Is there a business case for your improvement?
Unlocking the value in your organization requires a solid business case for every improvement effort. Implementing 5S (sort, shine, simplify, standardize and sustain), building dry erase boards, and even executing a full daily management system without a well-defined cause or problem makes the implementation twice as hard and half as successful. There are two critical reasons you need to have a business case for your improvement: it aligns everyone on the value of the effort and it ensures you understand the problem you are trying to solve.
It aligns everyone on the value of the effort
Successful improvement efforts are targeted directly at a business problem that needs to be solved. The problem may simply be not being at the ideal, but it is defined as a gap or problem. The first step in problem solving, or A3 thinking, is to clearly define the problem. For Strategic A3’s, we call this the business case.
Similar to a court of law, the business case makes the argument for why the improvement is needed. An insurance claims processing center may consist of a series of desks lined up with rows full of paperwork spilling out of baskets. Imagine it is noisy, cluttered and obviously disorganized. An improvement effort to clean up the area, even a full blown 5S event would surely seem justified. The most effective implementation for this effort would start with a rich understanding of the business value of the effort in concrete measurable terms. Data on employee morale measured by a survey, lost claims per day, employee turnover, and processing delays caused by missing information would all make the case for the effort’s necessity.
Then, it is critical to wrap the business need into a value. Maybe a hazard index is reduced, returned claims cost is reduced, lead-time to the customer is reduced, or training cost for new employees is reduced. These can be measured and communicated as a sign of the 5S improvement’s implementation. These measures help ensure everyone understands the problem related to the business because of the current condition. Without such measures, a group is left to rely on audit scores to sustain and measure the improvement. The challenge here is motivation to sustain. It is much easier to connect with the benefits of reduced claim return costs and feel good than it is to achieve satisfactory audit scores just for the sake of the audit scores.
It ensures you understand the problem you are trying to solve
Most improvement is easily justified as valuable. It is hard to argue 5S, process management, Total Productive Maintenance (TPM), or changeover reduction are not needed. In almost all cases they are justified, but if you are implementing the change based on an opinion of the problem or simply to meet a copy initiative, you may not see the benefits. Asking what problem you are trying to solve and building a case for the improvement helps understand that problem.
Suppose a large saw is seen as a bottleneck in producing logs needed for a lumber company. The owner sees the saw as old and uncared for and initiates a TPM program to improve the saw’s reliability. Few will argue it is a worthwhile effort, but if a case must be made for the TPM effort, the question of why the saw is a constraint has to be answered with data. How often is the saw in need of repair? How often is that the cause of the delay in production? What actually causes the saw to be over capacity? How much improvement in reliability will it take to create the capacity needed? These questions lead to analysis, which leads to understanding.
Help your organization convince a jury of its peers that their improvement efforts will drive business value. Ladies and gentlemen of the jury, I would like to present my case for making this improvement….
Learn more in Patrick’s book, “Facilitating Effective Change,” available online through Amazon and Barnes & Noble.
Patrick Putorti
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