We live in a business environment that is more competitive than ever before. Organisations and their managers are fighting for advantage and are becoming obsessed with ways to secure and sustain process improvement. Lean, Six Sigma and agile have taken the business world by storm across every industry sector – these initiatives promise to give companies both large and small the edge they seek to succeed. Countless industry research and our own experience have shown that businesses that embrace these techniques can enjoy the benefits of improvements in efficiency and costs.
However, when the University of North Carolina’s Brad Staats and the University of Oxford’s Matthias Holweg and David Upton looked at these companies closer they noticed a significant gap:
“These things always work well initially, but often the gains fade very quickly,” Holweg says: “It’s always felt like researchers were telling only half the story. It’s not just about putting the programs in place—it’s also about making them stick.”
The research team wanted to understand why some of these process improvement initiatives are sustained and others are not. The team looked at 204 Lean projects launched from 2012 to 2017 at a European bank that had 2,000 branches and served more than 16,000,000 customers.
Initially, the Lean initiative focussed on processes that were common to all regions and that could benefit from fewer steps (such as opening an account). Without looking at the detail of the project, it would be easy to think it was hugely successful. The first four years of the Lean programme launched between 33 and 51 projects every six months. Initially, the business saw an average efficiency increase of 10%, rising to 20% after a year and 31% after two. The global Lean consultancy firm that the bank hired were thrilled, as was the bank itself – those kinds of improvement figures are up there with some of the best in any industry sector.
However, the researchers wanted to dig deeper. They looked more closely and found the actual picture to be much more complex. Aggregate gains were impressive, but 21% of the projects that were implemented didn’t yield any improvements at all. Further still, amongst the 79% of the initiatives that showed initial improvements, many plateaued and eventually declined; only 73% were still producing results after a year and, after two years had passed that number fell to just 44%.
When the research team added up the projects that drove no improvement at all and calculated the ones where improvements were only seen temporarily, little more than just one-third of the projects showed gains after two years since implementation had passed.
Many reading this post will already know the fundamental importance of continuous improvement and its relationship to Lean. The team looked at whether or not these projects that were initially successful continued to improve and build upon the initially secured gains. Startlingly, only 51% of these Lean initiatives continued to improve a year after launch – after two years had passed, this figure was just 36%.
Part of the Lean implementation throughout the organisation was developing ‘Lean Champions’ locally. As the research team sought to understand why some process improvements stuck and others didn’t, the insight of these Champions was essential.
Interviews with the banks 14 Lean Champions showed the team that the one fundamental condition that was key to ensuring initiatives kept improving was the visible support from the business’s board members and senior leadership team – without this support, workers at the frontline of the business believed that the organisation’s enthusiasm for the Lean programmes had dropped off and thus backsliding ensures.
Throughout the interviews, it was also referenced that a consistently sustained system of measurements and monitoring was essential for tracking and understanding the progress of the implemented Lean initiatives. This monitoring allowed the team to notice when problems started to arise and when the returns of the programme started to diminish. “Addressing the low-hanging fruit is easy; it becomes harder in the long term,” one Lean Champion told the researchers.
…the one fundamental condition that was essential to ensuring initiatives kept improving was the visible support from the business’s board members and senior leadership team – without this support, workers at the frontline of the business believed that the organisation’s enthusiasm for the Lean programmes had dropped off and thus backsliding ensures.
The data from the research supports the observations of the Lean Champions. Those projects that had the strong backing and support from head office showed a 35% greater improvement after a year had passed than those without the same support – 79% of these performed above the baseline level after a year compared with just 61% of the projects that were not driven by leadership. The researchers could comfortably say: “Senior leadership, through paying attention to the lean improvements, clearly has a major enabling role in sustaining improvements”.
We work with so many companies that hope to see a continuous improvement mentality embedded within their culture. We’ve talked before about ‘Why Lean Programmes Fail‘ where the overall solution to counteract failing Lean initiatives is to develop an ‘Improvement Kata‘ within the organisation. This means to embed continuous improvement to the point at which it becomes a learned behaviour – improvement is second nature to employees.
Sustaining Lean improvements…
The research team interviewed leaders with a wide range of experiences leading Lean initiatives and process improvements throughout multiple industry sectors. This allowed the team to identify three key ways in which organisations can help to achieve sustained business improvement:
Communicate the programme clearly and in a way that aligns with the business’s purpose
Direct your efforts towards initiatives that ease pain points where the employees would benefit
Ensure that senior leadership within the organisation act as coaches to enable employees to increase motivation and engagement through small wins
Now, these three key elements might seem easy but you would be amazed at just how many businesses don’t pay attention to these fundamentals.
Let’s look at some examples…
For the first initiative, a hotel, for instance, might focus their efforts on a Lean direction that improves overall guest satisfaction; this is more likely to motivate employees than something that focuses on securing cost savings.
Secondly, let’s say that a hospital is looking to embark on a Lean journey to decrease the time staff spent on paperwork. This process improvement serves to free-up their time which means they can focus on better patent care, which itself serves as the motivator for the employees. It’s a win-win, the patient receives a better standard of care, the staff are free from the mundane administration and the hospital has motivated staff that are delivering.
It was overwhelmingly reported as part of the research that a huge obstacle to sustained process improvement was ‘improvement fatigue‘. Leaders were reportedly jumping around from one improvement initiative to another – this, in turn, led to employees becoming confused, which caused further problems.
Starting a new process improvement project is exciting for anyone, often much more so than maintaining it long-term, but it’s having the discipline to maintain the initiative that reaps the largest rewards.
Staats says, “It’s always easier to start something, whether it’s weight loss, going to the gym, or smoking cessation. Getting individual changes to stick is hard, and getting organisational changes to stick is even harder.”
Research: “Making Process Improvements Stick” by Matthias Holweg, Bradley Staats, and David M. Upton (working paper at the time of writing)
Supporting your process improvement…
Here at ClarityVM Consulting, we coach clients both far and wide about how they can use Lean and visual management to achieve their goals, exceed their targets and make financial savings which would otherwise be lost to waste. We work with our clients to create a bespoke strategy that ensures Lean is set up for success before providing specific, high-quality visual management products to sustain the initiative and make Lean work in the organisation long-term.
You can read more about the work we’ve undertaken with our clients by browsing through our Visual Management Case Studies
Further reading on the Clarity Blog:
- Developing an Effective Standard Operating Procedure
- ClarityVM at the Nissan Sunderland Plant
- Assessing Goals and Auditing Strategies
- Aldeburgh Lifeboat Station – Saving Lives With Lean Thinking
- A Visual Management Definition You Can Rely On
- Kaizen Events: Clarity Consulting’s Secret Weapon
- Why Your Workplace Communication Fails (…and How To Improve It)
- Why Lean Programmes Fail
- 6 Simple Solutions to Battle Workplace Stress