This is a much misunderstood and under-explored topic that affects us all in driving transformation, change and overall business performance.
70% of Transformation initiatives fail to deliver on the business case. Lofty goals for process change and performance improvements are infamous for not being achieved.
- There are some seductive myths around performance and productivity, which we need to reconsider
- Too many ineffective KPIs, including those which are not “key” and don’t actually contribute to the desired outcome
- Failure to fully appreciate the role and impact of end-to-end business processes
- Too much focus on symptoms rather than root causes and the process defects they represent
- The perennial struggle with “making it happen”, driving action, building productive habits & necessary behavioral change
- Lack of focus on applying the “Pareto Principle” to drive business outcomes fast
It is a complex issue, and not enough time is spent drilling into the core challenges and how best we address them. This 30 minutes gave us some food for thought, and ACTION, on this . . .
You can access the recording of the webcast here . . .
With the fresh, alpine air of Switzerland in his lungs, Martin Reeves shared experiences and insights from his work with Fortune 500 businesses to breathe some new life into your change and process improvement initiatives, from enterprise-wide transformational programs to individual initiatives to drive enhanced efficiency and effectiveness.
We shared some tools and techniques to make progress more visible and life more bearable, even down the barrel of a screen !
We introduced the topic by questioning how we see performance, as a “result” as in “winning” or a “state” as in a process of continuous motion. How we see the topic has a massive impact on the strategies we adopt.
Ten barriers to performance improvement were outlined, and I am sure you can identify more!
- Ambiguity between Efficiency and Effectiveness
- Performance Measurement and KPIs
- Cognitive Biases that work against us
- The prevailing “cadence” of individuals and business
- Technology trends & FOMO
- Project vs Process Thinking
- Understanding Process Issues/Defects & “Root Cause Analysis”
- Driving Behavioural Change
- Sustaining Motivation
- Shifting Priorities over Time
Given our growing “love affair” with KPIs it is only right we spent some tie discussing them. It is so abundantly obvious that measures of success are important, we almost have a mental block in digging into the challenges, of which there are several, not least conflicts between individual KPIs, the behavior that they are designed to drive, the potential unintended consequences and the fuel that can be added to the fire when we use KPI target achievement to drive compensation.
The harsh truth is that driving performance improvement requires some deep and critical thinking, including around KPIs themselves. We talked about the “watermelon effect” and cognitive biases, of which Dunning-Kruger is one that is a “gift” that just keeps giving.
In applying our muscles of critical thinking, “what does GOOD look like” is an intellectual workout worthy of an Olympian. It is never as obvious as it seems. If we take a micro approach to a single team or workgroup, we miss the needs and impacts of upstream and downstream stakeholders and participants. If we take a macro view of an end-to-end process or value stream, the differences between expectations and key priorities at any stage are stark, like lighthouses indicating substantially different directions.
We must not shy away from the challenge though. Identifying and agreeing “What Good Looks Like” is the highest impact activity and requires deep thought, root cause analysis and meaningful discussion, collaboration and understanding with other stakeholders and end-to-end process participants.
Once we have cracked this, we can focus on indicators, measures, KPIs, but we need to differentiate between leading and lagging indicators. Knowing what has happened is important, but there is usually little we can do about it. knowing what will, or may happen, is much more influential and useful. We talked about the example of seismograph predicting volcanic or tectonic activity, which is obviously much more useful than reporting when the cataclysms have occurred!
“Lagging Indicators” are what we typically see as our KPIs in business, that aim to show how well we are doing, and can be helpful for reporting to leadership as performance measures, but really don’t help us very much operationally. These are often “revenue per”, “cost per”, “cycle time”, output quality measures.
Leading Indicators, on the other hand, are pure gold when it comes to directing and motivating action to drive improved [performance, They aim to show us what is going wrong, identify barriers to a longer term positive result, assist in “navigation” and show us where to improve. These are “performance drivers” and typically focus on input quality, training, process defects etc.
We discussed “Defectivity” as the ultimate leading indicator, enabling us to identify, analyse and address root causes of process breakdown, driving us ever closer to aspirational outcomes.
The need for speed and agility in today’s digitally integrated business have driven a clear focus on end-to-end, often global processes and value streams. This focus has enormous benefits but is not without substantial challenges as any Global Process Owner can attest. This process focus makes the need for clarity on “What Good Looks Like”, as well as lagging and leading indicators a critical business issue.
All this is great stuff, and now we have clarity on aspirations and objectives and the key measures and insights to help us get there. But this is akin to having decided to get fit, bought the new gym gear, paid for a gym membership, acquired a Fitbit but not yet having visited the place of improvement, in this case, the gym.
The real human challenge in performance improvement then comes in “Making it Happen”, driving individual and collective action and behavioral change. This is the “Art of Execution” or as Martin Reeves told us “The Perils of Procrastination” . . . .
It is our responsibility as professionals and leaders to create a vision, articulate the vision, passionately own the vision and relentlessly drive it to completion. It is the last element where we fall short so often. This is not a business problem, it is a HUMAN problem. You just have to look at the debris of failed “New Year’s Resolutions” every January to realize how significant a challenge this is!
We are often diverted by contemporary mythology, that we can get fit in 7 days, lose 2 kilos in a week, look younger in a day, be happy in an hour, learn to play the piano in 14 days and so on. We all know, from our personal lives, that these myths are just that. If we want to achieve anything, we do know that we need determination and persistence, as real progress is an “aggregation of marginal gains”. Every elite athlete will tell you this.
The fascinating thing is, that in business, we still tend to believe the myths. That we can digitize or transform a process in a “big bang” , that once we have delivered the “project” that the work is done.
As leaders, we have to be careful not to perpetuate these myths, however appealing they might be in our minds . . .
The truth has always been that success results from consistent action taken over long periods of time.
Unfortunately, it can be difficult to stay the course.
It can be tempting to procrastinate as we are distracted by a myriad of competing responsibilities and priorities vying for our attention.
This is the challenge of execution.
And just as with the analogy of personal fitness, or weight loss, or learning a musical instrument, we need to create new habits.
Whether you believe habit forming takes 3 weeks or 3 months, or somewhere in between, habits are key to sustained progress and ultimate success.
We need a few things.
- An Action Plan
- Decide on the behavior we want and that which we want to replace
- Self discipline, determination and stamina (the hardest part!) – the bridge between goals and accomplishment
- Personal commitment and accountability – “it is down to me”
There are many hints and tips in this, and Martin referred to a number in his talk (which you can hear on the recording).
Fortunately, this is not all unpleasant news . . . .
The human body has some great tools to help us in habit forming. The “happy hormones” that re released when we do something pleasurable, and the ability to associate small tasks with achievement and this a release of dopamine et al.
I know myself, with a regime of regular (but still too infrequent) running, that when I wake up on the allotted day that my initial reaction is “Oh No, I don’t want to go for a run, it is too cold, wet, dark . . . etc.”. But I quickly turn my mind to the feeling I will have when I complete the run. That is a very warm and positive thought, “pre-loading” if you like, on dopamine ahead of time. It works for me.
Martin described the ADKAR model of initiating and sustaining new habits;
- Awareness – the Business “WHY”. Ensure all stakeholders, participants and enablers are aware of the business challenge /problem we are trying to solve, “what does good look like”, and the plan to deliver a positive outcome
- Desire – the personal “WHY”. Work out and plan to ensure that all participants and enablers (particularly) get a personal win out of this change and operating in the new “Business as Usual” (BAU) model
- Knowledge – ensure that all participants, enablers and stakeholders have the knowledge and a common agreed plan, including “what is expected of me”, “what do I stop doing”, and “what do I do instead?” required to operate successfully in the new BAU model
- Ability – assess, select and develop the attitudes, aptitudes and capabilities required for success (determination, vision, leadership, motivation . . as well as operational abilities)
- Execution & Reinforcement – change is hard, so make sure you have a plan to support, encourage, reinforce and recover the mindsets and activity required, over the long haul . .
Some good tips to get through the “hard yards” include;
- Remember your “why” (business and personal)
- Keep a Log (personal accountability)
- Practice Good Daily Habits (rhythm, operational self discipline)
- Reward yourself often (personal and collective celebrations of small successes)
- Get an accountability partner (eg a co-dependent colleague)
All this needs to be part of our plan for the project, program, process, change or transformation we aim to achieve, individually, as teams and as an organization.
As we know from personal experience, there are “No quick fixes or easy hacks”. As the Nobel Winner Atul Gawande said so well “success is about making a hundred small steps go right– one after the other, no slip-ups, no goofs, everyone pitching in”. And THAT, is the job of leadership.
In closing we talked about applying the accounting principle of “Net Present Value” (NPV) to all change initiatives, respecting the fact that time itself decays value delivered. This reinforces the fact that speed is always of the essence. We never know what is round the corner that can change our priorities or perceptions of value. Just think of your business priorities in February 2020 and how they changed very suddenly.
The Pareto Principle should always be in our minds, it helps address this NPV challenge. How can we deliver 80% of the business value or outcome with 20% or less of elapsed time, effort and cost?
We revisited cognitive biases and engaged in a brief game of “cognitive reflection” that demonstrates very clearly that we all suffer from these biases, Dunning-Kruger and the others, irrespective of our level of intelligence. It is all about thinking slow to execute fast!
Finally, we hared an objective checklist of how to avoid “Performance Disappointment”. Worth reflecting on;
- Recognize and address cognitive biases
- Engage ALL executive stakeholders around “what good looks like”
- Benchmark current performance and what is expected
- Be brutally honest on what is achievable in aligning across end-to-end process
- Develop a realistic roadmap
- Build a case for action and agreed benefits case
- Focus on Time to Value, not “time to implementation”
- Quick Wins – Pareto Principle 80/20 rule
- Consider adopting multiple competing service providers
- Confirm and echo agreed priorities throughout
- Consider cost AND value focus end-to-end
- It is not a project, it’s a process
- Most value flows from behavioral change, not all under your control
- What skills can most help in this?
- Engage subject matter experts from multiple perspectives
Ultimately, we need to win hearts and minds with a clear plan to drive performance and process change.
And we need determination, persistence and commitment.
“Success is not final, failure is not fatal, it is the courage to continue that counts . . .”
We closed the webcast and discussion with a collective question for the audience, “What, in your view and experience, is the single biggest inhibitor in driving performance improvement in business processes?”
The crowdsourced answer to this question is illustrated in the word-cloud below . .
You can access the recording of the webcast here . . . .