? The answers to this question are key performance indicators (KPIs). KPIs will give you an understanding of how you are operating on a daily, weekly, monthly, and annual basis.

There are two common mistakes with this question. Too often, companies don’t know what to measure, so they don’t measure anything except the final score. By then, it is too late to recognize the situation and react.

This strategy is similar to a football coach waiting until the end of the game to look at the scoreboard. Successful football coaches track the score throughout the game so they know if they need to adjust. In fact, they know the score is a lagging indicator (a measurement that gives a rearward view), and they go to great lengths to understand what they can measure that will give them an indication of what the score will be.

Because they’ve already determined what’s important to them and what their team’s identify is, they can zero in on the particular statistics they need to pay attention to as the game progresses. This helps them know if they will be successful if the team continues as it has done, or if they need to change course. This concept is deployed downward throughout the team. Different team units (i.e., defensive backs, the offensive line, etc.) develop metrics to reveal if they are making a positive contribution to the overall success of the team.

The second common mistake organizations make is to measure too many things. The adage “if everything is critical, nothing is critical” applies here. If you measure too much, the numbers get lost in the mess. Pick only the few critical items to track. That will send a message that they really are important to the organization.

After determining what to measure, you need to invest time in determining how to measure. How will data be gathered, and how do we ensure its accuracy? You may need to normalize the data against a variable that could fluctuate if the environment changes. Measuring defects per unit or number of referrals per client served will allow you to compare performance as volume shifts. The organization also needs to determine how frequently data will be gathered.

Does it make sense to collect certain data every day, or even every hour, or for each unit of work? To answer this, you need to understand the cost of measuring, the risk and effect of operating in a bad condition, and the organization’s ability to recover and correct.

Once data is collected, set up a reporting system that provides information on the appropriate frequency. Also, identify who will review and respond to the data. Developing an organizational scorecard will drive consistency in the metric system, and make it easy to track results over time, just as football teams develop scorecards for each position.

How are we performing?

The third question is about understanding if we are operating in a good condition or a bad condition. To know this, you must first know what you are shooting for. With the second question, you developed ways to measure what is important so you can meet the objectives set in the first question. In question no. 3, you will set targets for those KPIs.

Some football teams strive to hold the opponent to 100 or fewer rushing yards in a game. Others set a goal to create two turnovers each game. By setting a target, they can understand if they are on track to reach their goal, and lead the team to victory.

Once targets are established for the KPIs, the organization can compare current-state performance against the goal. Often, we think we have a problem whenever the perception of pain is present, and we throw a lot of valuable resources at the “problem” only to find out it really wasn’t an issue after all. To overcome this, define problems simply as gaps in performance. If you don’t have a performance gap, you don’t really have a problem, even if you have symptoms that are painful. By realizing you are still performing as desired, you can allocate your resources to more valuable endeavors. If you are performing at a level that doesn’t meet the target, there is a gap that needs to be closed. That is when you recognize you really have a problem, which leads to question no. 4.

How do we close the gap?

To really close a gap, you must first understand what is happening. There are several ways to do this. Simple observation can often give you an appreciation of the situation. To gain a deeper understanding, it is usually helpful to map out the process that feeds the metric. As you map it out, make sure you include those who actually live in the process. These people can provide insight regarding work-arounds and challenges that won’t be visible unless you ask “what if….?” or “what happens when…?”

Brainstorming tools such as cause-and-effect diagrams are good ways to identify potential contributors to a bad situation. You will easily be able to get opinions on what is causing poor performance. In fact, you may get more than you can realistically address at one time. You may have to spend time prioritizing the ideas so you work on the issues that have the biggest effect. It is also critical to take time to validate assumptions and verify these opinions before acting. Challenge your team to figure out ways to measure the potential contributors to not only validate they are having an effect, but to understand the extent of that effect. Once contributors are identified and validated, you can develop countermeasures that will allow you to close the gaps.

Before assigning actions items, outline the workload capacity and decide if your resources have time to work on the problem, or if you have conflicts that will prevent actions from being completed. It is difficult to improve an organization while living in the day-to-day operations. You may need to determine what should be offloaded so you can drive your performance to where you need to go. Overloading those in the organization is a primary reason improvement initiatives fail. If you’ve correctly linked KPIs to your organizational goals and objectives, closing a KPI gap should easily become a high priority.

Driving improvements essentially means making changes. Sometimes, those changes directly affect people within the organization. To increase your chance of success, take time to make sure the organization is ready for change. Help people understand not only what is happening, but why.

It’s important to identify potential risks and unintended consequences associated with countermeasures before implementing them. You don’t want to improve in one area only to drive another area into a bad condition. If possible, make changes in the virtual world first via simulations or modeling to better understand effects prior to implementing them in your real processes. If changes are widespread, it is wise to pilot the improvements in one area first, then copy the improvements in other processes. Upon implementation, it is important to validate the effect of countermeasures. Also, continue to monitor other KPIs so unintended consequences can quickly be seen.

An organization can greatly benefit by standardizing how it attacks problems. Several solid methodologies have been developed to guide organizations through this question. 8-D, A3 and Six Sigma are examples of standard problem-solving techniques. More information on each of these methodologies can easily be found with minimal research.

Football teams close gaps by changing formation, calling blitzes and stunts, or making substitutions. Because coaching staffs know their teams, they are prepared to implement changes throughout the game as necessary. Coaches then continue to measure the performance in various key areas to make sure the adjustments are working.

How do we sustain?

The final question deals with sustaining the improvements. Many organizations make changes, only to revert back to bad conditions later. This question focuses on setting up processes and implementing management mechanisms to ensure the improvements continue over time.

The best way to understand if you slip into a bad situation is to design a control plan that outlines what you will measure to make sure you stay the course. The control plan should include who will measure, and at what frequency. The plan should also outline the plan of action if a metric slips. Having a standard reaction plan allows the organization to move quickly and efficiently to correct the situation.

Your control plan should list all components of the process that need to be measured, and the organization needs to understand how various metrics are related. This is particularly important for organizations that have multiple functions. Keep in mind that people respond to measurements, so make sure you don’t drive the wrong behaviors as departments or individuals chase targets that maximize their area, but which may have a detrimental effect on the overall organization. To overcome the risk of conflicting goals, a balanced scorecard can help align all functions and balance efforts for the overall good of the organization.

Once actions are implemented, conduct an after-action review to understand the cultural acceptance of the changes. It is also good to understand the difficulties encountered while implementing changes so you can help the organization as further adjustments are needed.

Football teams spend a lot of time on this question. Coaches and player groups spend hours in the film room dissecting what happened, what worked, and what didn’t work. For things that didn’t work, corrections are designed. Things that are successful are examined so the team can continue to capitalize on the opportunities.

This is a cycle, which implies there isn’t an ending. One key to organizational success is to continue the cycle; don’t stop with sustaining your improvements. Continue asking yourself “What is important?” to re-start the cycle. After moving through the cycle a few times, the thought process of daily improvement becomes part of the organizational culture, and that’s when you know you are on your way to victory.

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About The Author

Barry Johnson’s picture

Barry Johnson

Barry Johnson serves as president of Performance Optimization Associates LLC, a performance improvement consulting group. Johnson has a bachelor’s degree in mechanical engineering from the University of Tulsa and a master’s degree in leadership from Grand Canyon University. He has more than 25 years of operations, engineering, and management experience in diverse industries such as oil and gas, automotive, consumer goods, electric utilities, and recreation. He can be contacted at barrygjohnson@sbcglobal.net.