Why do Business Improvement teams often struggle to get results?
As an organisation whose core services revolve around Lean and Continuous Improvement, Efficiency Works regularly interacts with Business Improvement (BI) teams that are established with the central responsibility for making tangible productivity gains within their host organisations.
Their day to day activities involve putting together business improvement plans, identifying business improvement projects, pushing operational functions to progress their projects, and sometimes fending off protests that ‘we are too busy with our workload to get involved in yet another organisational program’.
The result is often a frustrated business improvement team, annoyed functional managers, an enterprise where tangible productivity gains are few and far between and a cultural profile where business improvement and innovation are a low priority.
So what is wrong here? Does the BI team lack technical business improvement knowledge? Do they need more staff? Have they failed to identify opportunities to improve productivity? Do they not have the support of management or the Executive? Are they just incompetent!
Our experience shows that these common perceptions rarely reflect the facts, but to understand why BI teams often struggle to get results, we need to understand:
• the organisational dynamics of why the team was established • where they sit structurally • their core role and responsibility, and most importantly, • where they are positioned strategically.
A common situation is one where the Executive feels they need to start a productivity drive and they establish a Business Improvement capability using internal employees and/or new hires. This group is tasked with removing waste out of the organisation using Lean and other productivity tools and techniques. They may even instruct functional heads to engage with the group who will report back on progress. The problem with this is the strategic positioning of the group and its role. In Lean terms, this is a ‘push’ strategy where productivity projects are pushed by the group onto internal customers who may not want to ‘buy’ these services, or if they do, it might be for a token project that won’t take them away from their ‘real work’. What is required is a ‘pull’ strategy where potential customers clamber to get help from the BI team. How can this be achieved?
Well, consider the situation if the CEO or business unit head put tangible productivity targets into the performance plans and employment contracts of his or her direct reports, and then regularly (and publicly) monitored progress of the individuals against those targets. Most likely, the direct reports would subsequently incorporate similar targets into their direct reports, and so on.
With appropriate consequences for non-performance in place, and most likely, a lack of technical business improvement skills within their own operational control, you would expect (and get) a much higher level of interest in receiving services from an established BI group. The result is a ‘pull’ situation where customers seek services from the group, rather than the group trying to sell its services to potential customers. Great! So the BI team assigns its specialists to fix problems. Wrong. Depending on the volume of productivity activity generated through the performance contracts between the CEO and the Executive, under this scenario it would be unlikely that the BI team could cope with the workload and individuals may be tied up for long periods of time. More importantly it doesn’t result in great buy in from the business unit. They are being consulted to and given answers rather than coached on how to find their own solutions.
The true role of the internal BI team is to utilise their productivity expertise to help the customer realise the business improvement gains. The BI team role is to coach the business unit to identify the problem, formulate a solution and transfer knowledge and skills to the customer so that the team can move on the next opportunity. The other role of the BI team is to provide an overall coordination role for business improvement, using common templates and language for planning, monitoring and reporting progress on the organisation’s progress. This is necessary work but not as important as the leading and coaching work we have discussed. One mistake many B.I. teams make is that all of their work is this housekeeping and managing style work rather than the strategically important leading style work.
Structurally, BI teams should be positioned along with other organisational services such as Finance, HR, Organisational Development and Governance, although given its role in developing new or enhanced capabilities, there is a natural synergy with Organisational Development.
Under this model, the responsibility for business improvement sits with the functions, not with the BI Team. BI becomes a normal part of everyday life and the skills of all employees and becomes embedded within the culture of the organisation. The BI Team shouldn’t need to sell although their communication skills should be up there with their Lean technical skills.
Where this business improvement model has been deployed we witness a great acceleration in productivity and workplace culture, and importantly a happier BI team and happier customers.