Saturday, February 9, 2013

Executing Change in Your Organization. Part 4 on Organizational Change




Part four of this blog series on initiating change in the organization through Future State Mind Mapping and the execution of the change.  This part consists of the actual change, which most people are patiently waiting for.  The secret lies in how you and the project team use the Future State Map to develop this action plan. Remembering that the Future State Map is the blueprint for change is the single focal point for developing a good plan for improvement. Trying to create the perfect plan must not bog down the team. As General George S. Patton so bluntly stated, “A good plan today is better than a perfect plan next week.” The logic behind this statement was simple: It really doesn't matter what you plan, or how perfect you may think the plan is; when the plan is put into action, things will change. Therefore, get a good plan in place and move forward to implementation.

We often don’t see or understand the entire process, which includes the complexity hidden behind the scenes, and the interdependencies with other processes and systems. Cross-functional teams using tools such as value stream mapping thus uncover comprehensive problems, where everyone understands the process.  For those reasons we spent a great deal of time preparing to understand the organizational issues and evaluating the value stream. We are now ready to improve value delivery by creating a Future State Value Stream Map (FSVM).

Let me add a caveat to all this work I have defined for you.  This is only scratching the surface of continual improvement.  That's the point of writing these series.  You don't have to know it all to get started.  Having a basic should be enough to get going.  You likely have enough constraints facing your company that these high level suggestions will get you started.  There is much much more to learn though and that's why we call it continuous improvement. The time for strategy is over. Now the process of change can begin. But this does not mean that Value Stream Mapping is complete. Just like all other aspects of continuous improvement, Value Stream Mapping is never finished. As the project work progresses, the team may find that it is necessary to return to the map set and to update and modify both the Future State Map and the action plan.

The future state value stream map is a visual representation of the application of the various Lean tools in the Future State map.

It is created by:
• Arriving at a consensus
• Brainstorming
• Problem solving
• Testing tools for practicality and use
• Resource availability 

The future state value stream map will never be implemented all at once. It is meant to be adopted over a time period (i.e., six to eighteen months). The following icons can be used to create the future state value stream map.

Steve Bell in his book Lean IT comments. "Perhaps the highest accomplishment in Lean is to achieve value stream flow. So here are our simple (but not necessarily easy) guidelines for creating Lean IT flow: Position and evolve each value stream toward your competitive sweet spot; maintain a fluid balance between flexibility and efficiency in every process and practice. Stay light on your feet; keep your focus moving in the direction of competitive advantage as the market and your competitors evolve. Strive for simplicity and stability in every process before investing in electronic information systems: apply people, process, and technology—in that order. Listen to your customers often, and proactively manage demand to support just-in-time operations Flow every process where you can. Keep a simple line of sight (physical or virtual) along the entire length of every value stream and supporting process, so they become self-regulating, leveraging the creativity and problem-solving capability of every participant." Bell, Steven C. (2012-01-04). Lean IT: Enabling and Sustaining Your Lean Transformation

We are finally there.  We have mapped our value stream.  What components on our value stream we want fixed.  If this is your first time it's likely that you have a large amount of Non-Value Added activities.  Likely it's below 5% of your total value stream.   Don't worry this is normal.  Most companies run with this VA/NVA ratio.  If you are above 5% then likely you have left parts out or you've been working on this for a while and these blog posts are already achievements you have completed.  In looking at your value stream look for long wait times.   Those long wait times may not be a bottleneck in terms of how much work you can process but can contain a large part of your value stream non-value added activity.  Additionally wait times are the easiest to fix because they involve little process redesign or investments needed.  For example, if you have weekly meetings to plan work or approve components of your value stream then you're likely adding a minimum of 7 days to your total cycle time.  Find a way to reduce meetings to daily standups or eliminate them all together and you've shortened your cycle time by 7 days (Just think if one day's inventory is worth $10,000 then you have eliminated $70,000 of inventory just by eliminating a meeting).  

Along with the list of items you will be working it's a good idea to prioritize the items to prohibit boiling the ocean.  "Mapping the Total Value Stream: A Comprehensive Guide for Production and Transactional Processes" by Mark Nash has a great list which I would recommend for prioritization. 
  • Are fast and easy to complete        
  • Are most visible to the workforce (to demonstrate the power of continuous improvement)        
  • Address the biggest problem to the customer        
  • Address the biggest problem to the supplier        
  • Address the biggest problem to employees within the value stream        
  • Address customer satisfaction issues        
  • Effect biggest ROI        
  • Effect fastest ROI        
  • Facilitate employees' acceptance of change (fastest buy-in)        
  • Pertain to the toughest employees to convince

Regardless of the continuous improvement methodology employed by the organization, Value Stream Mapping lends itself well to the concept of kaizen. Although kaizen is literally translated from Japanese as “good change,” it is more appropriately defined as “rapid, good, continual change.” This concept, which is used in a cultural fashion with many Japanese companies, empowers the work force to immediately stop a functioning value stream at any time when a problem is encountered. All persons required to identify the root cause and a solution are gathered, and the issue is resolved as quickly as possible. Use your whole team to determine what activities or wait times on the value stream you will work on.  Involve as many people as you can in the process.  I'm not suggesting the solution needs to be by consensus but it does go a long way to get as much input from your intellectual capital (employees) as possible.  After all they know the problems all too well because they live in them daily. 

Once the fundamentals of the current value stream map and the future map have been addressed, there is a strong need to ensure that the implementation of improvements is carried out in a structured and methodical fashion. Without someone driving forward the improvements, they are unlikely to happen and the improvements to performance will be negligible. Similar to how you created your mind maps and value stream maps have someone who's watching the value stream and looking for opportunities.  This doesn't mean they are in charge of the value stream.  That role is for everyone within the value stream.  Everyone in charge of improving the value stream is also responsible for it.  

In order to keep track of your progress a lean improvement chart is one method I prefer.  A Lean improvement chart lists each Lean concept that the project team wants to introduce and sustain within the value stream. Each concept is shown with a section devoted to training, implementation, and sustainability. The overall success, as well as that of each component, is measured as “percent complete” on the chart, allowing for the team and the employees in the area to see their progress.

Finally, as progress is observed, the results should be conveyed to management in a format that allows for financial impact to be understood. Because any change that is implemented should ultimately result in improvement to the bottom line, it is critical that metrics provide data to support and substantiate the change. However, when dealing with the financial impact, it may be necessary for accountants and financial analysts to rethink the traditional ways of financial reporting. Implementing change at a fast pace may create a situation where traditional financial reports are misleading. The executive council must understand these potential situations and be prepared to have the financial staff of the organization retrained to think differently and also to strongly support the mapping and project team.

Your success will come from accepting change. Winning comes from a culture that embraces change and pursues perfection.  Setting lofty goals, empowering employees to do the things necessary to accomplish those goals, and accepting the rough spots along the road are the things that set great organizations apart. Success comes from understanding that the road to perfection is a journey of continuous improvement. Making change in small pieces, at a pace in the beginning that is acceptable to both employees and management, is how change starts. As the culture comes to accept change, the speed and amount of change will grow as well. By starting with those things that are easy to change, and by working with the employees accepting or wanting change, success will come.

But you must remember: this is only the beginning. Value Stream Mapping is not a “one and done” tool used at the beginning of the journey, never to be repeated. Value Stream Mapping, just like so many other continuous improvement tools, is to be used from now on. If you quit, it's not continuous improvement. Do not believe those who say: “We've achieved the future state. We're done.” You are never done. When the team, management, or employees within the value stream begin to realize they are close to the Future State Map, it is time to remap. This is the time to remap the Current State Map and create a new vision of the future.




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