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Table 1. Classifying performance measures with their associated areas of improvement
Once we measure that which we improve, if we then want to correlate process measures to project or product performance measures, we can do so, and we’ll have a more imperical basis for the correlation.
But now back to process improvement. We can and should define effects that improving our processes have on our business performance. If we understand these relationships, we can make more rationale business decisions about how and where to spend our improvement dollars. For example, if you could guess that a million dollar change to process could get you a 1.5X result, whereas the same investment in technology could get you a 2X result, and assuming you only have the one million dollars to spend, wouldn’t knowing the greater ROI influence your investment decision? Even just sticking to process improvement, how would you spend your money if you could reasonably guess that a $100K change to process performance would yield the same benefit as a $500K change to the defined (written) processes?
So let’s begin to look at some simple ways to answer these questions. Again, this series doesn’t go beyond a qualitative analysis. If you or your boss has to have numbers, you’re going to have to assign those numbers yourself.
One of the simplest ways to understand the relationships between process improvement and business performance is to chart it in a simple analysis matrix like the one shown in Table 2. This table provides examples of activities that can be considered process improvements, the correlating expectation in a business performance enhancement resulting from the improvement, and a description of the relationship between the improvement and the business performance results.
Table 2. Example of defining the relationships between process improvement and business performance
The most important element in developing this information is defining the relationships in the third column. If you and others find it difficult (or impossible) to descripe the relationship between process improvement and business performance, maybe you should accept that there isn’t a relationship and move on.
Don’t do this in a vacuum; round up people from multiple disciplines in your organization. Also, don’t just use a bunch of managers or people who aren’t busy at the moment. Staff this working group with people who are familiar with the processes, the technology, and the skills involved in the business area you want to improve. For example, if I wanted to improve call center response time (so that I could improve customer satisfaction and reduce call center paid overtime; see the first article in this series), I would staff my improvement working group with the person who knows the CRM system inside and out, the person who wrote the call center procedures, a person who didn’t write the call center procedures but has to use them, and someone who knows the skills needed for operating the technology and performing the processes to the extent that she or he is probably a trainer. In other words, staff this working group with real subject matter experts, not just the bosses who may have lost touch with the work they supposedly manage.
Although this series has provided much guidance in how to get performance from process improvement, the quest for brevity in representing this information means that I have only dealt with this voluminous topic in a superficial way. However, if you’re the kind of person who has no patience for the long story and just wants the punch-line or the ending, here’s your take-away list. To better ensure process improvement results in business performance improvement:
Either let go of or scrutinize your beliefs about the relationship between process improvement and business performance improvement.
Don’t tamper with the system … know what to improve, know what to leave alone, and why in both situations.
Improve what you intend to measure, and then measure that which you improve.
Connect process improvement to performance improvement by defining the relationships between the two.
Measure the effects of process improvement on business performance and, in doing so, learn how to not lie to yourself.
As of the writing of this series, the American economy is still struggling to emerge from a severe recession. As business leaders, we need to reflect on our individual decisions and actions that led us into that recession, and the decisions and actions that can lead us back to a place of economic strength. If in today’s world you still think it’s a good idea to throw money at process improvement and not know or care what the performance results you and your stakeholders should expect, then you haven’t recognized the sea-change we have encountered. Your competitors probably will
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