Organisations use Continuous improvement Programs as a way of identifying opportunities for streamlining work, reducing waste and variation in processes. Typically, methods such as Lean and Six Sigma, are used alongside or in addition to essential process driven improvements to find savings and growth opportunities.
Unlike process driven improvements, for example, audit non-compliances, customer complaints and corrective actions, the results and outcomes of CI are intended to have a more holistic effect on the organisation. However, they can be more problematic or challenging to measure in a meaningful way. In this blog post, we will look at how to measure process improvement.
Process driven improvements are generally more straightforward to measure and track. In fact, it is relatively easy to measure the number and types of customer complaints or audit non-conformities. These and a wider set of measures are typically used by Quality Assurance to ensure a management system is achieving the results expected.
Using tracking software or a spreadsheet, it is easy enough to trend or attribute to several reported areas of the business and their action status. The results of these indicators can then be used to focus on where to drive action to bring about these essential improvements.
Organisations often introduce Continuous Improvement Programs with the intention of becoming an excellent company. Our experience is that CI requires a different approach and skillset to the Quality Assurance driven improvement approach. Of course, measurement and key indicators are essential to drive the program and adapt it going forward.
CI programs and transformation typically have three main sets of aims:
- Strategic: Improving the quality, lead time and cost of processes, thereby reducing waste and increasing flow.
- Problem Solving & Performance Management: Sustaining and improving performance every day at individual and team level.
- People and Culture: Enabling the organisation to deliver on customer needs through the optimisation of people’s roles and responsibilities, thereby building their capabilities and engagement.
The types of measures and indicators used to track a CI program should aligned with these aims. Let’s look at each of these in turn.
Strategic CI Programs
For any organisation serious about CI, there must be some key strategic objectives. Assuming these exist, the appropriate CI measures would be related to the effectiveness of the deployment of the strategy. Lean approaches often focus on using a deployment system based on “Hoshin”. In this approach, the objectives are cascaded from the top level (Level 0) of the organisation to each organisational unit and key functions within each unit. Effective Hoshin planning can takes a few years to become effective. So, it makes sense to measure how you are doing versus where you want to be.
Problem Solving & Performance Management CI Programs
One way to think about these types of initiatives is to use a railway analogy of enabling the trains to run faster (problem solving and project management) and ensuring the trains run on time (performance management).
- Problem Solving initiatives should be planned and strongly aligned to achieving the breakthrough and improvement goals necessary to achieve the organisation’s strategy. These improvements are generally led by people with expertise in improvement and project management. In addition, they should use an established improvement method such Lean’s A3 or Six-Sigma’s DMAIC to ensure they achieve the best possible outcome. Organisations using this approach use measurement and tracking to ensure that the activities are supporting their strategy.
- Performance Management is a key part of any Lean based CI system. It involves every team reviewing and implementing improvements based on a regular review cadence. This “Daily” management activity involves looking a few metrics that are important to the team and their customers. When the team identifies performance below what is required, they set up meaningful actions based on an understanding of the causes to bring the performance back to standard or target level. Over time, the teams take ownership of measures and the enablers of performance in areas such as safety, leadership, and job skill training. They use measurement and tracking to ensure that the team-based improvement happens.
People and Culture CI Programs
Typically, Human Resources lead, develop and support the change management necessary to have the right team composition and leadership. The CI program plays a vital role in building the capabilities and behaviours needed for effective problem solving and performance management. We can identify the measures used which can be broken down into two main categories:
- Capability Building Metrics
- Number of people trained and certified in specific methods.
- Financial business impact of the CI training and certification
- People Engagement
- Perception metrics gathered from staff survey, focusing on key questions related to improvement.
Continuous Improvement Examples
You can see below how these measures might be presented and tracked in a CI scorecard.
As with any measurement process, it is important to have appropriate operational definitions of what is being measured. Next, you target those that make sense given the unit’s maturity and ambition level. Then, you present the measures in a scorecard format. This scorecard provides a readily accessible format that can form the basis for dialogue with leadership about what matters and where the next actions are necessary. Finally, you can trend the results over time rather than a “point in time”. This gives even greater context and will help bring the right kind of approach to bring performance to target.
We hope you enjoyed reading about how to measure your Continuous Improvement Program. You may also be interested in reading about How to Develop Continuous Improvement Capabilities throughout your Organisation and Partnering with External CI Trainers – 8 Key Questions to Ask to Ensure a Successful Outcome. All our blogs are available to read here. Please connect with us on Linkedin and Twitter.