The Forgotten Half of the Process Improvement Yield: What Actually Happens After the Improvement Plan is Ready?

Picture: AI generated visualization show-casing the forgotten half of the PIY. For a thorough discussion on how process improvement relates to motoring, please check the Car Analogy (incl. Audio Mode) in the app VISTALIZER for Enterprises (paid version required). The wheels in the Car Analogy equal the PDCA cycles.

Most companies understand that a plan is needed to improve operations. Somewhat less of the companies realize that both the plan quality and coverage matter. Just having a plan is not enough. Here it is also worthwhile noticing that the plan quality includes also the way the plan was actually created as this relates to lowering the implementation threshold (lowering the change resistance, improving decision speed and quality). Without a fast, scientifically verified method producing high-class process improvement plans (link to doctoral dissertation abstract) according to the need, it is very hard to get and keep the improvement effectiveness at the required level. Basically, the Plan Quality and Plan Coverage are one-time deliverables in the yearly or even the bi-annual improvement cycle. These are easily assured and managed via a sufficient and required number of VISTALIZER Reports (link to product page) targeted at key processes.

The above is all good, but having a high-class improvement plan and a decent coverage won't do as these considerations are together only half of the issues that need to be executed properly in order to realize real gains swiftly. The success of any improvement work can be easily tracked using the Process Improvement Yield (PIY) metrics (link to blog post discussing the PIY). It is defined as follows:

Process Improvement Yield (%) = Improvement Plan Quality (%) x Improvement Plan Coverage (%) x Implementation Quality (%) x Implementation Coverage (%)*

* For a real-life case showing how the first half and second half of the of the PIY score are defined, please see Pastinen, M., 2010. High-Performance Process Improvement. Berlin: Springer. (Table 4-1, page 74).

In practice, the Implementation Quality is how well each individual PDCA cycle is executed. Was e.g. the Do phase faithful to the Plan phase, was the Check phase rigorous (not just a status meeting), did the Act phase actually close the loop or just generate a new to-do list? Implementation Coverage, on the other hand, equals what % of the (key) improvement objects actually get run through the implementation phase (PDCA) at all, vs. those that are quietly shelved after the kick-off enthusiasm fades. Very few companies, if any, master the Implementation Quality and Implementation Coverage issues properly. Those that seemingly do, fail after a more thorough review. Also worth noticing that the time elapsed between the first half of the PIY metrics and the latter half is mostly way too long. In between, nothing happens besides losing a lot of money, time and mental momentum due to not realizing the improvement potential properly.

Why Does the Latter Half of the PIY Metrics Break Down in Practice?

Why both the implementation quality and implementation coverage fail is due to the organizational culture. In other words, the implementation failure traces back to what the organization does and says (or does not do or say). The organization is not used to solve problems in a systematic way, which means that there is no time allocated for the implementation part in the first place (cp. that about 4% of the working time should be allocated to improvement work to run the PIY at the correct level). Many organizations run in a constant self-generated "busy mode" that everybody is seemingly occupied with so much top-prioritized work that it is impossible to allocate time for improvement efforts. It is, of course, a completely other story how much of the busy work is both effective and productive.

The improvement implementation is by nature ongoing and distributed across many people/roles/months, which means that the improvement implementation quality decays inevitably over time without proper countermeasures, whereas coverage erodes as priorities shift. The funny part is that wasted time, even large amounts, due to malfunctioning operations is many times not a problem, finding time here and now to really improve operations is. A low-quality process analysis and synthesis do not even reveal process deficits, delivering thus a low-level input for the implementation part. In many companies there is also an ongoing "PDCA theater" which means that the PDCA logic is not run at a sufficient quality level (>85%), although the company claims otherwise. Also, companies suffer from the "champion left the company" problem, whereas other companies suffer from the "only the easy objects get implemented" bias. One large listed company claimed e.g. that they are running the PDCA logic at a sufficient quality level. At a closer look, the PDCA logic had been "re-engineered" to only cover the PD-phases, "to speed up things". The CA-phases were totally missing, and had been so for years. Driving a car with semi-circular wheels (see the picture), non-purposeful wheels, with a low coverage (cp. the missing rear wheel; Did anybody even notice that?), is very hard. The transformation momentum is impossible to generate (cp. the car has no real capability to gain and maintain speed). It's no different when trying to improve operations without the right implementation quality and coverage.

How to Avoid the Breakdown?

To avoid the breakdown, and to thus assure a sufficiently high improvement efficiency, requires that the management and the employees are both sufficiently motivated and sufficiently skilled. From a management point of view this is tracked via four key signals:

1. the time elapsed between that the plan has been accepted and the implementation starts,

2. the resources allocated for implementing the plan (time, money, staff),

3. setting key threshold objectives and targets and follow-up the progress (e.g. PIY level for years 1-3; % of the staff operating the PDCA logic with a quality above 85%; % of staff understanding the improvement philosophy, approaches and tools; time allocated to real-life improvement work as % of the working time),

4. willingness to learn at least the basics of process improvement (philosophy, concepts, approaches, tools)

The management should first and foremost assure that points 1) to 4) are sufficiently well dealt with. This assures a steady progress for the overall improvement work, and makes it possible to increase the ambition levels of both the improvement work and the focus operations. From a staff point of view, it all boils down to two key indicators:

1. the amount of the staff that understands sufficiently well the improvement philosophy, approaches and tools (>40%),

2. the quality level of individual PDCA cycles >85% or at least a score of 170 points out of a maximum of 200 points as defined by the PDCA Quality Measurement Logic**. The PDCA cycles need also to fit the defined time windows.

** See Pastinen, M., 2010. High-performance process improvement. Berlin: Springer. Pastinen, M., 2010. High-Performance Process Improvement. Berlin: Springer. pp 192-195 for a detailed discussion and case how to measure the PDCA quality.

Points a) and b) above require, as a built-in requirement, that the motivation of the staff is dealt with properly at all times so that the overall objectives can be met swiftly. How to realize points a) and b) in practice is probably the most demanding task to accomplish and it requires a well-thought solution how to both educate and train executives, managers and employees in different settings. In the High-Performance Process Improvement (HPPI) field, the solution is the app VISTALIZER for Enterprises (VfE), that does the heavy lifting based on local and individual needs, including your preferred mode of learning (linear, non-linear, in group). The in-depth analogies provide a fast track to get a reasonable understanding of the key issues to process improvement. The app makes it possible to build and verify, to the desired extent, the motivation and improvement knowledge and skills of the organization to implement the plan according to the need. HHere, you can e.g. study how to run a PDCA work ("PDCA 1" in the app) with 100% quality (incl. the documentation). With the bar set at the correct ambition level, you can then test your own skills of managing the PDCA cycle in a more demanding setting ("PDCA 2" in the app), including your documentation quality (output). Additionally, you can get for your PDCA output a PDCA score (0-200 points) verified by an expert (incl. feedback to reach a quality level of at least 85%). Both the PDCA 1 and PDCA 2 cases are real-life cases with a detailed cause-and-effect chain making a before/after study very concrete. With such an end-to-end PDCA logic understanding, the jump to apply the PDCA logic correctly to own problems is far more likely. How to create the right improvement momentum (motivation) can be dealt with to the "last bolt and screw" via the Mountain Analogy (incl. Audio Mode) and the advanced Story Telling feature, providing a thorough support for change management and motivation generation. These features are crucial in transformational improvement efforts that many times face a great failure risk.

You can test the free version of the app by installing it from either App Store (iOS/iPadOS) or Google Play (Android). A paid subscription provides the full access to content for the set time. Naturally, an auto-renewal subscription can be easily cancelled. For Android devices there is also the option to purchase a short-time, non-renewable subscription. The app comes also with extensive review services and integration features available at vistalizer.com that makes it possible to create a high-performance process improvement system according to your specific needs. Larger roll-outs of the app are done using Apple Business Manager and/or managed Google Play, deploying the app as a private app to your organization. Here the only things needed are basically your organization ID and a valid contract (approved offer) with Vistalize Oy. In this setting, the full version of the app is immediately accessible for the user (no paywall), also in off-line mode.

We have a Great Plan but Low PIY: How is This Possible?

Having a high-class plan but a low process improvement yield is not contradictory. If your plan quality is 100%, coverage reasonable high (60%), but your implementation quality (30%) and coverage (30%) low, your PIY level is low 5.4% (1 x 0.6 x 0.3 x 0.3 x 100%). With such a performance much time and money are lost in practice, as the (modest) improvement gain won't likely compensate sufficiently for the investment. It is very hard to improve the organizational performance beyond general market conditions. This will increase the risk for a declining competitive position on the market, given also pressure from inflation.

What are the Recommended Next Steps for an Organization Aiming at HPPI?

HPPI / VISTALIZER is by nature a modular solution. This means that you can build your own HPPI / VISTALIZER setting based on your specific needs. Good starting points for an organization aiming at a HPPI include the following actions:

• Understand the concept: read the book High-Performance Process Improvement (e.g. the Preface and Chapter 1), study the subject using the free version of the app VISTALIZER for Enterprises (e.g. via the three Audio Blogs, and curated documents such as the Executive's Handbook and HPPI Awareness Booster available in the module Proposed Learning Paths), and/or run an HPPI expert-led half-day seminar for the top-management. You can also download the handbook here.

• Discover your current PIY level: the solution VISTALIZER Acid Test provides swiftly a score at what level your improvement work is in real-life. The review is done by a seasoned HPPI expert.

• Disclose the real improvement potential of a key process: run a VISTALIZER Report (a "mini-project" lasting a few weeks, and consuming some hours of the key persons' time).

• Understand thoroughly the knowledge and skill level required to run the implementation according to HPPI criteria: run an expert-led education and training effort using the VfE app as the supporting technology. This educational and training effort may be 1-14 sessions long (one session equals a half day education and/or training).

In my experience, curious, knowledgeable and visionary executives wanting real improvements beyond traditional low-performance approaches such as lean, are the foundation for really getting things on the right track. For more information, please send your inquiry to pdca@vistalizer.com.