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The HOW of High Performing Continual Improvement: Let’s Start with VALUE

In the first two articles, we presented the goal of high performing continual improvement and the resulting benefits. Let’s talk now about HOW it produces those benefits and what is needed to be successful. One of the ways continual improvement helps performance is by embracing the important concepts of VALUE and WASTE. These concepts are used practically (in strategies, improving work processes, and daily problem solving) to help customers satisfy their needs and to improve efficiency in the organization.
Think about the simple example of getting a flu shot.  What I may care about as a customer is probably that the treatment prevents the flu, is convenient and timely, has low pain to acquire and can be purchased at a low cost. Think about the steps and time to acquire it however- drive, wait, paperwork, wait, prepare, shot, paperwork, and drive home. In a 75-minute process, the value-added step to me is probably 2 seconds (the “shot” time). This yields 74.97 minutes of waste, and plenty of opportunities for improvement and time for adding more value!

Often organizations find that typical work processes are only 5-15% Value-Added. Note this does not mean that people are not working hard in their work processes. Quite to the contrary, they are occupied overcoming the waste in a process in order to deliver value to the customer. Improving the value added and reducing waste may require a change to the way “it has always been done” and some improvements may not be practically possible, however, the good news is that significant opportunities are present to make processes more effective, efficient, and EASIER TO DO!

Let’s look at Value first. An understanding of value is critical – it can increase growth, unlock innovation and product development, and challenging what does not add value identifies opportunities to improve work processes. To use the concept of value, lets establish some definitions and discuss how they are practically used.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noriaki Kano[1] added some guidance to the above definitions and characteristics by suggesting not all values were equal in the customer’s view and that, when understood, opened opportunities to better add value and increase satisfaction.

[1] For more on Kano, see Walden, D., 1993, The Center for Quality of Management Journal

 

Consider the above flu shot example and how we would innovate and improve the overall process using the above concepts and definitions. Would I see higher value, be delighted, if it was possible to receive a flu patch mailed to my home, automatically from my primary care provider, apply myself for a short period of time, and prevent the flu?  Perhaps not currently possible, however, I would see it as adding value and sign up!

Organizations with a culture of continual improvement use these perspectives of value in achieving their Mission, product/service development, identification of improvement opportunities and daily behaviors when dealing with customers and creating products/services.

 

So, what can you start doing tomorrow to use the concept of VALUE to improve your organization? Plenty. Whether you are a small or large organization, let’s start by…

  1. Teaching everyone from the owner to the entry level employee (onboarding on day 1) how to identify value from the customers perspective and in their work processes.
  2. “Be your customer” – experience your offering from the perspective of the customer-order it, buy it, open it, install it, use it, maintain it (what people call going to the Gemba).
  3. Talk to the customers! Adopt a helper’s perspective and ask them what they think, how it helped, what was a problem, and what else they can use to help solve their problem!
  4. Collect customer information and data; summarize it into key understandings of their values for communication inside the organization and generating improvement ideas.
  5. Start using the customer understandings in a real way to set strategic and annual improvement plans, targets that increase value in products/services, and identify processes for improvement.
  6. And make sure that everyone in the organization understands what are the key ways and measures that are used to improve customer value in their work process.