Improving business processes first requires that they be standardized. Many firms omit this critical step and move directly to improving their processes without first establishing any standardized baseline from which to drive improvement. Standardizing is essential for two reasons: first, unless you improve from a known standard, you cannot know if any change is an improvement; and secondly, if there is no known standard, the process is likely chaotic and not amenable to improvement.
In our process improvement work with client firms, we advocate and teach a simple three-step cycle consisting of Standardize-Control-Improve. Let’s look at the steps of this cycle.
Standardizing involves defining the process as it is executed, right now. That means defining the process inputs and outputs, the resources used, the work methods and procedures employed (including tasks and times), and the measurements of process performance. The process does not need to be executed perfectly – after all, that’s why you are improving it – but it does need to be standardized.
Once a process is standardized, it should be assessed for the state of Control which it exhibits. The Control phase means several things. Firstly, it means determining the stability and predictability of the process. This can be done by measuring with appropriate techniques the amount of variation inherent in the process and determining how much of that variation is special cause variation. Special cause variation is variation for which there is an assignable cause and is distinct from the variation which represents the normal “noise” of the process. In the Control phase, we look to identify the special cause variation and use root cause analysis to identify its causes. Once the causes are known, countermeasures against the causes can be developed to improve the process.
Secondly, Control means determining if improvements introduced into a process have in fact reduced or eliminated the problems they were designed to address. After improvements have been introduced within a process, the process should be re-standardized and then reassessed to see if it remains in a state of Control.
Improvement is that phase where process improvements are designed and implemented to attack the causes of a lack of Control. The Control and Improvement phases represent experiments where hypothesize about the causes of process problems and develop solutions for implementation and testing. If the hypothesis is disproven (i.e., the implemented solutions do not address the postulated cause), we must go back and re-analyze the cause of the problem.
Many firms are using Six Sigma which advocates a five step process for improvement known as Define-Measure-Analyze-Improve-Contol (DMAIC). In our practical work, we find the three-step cycle of Standardize-Control-Improve to be much easier to learn for most firms, and certainly much easier to apply. The key thing to remember, though, is that the whole cycle starts with Standardize.