Redesign in a Context

What role does senior management play in breakthrough process improvement? Are they merely the sponsors and bill payers? Is it just final approval we need from them? Or perhaps do we need them to run interference if the Head Office is looking for ways to save money?
Well, yes, all of that and then some. To understand the additional pieces, we need to look at the process improvement effort in a larger context. At Rath & Strong, we use the model depicted in Figure 1 to guide us in our breakthrough process improvement work with clients.

Figure 1 - Rath & Strong's Organizational Model

The three horizontal boxes depict the supply chain from Suppliers to internal organizational Processes, like materials conversion, through to Customers. It is along this chain that most reengineering occurs. Some of the efforts are small, isolated, within-department processes. Others are larger in scope, touching on every aspect of the flow from suppliers to customers.

Independent of the project's scope, it's important to remember that all process improvement efforts occur in a context. That context is created by the vertical boxes: from Leadership to internal, human resource Processes, such as managing, motivating, and developing people, to the Culture of the organization.

Context is critical to the success of process improvement efforts. The supply chain runs through an organization, and the dynamics internal to that organization have a huge impact on the ability to make gains and make them stick. Redesigning processes without altering the organizational context is like going into a rehab clinic to kick a nasty addiction and not doing anything about the friends and environment at home which supported that addiction. In both cases, the bad habits are bound to return.

Another point about context is that it is shaped by the organization's leadership. So, in the short-term, senior management's role in a process improvement effort is to create a context that enables the reengineering effort's goals to be achieved. Long-term, management's role is to fashion an adaptive culture which stays focused on continuous improvement and can adapt and renew itself as conditions change.

Marshaling Leadership's Attention

The question becomes, how do consultants or reengineering project leaders convince Senior Management of their role in shaping context and get them to take action?

At Rath & Strong, we get management's attention by offering to guarantee our process improvement results. The quid pro quo is that senior management must do their part to help shape the contextual variables. We use two tools in the assessment phase to help focus senior management on the correct contextual variables: the 5 x 5 Change Readiness Assessment^SM and our Organization Print^SM.

The 5 x 5 Change Readiness Assessment provides a forcefield-like analysis of five variables: Impetus for Change, Leadership, Deep Culture, Current Environment and Sense of Control. Under each of these five dimensions, there are five questions to assess the strength of that dimension. The questions are stacked against each other and a Change Readiness Indicator (see Figure 2) provides some sense for how easy the process improvement effort is going to be.

Figure 2 - 5x5 Change Readiness Indicator

The 5 x 5 Change Readiness Assessment serves as the center-piece for our discussion with management about the change effort and how each of the contextual variables will impact the organization's ability to change. In addition to the average on each of the dimensions, there is the range of scores on a question which allows the leadership group to air collective perspectives on an issue. It is not uncommon for one person's comments to cause the entire group to change their responses because of some point that has been raised. Having the leadership team in sync is critical to a project's success.

We like to ask employees similar questions using our Organization Print^SM. This allows us to compare the perspective at the top with the views of those immersed in daily operations. Large gaps between the two groups' perspective helps us to encourage management to reconsider the accuracy of their perspective.

Though the Organization Print^SM provides useful information about the organization's readiness for change, its primary purpose is to help senior management build an adaptive culture, capable of sustaining the gains and enhancing the organization's competitiveness over time.

The Leadership Agenda for the Long Term: Purpose & Process

In his new book, Reengineering Management: The Mandate for New Leadership, James Champy argues that management's agenda needs to be redefined:

If you haven't gotten it by now, let me say it plainly: Purpose, culture, process, and people replace strategy, structure, and systems as our superordinate questions. (Pg. 37)

Rath & Strong's Organization Print^SM uses the Purpose and Process framework to profile an organization. Purpose refers to the degree to which employees are connected to customers and aligned with the strategic direction of the company. Items within the Purpose construct are organized into the following dimensions to isolate strengths and opportunities for improvement: Alignment, Information Sharing, Coaching, Involvement, Customer Connection, Trust and Support.

The Organization Print defines Process as the efficiency of key internal processes. Items within the Process construct are organized into the following dimensions to isolate strengths and opportunities for improvement: Continuous Improvement, Decision Making, Managing Change, Quality, Team Work, Work Flow.

Rath & Strong's Organization Print measures Purpose and Process and juxtaposes them to provide a window into the environment in different parts of the organization (see Figure 3).

Figure 3 - The Purpose & Process Assessment Grid

Within this framework, how do organizations move into the High Purpose, High Process zone? The transition into the Energized quadrant requires a focus on another subscale of the instrument: the Empowerment Metric. Today it seems that everyone wants to talk about empowerment, but no one wants to talk about power. Using the dictionary definition of power as "the ability to do, act or affect," we calculate an Empowerment Metric based on aggregating all the organizational and managerial factors which increase or decrease employees' power.

Our clients have found that it is not the power in a position but the power under a position that is key to sustaining process improvement gains and becoming High Purpose, High Process organizations. Adaptive cultures are built by looking at the managerial and organizational factors which increase employees' abilities to do, act or affect.

An Example

One of our clients, a mid-sized manufacturing organization, wanted to redesign process flow throughout the entire supply chain. They started with the 5 x 5 Change Readiness Assessment and it came up "Intervention Required," which meant they needed to delay the project. The reengineering would create a lot of turmoil in the organization and there was simply not enough energy for change in the system. After meetings with employees to talk about the competitive situation, the changing needs of customers, and to convey senior management's commitment to the effort, the organization was ready to begin.

As previously discussed, the organizational context affects the ability of the organization to achieve and sustain the gains that the opportunity analyses revealed were there. So after the process improvement efforts began, Senior Management was given the task of working to change the environment (as defined by the twelve dimensions of the Purpose/Process model) in which the changes were being implemented.

Since the supply chain project was so focused on making improvements that would affect the Process side (Continuous Improvement, Work Flow, Decision Making, etc.), Senior Management aimed their efforts at the Purpose side (Information Sharing, Involvement, Coaching and Alignment). They also worked to clarify the market and competitive environments, define the organization's strategic goals, and explore how the changes would help the organization succeed. Senior management clarified the role of managers regarding communicating with and developing employees, and provided training to support these changes.

During the course of this effort, many changes were made. The number of suppliers was reduced, while requiring better quality and smaller but more frequent deliveries from the suppliers remaining. Processes were changed on the factory floor to set up a "pull" system to manufacture on demand based on customer usage. This reduced WIP inventory and thus costs for both the organization we were working with and its key customers. Finally, the organization revamped its view of providing value to its customers and initiated business teams to interface with them.

Once process improvement gains started to be realized, senior management readministered the Organization Print to see what kinds of changes had occurred. Interestingly, Purpose and Process scores improved most significantly in those parts of the organization that had experienced most of the restructuring and redesign. This is something we have seen repeatedly: Process improvement efforts have a significant, positive impact on employee perceptions. In fact, we avoid setting out to improve culture or climate directly. Instead, we change the culture and climate by changing processes.

This organization now administers the Organization Print every year to check on progress and fine-tune their approach.

By focusing senior management on the environment in which processes are being reengineered, you greatly increase the chances that the organization will be pleased with the results of the process improvement effort and that the gains will be sustained.

About Rath & Strong... 

Rath & Strong is a management consulting firm headquartered in Lexington, Massachusetts. Founded in 1935, Rath & Strong helps clients achieve desired change by providing consulting services in four main areas: process and operations management, organization development, counsel to leaders, and customer connection. The firm specializes in helping clients address issues relating to these four areas simultaneously from a systems perspective.