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Common Characteristics of Why Process Improvement Projects Fail

As a person trained in Six Sigma, I realize a tremendous amount of effort and resources have been poured into process improvement projects over the years. I also realize, as I???m sure you do, many of these process improvement projects have failed. We could go as far as to say that a majority of these project efforts have failed to produce their desired results. But why? The benefits look so tangible and obtainable.

Tangible

According to an article in Tech Republic, The Juran Institute estimated that the cumulative cost of mistakes, rework, and scrap add up to 25-40% of a business??? total annual expenses. The article goes on to say that a study (conducted by The Standish Group) based on surveys of more than 50,000 Information Technology projects, estimated less than 30% of all software projects succeed, with over 50% of all projects failing to attain cost, schedule, or performance goals. Almost 20% of projects are cancelled prior to completion or were never used.

Although process improvement projects generally include more areas than just I/T, the complexity of I/T projects is similar to that of process improvement projects, therefore, the statistics should be comparable. There has been little research conducted trying to quantify the success rate for process improvement projects.

Obtainable

I believe most process improvement efforts ???fail??? due to three widely held views:

1. Optimizing process sub-components will in turn optimize the overall process

2. Process improvement is an automation, or I/T, project

3. All business processes could be improved, thus should be improved

In order to successfully improve a business process and obtain the associated benefits, one must start by taking a holistic business approach. You would think it absurd for a business owner to decide to make a new product based solely on the fact they could produce the product with their current equipment and personnel, right? I mean, wouldn???t they have to consider the market demand, competition, opportunity costs, etc., (the total process)? Of course they would. However, many companies approach process improvement in a less than holistic manner.

Taking a holistic business approach is the first step. The next, and equally important, step is keeping an open mind to potential solutions. Here are a few ways to ensure team members will NOT keep an open mind:

1. Tie process improvement with job reductions

2. Associate issues with one or two ???problem areas???

3. Protect ???sacred cows???

4. Don???t include those people involved in the current process

5. Fail to give credit to past improvements done on an individual or departmental level

6. Communicate the idea that the management team is not aligned

7. Allow team members to be less than supportive

8. Assume the best process will be faster

Successful process improvement efforts should not be driven by technology. Technology should be seen, and used, as a tool to achieve a business goal or objective. If technology becomes the focus of process improvement the results tend to be more of the same but with a higher cost. Attention must be given to business requirements prior to exploring solutions.

Return on investment (RIO) figures will sideline many process improvement efforts when business requirements are gathered upfront. Most organizations would be safe by taking an 80/20 approach. That is, 80% of process improvement benefits will be derived from improving 20% of the business processes. Not all processes are appropriate targets for process improvement, because the cost of the improvement may be more expensive than the increased productivity they generate.

Copyright 2007 Gerke & Associates

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