Monthly Archives: May 2011

Lean and Six Sigma are Good, Adding Change Management is Great

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Six Sigma and Lean are all the rage with some of our clients.  If you haven’t heard of them, Six Sigma is a set of business practices (originated at Motorola) designed to improve processes by eliminating defects, and Lean is a business system (pioneered at Toyota) that aims to reduce waste and improve customer value.  Both can bring tremendous improvements to organizations.

(Those of us of a certain age remember similar process improvement methodologies like Reengineering and TQM.)

One client in particular is a devout follower of both Six Sigma and Lean.  And for good reason.  The processes help clarify issues, diagnose root causes, and pinpoint business solutions.  This client, however, has not always been great at implementing those great business solutions.

When they adopted these new business improvement methods, they jumped in with both feet.  They sent people to training on new tools and techniques, started measuring their use, and encouraged people to get certified in improvement methodologies.  All in, over
30% of their staff is certified in a business improvement method.

With a stable of Black Belts and a sizable budget for Lean consultants, the organization is well positioned to develop the best business solutions in their industry for their customers.  But it has not always been smooth sailing as they got used to their shiny new toolkits.

Their internal and external process experts worked on projects for months and even years, but the organization got stuck when leaders argued about business needs and budget priorities, middle managers questioned the data and the process used to develop the solutions, and front line employees just paid no attention to the new ideas.

They came face to face with the realization that the biggest challenges to making change happen within organizations are people issues.  They realized that they needed to spend a little time thinking about how people internalize the new behaviors required rather than dedicating all of their focus to processes and systems.

General Electric realized, years ago, that Six Sigma falls short unless people within the organization make the personal changes necessary to behave differently.  Some within GE use the equation E = Q x A.  The Effectiveness of the solution is equal to the Quality of the solution multiplied by the Acceptance in the organization of that solution.  The highest quality business solutions are not effective unless they are accepted by people who need to act on them.

The focus on the “people stuff” in and of itself is a discipline called Change Management (not to be confused with technical change management / version control).  Change management is the next frontier of business improvement for organizations of all sizes.  The newly formed Association of Change Management Professionals (ACMP) is growing quickly and globally.

Just as Six Sigma and Lean started with big companies and has since “trickled down” to smaller organizations, effectively managing change is starting to trickle.  You don’t have to be big or rich to be fast… you just have to be fast to be fast.

How did our client make the most of the huge investment they had made in Six Sigma and Lean?  They focused on Change Management.  They acquainted leaders with their role in driving change; included Change Management as part of basic skills training for managers; and certified a group of internal experts on how to make change stick.

Don’t forget about Six Sigma and Lean.  It is all great stuff.  But remember to include a focus on people.  Organizations with a Change Management competency help their people move from thinking and acting in existing ways to thinking and acting in new ways that are required for the organization’s success.  A great solution is no good if people don’t act accordingly.

“Off-Shoring”, “Right-Sizing”, “Out-Sourcing”… Whatever You Call it, it Means Big Change

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For organizations seeking to reduce costs by sending work to other countries, the
path is long and difficult.  Off-shoring may be absolutely necessary for your organization to remain competitive or possibly just stay in business, but don’t underestimate what it will take to do it and do it right.  With the pace of change around the globe these days, even the basic questions like “Where should we send the work – India?  Ireland? China?” may be hard to answer.

What is also hard, but often overlooked, is how to deal with the people within an organization during the process.  There are two primary groups you need to think about when you are off-shoring:  the people who will lose their jobs, and the people who will be left behind and will watch the process unfold before them.  If off-shoring doesn’t take into account the needs of the people who are impacted by it, the gains that you hope to make can be lost by large scale disengagement, decreased productivity, and massive turnover.

During organizational transition, everyone is affected.  People who will lose their jobs are obviously impacted; but also, employees who don’t lose jobs may experience guilt that they “survived” and fear that they could be next.  The things we do to help both groups transition are completely inter-related.  For the “survivors,” the #1 factor that contributes to their experience of the off-shoring is their observation of how those who lose jobs are treated.

During out-sourcing (well, any time actually), there should be an underlying desire to treat people with respect and dignity.  It sounds easy enough, but it can be difficult in situations like this.  It’s not as if we intend to treat people poorly, but sometimes we just forget what people need or we just get too busy and forget about the people impacted.  Every day, you need to ask yourself, “Are we doing for people who will lose their jobs what I would want to be done if it were me that was going to lose my job?”

As you make every decision, keep the golden rule in mind.  How would you want to find out your job was being eliminated?  Most likely, you’d like to hear it directly from your manager in a one-on-one conversation rather than in a meeting of 50 people.  And you probably would want to hear it before anyone else in your group heard it.  While it is logistically difficult, the effort will pay off.

Remember that the people who will lose jobs are also likely friends of people who will remain a part of the organization after they are gone.  If the people leaving the organization are treated poorly, not only do you engender ill will from organizational alumni who are out there bad-mouthing your organization, but you also plant the seed with employees who will stick around that you might not treat them so well either in the future.

While the work of off-shoring is difficult, it doesn’t mean you should steer away from off-shoring.  Just go in with your eyes open about the work it will take.  Treating people well is not about just coddling people.  It is about getting the business results you are seeking by keeping your organization engaged and productive.