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Minnesota Technology Magazine - Summer 2006

Getting Better

Getting Better What’s really new—and what really matters—in continuous improvement? At a gut level, who doesn’t buy into the concept of “continuous improvement?” The phrase sounds noble and enlightened, infused with connotations of Japanese management secrets, Harvard Business School wisdom, and, ultimately, happy customers buying and using better products.
All of that might help explain why the notion of continuous improvement has such an enduring grip on the business world. In the last 20 years alone, approaches such as Total Quality Management (TQM), Business Process Reengineering, Business Process Management, Six Sigma, Lean Manufacturing, and numerous others have made big headlines by promising revolutionary results (and occasionally, but not always, delivering on them).

While everyone agrees that continuous improvement—which can roughly be defined as an effort to eliminate waste, cut response times, fine-tune processes, simplify product design, and boost customer service—is a worthwhile goal, deciding on which program to embrace can be a challenge. There always seems to be something new to choose from—and a new chorus of experts proclaiming it as the magic bullet. How can you tell what works—and what’s really new, for that matter?

WHAT’S NEW?
Some experts may proclaim continuous improvement approaches as revolutionary, but others will argue that even the latest approaches are really evolutionary changes rooted in the work of early 20th-century quality pioneers such as F. W. Taylor and Walter Shewhart. Consider, for instance, three of today’s more popular strategies: Lean Manufacturing, Six Sigma, and the Theory of Constraints (TOC). These and other quality tools share some common threads. They are all historically rooted in the post-World War II quality improvement philosophies first espoused by quality gurus such as W.E. Deming, Joseph Juran, and Phillip Crosby. Further, all of these tools attempt to make processes and products better through methodologies rooted in data quantification and statistical and systematic analysis.

What’s new regarding these quality approaches is the growing realization that while “quality may be free,” (the title of management guru Phillip Crosby’s landmark book), its implementation is anything but.

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Brian Lassiter, president of the Minnesota Council for Quality, a Twin Cities-based nonprofit, says that organizations are becoming more aware of the broad scope of change that quality tools such as Six Sigma, Lean, TOC, and others require. Indeed, savvy executives know that it’s the implementation— and not the conceptual planning of continuous improvement programs—that is the most difficult part of the quality equation. “Continuous improvement programs require change in many aspects of an organization,” Lassiter notes. “They could be labeled ‘change management tools’ because they change the way companies operate.”

The Big Three
A BRIEF LOOK AT A TRIO OF POPULAR MANAGEMENT STRATEGIES.
1. LEAN MANUFACTURING
Lean is a manufacturing approach that focuses on reducing or eliminating specific types of waste endemic to production environments. Through concentrated and purposeful effort, it attempts to eliminate waste, reduce costs, reduce production time, and improve quality. Lean’s toolbox includes such techniques as intensive process analysis, just-in-time production, and mistake-proofing.

2. SIX SIGMA
This is a methodology pioneered at Motorola and made famous by General Electric Corp., and designed to reduce process variations that cause defects in products and services. A highly mathematical approach to manufacturing management, Six Sigma incorporates sophisticated statistical methods to identify and remove process variability and, in so doing, reduce wasteful processes.

3. THE THEORY OF CONSTRAINTS
A philosophy of management and quality improvement developed by Eliyahu M. Goldratt and introduced in his book The Goal. Goldratt contends that in any complex system at any point in time, usually a few critical aspects of the system limit its ability to become more productive. So, he writes, any system can be significantly improved if those key constraints are identified and the whole system is reordered or rearranged to eliminate the bottlenecks.
—W.G.

John Connelly, MTI’s business services and products director, echoes those sentiments, noting that quality tool implementation requires a change in corporate culture and individual beliefs, as well as in a company’s existing processes. In fact, Connelly says, a company’s culture is often the greatest obstacle to successfully implementing continuous improvement programs. “[Employees] may not agree that improvement is necessary,” he explains. “They have a lot invested in the work they’ve already performed. It’s hard for them to say a process can be done differently and done better. So, they feel it’s a waste of time, since they’ve spent a lot of time getting the process to where it is.”

But getting management and employees to buy into continuous improvement programs is as important as it is difficult. Over the years, many approaches to motivating employees toward higher performance and continuous improvement have been tried, but not all have been successful. A number have fallen into disuse or even disdain, often because of irreconcilable differences between an approach and the company’s culture. If that occurs frequently enough, the once-popular approach becomes relegated to the “fad” category, a label heavy with negative associations.

Many approaches were once quite promising, but in the end clashed too violently with existing corporate cultures. Some lacked staying power because they either did not produce the promised results or were replaced by more comprehensive and easily implemented techniques. For an example, consider the case of TQM, an approach that advocates implementing quality-improvement programs throughout a company. It is considerably less popular now than it was in its early 1990s heyday. As a management approach, it undoubtedly did provide significant improvements in the quality of manufactured products. But, it has been criticized by several management analysts and, subsequently, by the business media for its supposedly lackluster impact on corporate financial performance. Indeed, media sniping such as the Washington Post headline “Totaled Quality Management” and Business Week’s assertion that “TQM is as dead as a pet rock” made many view TQM as a passing fad.

Other approaches to continuous improvement failed because they were poorly conceived. Consider the case of “Howie Makem, the Quality Cat.” As detailed by former autoworker Ben Hamper in the 1990 book Rivethead, Howie was a GM employee who dressed in an oversized cat suit and prowled the company’s Flint, Mich., assembly lines in the 1980s. Howie would mysteriously appear at random intervals on the line, purring phrases such as “Quality is the backbone of good workmanship,” and “Safety is safe,” to the bewildered reaction of autoworkers. Eventually, wrote Hamper, reaction to Howie’s appearances became unrelentingly negative. After a few months, the assembly line employees invented their own mascot, a “Quantity Cat” that chased Howie off the factory floor for good.

THE TEST OF TIME
For every theory that became a staple of case study pedagogy at Stanford, Harvard, or the University of Minnesota’s Carlson School, a dozen others were quickly discarded and forgotten. Some theories died because their scope was too specialized or too broad, while others failed because they were not cost effective to implement. Perhaps for many reasons, managers were unable to build a long term, competitive strategy upon them.

How will currently popular tools such as Lean Manufacturing and Six Sigma stand up to time? Are these approaches cure-alls to manufacturing woes, or simply the topic du jour among academics and consultants? Programs such as lean may evolve, but they are built on stable, valid ideas. Kevin Linderman, associate professor of Operations Management at the Carlson School, has studied a number of continuous improvement concepts and systems. He says that while some programs do contain new ideas and approaches, much of what passes for new is simply a repackaging of the tried and true. He’s found that several core components are part of all effective continuous improvement programs.

Getting Better “While continuous improvement concepts may evolve over time, there are enduring concepts,” says Linderman, noting that these core ideas include a structured approach to quality improvement, team building, a focus on customers, and a perspective that emphasizes systems, as opposed to components. Kent Myhrman, an MTI business services consultant, points out that studies have shown that simply following a structured approach—in fact, almost any structured approach—provides quantifiable productivity benefits. Organizations that implement a formal program, states Myhrman, whether Lean, Six Sigma or something else, were shown to be better off and have better plant operations than those companies without formal programs.

“I don’t believe Lean or Six Sigma are fads, if correctly implemented,” says Lassiter. “Both have been around in various forms for more than 25 years. The fact that they’ve been used successfully for such a long time validates their worth.” MTI’s Myhrman seconds that. “Continuous improvement was here, is here, and will be here in the future. How you go about improving quality may change, but it’s always going to be a requirement.”

William Gurstelle is a Minneapolis-based freelance writer and frequent contributor to Minnesota Technology.

Come and Gone
A DECADE-BY-DECADE LOOK AT MANAGEMENT APPROACHES. CAN YOU MATCH THE THEORY WITH ITS DESCRIPTION?

Here’s a decade-by-decade list of some of the most popular management theories of the last 50 years. Some came and went quickly; others stuck around. Can you match the theory with its description?

1950s and 1960s
1.Theory X
2.Theory Y
3. Management by Objectives
4.T-groups
5. Matrix Management

1970s and 1980s
6. Zero-based budgeting
7.Theory Z
8. Quality Circles
9. In Search of Excellence

1990s and 2000s
10. Reengineering
11. Balanced Scorecard
12.Delayering

A. A management style in which management and employees make formal agreements about accomplishing specific objectives at the start of each year.
B. Managers believe that people have an inherent dislike for work and will avoid it whenever possible. Employees must be coerced and threatened in order to achieve organizational objectives.
C. An organizational design in which project team members report to both a functional manager and a project manager.
D. Managers believe that work is as natural for people as play and rest. Therefore, employees will motivate themselves.
E. A training tool that uses feedback and role-play to help employees gain personal insights and, in so doing, change their attitudes and behaviors.
F. A management technique in which all expenditures have to be justified in complete detail by each division manager at the start of each fiscal year.
G. A style of management in which managers try to emulate the patterns found in large, well-known companies. Typical emulation patterns include having a “bias toward action,” “sticking close to their knitting,” and using “simultaneous loose tight properties.”
H. Volunteer groups of workers meet to discuss workplace improvement, followed by presentations to management with their ideas.
I. Instead of focusing on functional specialties, such as engineering and marketing, executives manage by looking strictly at business processes.
J. A business’s organization chart is redrawn, and with layers of management between top executives and the front or operational lines drastically reduced.
K. Organizations should be managed by considering four key areas simultaneously: learning and growth, business processes, customers, and financial performance.
L. Companies provide a job for life. In so doing they reap the rewards of very loyal and hardworking employees.

Answers:
1-B, 2-D, 3-A, 4-E, 5-C, 6-F, 7-L, 8-H, 9-G, 10-I, 11-K, 12-J
—W.G.

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