Effective leadership has long been recognized as one of the elusive critical factors in organizational success, especially when it comes to improving operational performance. During the past decade, deploying BPM as one of many improvement methods, has gained popularity. Yet, the actual success rate in driving and sustaining change has been, and remains, dismal. In a 2008 a broad based survey of 3,199 executives around the world, it was found that only one transformation in three succeeds. The Standish Group’s 2009 report on IT project success indicated that only 32% of the surveyed projects were delivered on time, on budget and with the required features and functions. A recent article also suggested that nearly 60% of all corporate Six Sigma initiatives failed to yield desired results. Other studies over the past decade reveal very similar outcomes. It appears that, in spite of the abundant body of knowledge on leadership and change management, and the increasing array of tools and methods, including BPM, companies have not had more success in implementing change programs.
What’s the problem? Why does a lack of committed leadership typically surface among the top few barriers in practically every survey on the obstacles to successfully transforming operational performance? Why do leaders continue to struggle in this regard?
This article outlines that while there are no pat answers, the success of BPM and other operational improvement projects can be enhanced if leaders were to focus on these four key areas:
- Understand the importance of pacing
- Avoid the most common pitfalls
- Craft a compelling case for change
- Emphasize the need to sustain improvements
A Compelling Case for Change
Creating a compelling case for change is the foundational first step in any operational improvement.
The key components in crafting a compelling case for change include:
- State what improvement in operational performance is needed and why
- Address both facts and feelings
- Use simple, visually gripping support materials
- Communicate (repeatedly)
A compelling case for change is typically built on either an imminent threat or a perceived major opportunity. Either, we must join forces and change how we do things to survive or we must join forces and change how we do things to prosper. The best tests of a compelling the case for change is whether people step forward as willing followers and whether they are motivated to act with urgency. Executives, middle managers and front line employees need to understand the point of change and also agree with it. That’s why the case for change needs to tell a compelling story that speaks both to the head and the heart. This is where viewing operations from the customer’s point of view becomes important. Many companies do not measure the performance factors that are truly important to the customer such as responsiveness (first time right) and flawless delivery of product or service (on-time, complete and error free). In building a compelling case for change, highlighting the gap between current and desired performance for customers can be a powerful way to touch people’s emotions.
Thoughtful leaders sense that employees are not motivated by the same things that matter to executives. Instead, employees are more likely to be engaged by stories around factors such as improving customer service, making a contribution to some greater social good, improving their own working environment and a potential for personal rewards through either bonus compensation or visible recognition.
The likelihood of success in any significant improvement of operational performance is low unless the leader crafts a compelling case for change. There are simply too many people, too many departments, and too many competing initiatives involved. A compelling case for change must address the why and what of the needed improvement in operational performance and provide both logical and emotional reasons for people to be wholeheartedly committed to a common course of action.
How do you know when you don’t have a compelling case for change? What constitutes a fragile case for change? It’s whenever one or more of the following conditions exist. The reason for change is unclear. The scope of change needed is unclear. The needed collaboration from key departments is missing. The basis for the needed change in operations does not address both the heads and hearts of executives, managers and the front line. There is insufficient communication of the need for change.
The right pacing is essential. Leaders must assure that project teams do not dive into too much detail in the early stages of an improvement project in terms of the time and effort needed for modeling and measurement. Leaders also look for ways to maintain momentum by way of early wins. These potential early wins are typically related to revising outdated policies and eliminating obviously non-value added activities and hand-offs. Generally, early wins can be implemented in a month or less, and do not require major IT investments. Given that major change can take a year or longer, especially if information technology and integration issues are involved in some significant way, planning for and taking action to assure early wins is one of the most important ways to maintain momentum.
The ability to think at the right level of detail is one of the critical success factors in this respect. This means exercising discipline in early stages, at the getting ready stage, to think at a high level, and assuring that a customer’s perspective is taken. Here, the leader’s emphasis is seeking to understand and asking probing questions – as opposed to coming up with solutions. In contrast, later on, at the taking action stage, it’s important for leaders to think at a more granular level of detail, encourage the prioritization of the opportunities for improvement and push for the rapid implementation of the so called “early wins” to demonstrate progress and maintain momentum.
There are many potential pitfalls in leading substantial change in operational performance via BPM. Failing to have a compelling case for change, diving into too much detail too soon, failing to have early wins to demonstrate progress, failing to promptly remove obstacles to change, not installing the right set of metrics, and not building aligned reward and recognition systems to sustain the change are some of the major pitfalls.
There are two particularly undesirable practices that leaders should attempt to avoid:
- Placing methods before outcomes
- Putting structure before workflow
Emphasizing methods before or more than outcomes occurs whenever a selected method of improving or transforming operations takes on an identity of its own and overshadows the desired outcomes for customers and shareholders. This can happen with any codified improvement method be it Lean Six Sigma, BPM or Reengineering. Since most improvement methods require a shift in leadership mindset from a traditional stovepipe view to a customer focused, value chain point of view, it’s understandable that there is a certain amount of fanaticism and proselytizing involved. However, it is problematic when the selected method of improvement takes on a life of its own and overshadows the underlying reasons for engaging in fundamental change.
Putting structure before workflow is yet something else to avoid in leading operational change. This practice flies in the face of the long held dictum that form follows function – in other words an understanding of workflow will reveal insights that are useful in determining organization design. While some degree of restructuring may be involved in improving workflow, it is best done after workflow considerations are understood and in a phased method. The wholesale restructuring of the organization chart, in advance of understanding the end to end business processes that create value for customers, have the tendency to encourage people to focus more on personal relationships versus on what needs to be done to better perform for customers.
Operational improvement projects, such as BPM, by definition have a clear beginning and an end. When it comes to sustaining these gains, the emphasis needs to evolve from a project mentality to governance and continuous improvement. While there is less data on historical sustainable performance, the general sense is that organizations’ track record in sustaining the gains from improvement efforts is not particularly good. Executives regularly express frustration on the challenges in sustaining the gains from change programs. Process improvement professionals periodically remark on the need to improve/redesign the same process that was addressed just a few years ago. The relative lack of success in sustaining process change may be part of the reason that organizations drift from one method of process improvement to another over time.
While most firms are becoming increasingly adept at executing improvements to their operations in projects of small scope, many firms continue to struggle when it comes to executing projects of larger scope requiring broadcross-functional collaboration. And this is amplified when it comes tosustaining the changes from dramatic improvements to performance.
The major elements of sustaining change include the means to set commongoals, focus upon ongoing cross-functional commitment, assure the means forcontinuous improvement and engage in periodic celebration as an essential partof the organization’s fabric.
How do you know when you don’t have the means to sustain changes? Consider these points:
- The new, recommended performance measures are not incorporated into thesenior leadership team’s scorecard
- Declaring victory before the new work practices become the way “wedo things around here”
- There is insufficient effort invested in establishing the infrastructurefor continuous improvement
- Shifting priorities lead to a decrease of continuing managementattention
There are probably more ways to fail than to succeed on any largeoperational improvement initiative, including most large BPM projects. Yet,leaders can improve the odds of success by focusing on the four practicesdescribed in this article.
This article is based on concepts described in Andrew Spanyi’s book Operational Leadership.