Performance Acceleration

Management:

A Way to Change Your Culture

By

Dr. H. James Harrington

May 1, 2013

Typical Comment

"Every year we improve. I have data that

proves this. Continuous improvement is a way

of life in our company. Then why, oh why, do

we continue to lose market share even though

we are using the latest improvement

methodologies and installing software like

CRM?"

"Many organizations

are improving but they

are not winning the

race."

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Time

Quality

Quality Improvement and Customer Expectations

© 2007, Harrington Institute, Inc.

Confusion Reigns Supreme

• Philip B. Crosby’s 14 Steps

• Dr. W. Edwards Deming’s 14 Points, or new and

different 14 Points of “Profound Knowledge”

• Dr. Armand V. Feigenbaum’s 10 Benchmarks for

Quality Success

• Dr. Joseph M. Juran’s Step-By-Steps

Improvement

• Dr. Kaoru Ishikawa’s Six Categories for

Transformation

Lean Methodology

• Today Lean is a very popular methodology.

• It focuses on the elimination of all wastes.

• You can't argue that waste is bad.

• My great-grandfather used to say,

“Waste not, need not.”

© 2007, Harrington Institute, Inc.

A Streamlined Car

"If you change the way

the outside world views

the organization, it is

just a temporary fix. It

becomes permanent

when you change the

way the organization

views itself (its

culture)."

• "If you don't change

behaviors/habits, the

organization’s culture hasn't

changed. If you don't change

culture, you won't have

long-term performance

improvement."

© 2007, Harrington Institute, Inc.

Typical Question

• "Why does my organization need to develop

a performance improvement plan to

improve? I know a lot of problems that we

can start working on right now.”

• Answer –. Our research shows that more

than 1,300 different improvement tools

exist today that will provide a positive

impact upon an organization’s environment.

© 2007, Harrington Institute, Inc.

© 2007, Harrington Institute, Inc.

Process Improvement 8 ATE's

• Eliminate

• Informate

• Automate

• Coordinate

• Innovate

• Replicate

• Cultivate

• Regulate

The Three Parts to

Performance Acceleration

Management I. Define how the organization needs to

change.

II. Define what the organization needs to do

and when to do it to change.

III. Managing the organization’s change

process.

Part I. Defining How The

Organization Needs To Change.

To Change the Organization's Culture

You Need to Define and Change the

Things (Key Business Drivers) that

Dictate the Organization’s Performance.

Business Drivers

or

Controllable Factors

The Organization Culture

New Improvement Program Impact

The Next Improvement Program

Impact

The Total Impact

Typical Business Drivers

• Leadership and Support

• Customer Partnerships

• Business Processes

• Training

• Knowledge Management

• Measurements

• Supplier Partnerships

Part I. Defining How The

Organization Needs To Change.

• Activity 1 – Assessment (as/is statement)

• Activity 2 – Vision Statements (Should -

be vision)

Part I Activity 1 – Assessment of Present State

• As-is/Should-be

• Business Drivers’ Maturity Grid

• Historical Change Analysis

• Past Performance Initiatives’ Analysis

• Develop an organizational present

cultural model

Part I Activity 2 - Vision Statements

• Preliminary Vision Statements

• Stakeholders’ Reviews

• Final Vision Statements

Part I

Define What Will Change

Part I

Define What Will Change

Get a clear view of

your Vision or what

you want the Future

State to look like.

Get a clear view of

your Vision or what

you want the Future

State to look like.

28

Typical Vision Statement for

Operating Processes

Major processes are documented, understood,

followed, easy-to-use, prevent errors and are designed

to be adaptable to our stakeholders’ changing needs.

Staff uses them because they believe they are more

effective and efficient than the other options.

Technology is effectively used to handle routine,

repetitiveness, time-consuming activities, and remove

bureaucracy from the process.

Part II. Defining What The

Organization Needs To Do and

When To Do It To Change.

Part II Defining How to Change

Part II Defining How to Change

Start with an Organizational

Assessment to determine the

most critical change areas to

focus on first.

Start with an Organizational

Assessment to determine the

most critical change areas to

focus on first.

31

Part II. Defining What The

Organization Needs To Do To

Change.

Activity 3. Set Performance Goals.

Activity 4. Define Desired Behaviors.

Activity 5. Develop Individual Improvement Plans.

Activity 6A. Combine the Individual Plans.

Activity 6B. Design the Change Management Plan.

Part II Activity 3. Setting Performance Goals

• Return on Investment

• Customer Satisfaction

• Response Time

• Value-added per Employee

• Error-free Performance

• Dollars Saved

Measurement YEAR

0 1 2 3 4 5

1. Customer satisfaction 60% 65% 75% 80% 85% 95%

2. Return on investment from TIM 1:1 4:1 15:1 30:1 40:1

3. Return-on-investment 2:1 5:1 10:1

4. Defect rate improvement 2X 10X 100X

5. Value added/employee in $1000 45 50 65 70 75 80

6. New product cycle time in months 53 53 30 15

Typical Performance Improvement Goals

Part II Activity 4. Define Desired Behaviors.

EMPOWERED EMPLOYEES

• Wild ideas are encouraged and discussed.

• Unsolicited recommendations and suggestions are often turned in.

• Business information is readily available to all employees.

• Management defines results expected, not how to get them.

• Decisions are made at lower levels.

• Less second-guessing.

Part II Activity 5. Develop Individual

Improvement Plans.

• One for each vision statement.

• Problems today.

• Roadblocks to move to future state.

• Select the right tools from the 1300+

toolbox.

There is a difference between planning

and problem solving.

Part II Activity 6A. Combine the Individual Plans.

Considerations:

• Availability of resources

• Other activities going on within the

affected areas

• Holidays and vacation periods

• Seasonal and/or new product workload fluctuations

• Interdependencies

• Organized labor interventions

• Change management timing

Total Improvement Management

Combined 3-Year Improvement Plan

Activity

#

3-Year 90-Day Plan 4/19

Develop Plans for Individual Divisions

Business Process

BPI

Management Support/Leadership

Team Training

DIT

MBWA

Employee Opinion Survey

Strategic Direction

Performance Planning and Appraisal

Suggestion System

Supplier Partnerships

Partnership

Supplier Standards

Skill Upgrade

Cost vs. Price

Proprietary Specifications

A M J J A S O N D J F M 2 3 4 1 2 3 4 Person

Responsible2 0 0 2

= Action

= Ongoing Activity

P

0.2

BP

1.0

ML

1.0

2.0

5.1

5.2

3.0

4.0

6.0

SP

1.0

2.0

3.0

4.0

6.0

H.I. - EIT

EIT

EIT / Bob C.

EIT / Tom A.

EIT / Task Team

Dept. Mgrs.

Division President

H.I.

Sam K.

Joe B.

Task Team

H.I. – Dave F.

H.I. – Doug J.

Bob S.

Jack J.

Division President

2 0 0 3 2 0 0 4

Cycle 1

Cycle 2

Cycle 3

Cycle 4

A C T I V I T Y

Activity 6B. Design the Change

Management Plan

“Some 50% to 70% of reengineering

attempts fail to deliver the intended

dramatic results.”

Hammer & Champy

Reengineering the Corporation

Research confirms that as much as 60% of

change initiatives and other projects fail as a

direct result of a fundamental inability to

manage their social implications.

GartnerGroup

45

Enterprises contemplating organizational

transformation should first acquire formal

change management competencies and

develop the organizational discipline to

perform cultural due diligence.

GartnerGroup

46

First-Order

Magnitude

Tasks Affected

Second-Order

Magnitude

People Affected

Third-Order

Magnitude

Structure/Culture

Affected

Culture Technology

Structure

People

Technology

Tasks

Culture Technology

Structure

People

Technology

Tasks

Culture Technology

Structure

People

Technology

Tasks

+ +

The Magnitude of IT Driven Change

Source: O’Hara, Watson & Kavan

Cultural Model

PEOPLE

PROCESS TECHNOLOGY

People, Process, Technology

“More than any other

contributing factor, many

projects fail because

executives don’t take the

time to develop and

implement a Change

Management Plan.”

Dr. H. James Harrington

“More than any other

contributing factor, many

projects fail because

executives don’t take the

time to develop and

implement a Change

Management Plan.”

Dr. H. James Harrington

49

Cultural MANAGEMENT TOOLS Cultural management includes over 50 unique

tools. Some of them are:

1. Cultural Assessment

2. Landscape Surveys

3. Change Agent Evaluation

4. Change History Survey

5. Change Resistance Scale

6. Overload Index

7. Predicting the Impact of Change

8. Role Map Application Tool

9. When to Apply Implementation Architecture

The Three Part III Managing

the Organization’s Change

Process.

ORGANIZATIONAL ALIGNMENT

Strategy

Rewards

System

Processes

Networks

People

Capabilities

Structure

Typical Organizations that Have

Used PAM Methodology

• Lambda Novatronics Inc.

• Martin Marietta Manned Space Systems

• Matrixx Consumer Division

• US Air Force Systems Division

• LTV Missiles and Electronics Group

• State of Arizona Department of Transportation

• Eastern Space and Missile Center

• Earle M. Jorgensen Company

• Allied Supply Company

• Lambda Electronics Incorporated

• Accurate Inc.

Every day in Africa a gazelle wakes up knowing that

he must be the fastest gazelle in the group

or he will be eaten by a lion.

Every day in Africa a lion wakes up knowing

that he must be the fastest lion in the pride

or he will starve.

Every day in Africa a gazelle wakes up knowing that

he must be the fastest gazelle in the group

or he will be eaten by a lion.

Every day in Africa a lion wakes up knowing

that he must be the fastest lion in the pride

or he will starve.

It doesn’t matter if you are a lion or gazelle.

When you wake up, you better be running!!!

Thanks for your attention.

Do you have any questions?

©Copyright 2009 All Rights Reserved ©Copyright 2009 All Rights Reserved

Six Sigma Executive Overview Six Sigma Executive Overview What is Six Sigma? What is Six Sigma?

Harrington Institute, Inc. Harrington Institute, Inc.

Have a quality day

with a high degree

of reliability.