Performance Acceleration Management: A Way to Change Your Culture. By Dr. H. James Harrington May 1, 2013

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1 Performance Acceleration Management: A Way to Change Your Culture By Dr. H. James Harrington May 1, 2013

2

3 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?"

4 "Many organizations are improving but they are not winning the race."

5 Six Sigma Executive Overview What is Six Sigma? Quality Improvement and Customer Expectations Quality Time Harrington Institute, Inc. Copyright 2009 All Rights Reserved

6 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 2007, Harrington Institute, Inc.

7

8 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.

9

10 A Streamlined Car

11 "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)."

12 "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.

13 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.

14 2007, Harrington Institute, Inc.

15 Process Improvement 8 ATE's Eliminate Informate Automate Coordinate Innovate Replicate Cultivate Regulate

16 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.

17 Part I. Defining How The Organization Needs To Change.

18 To Change the Organization's Culture You Need to Define and Change the Things (Key Business Drivers) that Dictate the Organization s Performance.

19 Business Drivers or Controllable Factors

20 The Organization Culture

21 New Improvement Program Impact

22 The Next Improvement Program Impact

23 The Total Impact

24 Typical Business Drivers Leadership and Support Customer Partnerships Business Processes Training Knowledge Management Measurements Supplier Partnerships

25 Part I. Defining How The Organization Needs To Change. Activity 1 Assessment (as/is statement) Activity 2 Vision Statements (Should - be vision)

26 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

27 Part I Activity 2 - Vision Statements Preliminary Vision Statements Stakeholders Reviews Final Vision Statements

28 Part I Define What Will Change Get a clear view of your Vision or what you want the Future State to look like. 28

29 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.

30 Part II. Defining What The Organization Needs To Do and When To Do It To Change.

31 Part II Defining How to Change Start with an Organizational Assessment to determine the most critical change areas to focus on first. 31

32 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.

33 Part II Activity 3. Setting Performance Goals Return on Investment Customer Satisfaction Response Time Value-added per Employee Error-free Performance Dollars Saved

34 Typical Performance Improvement Goals Measurement YEAR 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 $ New product cycle time in months

35 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.

36 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 toolbox.

37

38 There is a difference between planning and problem solving.

39

40 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

41 Total Improvement Management Combined 3-Year Improvement Plan Activity # P A C T I V I T Y 3-Year 90-Day Plan 4/ A M J J A S O N D J F M Person Responsible H.I. - EIT 0.2 BP 1.0 Develop Plans for Individual Divisions Business Process BPI Cycle 1 Cycle 2 Cycle 3 Cycle 4 EIT EIT / Bob C. EIT / Tom A. ML Management Support/Leadership Team Training DIT MBWA Employee Opinion Survey Strategic Direction Performance Planning and Appraisal Suggestion System EIT / Task Team Dept. Mgrs. Division President H.I. Sam K. Joe B. Task Team SP Supplier Partnerships Partnership Supplier Standards Skill Upgrade Cost vs. Price Proprietary Specifications H.I. Dave F. H.I. Doug J. Bob S. Jack J. Division President = Action

42 Activity 6B. Design the Change Management Plan

43 Some 50% to 70% of reengineering attempts fail to deliver the intended dramatic results. Hammer & Champy Reengineering the Corporation

44 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 45

46 The Magnitude of IT Driven Change First-Order Magnitude Tasks Affected Second-Order Magnitude + + People Affected Third-Order Magnitude Structure/Culture Affected Culture Technology Culture Technology Culture Technology Structure Technology Structure Technology Structure Technology People Tasks People Tasks People Tasks Source: O Hara, Watson & Kavan 46

47 Cultural Model

48 People, Process, Technology PEOPLE TECHNOLOGY PROCESS

49 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

50

51 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

52

53 The Three Part III Managing the Organization s Change Process.

54

55 ORGANIZATIONAL ALIGNMENT Strategy Rewards System Processes Networks People Capabilities Structure

56

57 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.

58 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!!!

59 Thanks for your attention. Do you have any questions?

60 Six Sigma Executive Overview Have a quality day What is Six Sigma? with a high degree of reliability. Harrington Institute, Inc. Copyright 2009 All Rights Reserved

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