"The value of an idea lies in the using of it",
Thomas Edison.
In spite of it often being just a cliché, the concept of value itself often loses its lustre in a project as it journeys downstream after its value is defined at the outset. Almost as if the longer the distance travelled, the more obscure becomes the origin! Call it what one may - value, value proposition, why, the purpose, the objectives, the goal, the vision, the intent - it all means the same thing - the intended utility in exchange of the cost incurred and the time spent. Value is some quality delivered at some cost at a certain time. All subconsciously understand and agree on the need to define it too, yet obscurity creeps in no sooner than the stage when the value proposition needs to be consciously borne in mind by all in the team.
Doesn't sound cogent yet?
The purpose of the article is to discuss the possible ways of minimizing this typical pitfall in routine management. Yet - to appreciate the extent of the impact of occurrence of this simple error, let us think of some typical scenarios which are not common - but not rare either.
Scenarios (Macro-level)
Typical manufacturing company embarks on a lean manufacturing programme. The ultimate value lies in growth in margin, growth in the top line, increase in customer satisfaction and employee morale, improvement in supplier relationship and reliability etc. The senior management enthusiastically announces that the intention is to enhance employee initiative and involvement and all-round improvement in the business performance. Some go a step further and announce that this shall never lead to any reduction in labour. The initial phase is marked by massive involvement of management in value stream mapping or balanced scorecard development and of the workforce in 5S. The subsequent phases are marked by celebrations for cosmetics of the employee involvement and the visible, lustrous signs of progress - felt but not measured. What follows is an anticlimactic series of financial results that reflect no intended improvements. The illusion that culture has improved if not financial performance is soon demolished by lay-offs. The ultimately responsible aspect for all this is - no marks for guessing - the unexpected economic conditions! Somewhere along the line, the original intent or the value-proposition of the whole effort first becomes obscure and then simply vanishes into thin air! Implementation failures for lean manufacturing programmes have been known to be 60%. (Ref. Antony Pearce, Dirk Pons, Thomas Neitzert, Implementing lean — Outcomes from SME case studies, Operations Research Perspectives, Volume 5, 2018, Pages 94-104, ISSN 2214-7160). Not that all the failures are attributable to lack of emphasis on the core value proposition, but it does play a vital role in steering the process effectively.
Another commonplace scenario is that of a hard technical commitment prematurely done that affects the business downstream. This is sometimes because of heroics or false notion of action-orientation being the same as reckless actions. Machines are purchased instantly. Materials are ordered instantly. Suppliers are appointed instantly. Employees are employed or fired instantly. All - to realize later that the original set objectives were remarkably different from the ultimate outcome.
ERP implementation is yet another area of perennial detachment from original objectives resulting in cost escalations, delays, or scope creep - sometimes all three. As a result, the recent developments in lifecycle modelling have forced the designers to look at iterative approaches that force the participants to keep looking at the intent and the core value-proposition frequently. The need for agility and hence the agile approach.
Scenarios (Micro-level)
There would be probably a much longer list, if one were to make it, of scenarios at the micro-level in which the sight of intent or value is lost or has significantly eroded.
Reports are a typical example. Think of the reports developed, regularly generated, distributed, preserved, searched and eventually deleted without almost any part of theirs being used. Not even as exceptions wherein something untoward stands out and, therefore, the value of the report is suddenly realized at least once in a blue moon. Reports are usually developed on the basis of the need at a particular instance or in a particular period. Over a period of time, the utility is lost. Yet the practice continues. Even for a report to be serving some purpose through highlighting a potential danger or a risk - people need to look at the reports - which does not necessarily happen. Reason? Simple. The perceived value itself is already long-lost.
Approval processes set in stone for years, regular meetings with set periodicity that generate little work for the time and labour they consume are some other examples.
Roles of people are particularly interesting in this regard. It is very common to see a job description and job specification being arduously made with a certain intent in mind. It is equally common to see that, in reality, the role performed by the incumbent person is significantly different from that intended. Furthermore, if questioned with blinded data collection approach, the response by the incumbents is sometimes significantly different from what their documented job description outlines.
Needless to mention that. avoiding this aberration without undermining the necessity of being flexible in redefining the intent or the objective when genuinely required, is the heart of the matter. Three key approaches based on three values i.e., being proactive, collaboration and flexibility are relevant for this.
1 - Invest sufficient time in defining the intent
Planning at an early stage to define the objectives of the project is a crucial phase. While it is often important to change the objectives downstream, it helps to detail quickly but specifically the objectives at the outset.
In engineering or manufacturing industries, silver-bullet syndrome gripping some engineers is commonplace. A robot that is not economically justified, is simply bought because an engineer in authority is mesmerized and dreams of automating the line that is neither a bottleneck nor a high-wage high-overhead problem. Furthermore, the robot does not function for several months - at times years - to follow. Not that this happens to a special purpose robot alone. It can happen to others processes too.
It is also not uncommon to envisage an ERP or a digital transformation or an operational excellence programme to be the cure-all for all the current woes and the programme itself becomes a woe for considerable time to come!
Notwithstanding that plans almost always change - planning is still better than not.
There are dreamers and there are planners; the planners make their dreams come true.
- Edwin Louis Cole
2 - Participative and collaborative concept-building
Not groupthink, but collaboration and participation of stakeholders helps. It is best not to skip the divergent thinking phase to start with - the brainstorming sessions to precisely determine the value proposition. Else objectives are often set as they are impulsively pre-conceived. There is also anchoring bias of those in authority that keeps challenging thoughts away. If that is allowed to happen - as it often does - at the management levels, the issues at the ground level are disconnected and never expressed clearly.
It is common to see that a good TPM (Total Productive Maintenance) programme lays emphasis on equipment reliability and increases Overall Equipment Effectiveness. It is used emphatically to create stocks - while a team working on new products is working on phasing them out soon.
Reducing slow or obsolete stocks (SLOB) leads to curtailing purchases first, whereas the unpleasant reality is that the non-moving stock are already sitting idle in the system. The value of inventory does go down, but in unwanted areas causing severe shortage, and the non-moving stocks stay as they were before. As a result - either sales are lost, or procurement expenses spiral up leading to serious erosion of margins.
It is also not uncommon to see the top tier of management vigorously working on cost reduction programme while the supervisors are aggressively working on quality at any cost.
Such examples are usually symptomatic of group sessions, intended for bottom-up communications, actually working with top-down effect and cross-functional communication broken down due to undefined silos that set in over time.
3 - Embrace iterative lifecycle when feasible
Lifecycle modelling has gained significant importance in the information technology areas over last four decades. The concept is equally applicable to any organized change. However, it is seldom embraced in other industries with as much detail and discipline as in software development.
With agile methodology, spiral lifecycle has already gained popularity. A slowly growing scope with iterative routines of development can be used for management initiatives such as operational excellence too. Evolutionary prototyping or evolutionary delivery (i.e., final implementation) too make enormous difference when compared with traditional staged processes.
The underlying important principle in adopting iterative lifecycle of change for any initiative is simple. The value-proposition of a change initiative almost never remains the same at the end as imagined at the beginning. Yet - with agility of reviewing and adjusting it frequently - it does not go out of sight.
- Nilesh Pandit
26 January 2023
#lean #LeanManufacturing #ChangeManagement #ContinuousImprovement #OperationalExcellence #leanleadership #CollwisMax #problemsolving