Only in the last 5 years we have been working together with our customers on more than 50 improvement projects.
The ability of a company to effectively execute improvement projects is becoming more and more important and can represent a powerful source of competitive advantage. High performance organizations not only want to ensure the next improvement project will be successful but progressively build the capabilities and the mind set required to continuously deliver results.
Key points
As of today, the ability to execute on improvement projects is a key to increase competitiveness and profitability
The best companies focus on few and “high impact” improvement projects, use data in decision making and make thinking visible to ensure alignment and transparency
It is difficult to change the people, but managers can change the "contex" the people work in
For certain projects the standard project management techniques don’t work well. A more “agile” approach to project management must be adopted
Why the ability to execute on improvement projects is becoming a source of competitive advantage
The intent of an improvement project is to effectively transform the priority goals of an organization into changes that produce lasting economic results.
Until few years ago the change was mostly perceived as a project with a defined start and finish or as an issue or opportunity to get through before getting back to normal (for example the implementation of a new ERP system). What we see is that for successful organizations these times are finished.
Successful and high-performance companies don’t stand still. They understand that the change is continuous and is accelerating. The fact that we have built a long-term and continuous collaboration with our key customers on the execution of improvement projects further confirms this idea.
There are different forces that strengthen the need to continuously executing on change. Some example includes:
Increasing pressure on cost: managers need to find new ways to improve product costs (e.g. complexity reduction, Value Engineering etc.)
New source of profitability: cost reduction could be necessary but not enough to sustain profitability and competitiveness and new innovation on the sales, marketing or pricing processes have to be implemented
Digitalization: the decreasing costs of software give new opportunities to digitalize, automate and improve company processes
Volatility is becoming the norm across all industries and this makes the frequency of change higher and higher.
Examples of improvement programs can include the following (the list in the table below refers to projects we worked on together with our customers in the last years):
How companies can become successful implementers and deliver better economic results
Every company “leaks” value at various stages of an implementation process: some of the prioritized initiatives don’t get implemented, others are implemented but don’t achieve bottom-line impact, still others may achieve bottom-line impact, but that impact isn’t sustained.
So how can an organization efficiently deliver results with projects? How can it continuously reinforce this capability for superior economic results?
Even if projects can have different goals, our experience tell us that there are few important factors that successful implementers apply (see fig. 1). A significant part of the value we deliver when we work with the teams of our customer, comes from the systematic application of these factors.
Fig 1: 5 key factors to improve the execution capability
1. Focus on essential changes: the pareto law is one of the most powerful principle in executing improvement projects. The questions are:
which improvement projects are best rated in term of results, risks or cost for implementation (see Fig 2)?
for the specific project, “which are the 20% of the changes that would generate the 80 % of the economic benefit?
(for a project with a significant impact on IT system): if you could implement only 20% of the functional requirements we have identified, which would they be?”.
This principle is powerful because if properly applied, can help to save months of work and to reduce the implementation cost by a factor of 2 or more.
Fig 2: example of a matrix to prioritize projects
2. Make thinking visible: this principle is critical during all the steps of the project. A common understanding for all the team members of the project scope, the current situation, the issue to solve and the results to be achieved is a key condition for the project success.
This is true also during the execution phase when the team must make decisions, evaluate options, identify causes of a problem, or plan a preventive action.
We have the experience to help our customers to make this “thinking” visible through all the project steps. This condition ensures alignment and improve the speed and the quality of the decision making during the project.
3. Using data in decision making: the ability to use data in decision making is becoming more and more important. Expert judgment must be combined with data to make faster and better decisions. Data are necessary to evaluate alternative options or to test an idea.
For example, we recently facilitated a work session with one of our clients. The goal of the work session was to generate ideas and alternative options to improve the effectiveness of the new product development processes. We then performed the data analysis that was required to prove / disprove the idea and to evaluate and prioritize the identified improvement options. This help to quickly identify the best solutions and improve the value delivered with the project. The fig. 3 presents the typical steps we apply together with our customers to combine data and expert judgement in decision making.
Fig 3: Example of steps to combine data and expert judgement
4. Engage people for results (not for reports): we have seen that a critical factor when it comes to implementation success or failure is the ownership and the commitment of the team on the results.
We think there are two ways to foster commitment:
The management team or the entrepreneur demonstrates with words and facts that the project is important.
The manager (sponsor) reviews the status with the project team at least every 3 – 4 weeks
This approach works very well only if the principle 1 (focus on essential changes) has been applied.
5. Combine “agile” with “standard project management” techniques: robust project management capabilities are essential for the success of any improvement project. The traditional project management approach is linear, and all the phases of the project occur in sequence (for example: assessment, requirements definition, design, deployment, test). This is approach works well when the team already worked the same type of project several time (this happens often in product engineering).
If a certain type of project has already been performed several times, the team can define a robust plan and the risk of change in project scope is relatively low. In general, this is not the case for improvement project because the solution to implement may not be clear from the beginning.
For this reason, we often encourage our customers to use a more “agile approach” that is based on interactive steps (Fig 3). This also help to minimize the time required to generate measurable results.
Fig 4: Agile proejct management for improvement projects
In our project we also a web-based software (Jira) that supports the application of the agile project management principles, help to improve speed and quality on projects and foster the collaboration between the member of the project team.
For more information please contact us at info@alyant.it
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