Tag Archives: continuous improvement

Continual vs. Continuous Improvement

W. Edwards Deming in Tokyo

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Coming from a W. Edwards Deming background, I have been sensitized to the word “continual” when it comes to improvement.  It served as a code word for those that where true followers of Dr. Deming vs. “the pretenders.”  I always knew who really understood the philosophy and those that just sounded good.

Even today, I still find myself talking to groups about the difference between continual and continuous improvement.  I like to describe “continuous improvement” as always making improvements and moving forward – I have never seen this happen over the long haul.  “Continual” improvement” implies that sometimes you have to stop or even take a step or steps backward to achieve improvement – improvement is discontinuous in nature.

Management doesn’t understand continual improvement as their impatience only allows them to embrace continuous improvement.  Always forward, the next quarter must be better than the last.  Growth, no matter what the reality or the foolishness of the pursuit.

Studying systems requires a stoppage to understand the underlying thinking that dictates the current performance.   With solid understanding, experimentation with method may lead to improvement or knowledge of what doesn’t work.  For a scientist, this is a victory as they come one-step closer to discovery.

The road to continual improvement is a rocky one with many ups and downs.  Understanding this allows one the opportunity to begin the journey.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com.  Learn more about the 95 Method for service organizations.  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Forms of “Copying” that Lose You Money

Process and data modeling
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I mean seriously, what organization or government wouldn’t want to copy what another is having success with in the marketplace.  It is the right thing to do and after all . . . everybody does it.  This has to be right approach.

The problem is, it is not the right approach.  Yet we are inundated with those that advocate and perpetuate things like tools, benchmarking and best practices.  All are forms of copying and can get your organization to lose grown quickly.

Systems thinking begins with understanding that no two systems are alike.  The translation is that all organizations are different.  Think about it, different people, different customer demands, different processes, different technology and the list goes on.

So why is it that consultants, technology companies and others always want to copy?  Usually because they weren’t the ones that came up with the method, but anyone can copy.  This approach doesn’t teach people in organizations how to develop new methods and what I find with tools is no one seems to be discovering new ones.

And so it goes with systems thinking, we teach that all organizations are different.  Three good questions to ask before copying: Who invented the tool? What problem were they trying to solve? Do I have that problem?  In service industry this is constantly abused by lean practitioners as they apply lean manufacturing tools to service (never a good idea to blindly apply).

As for best practices, the issue is that this is usually applied by software development firms that want to sell the standard software package.  There is no “one best way” and this approach totally discounts that there is always a better way.  I start to hear things like “everyone uses an IVR” (Interactive Voice Response) for their call center and you should have one too.

No, you shouldn’t and other blog posts will tell you why.  It is to assume that this will make things better and we know that assumptions are bad to make.  This is true especially when dealing with systems as complex as service organizations.

Organizations spend a pretty penny benchmarking against each other to compare, what a waste of resources.  It is difficult enough to compare (and expensive), but in comparing to a different organization in the same industry we ignore the fact that all organizations are different.  So save your money and invest in your own organization.  The truth is every organization has what it needs within it to improve.

Another reason for not copying is that you will never catch up.  Manufacturers for years have been trying to “catch-up” to Japanese Manufacturers.  The problem with this approach is that you never catch-up, unless of course you are Toyota that has left the door wide open.  The Toyota problem is copying the US investment community and has left Toyota with the same short-term thinking that has infected the US for so long.

For me, it is the thinkng that develops good ideas to improve systems.  To improve performance we have to change our systems (and no this is not just processes), we have to change our thinking about the design and management of work.  No copying in the form of tools and best practices, but the mindset to create the improvement.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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Zappos’ Achilles Heel

First of all, let’s not look at the cup as half empty for Zappos, because I believe it is two-thirds full.  At the Economist Marketing Forum held in San Francisco this year Tony Hsieh (pronounced Shay) and two CMO’s from Del Monte and Frito Lay discussed the role of marketing in their organizations amongst other things (watch: Ties That Must Bind: Why CEOs Rely on CMOs More Than Ever).  The poor guys in the traditional roles of CMOs (by function) had to listen to Tony say that they really didn’t have a marketing function at Zappos.  They reinvested into customer service and the better service was the marketing for Zappos.  I thought the others would spontaneously combust.

So yes, there is much to like about Zappos.  Let me highlight a few other comments Tony Hsieh made that got my attention:

  • Our culture (of customer service) is our brand
  • Investment of surprise upgrades to customers
  • Repeat customers from word-of-mouth (pull, not push)
  • Investment in culture is not an immediate benefit like cutting costs, long-term thinking is necessary
  • The use of the telephone as a branding device
  • Allowing new hires to weed themselves out by offering significant money ($2,000) if they quit
  • A lot of emphasis in getting the right people in the organization
  • Leadership development and training

So why the heading about the “Achilles Heel”?  What could possibly better than this.  I got concerned when Tony started to talk about:

  • Low Performers (and how they weeded out “Jack Welch” style the low 8%).  I don’t know the nature of the 8% and it could be they hired the wrong people before they “improved” the hiring process.  But it brings up questions about having already invested in training and Tony said they were profitable when they did it and didn’t have to do fire the 8%.  Who says that if they dip back into the pool of people available that they will find better employees than the ones they just let go and now they have to be trained.  This “renewal” process is expensive.
  • Call Monitoring.  Call monitoring has a useful purpose if the agent is new or if the monitoring is for improvement efforts.  Regulatory compliance is waste, but required and doesn’t always require monitoring that’s just they way people interpret it.  Otherwise, call monitoring used as inspection comes too late and is costly.  if the other elements like culture, hiring the right people, management thinking, etc. are correct do I really need to inspect?
  • Performance Appraisal.  I was disappointed to hear that performance appraisal was being used.  My fear is that the worker is being managed command and control style. If I understand purpose “to serve the customer” what possible good can come from an appraisal of performance.  It distracts the worker from “serving the customer” to “serving my supervisor or manager” or could over time . . . this is a type of waste.
  • Financial Goals.  If this means targets for profits  that lead to scorecards, MBO or the like trouble is not far away.  The targets (financial or performance) will ultimately become the defacto purpose of the organization and customer service will become secondary to the target.
  • Failure Demand.  How many phone calls are they getting that are follow-ups, wrong shipments, wrong billing, problems with the product, etc?  This is failure demand and even if you have nice people and good service if failure demand runs high customers will eventually erode their advantage and go elsewhere.  So, what percentage of calls are failure demand?
  • Do they understand variation?  Do they understand when a worker is statistically different from other workers?  Do they understand how to use data for prediction?  Do they understand the difference between “special” and “common” causes of variation that will help them continually improve their organization.
  • How will they achieve continual or continuous improvement?  “By what method” will they improve.  Will command and control or will systems thinking prevail in their business improvement efforts?

I know he didn’t talk about the last three, but these are things that will play themselves out over time.  There is much for Zappos to be proud of in its inception-to-date achievements and I can only hope that continue to maintain that innovation leadership that they have on their side now.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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SLA = Stupid Limiting Agreements

SLAs seem to be the staple for the customer management process for contracts, performance and operations.  The first time I heard the word SLA I was consulting for a Fortune 500 IT company and they needed to have a group of metrics because of the poor service they had been delivering to their banking customers.  I already was a student of the statistics of Shewhart and Deming, meaning I understood the difference between “common” and “special” causes of variation and also understood that having a service level agreement (SLA) didn’t improve the performance of the organization.  I used SPC (statistical process control) to determine the differences in variation.  All basic to improving the system.

The problem . . . I was the only one focused on improving the partnership.  The IT vendor and the customer were focused on the service level and not the system.  The customer wanted penalties and the IT vendor wanted rewards (and to avoid penalties).  The two groups spent an inordinate amount of time dickering over what the rewards and penalties should be and I (working for the IT vendor) was to be sure that the operational definition of the metrics was such that the vendor could not fail.  The slew of waste (manipulation, reward/penalty setting, etc.) between the IT vendor and the customer was astonishing.  No one was interested in working together to improve method or even discuss the validity of the original measures. 

SLAs are no more than targets and create what I believe to be adversarial relationships and distrust, focusing on results not method.  This is no different when the SLAs are internal. I see this between departments and units. “I will get you my work in 2 days or less.”  The problem is the measure is not tied to any customer metric it is all internally focused.  Additionally, the amount of manipulation begins when you hear things like “the clock doesn’t start until I open your request” and they don’t open their email for a week . . . did they really hit the SLA?

A better “systems thinking” way is to understand purpose from a customer perspective, derive measures and then find “new” methods.  This avoids the waste associated with measures that do not matter.  Workers that understand good customer metrics and expectations can be creative in changing method.  Partners (like my Fortune 500 IT company and their customers) can achieve continual or continuous improvement by working together on method, not SLAs.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  He is focused on exposing the problems of command and control management and the termination of bad service through application of new thinking . . . systems thinking.  Download free Understanding Your Organization as a System and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt.

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Labels, Tools and Change Management

In our last major crisis, the car manufacturers were on the ropes because they were unable to compete against the Japanese manufacturers.  This was not last year this was in the 1970s and eventually culminated in major changes to the way manufacturing was done.  However, the change never hit the executive ranks and here we are again in 2009 (my opinion). BTW, we have been through a financial institution crisis before and I’m not talking about The Great Depression, I am talking about the Savings and Loan crisis in the 1980s.

So what mistakes did we make that places in our current position, some are outlined between command and control thinking vs. systems thinking.  I see something more subtle that has happened.  When people started to investigate W. Edwards Deming and Japanese manufacturers with visits and questioning of “how they do it” they came back with a label and ideas.  The label was TQM (Total Quality Management).  A label that did not come from the Japanese or Dr. Deming, but a label founded by the consultants that wanted to profit from the new movement.  Worse, in manufacturing visitors from the US saw JIT (Just-in-Time) manufacturing, quality circles, etc. as the “secrets” to improving manufacturing.  Many manufacturers rushed to copy these ideas without understanding the underlying concepts that created these innovations.  What I learned from this time period was you can not copy results and labels are meaningless except to market to organizations.

As the “Lean” movement got underway, I saw a repeat of the same mistakes.  Taiichi Ohno never labeled what he did in the Toyota Production System “Lean” . . . he had concepts from watching a Ford manufacturing facility.  This movement has taken a similar path to TQM in that the focus has been on the tools.  “Lean” has tools like 5S, A3s, Value Stream Mapping, etc. that has watered down the change in thinking required to not only sustain the changes, but to discover new tools and ideas that can take an organization to the next level.

Understanding the basics of changing thinking and speaking to the fundamental concepts that Deming spoke/wrote about in his 14 points and 7 deadly diseases (later System of Profound Knowledge) and Ohno’s Toyota production System.  This has helped gain new learning in service industry in achieving business cost reductions and service improvement.

I will no doubt get push-back from those that aspire to tools that they have achieved gains in their change management programs, and I will not dispute that they have achieved business improvement. I believe there are limitations to this approach without the fundamental change in thinking required at the leadership level to sustain these improvements.

What I do see is a difference in method,  one of changing thinking vs. use of tools as a lead to making organizational change.  A method that has a greater chance of sustaining an organization’s continual (Deming’s preferential term) and continuous improvement process.

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Out with the Old and In with the "New" Systems Thinking

will be the first to tell you to remain skeptical of any “new” thinking.  However, what we have here is not “new” per se.  Our prevailing management style in the US is born from Frederick Winslow Taylor called “Scientific Management” that gives us the structure of functional specialization of work (assembly line).  This original thought has been the staple of our management philosophy from the late 1800s to present.  A time period that spans the invention of the Zepplin, teabags and the first flight of the Wright Brothers to walking on the moon and the iPod.

Nothing changed much until the American W. Edwards Deming was successful in post WWII Japan in the 1950s in what would become known as the Japanese Industrial Miracle.  All of a sudden the US had a staunch competitor in manufacturing.  Add to this “new” thinking Taiichi Ohno and the Toyota Production System, and we have a whole new management system.

When you look at service organizations (private and public sector) you will find precious few that have ever tried such “innovative” thinking.  The list is long as to why . . . competition (no one else pressuring service organizations), “we’ve always done it this way” thinking, lack of understanding, unwillingness to give up control, technology, etc., etc.  For what ever the reason, not much has changed in management since Frederick Winslow Taylor.  Business Improvement programs (Lean Six Sigma, TQM and many others) have become more of the same.  However, “new” thinking challenges this stale sameness.

The economy has changed now.  Maybe we need to be looking for better ways.  My continual search for better methods has led me back to Deming and Ohno. Instead of tools in our continual (continuous) improvement, we need new methods and to change thinking.
To read more on systems thinking with practical exercises, I would urge you to read the Fit for the Future management articles (six in all).  These articles are good reads for your organizational change management and leadership programs.
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