“Swatting the Flies but Missing the Elephants”
I was sitting in a meeting in the bank’s Property Management Department where the purveyors of Activity Based Analysis (ABA) were facilitating a discussion of the major findings of their process improvement work. The agenda was for the consultants and project team to present their findings and recommendations for management to assess and agree. I sat there listening to the proceedings and to decisions being made which did not make sense.
I called for a ‘time out’. I asked:
“How many properties do we own?”
“How many do we rent or lease out?”
“This is the Property Management Department?" I queried.
The worrying aspect of this story was that the project had gone on for ten weeks doing detailed analysis of every process in the Property Management Department and failed to discover that they did not manage properties!
The reason for this was the nature of this reengineering approach — it was totally data driven.
The process steps were identified, the time for each step was identified, who performed each step was identified, their cost was identified, the cost of each step was computed, the nature and usefulness of each step was assessed, and any steps deemed redundant were eliminated and their cost added up to generate ‘the savings’. All detailed, step-level data collection and processing.
But this is how such data-driven improvement techniques get misdirected by all the data and end up “Swatting flies and missing the elephants.”
When improving processes you need to oscillate between the big picture and the detail on a regular basis. This enables you to use both sides of your brain to generate the best results.
When you oscillate between the big picture and the detail, you are driven by business-drivers, not process steps.
The types of questions you should be asking include:
- What is the overall vision we’re seeking?
- What are we trying to achieve?
- What is the strategic intent of the process?
- Where and how does it add value to the business?
All big-picture questions that need to be supplemented by detailed step-by-step process analysis
- How does the process work?
- What value does each step contribute?
Taking into account the big picture
- How can we simplify the approach to achieve the same ends?
This bigger picture approach can allow you to discover whole processes that are redundant and multiple process steps that exist due to some earlier deficiency in another process upstream. You can often find 40-50% of the process steps disappear – reducing both project and ongoing operational complexity (and costs).
Some years ago we used our Business Simplification approach at the same time as the Activity Based Approach was used in the same manufacturing organization.
- The ABA approach found savings of $2.3m in a non-materials cost base of $21m.
- Our Simplification approach found savings of $7.8m and also found that a fraud was being committed in one part of the factory.
Same factory and processes being reviewed – the only differences were the project teams and the approach – yet our Simplification approach found three times the savings in the same processes – savings that would reduce operating costs by one-third.
Now it needs to be stressed that both sets of savings were not identified by a bunch of consultants who did not have to live with the results but by the incumbent staff who were identifying how to streamline their own organization and, in this case, make it profitable again.
A major reason why the Simplification approach was so successful was that it oscillated between the big picture and the detail. The ABA approach got lost in the detail of the data. They saved a nip here and a tuck there; Simplification changed the way the factory worked with the support and commitment of the management team who would have to make it work.
We have consistently found that the Simplification approach generates results three to four times those delivered by ABA and Six Sigma – and these results are generated by the incumbent staff who live and breathe the processes. They also know if the recommendations are practical or not. As a result, far from encountering ‘resistance to change’ we find that Simplification generates a momentum for change as staff want to implement the new ways of doing things as fast as possible.
The fact that incumbent staff who have “never changed a lightbulb” before can learn, use and leverage the Simplification approach ‘on the fly’ and generate exceptional results shows how effective this oscillating approach is and how it successfully deals with ‘the elephants’.