As more and more companies focus on performance improvement, knowledge and the application of problem solving skills become a core competency.  Why is this? If an organization is to perform effectively it requires every person to be empowered to use their knowledge and talents to solve problems and improve processes.

There are several methods for problem solving.  However, a typical problem solving method consists of the following steps:
* Describe the problem
* Identify root causes
* Select appropriate alternative for problem resolution
* Implement solution
* Verify effectiveness of problem resolution

Recently I met a group that applied what I consider to be “semi-circular thinking” to their problem solving process.  They would start out at problem solving, then identify root causes and brainstorm solutions.  Instead of moving forward to complete the problem solving process the management team would often go back and challenge the team with the following comments.

“Maybe this is not the appropriate root cause for the problem”
“How do we know that this is really a problem?”
“Maybe this is not significant enough”….etc.

These comments emerged after spending considerable time in defining the problem, creating a project charter and obtaining approval from a sponsor.

The result was that problems were not resolved or if they followed the total problem solving thought process someone would disagree with the validity of the outcome.

After working with the group for awhile I realize that this was a cultural issue and was the thought process that is sometimes used to challenge problem solving teams.

“Semi-circular thinking” is destructive.

• Teams  are stuck in the problem solving process
• Teams are discouraged from participating in problem solving
• There is no incentive to change the status quo

Managers need to allow teams to follow the steps in problem solving and once the team has been given the approval should support and not challenge the results.

The need for organizational alignment ensures that all individuals understand the overall direction of the company, and is focused on their contribution to the strategy on a day-to-day basis.  In part 2 we identified the elements that ensure organizational alignment and discussed performance measures and a deployment system. In this final portion we will cover the need for a closed-loop system and a structured review system.

Closed-loop System

Once measures have been identified at each level, then steps need to be taken to impact or change performance if it is moving in an unfavorable direction.  This is done in the following ways:

1. Measures selected should be displayed on a trend chart.  The use of the chart is to show the behavior over time.  In fact, the trend chart reflects what the system is able to produce.  It is important to review the performance by analyzing the trend charts.  For example, if the operations department is concerned about effective equipment utilization, then a trend chart could be used to evaluate downtime of the equipment in the facility in weekly increments
2. Pareto charts should be developed.  This will identify the magnitude of the components that drive or impact the trend.  In many cases, the performance identified on the trend chart may be too broad to impact.  The Pareto chart is developed cumulatively and shows the biggest systemic contributor to the performance indicator.  If the Pareto chart is developed on a weekly basis, then the response to the largest item might drive short-term thinking and a fire-fighting approach to problem resolution.  The Pareto chart associated with the trend chart for equipment downtime may have categories such as change over time, number of equipment failures, and material availability as the basic drivers of equipment downtime. 
3. A structured problem solving activity is essential as it focuses on the primary issues identified on the Pareto chart and tries to determine the root case –the main reason why the problem is occurring.  The intent at this point is to evaluate the system and identify any systemic issues that could be causing the problem to occur.  The problem solving activity is, therefore, aimed at not only identifying the constraint, but determining appropriate systemic solutions and instituting them so the problem would not recur.  For example, if equipment changeover is the primary cause for equipment downtime, then the problem solving activity may need to be focused around reducing the time required to change tools.
4. Monitor Effectiveness.  In many cases, it is often easy to think that problems have been ‘fixed’ however, what actually happens is that short term actions are put in place which may have long term unintended consequences.  This occurs because the system issues have not been addressed.  The importance of monitoring the effectiveness of corrective actions is to ensure that initiatives are sustained and do not cause problems in other areas.
5. Performance measures should be reviewed on a continuous basis to identify opportunities for continuous improvement.

The closed-loop system needs to be used at every level of the company, and encourages the process of problem identification as well as effective problem resolution.

The Review System

 An important component of maintaining organizational alignment is the ability to develop and use a structured and consistent review system at each level.  The frequency of the reviews will vary depending on what level of the organization  doing the review, and whether there are critical issues that need primary focus.  For example, if a plant has a high reject rate, or may have a poor on time delivery performance, it may be necessary to review performance weekly.

In general, the review process at the management level should take place every two weeks or once per month.  At the department level, reviews should be done once per week, while on the frontline it should take place daily.

The strategy for problem solving on the frontline may be slightly different from those at higher levels of the company.  At the frontline, the review process is identifying anomalies, i.e. special causes of variation.  For example, a dimension on a part might be out of the required specification because of tool-wear.  The individuals on the frontline may have the ability to immediately respond to tool wear.  At other levels of the company, one might more easily identify basic causes of tool wear such as types of tools selected, and method of using the tools.  This might require the need to perform tool studies to identify how long the tool should last and to use this information to change tools before they become a serious problem.

Through the review system, individuals or departments are continually held accountable for performance and the actions that are being taken to make the necessary changes.  In addition, the review system provides the vehicle where the organization can continuously evaluate its performance and make changes towards continuous improvement.  Periodically the company should question the need to track certain measures and add or delete measures in response to changing needs of the environment.

Through the review system, the company is able to understand activities at all levels of the company and to evaluate the extent to which they are aligned.  It also prevents several groups working on the same problem because there is now a process through which the organization is kept informed on the projects that are in progress.

Summary

Organizational alignment is both vertical and horizontal.  Individuals need to be both aligned to the strategy and the needs of the customer.  Creating a framework that provides a means for linking the entire company provides the mind-set where everyone knows how decisions are made, and how they add to the corporate value.  Also, effective communication begins to occur throughout the organization.

Communication from the boardroom to the frontline starts with a well thought-out strategy which is used to guide the selection of leading indicators, for the whole organization, which will be measured.  These measures will, in turn, be used to guide the selection of leading indicators, for a department or unit, which are then measured.  Finally, the department or unit measures are used to guide the selection of frontline measures.  Through this linked selection process, the frontline personnel know what is required, on a daily of hourly basis, to meet the goals established by top management.  Changes in direction by top management are communicated through out the organization merely by selecting new measurements and deploying them all the way to the frontline.

The framework for organizational alignment is the methodology for achieving ‘constancy of purpose’ and describes a business model that integrates concepts of organizational development with basic philosophies and tools of quality. The four components of the framework are:

• Performance measures developed by upper level management
• The Deployment process
• Closed-loop system, used to monitor and respond to performance
• Review process, to ensure continual alignment

Performance Measures
The famous quote “you cannot manage what you cannot measure” is often used to emphasize the need to select and use the right measurements.  Performance measures can be defined as the quantitative means for evaluating the products and services in a system.  Organizations need to know their progress towards an outlined strategy.  Performance measures, when clearly selected provide the means for articulating the vision in a form that everyone can understand.

The selection of measures by senior management begins by:

• A review of the vision, mission and values of the company
• The strategy that outlines how the vision will be achieved.
• Defining the current situation of the organization –its strengths and weaknesses
• The relationships with the customers
• Internal technical capabilities and constraints

Performance measures should relate both to the current situation and to the overall direction of the company.  This will give mangers the ability to chart a course and monitor the company’s progress.  The measures selected should also be broad enough to provide information on the overall health of the company.  Data should be collected in a form that allows the evaluation of performance in small time increments.  If this is not done, the measures will all be lagging indicators, which can only provide a historic perspective on organizational performance.

The Deployment Process
Once measures are defined by the senior management, a process is needed to translate those measures into something meaningful for everyone.  The interest at the top of the company is usually quite broad where as further into the organization the measurements become increasingly specific. The measurements should also be relevant to the work performed by the people or the act of measuring will add no value.  The deployment process should be well structured and carefully managed to allow for the selection of measurements that contribute to the direction of the company.

It is important not to dictate the measurements to the people in the company.  Instead, care should be taken to communicate the measures that are important to the organization and why.  Then teams, units or functional groups, should be allowed to select the measures that they believe will be relevant to enhancing the progress of the company.  Encouraging teams to select the measures in their area allows them to own the process of monitoring and responding to the measures in the right way.
Measures at the top of the company are broader in definition.  However, as measures move down they become more specific and are more narrowly defined.  The corporate financial measure, Return on Net Assets (RONA) identified at the top by senior management is linked to the next level by measuring Inventory turns and output/equipment.  At the Plant Management level, these inventory measures lead to the consideration of manufacturing cycle time, inventory days on hand and vendor lead-time.  At the department level, the measures that are connected to those above are machine downtime, First Run Yield and the number of unplanned product changes.  The process drivers which impact downtime are the time it takes to changeover equipment after a production run, the number of equipment failures, and the number and condition of the parts available for a production run.  The ability to link measures enables managers at each level to control his or her performance to the measures identified.  Linking the measures in this way provides the structure for ensuring constancy of purpose.  All individuals will be familiar with what is important and how they support the overall direction of the company.

This structure is useful in departments that have not traditionally tracked and responded to performance measures.  For example, in considering safety, the corporation might be interested in the accident rate, while the plant manager will evaluate the number and types of accidents in each plant.  Each department might be concerned with and keep track of the number of unsafe acts.  This measurement is focused and may be considered as a leading indicator of accidents.

Guidelines for deploying measures:

• The measures selected should relate to the previous level.  The use of a Deployment matrix will help groups to link measures to those of previous levels.
• Measures selected should also be related to the ability of the unit to satisfy internal customers.  For example, the preventative maintenance department should be concerned with their response time to a request to fix equipment, the number of times the same equipment needs to be repaired, and the ability to accurately predict and execute the maintenance program before the equipment goes down.
• The measures should reflect the activities that are under the control of the respective individuals.  Individuals should not be collecting and monitoring data of other areas.
• Measures selected should drive action.  This means that they should be leading indicators rather that lagging indicators.
• The team should have the ability to monitor and review the measures selected on a regular basis.

This section dealt with selecting performance measures and deploying them through out the organization, two important components that will ensure organizational alignment.  The final section will focus on the need for a closed loop system  and a review system that will guarantee that the metrics will drive actions and will be a critical part of dally activities.

I often hear animated discussions amongst quality professional on this subject.

I find this subject amusing because it is like choosing between good defense or good offense for a football team. Both are essential if you want to play and be succesful in today’s Global market superball!

The two acronyms represent essentially same process except their main focus is in different arena and they have some small differences in the emphasis of methodology.

DMAIC is traditionally used in Lean Six Sigma application with its emphasis on production/cost efficiency, Process mapping,mistake proofing, Problem resolutiion, reduction in variability, data driven decision making, Continuous Improvement etc.

IDDOV process, on the other hand, is used in Design for Six Sigma (DFSS). It’s emphasis is on developing robust product desings that are optimized & verified to deliver customer expectation  while being compatible with the manufacturing capability to produce it.

Other than this subtle difference , they are same processes with different accronyms to suit their area of focus.

Prakash Sathe

Simons-White & Associates