Facilitate continuous improvement (BSBMGT516)

Facilitate continuous improvement BSBMGT516

Student Workbook

1st Edition

Student Workbook BSBMGT516 Facilitate continuous

improvement 1st Edition 2015

Part of a suite of support materials for the

BSB Business Services Training Package

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Published by: Innovation and Business Industry Skills Council Ltd Level 11 176 Wellington Pde East Melbourne VIC 3002 Phone: +61 3 9815 7000 Fax: +61 3 9815 7001 Email: [email protected] www.ibsa.org.au

First published: April 2015

1st edition version: 1

Release date: April 2015

ISBN: 978-1-925123-70-8

Stock code: BSBMGT5161D

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Table of Contents

Introduction ...........................................................................................................................1

Features of the training program ...................................................................................1

Structure of the training program ...................................................................................1

Recommended reading ...................................................................................................1

Section 1 – Lead Continuous Improvement .......................................................................3

What skills will you need? ...............................................................................................4

Review continuous improvement methodologies .........................................................4

Develop strategies for participation ............................................................................ 20

Establish communications systems: The communications strategy ......................... 26

Ensure sustainability requirements ............................................................................ 31

Develop training, coaching and mentoring processes ............................................... 38

Develop and use knowledge management systems .................................................. 45

Section summary .......................................................................................................... 48

Further reading ............................................................................................................. 48

Section checklist........................................................................................................... 50

Section 2 – Monitor Continuous Improvement ............................................................... 51

What skills will you need? ............................................................................................ 51

Develop monitoring strategies ..................................................................................... 52

Identify improvements: Continuous improvement tools ............................................ 59

Identify improvements: Quantitative monitoring, analysis and control tools ........... 68

Adjust and communicate strategies and tactics as needed .................................... 76

Section summary .......................................................................................................... 79

Further reading ............................................................................................................. 79

Section checklist........................................................................................................... 79

Section 3 – Manage Opportunities for Further Improvement ........................................ 80

What skills will you need? ............................................................................................ 80

Establish communications processes ......................................................................... 81

Record and report on team performance ................................................................... 92

Incorporate information into future planning ........................................................... 100

Section summary ........................................................................................................ 103

Further reading ........................................................................................................... 103

Section checklist......................................................................................................... 104

Glossary ............................................................................................................................ 105

Appendices ....................................................................................................................... 110

Appendix 1: Answers to selected learning activities ................................................ 110

Appendix 2: A3 reporting ............................................................................................ 113

BSBMGT516 Facilitate continuous improvement 1st edition version: 1 © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook Introduction

Introduction

Features of the training program

The key features of this program are:

● Student Workbook – Self-paced learning activities to help you to develop an understanding of key concepts and terms. The Student Workbook is broken down into several sections.

● Facilitator-led sessions – Challenging and interesting learning activities that can be completed in the classroom or by distance learning that will help you consolidate and apply what you have learned in the Student Workbook.

● Assessment Tasks – Summative assessments where you can apply your new skills and knowledge to solve authentic workplace tasks and problems.

Structure of the training program

This training program introduces you to facilitate continuous improvement. Specifically, you will develop skills and knowledge in the following topic areas:

1. Lead continuous improvement

2. Monitor continuous improvement

3. Manage opportunities for further improvement.

Your facilitator may choose to combine or split sessions. For example, in some cases, this training program may be delivered in two or three sessions, or in others, as many as eight sessions.

Recommended reading

Some recommended reading for this unit includes:

● Andersen, B., 2007, Business process improvement toolbox, 2nd edn, ASQ Quality Press, Milwaukee.

● Armstrong, M., 2006, Performance management: key strategies and practical guidelines, 3rd edn, Kogan Page, London.

● George, M. L., Rowlands, D. T., Price, M., and Maxey, J., 2004, The Lean Six Sigma pocket tool book: a quick reference guide to nearly 100 tools for improving process quality, speed and complexity, McGraw-Hill, New York.

● Johnson, S., 2001, Meeting the challenge of change, Eastern House, Croydon, Victoria.

● Plenert, G., 2011, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York.

BSBMGT516 Facilitate continuous improvement 1st edition version: 1 © 2015 Innovation and Business Industry Skills Council Ltd Page 1 of 113

Introduction Student Workbook

● Pyzdek, T. and Keller, P., 2014, The Six Sigma handbook: a complete guide for greenbelts, black belts, and managers at all levels, 4th edn, McGraw-Hill, Sydney.

● ReVelle, J. B., 2004, Quality essentials: a reference guide from A to Z, ASQ Quality Press, Milwaukee, Wisconsin.

● Tovey, M., Uren, M.-A. L. and Sheldon, N. E., 2010, Managing performance improvement, 3rd edn, Pearson, Frenchs Forest, NSW.

Please note that any URLs contained in the recommended reading, learning content and learning activities of this publication were checked for currency during the production process. Note, however, that IBSA cannot vouch for the ongoing currency of URLs.

Every endeavour has been made to provide a full reference for all web links. Where URLs are not current we recommend using the reference information provided to search for the source in your chosen search engine.

1st edition version: 1 BSBMGT516 Facilitate continuous improvement Page 2 of 113 © 2015 Innovation and Business Industry Skills Council Ltd

Student Workbook Section 1 – Lead Continuous Improvement

Section 1 – Lead Continuous Improvement

The focus of this section is on leading continuous improvement systems and processes. This section will introduce you to commonly used continuous improvement methodologies. These provide a framework for identifying potential improvements and fostering a culture of continuous improvement. This section includes information on communication strategies and integrating continuous improvement with existing organisational approaches to sustainability, performance management and knowledge management.

Scenario: Continuous improvement at Australian Hardware

Australian Hardware (a simulated business) is a large and expanding hardware and homewares retailer with approximately 140 stores located across Australia. In its vision statement, Australian Hardware outlines that it intends to lead the hardware and home improvement market in Australia within five years. In order to realise this vision, the organisation will take the following strategic approaches as outlined in its business plan:

● increase sales revenue and gross profit

● maintain or increase market share

● control direct and indirect operational costs

● maintain superior product and service quality standards

● establish the reputation of Australian Hardware as a socially and environmentally responsible company.

Continuous improvement and high performance is important to Australian Hardware. The implementation of performance management, from the top levels of management through to the store and team levels, is designed to be integrated with other related management functions, such as financial control, recruitment, succession planning, risk management, health and safety, training, etc. to take a unified and holistic approach to the development of individuals and of a high-performing organisation.

Looking forward, the organisation intends to take a more systematic approach to continuous process improvement (CPI) in order to gain greater customer and stakeholder value. The organisation is considering adopting a continuous improvement methodology for application across the business. Leading candidates include TQM, Lean Manufacturing and Six Sigma.

Australian Hardware simulated business information, including business and operational plans, financial information, and policies and procedures (including performance management) can be located online at <http://simulations.ibsa.org.au/>.


Section 1 – Lead Continuous Improvement Student Workbook

What skills will you need?

In order to lead continuous improvement, you must be able to:

develop strategies to ensure that team members are actively encouraged and supported to participate in decision-making processes, assume responsibility and exercise initiative as appropriate

establish systems to ensure that the organisation’s continuous improvement processes are communicated to stakeholders

ensure that change and improvement processes meet sustainability requirements

develop effective mentoring and coaching processes to ensure that individuals and teams are able to implement and support the organisation’s continuous improvement processes

ensure that insights and experiences from business activities are captured and accessible through knowledge management systems.

Review continuous improvement methodologies

To implement continuous improvement in your organisation, you will need to review general methodologies or approaches. Many, if not most, methodologies have their historical origins in Japanese quality improvement efforts of the latter half of the 20th century, particularly the Toyota Production System (TPS) – in fact, as we shall see in Section 2, they share many facilitation and monitoring tools; however, each approach differs in focus. Each methodology may be better suited, therefore, to addressing certain quality problems and opportunities and not others.

This section describes four continuous improvement methodologies or systems:

● Total Quality Management (TQM)

● Lean Manufacturing

● Six Sigma

● Benchmarking.

Total Quality Management Total Quality Management (TQM) is a collection of ideas to improve the profitability or customer satisfaction of an organisation by improving the quality of the product and increasing productivity through a philosophy of embracing continuous change. TQM has been successfully implemented by large corporations such as Motorola and AT&T.

Three central figures, Deming, Juran and Crosby, had the most influence on the development of the aggregate of concepts and tools that make up TQM. As you read, note the similarities and differences between the approaches to quality that are advocated.



Deming/PDCA cycle In addition to the Deming cycle, often known as the Plan, Do, Check, Act (PDCA) cycle, Deming advocated a 14-point plan for the management of quality within organisations. This plan is as follows:

1. Create a plan; publish the aims and purpose of the organisation.

2. Learn and adopt the philosophy of quality.

3. Understand the purpose of inspection; stop depending on inspection as motivator for quality.

4. Stop awarding business based on price alone.

5. Improve the system at every stage so as to improve the system overall through statistical control.

Deming identified two types of process variations that may be the source of errors:1

● Special variations: Non-random sources of error, which individuals can control and can be held accountable for. These require information and training to eliminate. Special variation may include poorly trained individuals making multiple errors, improper use of machinery, or switching to unreliable suppliers. Note that, according to Deming, a process is in control when it can be controlled by individuals after sources of common variation have been (ideally) eliminated.

● Common variations: Claimed by Deming to be 94% of variation, these are system-wide causes of error, including the random, natural effects of poor workstation or equipment design, inadequate monitoring, dirty work equipment or inadequate training methods. System-wide problems require system-wide solutions; for example, machines are recalibrated, cleaned, or an effective, modern, induction program is implemented, with outcomes that reflect organisational quality and performance goals.

Methodologies such as Statistical Process Control and Six Sigma, which is discussed later in this section, aim to ensure processes contain only common cause variation, which is, to some extent, unavoidable. This enables operators and managers to use statistical methods of inference to understand and make system-wide changes.

Many tools associated with quality problem identification discussed in Section 2 of this Student Workbook are relevant to determining causes of variation and undertaking quality control more generally; for example, control charts, scatter diagrams, histograms, and fishbone charts.

1 Adapted from: G. Plenert, 2011, ‘Chapter 3’, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York.



6. Institute training using modern methods.

7. Teach and institute leadership using modern methods.

8. Drive out fear, create trust and create a climate for innovation.

9. Optimise the efforts of teams, groups and departments by breaking down barriers and silos.

10. Eliminate urgent directives and numerical targets for the workforce; provide methods of achievement. Slogans such as ‘zero defects’ are not seen as helpful motivators in the Deming approach.

11. Eliminate numerical quotas for the workforce.

12. Remove barriers that rob people of pride of workmanship.

13. Encourage education and self-improvement for everyone.

14. Create a cycle of management-led, never-ending improvement through implementing the 13 previous points.

Deming’s approach to quality may be described as relying heavily on management leadership and statistical analysis to identify opportunities for improvement. As such, the Deming version of continuous improvement anticipates methods such as Statistical Process Control (SPC) and Six Sigma, which will be discussed later in this section.

Crosby Crosby’s approach to TQM focuses less on statistical thinking than Deming’s approach and more on the process effecting the cultural change necessary to support quality improvements.

In Quality is Free, Crosby introduced four absolutes in managing quality and a 14-point program for implementing a quality improvement system.2

The four absolutes in managing quality are:

● Quality is not ‘goodness’; it is conformance to requirements.

● Prevention is the means by which quality is achieved, not evaluation.

● The performance standard is zero defects.

● The price of non-conformance is the measure of quality.

Crosby advocated the following 14 points when implementing a quality system:

1. Communicate management commitment to all employees.

2. Establish a quality improvement team or council comprising of department heads to oversee improvements.

3. Implement quality measurement for every activity.

4. Estimate the cost of quality is to identify areas of improvement.

5. Raise quality awareness among all employees.

2 P. Crosby, 1980, ‘Chapter 8’, Quality is free: the art of making quality certain, Mentor, New York.



6. Plan corrective action.

7. Plan for zero defects.

8. Train supervisors in quality implementation.

9. Schedule a monthly ‘Zero Defects Day’ to reaffirm management commitment.

10. Set goals for each individual.

11. Remove error causes by having employees inform management of problems.

12. Recognise those who meet quality goals with non-financial rewards.

13. Ensure quality councils meet regularly.

14. Do it all over again (repeat steps 1–13).

Crosby’s most well-known slogan is ‘zero-defects’. Note how Crosby’s point 7 contradicts point 10 of the Deming quality program.

Crosby emphasised meeting customer requirements by focusing on prevention rather than correction and on company culture rather than statistical control. For Crosby, a low-quality organisation has five cultural characteristics:3

● employees complain

● management complain

● management direction is vague

● management focuses on time and cost, not quality

● management denies its role in leading continuous improvement.

Juran Juran’s approach to TQM is focused on the process of managing quality, which is ultimately the responsibility of managers. Managers need to take the quality seriously and plan for quality outcomes in a similar way in which they plan for financial outcomes.

Juran’s approach defines quality as ‘meeting customer expectations’. There are three general steps to achieving quality in the Juran quality program:4

1. Plan for quality: Set goals and plan for achieving them. Base goals on customer needs. This requires identifying customer needs, designing a product/service offering to meet needs and establishing a feedback system to ensure customer needs are understood and being met over time.

2. Control quality: Publish individual goals and ensure employees have the high degree of control required to adjust processes and achieve goals. Ensure information from monitoring activities flows back to workers who exercise control.

3. Improve quality: Top management should actively participate in identifying and carrying out one quality improvement project at a time, focusing on the key procedural problems that cause most of the quality issues.

3 Adapted from: G. Plenert, 2011, ‘Chapter 3’, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York. 4 Adapted from: G. Plenert, 2011, ‘Chapter 3’, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York.



In addition, Juran’s expanded ten steps to quality improvement are as follows:

1. Build awareness of the opportunities to improve.

2. Set goals.

3. Organise to reach goals.

4. Provide training.

5. Carry out projects to solve problems.

6. Report progress.

7. Give recognition.

8. Communicate results.

9. Keep score through regular monitoring of outcomes

10. Maintain momentum by making annual improvement part of the systems and processes of the organisation.

Juran’s approach defines quality as meeting customer expectations. Juran is known for introducing the 80/20 rule, or the ‘Pareto principle’ – 80 per cent of trouble comes from 20 per cent of problems.5 Juran advocated management undertaking projects to identify the ‘vital few’ process improvements to meet customer quality needs, ignoring the ‘trivial many’, that have much smaller potential impact.

Learning activity: TQM – Compare Deming, Juran and Crosby

The three central figures of Deming, Juran and Crosby had the most influence on the development of the aggregate of concepts and tools that make up TQM. Compare the three figures’ approaches in the space provided below.

Focus Example Slogan or main identifying characteristic.

Deming

Juran

Crosby

5 F. J. Reh, 2002, ‘Pareto’s principle - The 80-20 rule: how the 80/20 rule can help you be more effective’, About money, viewed January 2015, <http://management.about.com/cs/generalmanagement/a/Pareto081202.htm>.



Lean Manufacturing Plenert points out that Lean Manufacturing, as did TQM and Six sigma, evolved as a variation of the Toyota Production System.6 Lean Manufacturing may be considered a Westernised version of ‘Just in Time Manufacturing’ (JIT) and ‘Kaizen’ (Japanese for continuous improvement). During the 1970s, Toyota built a culture in their plants of joint responsibility between managers and workers to reduce waste of space and materials. With the implementation of Lean/JIT/Kaizen, Toyota reduced car production time from 15 days to one.

Lean Manufacturing combines five systems in one:

● inventory control

● set-up improvement

● maintenance improvement

● quality improvement

● productivity improvement.

Lean Manufacturing differs from mass production, favouring small production batches over large; ideally never producing more than what is demanded or ‘pulled’ by the internal or external customer. Importantly, Lean Manufacturing principles apply to a wide variety of industries, including service industries, and so therefore may be referred to as simply ‘Lean’. The overarching principle of Lean is to only do as much as is necessary to meet customer demand.

Accordingly, a key focus of Lean Manufacturing is the reduction of ‘Seven Wastes’. Specifically:

1. over-production, producing more than the customer needs at any one time

2. waiting or wasted

3. transportation

4. inventory

5. processing inefficiency, or processes that are unnecessary for satisfying the needs of customers

6. motion, e.g. unnecessary movement around a store or warehouse

7. defects.

Each of the Seven Wastes represents an opportunity to improve process efficiency. Using Lean, you need to identify, for example, whether transportation times could be reduced or whether the organisation produces more or better products than the customer is willing or able to pay for.




Learning activity: Lean Manufacturing and the Seven Wastes

Investigate a process in your place of work. Find examples for as many wastes as you can and complete the table below.

Waste Example

Over-production

Waiting

Transportation

Inventory

Processing

Motion

Defects



Lean specifies a set of five actions, the ‘Five S’s’ to build a workplace that intrinsically reduces waste. The Five S’s were developed by Hirano and translated into English, they are as follows.

Name Translation Description

1 Seiri Sort Separate out all the things that are not necessary and eliminate them or tidy them away.

2 Seiton Straighten Arrange the essential things in order so we can quickly and easily access them and put them away.

3 Seiso Shine Keep our working environment and machines clean.

4 Seiketsu Standardise Make cleaning and checking a routine practice; maintain a pleasant environment.

5 Shitsuke Sustain Standardise the previous four steps and constantly improve them.

In order to implement Lean, organisations need to focus on building the right culture. This can be done through team building, integrating systems to reduce waste and ensuring each employee is empowered to identify and facilitate improvements, through delegation of responsibility and training. The three steps to lean implementation are:

1. Acceptance stage – Usually involves a trained Lean facilitator to lead the change and build buy-in for the continuous improvement system.

2. Technical stage – Involves an event such as a process mapping to identify wastes and opportunities for change.

3. Sustainment stage – Involves the communication, training and integration of the changed process into the workplace culture and the way things are done.7

To reiterate, Lean, is primarily about seeing value and waste from the customer’s perspective. Waste can, in fact, include ‘good’ work that is strictly not necessary, which uses resources that could be more profitably employed creating what the customer actually does value. The organisation’s total effort needs to be focused on delivering only what the customer needs when they need it.




Learning activity: Lean Manufacturing practices in the workplace

Watch the video ‘BSBMGT516C: Lean manufacturing practices in the workplace’ on IBSA’s YouTube channel at <http://www.youtube.com/ibsachannel>.

Then, answer the following questions. (Sample answers are provided in Appendix 1 of this Student Workbook.)

● At the beginning of the video clip, Jack Parr is showing employees at Australian Combined Resources an example of how a tool box is set up. Which of the Five S’s does this situation promote? Explain your answer.

● What are the Five S’s listed by Jack Parr?

● According to Jack Parr, what kind of workplace do the Five S’s help to build?



● Other than keeping the machine clean and tidy, what is an important part of the Standardise step?

● How does Jack Parr define the Sustain step?

● Think of your office activities. What are examples of activities that you could do to implement the Five S’s?



Six Sigma The second variation of the Toyota Production System (TPS) is Six Sigma. While the driving principle of Lean is reducing waste, the key principle of Six Sigma is measurement. Both methodologies, however, are ultimately directed at achieving customer value. The Six Sigma methodology concentrates on measuring and improving those outputs that are critical to the customer.

Six Sigma has, at its core, the following concepts:

● Everything we do is a process. Each process has inputs and outputs and substantially changes the inputs to add value for the customer.

● Every process has measurable characteristics. For example: number of parts, size or weight are input and output measures. Process efficiency may be measured, for example, by time or cost. Each process has requirements for inputs and customers have requirements for outputs.

● Measurements follow a frequency distribution. Frequency distributions are histograms showing how many measurements fall within a given range of data. The range of data is divided into buckets. Each data point is allocated to a bucket.

○ Plotting the number of data points in each bucket against the data range produces a frequency histogram. A normal distribution histogram has the following characteristics:

– the centre point is the mean (half the measurements above the mean and half below)

– the curve is a bell shape

– the variation of the curve is measured by the standard deviation, or Sigma, the average distance between the mean and a given measurement

a Lower Specification Limit (LSL) and an Upper Specification Limit (UCL) should be determined in order to allow six standard deviations to fit between the mean and the specification limits. This means that defects under the quality system become extremely unlikely – less than four parts per million.



Note: Application of Six Sigma to service quality

Six Sigma and other applications of Statistical Process Control are typically applied to manufacturing products within set specifications, using additional tools such as control charts (which will be discussed in Section 2); however, Six Sigma can be generalised to apply to services as well.

To take a very simple example, under Six Sigma, if the average wait time for service in a store, or over the telephone, is two minutes, and the maximum tolerable wait time for a customer is three minutes, the process of customer service should be designed so the average variation in wait time from the mean (the standard deviation, or Sigma) is no more than 10 seconds. Such an outcome might be achieved through training (as a process input), and standard customer service procedures (as a direct process improvement).

● Customers have differing expectations of process performance. For example, customers of a fast food restaurant will expect a clean environment with little or no waiting and simple food. Customers of a five-star restaurant may be willing to wait for a table if they have not booked but will expect impeccable, individualised service and foods that they would not be able to cook themselves at home. Customer expectations should be determined and provide the standard for process design.

● Three sigma is the normally accepted standard across industries. Most observations fall within three sigma using such a standard. A normal distribution curve has 99.74% of all outcomes falling within three sigma to the right or left of the mean.

● Three sigma applied to a continuous and high-volume process still adds up to a lot of failed expectations. Manufacturing and services processes are generally designed for the majority of customers, not individual customers. A customer receives the final output after several processes. The 0.26% failure is cumulative, typically resulting in a 7% error rate. Six Sigma, on the other hand, means a failure rate of less than four in a million.

● Six Sigma is a philosophy as much as it is a methodology and a quality metric. Implementing a philosophy means affecting culture and ways of thinking about quality that pervade an organisation.

Methodology (DMAIC) The Six Sigma methodology (DMAIC) assumes we can measure the output as a function of inputs and change processes to bring outputs under control. It comprises five steps:

1. Define – Define the problem or improvement opportunity.

2. Measure – Measure process performance (outputs).

3. Analyse – Analyse the process to determine the root causes of poor performance. Determine whether the process can be improved or should be redesigned.



4. Improve – Improve the process by attacking root causes.

5. Control – Control the improved processes to maintain the gains. Set up pilot runs to establish process capability, move on to production, set up control mechanisms and continuously monitor the process.

Learning activity: Six Sigma

Watch the following interview with Jack Welch, who drove Six Sigma at General Electric.

● S. Bonacorsi, 2007, ‘Six Sigma interview with Jack Welch’, YouTube, viewed January 2015, <http://www.youtube.com/ watch?v=aNMULFcLuIM>.

Answer the following questions:

● According to Welch, what is a Six Sigma company?

● What is the ‘Winning Game’?

● Will an internal focus on processes necessarily translate to business success?



● What does customer focus mean?

● What is the importance of a deep and broad Six Sigma philosophy and understanding throughout the company?

Benchmarking Our fourth quality improvement methodology is benchmarking. Benchmarking is a methodology which:

● compares like processes for efficiency and effectiveness

● creates metrics for the processes to measure the outcome differences between the processes quantitatively

● re-engineers processes that are below the benchmark to create output measures closer to, or above, the benchmark.

There are four popular approaches to benchmarking that may be applied. These include:

● Internal benchmarking, which has a narrow scope, comparing processes undertaken by business functions and departments of an organisation either within one geographic location or across multiple locations.

● External best practice benchmarking, the aim of which is to identify best practice no matter what the sector or location. Such benchmarking is broad, and for that reason has the potential for stimulating radical change; it holds out the possibility of breakthrough discoveries through comparison with world best practices.

● Competitive benchmarking, which focuses on key competitors within the sector. Such benchmarking holds out the promise of being relatively easy to apply because of the similarity of issues between the businesses being benchmarked.

● Sector benchmarking, which is a broader type of benchmarking that makes benchmarking data available to all in a sector. This type of benchmarking data makes it simple to identify general industry trends but, because of its non-targeted nature, is difficult to derive specific recommendations for key process improvements linked to organisational strategy.



The basic steps of benchmarking are as follows.

1. Understand your operation – Understand the processes that make up your operation.

2. Review your industry – Who are the ‘best in class’ players overall? Who are best at specific processes? Who outside your industry is best at specific processes? For example, a hotel may learn something from a hospital in the ‘check-in’ process and vice-versa.

3. Investigate processes that you can copy or improve or that you can implement to the benefit of your performance – Take care to copy or improve on all related processes. For example, do not copy a high-tech manufacturing process without copying the training and development processes, recruitment and induction process, maintenance process and quality management processes if these, in fact, drive the outcome you desire to copy.

4. Determine the metrics that will enable you to understand whether your performance is approaching that of your competitor, industry standard or process standard in other industries.

Note: Competitor companies are not likely to allow you to investigate their processes in detail. You will need to talk to suppliers, distributors, industry media and former employees (while complying with your organisation’s ethics policies and procedures) to find out information.

Learning activity: Benchmarking

Determine which type of benchmarking is suitable for your organisation or an organisation you know. Identify the three most significant obstacles you would face in implementing benchmarking in the left column and what potential solutions there are to overcome those obstacles in the right column.

Obstacles Possible solutions



Other methodologies TQM (including the Deming, Juran and Crosby variations), Lean Manufacturing, Six Sigma and benchmarking are four widely used methodologies for continuous improvement. These are by no means the only methodologies it is possible to follow. Some other methodologies are listed below.8

Total Quality Control (TQC)

Focuses on establishing control points and mechanisms to check quality. It relies on statistical methods of control. It is an early precursor to Six Sigma.

Quality Functional Deployment (QFD)

Focuses on ensuring that all functional areas of management work to achieve a common quality goal.

Breakthrough Thinking

Focuses on formulating the ideal or ultimate objective and following through with concrete actions to realise the objective. A radical approach to brainstorming that focuses on the ‘why’ of a process rather than the ‘how’.

Concept Management (CM)

Like breakthrough thinking, this method focuses on reformulating goals to move away from traditional and expensive root-cause analysis. CM is a combination of approaches, including Breakthrough Thinking and TQM.

Theory of Constraints (TOC)

Focuses on identifying and removing bottlenecks in processes that are sources of waste or delay.

Process Re-engineering (PR)

Focuses on assessing the organisation’s strategic goals and customer needs and then radically redesigning processes for maximum impact on customer service, budget control and competitiveness. PR is also known as Business Transformation or Business Process Change Management.

ISO standards Focuses on using ISO standards, themselves often relying on TQM approaches such as the Deming cycle, to provide a framework for continuous improvement of performance and quality outcomes.

Like the four methodologies discussed earlier, these methodologies share some concepts as well as facilitation tools to be discussed in detail in Section 2.




Learning activity: Further continuous improvement methodologies

Undertake research on the seven methodologies outlined above. Consider a process that could be subject to continuous improvement in your place of work. How could the following methodologies be applied to improve the process? Note your answers in the space provided below.

Methodology Possible application

Total Quality Control (TQC)

Quality Functional Deployment (QFD)

Concept Management (CM)

Breakthrough Thinking

Theory Of Constraints (TOC)

Process Re-engineering (PR)

ISO standards

Develop strategies for participation

To ensure the successful implementation of continuous improvement methodologies, you will need to develop strategies to encourage and support participation in decision-making processes. You will also need to ensure you take steps to promote a philosophy of continuous improvement and build an organisational culture in which employees and managers assume responsibility and take the required initiative for improving processes.



Interpersonal skills As you implement continuous improvement methodologies, you will need to use interpersonal skills to build rapport and create enthusiasm for change initiatives. You may deploy interpersonal skills on a day-to-day basis to coach performance or gather feedback on processes from staff. You may also use such skills to facilitate formal continuous improvement sessions or events. Interpersonal skills include communicating verbally and non-verbally, active listening, team problem-solving, negotiating, advocating and asserting values, and decision-making. Let’s look at active listening, team decision-making and negotiating as key skills.

Active listening Active listening may be key to understanding and assimilating participant’s ideas into continuous improvement efforts. Active listening is an activity in which you fully engage with a person in an interaction to fully understand them. Active listening comprises four processes. The four processes are:

1. Asking questions.

2. Paraphrasing.

3. Using verbal prompts.

4. Demonstrating commitment.

Active listening is a skill that requires practice and will develop over time if you work at it. Let’s look at how you should deploy active listening in continuous improvement.

Asking questions Try to engage with the person you are listening to by asking questions. Ask ‘open’ questions, for example: ‘What are your ideas or feelings?’ to encourage expansiveness. You could also try to restrict the range of possible answers to eliminate ambiguity by asking closed questions, such as ‘Do these results make you angry?’. Show interest in what they are saying and try to build rapport. Seek clarification of any issues to find out what the root problem or performance issue is. Be empathetic, not too aggressive.

Paraphrasing From time to time, summarise or recap what the person has said to you. This serves two purposes: (1) to confirm to yourself that you understand what has been said and the emotional context, and (2) to let the other person know that you have been listening – that they are important to you.



Using verbal prompts

Use words such as ‘yes’, ‘I see’, and ‘OK’ while the other person is talking to show you’re paying attention. Take care to use these words meaningfully. Do not say ‘OK’ or ‘I see’ in order to make the person you are talking to feel better when you don’t actually understand what they are saying. Doing this may irritate them and thus undermine the goal of understanding and building relationships that form the basis for a culture of continuous improvement.

Demonstrating commitment

Demonstrating commitment to the communication process serves two purposes – to show the person you are listening to that they have your full attention, and also to model management commitment to the process of continuous improvement.

Team problem-solving hinges on gathering the maximum amount of information to examine the problem. Sometimes, as a facilitator, you will need to draw out that information from individuals in order to make the information explicit for the team to discuss and process. You don’t want to omit key information simply because the person who holds that information is shy, introverted, or otherwise reluctant to share with the team.

Team decision-making While it is not always appropriate or possible for business decisions to be made collectively, it is often the best way to proceed, particularly where each individual’s active participation or support is essential to implement decisions. Senior management level strategy decisions may serve as an example; another example, at a lower level of decision-making, would be team decisions about how best to achieve a target set at a higher level. You will need to use interpersonal skills to ensure each person has had a fair chance to air their views. You will also need to facilitate group decision-making through an appropriate tool or process, for example, voting on priorities, and ensure group acceptance of the rules of the team decision-making process.

Negotiation In many cases, team decision-making may not be appropriate or you may need to advocate for a particular position. If you don’t have the exclusive decision-making power, you will need to engage in some form of negotiation.

In cases where you must advocate for a new process or procedure, there is likely to be some resistance with one or more stakeholders in that decision.

Some people fear change and will openly resist it. Some of the signs of resistance you may observe are:

● confusion

● immediate or in-your-face criticism

● denial

● malicious compliance

● sabotage

● easy agreement

● deflection (change the subject)

● silence.



You can address these behaviours in a number of different ways. The Thomas-Kilmann conflict modes describes five modes of handling conflict. These modes of conflict handling are defined by the degree of assertiveness and cooperation involved. The five modes of conflict are competing, collaborating, compromising, accommodating and avoiding. Consider the following figure.

Competing Competing is an assertive approach that involves defending and maintaining your position without cooperating with the other individual or group you are disagreeing with. Competing is not good for developing a positive culture or strong relationships because it is essentially a win–lose situation. When competing, you may have to use your power, position or strong arguments to ‘win’ your case.

Collaborating Collaborating is assertive yet cooperative. It allows both parties to be satisfied with the outcome of the disagreement but can require a high investment of time and energy to come to the solution.

Accommodating Avoiding

Asse

rtive

ness

Level of cooperation

Competing Collaborating

Compromising



Compromising Compromising involves being moderately assertive and moderately cooperative. A compromising approach is similar to collaboration as it leads to finding a solution that satisfies both parties; a win–win solution. Compromising differs to collaboration in that it leads to more sacrifices on the part of the compromiser and is a quicker conflict-handling approach. Compromising should be used when a quick solution is required and where the source of the conflict (such as the process or system being discussed) allows for a flexible solution. For example, when introducing a system that must comply with legislation, compromising may not be appropriate because the solution is more likely lead to non-compliance than if a competing or collaborating method were adopted.

Accommodating The accommodating approach is the opposite of the competing approach; highly cooperative without being assertive. Taking the accommodating approach involves yielding to the individual or group you are disagreeing with. Accommodating allows you to cooperate with the other party, but is ineffective if you need to implement a system because it involves adjusting your position and making the changes to the system that will completely satisfy the other person or group.

Avoiding An avoiding approach does not directly address the disagreement. It is a non-cooperative approach but differs from competing in that it does not involve any level of confrontation. Avoiding can include postponing the issue, or addressing the issue in a different context (not with the individual or group that is disagreeing with it).

In general, the most effective approach to negotiation in the case of continuous improvement is collaboration. This approach allows you to keep other stakeholders’ interests in mind (after all, their views and cooperation may be crucial), while being a forceful advocate for what you see as the best approach to improving processes.

Participative culture-building As an overall strategy to effect continuous improvement, you will need to foster a culture in which every person in the organisation, from senior management down, is accountable for quality and high-performance. At a personal level, using interpersonal skills, you will be able to build teams and create advocates for change. At a higher, more strategic level, you will need to ensure that participation is valued by the organisation. You will need to communicate that participation in continuous improvement is required, measure it as part of performance management, and recognise and reward participation.



Learning activity: Reflect on facilitating effective participation in CI

Consider the last time you facilitated the work of a team to identify an issue or reach a decision and answer the following questions:

● How did you deploy active listening?

● How did you ensure participation and build ownership of the process?

● How did you build trust in yourself or the process?

● How have you contributed to a culture of continuous improvement within your organisation?



Establish communications systems: The communications strategy

One of the most important tasks in implementing continuous improvement across an organisation is developing a communication strategy. To develop a communication strategy, you will need to determine your communication objectives and promotional activities, and your audience characteristics and needs. Your communication strategy should also set out how you plan to craft and customise your message to meet those needs and use appropriate media to achieve your communication objectives. You will also need to consider other important aspects of planning, such as resources and budgets, as well as who will be responsible for delivering or managing communications.

Purpose and audience Possibly the two most important considerations in business communications are purpose and audience.

Firstly, the purpose of your communication plan should focus more on the impact you intend to make on your audience and the organisation. Some generic purposes for your communication strategy are to9:

● communicate the organisation’s continuous improvement strategy and expected performance outcomes to internal and external stakeholders

● promote a culture of continuous improvement by ensuring stakeholder understanding is aligned with the continuous improvement strategy

● energise employees by informing them how their work is aligned to quality objectives

● empower employees to focus their efforts on the right tasks and activities to advance organisational aims

● motivate employees by showing them how they are on the front line of the organisation’s quality improvement strategy.

The first step when thinking about how to achieve the purpose of your communication strategy, is to start by asking a number of questions. What do you want your audience to do with respect to implementing continuous improvement? What or how do you want them to think? What do you want them to think of you (so that they trust your judgement)? The purpose can usually be expressed as two or three objectives or goals for communicating. Be clear about these and how your communication goals relate to overall organisational goals. In an organisational setting it is often best to design your communications with the organisation’s goals firmly in mind; your mission being to convince others to take actions or support actions in order to further those goals.

Second, in order to achieve your purpose, you will need to consider the informational, social and emotional needs of your audience.




In a business setting, audience needs are likely to be needs for:

● useful, relevant information for one’s job role or to effect change

● reassurance: that information is correct; that risk to the organisation or the individual has been considered and minimised

● clear actionable recommendations

● personal respect

● respect towards the organisation: its goals, values and business culture.

Remember, your audience may cover a range of possible internal and external stakeholders, including:

● senior managers

● line managers

● frontline employees

● customers

● suppliers

● special interest groups, such as environmental groups interested in sustainability initiatives.

In designing your strategy, you may have to consider a range of approaches to meeting the needs of different audiences. Consider your purpose and audience carefully to make sure your communication achieves organisational goals.

Stakeholder mapping Stakeholder mapping is an important tool for considering your audience and their potential to support or undermine the objectives associated with your communications strategy. Map your stakeholders in order to:

● understand the support and opposition to a planned change, such as implementing a continuous improvement program

● determine who, what, and how often to communicate as part of implementing continuous improvement

● determine the composition of a continuous improvement project team or a steering committee.



The stakeholder map is a simple table consisting of a rating of the level of support or opposition of identified stakeholder groups and individuals ranked by their level of power and influence over the continuous improvement project method or outcome.

Consider the following table:

Opposition Support

Active opponents

Passive opponents Fence-sitters Passive

supporters Active

supporters

Stakeholder Power

High

Medium

Low

Use the table to identify stakeholders you need to keep on side and those for whom you will need to carefully craft your message and media in order to gain their support. For example, if you identify a high or medium power stakeholder who is a passive opponent with the potential for negatively influencing others, you will have to craft the right message, using the right media at the right frequency to attempt to move that stakeholder into a support column. Ideally you would aim to have all stakeholders as passive or active supporters depending on their role.

Through the implementation of continuous improvement initiatives you may use the stakeholder mapping chart to track progress with regard to positively influencing stakeholders and building acceptance.

Message You may have clear goals for improving operations, but not everyone in the organisation or every level of the organisation has to hear exactly the same message to achieve that goal. It is important to consider what message you want to convey to each audience, bearing in mind their needs, role within the organisational hierarchy, level of hard and soft power, and level of support. For example, some audiences may require only a summary of continuous improvement initiatives to keep them on side, while others on the front line may need detailed action plans or procedures for new processes to ensure effective implementation.

In any case, messages should be clear and unambiguous and relate directly to your communications objectives. Remember to tailor the style and content of your message to suit the needs of your audience.



Medium Once you have determined your objectives, audience needs, and the message you wish to convey, it is time to consider the best media or means for communicating the message and information to your target audience. Some suggested means of communicating are as follows:

● team meetings

● informally, via word-of-mouth

● training sessions

● staff orientations and inductions

● information sessions

● promotional videos

● organisational meetings

● employee-initiated enquiries

● online document repositories or other knowledge management (KM) technologies

● job aids

● email

● work-related social media platforms such as LinkedIn, Yammer or Slack

● project management software, with facilities for alerts and setting tasks

● intranet

● noticeboards

● brochures

● fact sheets

● newsletters

● magazines

● employee handbooks.

It is important to consider how you can use your chosen media to the best effect to achieve your communications objectives.

You may also consider combining media or integrating media with approaches to training and development and employee performance management. For example, job aids and written procedures, accessed through online document repositories, may help employees to retain knowledge and apply it to on-the-job practice.

When considering media choices, you will also need to consider your organisation’s financial and budgetary needs.

Let’s look at an example of a communications strategy.



Australian Hardware: Communication strategy

Communication objectives: (aligned to CI objectives and organisational strategic goals)

● Inform management and employees of responsibilities with respect to the new continuous improvement methodology (Lean).

● Promote employee buy-in for change initiatives.

Audience (characteristics/receptivity to message)

Message Tactics: Media, approach, rationale (why it will communicate message and meet objectives)

Resources/ budget (if applicable, estimate)

Person responsible

All employees of Australian Hardware

Organisation’s objectives and positive approach to continuous improvement.

Promotional video featuring senior management team to build buy-in and underscore management commitment to Lean philosophy, methods and facilitation tools.

$20,000 Continuous Improvement Council

Customer service and sales staff

Introduction to personal targets and new balanced scorecards.

Description of relevant procedures and training opportunities.

Team meetings with sales team supervisors to integrate continuous improvement with normal team and performance management practices.

N/A Team leaders and supervisors

Wollongong management team

Introduction to reporting and audit responsibilities.

Description of relevant procedures and training opportunities.

Email, face-to-face presentation to enable managers to raise implementation issues and reporting concerns.

N/A HR officer (member of local CI project team)



Learning activity: Develop a communication strategy

Consider your organisation or an organisation you wish to research.

● Consider the organisation’s business model – the organisation’s basic approach to creating and capturing value for stakeholders, customer’s and the organisation itself.

● Examine strategic plans – vision, mission, goals and values – and operational plans.

● Consider the organisation’s continuous improvement approach or strategy, including policies, plans and initiatives.

● Consider the possible communication objectives the organisation could have with regard to continuous improvement goals.

● Consider the needs of the organisation’s internal and external stakeholder audiences.

Develop a short communication strategy similar to the example above. Keep your strategy handy. You will need to make adjustments or additions to this strategy in Section 2.

Ensure sustainability requirements

To implement continuous improvement, you will need to consider the organisation’s overall business model, how it generates value for customers and investors, and its approach to sustainability. On a more detailed and strategic level, you will also need to identify and conform to overall business strategies as outlined in business or operational plans. Let’s look at sustainability business models, and approaches to meeting sustainability objectives, in the context of applying continuous improvement methodologies. Finally, let’s look at how continuous improvement may be implemented to achieve sustainability targets.

Business models for sustainability Business models are general approaches to doing business that produce compelling value propositions – benefits to customers of purchasing products or services – for customers, gain advantageous cost and risk structures, and capture value for the business in the form of profit. While not a fully fledged strategy, a business model is the general idea for a business. It sets the context in which particular strategic decisions are made to put the business in the strongest position to exploit its particular advantages over competitors (who may have similar business models).10

Sustainable business models, rather than representing a completely different approach to business and implementing strategy, take a wider view of the process of generating and capturing value. Value is attributed to results and processes that are not directly related to financial measures.

10 D. J. Teece, 2010, ‘Business models, business strategy and innovation’, Long range planning, vol. 43, no. 2–3, pp. 172–194, doi:10.1016/j.lrp.2009.07.003



Wells11 identifies several principles for sustainable business models:

● resource efficiency

● social relevance

● localisation and engagement

● longevity

● ethical sourcing

● work enrichment.

Following the principles listed above allows organisations to factor sustainability into the development of overall business models and strategies. It is useful to point out that organisations do not necessarily value sustainability at the expense of financial gain. In fact, integrating sustainability principles into business models may generate substantial value by appealing to environmentally and socially engaged customers and investors.

It is easy to see how implementing continuous improvement methods can achieve a range of sustainability-related sources of increased value, including increased revenue or lower wastage costs.

Example: Australian Hardware sustainability goals

Australian Hardware has the following sustainability objectives:

● 10% reduction in water and energy usage

● 10% reduction in wastage and resource use

● 90% score on employee satisfaction in fair working conditions and fairness.

● build community and customer stakeholder awareness of the Australian Hardware corporate responsibility.

Achieving success will require the application of continuous improvement methods to identify areas of possible improvement.

Approaches to meeting sustainability objectives As part of achieving sustainability targets, you will need to consider various approaches or recognised methodologies for overcoming traditional, linear models of resource use and disposal.

Fortunately, there are standard methodologies to help your business overcome linear models of thinking and behaviour to develop process improvements. These methodologies include:

11 P. E. Wells, 2013, Business models for sustainability, Edward Elgar, Cheltenham, UK.

Life-cycle analysis

Lean Manufacturing

Closed-loop product design ISO standards

1st edition version: 1 BSBMGT516 Facilitate continuous improvement Page 32 of 113 © 2015 Innovation and Business Industry Skills Council


Let’s look at these methodologies in more detail with respect to achieving sustainability goals.

Life-cycle analysis Life-cycle analysis is the systematic analysis of consumption and production patterns to identify areas of potential for sustainable management of finite resources. The cycle is often presented as follows:

The aim of life-cycle analysis is to identify potential for the more efficient or productive use of resources. Once this potential is identified, the life cycle of products may be managed to integrate environmental issues into management decision-making, optimising the environmental impact of the product during its life cycle through engineering, and fostering new organisational sustainability cultures within organisations.12

If your organisation makes products or uses products as part of its processes, you will need to understand and apply life-cycle analysis to identify opportunities for process improvement.

Lean Manufacturing As discussed earlier in this section, the philosophy of Lean Manufacturing is clearly rooted in increasing value for customers and reducing waste. The idea may be summed up as ‘producing the most for the customer at the least cost’ through rigorous analysis of manufacturing and value-creating processes. The philosophy, however, is amenable to sustainable business practice on two fronts.

12 EPA Victoria, EcoRecycle and DIIRD, 2005, Product and business improvement through the application of life cycle management and approaches, available online, EPA Victoria, viewed January 2015, <http://www.epa.vic.gov.au/our-work/publications/publication/2007/march/1109>.



First, once you take a wider view of business stakeholders and customer needs, value can clearly involve value with respect to reduced impact on the environment and positive social impact, particularly if customers make green demands on businesses, governments act to regulate processes, or shareholders and directors act to create social value, or consider this as a valid indicator of success. Second, and related, from a reporting perspective, it is easy to align and integrate sustainability measures with traditional financial measures under the umbrella of Lean Manufacturing. By creating a sustainability policy in keeping with Lean thinking, you are much more likely to develop a set of core business values and performance measures that can be understood and implemented by a business audience.

Closed-loop product design Closed-loop product design entails a production system in which the waste or by-product of one process or product is used in making another product. For example, a restaurant that composts its organic waste for use in growing their own fresh produce.

Typically, policies and procedures need to be evaluated to transform linear processes to cyclic processes to enable resources to be reduced, reused or recycled.

Learning activity: Linear to closed loop

Watch the ‘Linear to closed loop’ section of Michael Pawlyn’s TED Talk, which is 3:59 minutes into the following video:

● ‘Using nature’s genius in architecture’, YouTube, <https://www.youtube.com/watch?v=3QZp6smeSQA>.

Answer the following question:

● Choose a product or material that is currently used and disposed of in a linear fashion. How would you close the loop of this product/material’s life?

1st edition version: 1 BSBMGT516 Facilitate continuous improvement Page 34 of 113 © 2015 Innovation and Business Industry Skills Council


ISO standards As mentioned earlier in this section, ISO standards may be used by organisations as a method to effect continuous improvement. The AS/NZS ISO 14001:2004 environmental management systems standard sets out guidelines for developing environmental policies and processes.

Importantly, the standard also lays out a framework for planning and implementing policy based on the well-known Plan-Do-Check-Act (or Deming) cycle:13

A key to the effective use of the standard is putting in place systems of continuously reviewing policy and taking action to improve environmental performance.

Using an implementation plan There are a number of approaches you may use to analyse processes to identify opportunities to improve sustainability performance and reach organisational goals.

Let’s look at an example implementation/action plan.

13 Standards Australia, 2004, AS/NZS ISO 14001:2004 environmental management systems - requirements with guidance for use, SAI global, Sydney, p. 4.

•Monitor and measure success against policy objectives and processes

• Act to continually improve processes and results

• Implement the process

• Establish sustainability objectives and processes

Plan Do

CheckAct



Example: Australian Hardware implementation/action planning

Susan Black, the HR General Manager at Australian Hardware, has completed the following action plan to manage the implementation of the organisation’s sustainability initiatives as a special application of the organisation’s continuous improvement strategy.

Action plan

Objectives Improve employee engagement and satisfaction.

Integrate sustainability policy with organisational strategy (including continuous improvement strategy) and day-to-day operations.

Reach sustainability targets:

● 10% reduction in water and energy usage

● 10% reduction in wastage and resource use

● 90% score on employee satisfaction in fair working conditions and fairness.

● Build community and customer stakeholder awareness of the Australian Hardware corporate responsibility.

Owner of plan HR General Manager, Susan Black

Action required Responsibility Timeline Strategies/tactics Resources/budget

Publish revised sustainability procedures on intranet.

Garden Products Manager, Pat Lee

1 February N/A N/A

Promote revised sustainability policy and procedures.


1 February Conduct videoconference presentation with managers (see communications strategy).

Room bookings: $10,000



Action Required Responsibility Timeline Strategies/tactics Resources/budget

Develop and trial employee climate survey.


10 March Test prototype at Wollongong store for usability and validity of tool to determine employee satisfaction.

N/A

Conduct employee climate survey.

Line managers 15 March Use line managers to explain survey.

Distribute survey through secure online survey tool.

IT consultant: $5,000

Sales and warehouse sustainability training.

Sales and warehouse staff

15 March Deliver training to staff responsible for implementing continuous improvement methodology (Lean) and applying to sustainability objectives.

Training consultant: $100,000

Lost productivity/ entitlements: TBA

Manager sustainability reporting and management systems training.

Senior managers

15 March Deliver training to managers responsible for implementing Lean methodologies, reporting, and integrating sustainability performance with performance management.

Training consultant: $35,000

Lost productivity/ entitlements: TBA

Sustainability audit.

Relevant senior managers

15 May Use sustainability improvement team to conduct audits and assess first round of improvement in environmental performance.

N/A



Learning activity: Develop an action/implementation plan for sustainability

Consider your organisation or an organisation you wish to research.

● Review the organisation’s sustainability policies, plans and initiatives.

● Develop two or three sustainability continuous improvement objectives.

● Develop an action plan to achieve objectives similar to the example given above.

For a different perspective, review the following example action plan template:

● University of Melbourne, ‘Sustainability action plan template for business plans’, University of Melbourne, viewed January 2015, <http://sustainablecampus. unimelb.edu.au/business_plans/docs/Sustainability%20Action%20Plan%20Template%20for%20Business%20Plans%20%282%29.pdf>.

Develop training, coaching and mentoring processes

To ensure individuals, and the organisation as a whole, have the capacity to effect continuous improvement changes, you will need to integrate your approach to continuous improvement with performance management processes. This means putting in place processes for integrating continuous improvement with performance management. In effect, this means facilitating individual and team goal-setting and performance-planning processes and then ensuring the development of workforce capacity through provision of the required training, mentoring and ongoing coaching required to keep individual and team performance aligned to continuous improvement objectives.

Performance plans A key part of performance management is performance planning. Performance plans for individuals should comprise two components:

● standards of performance associated with the essential functions of a job

● stretch targets, which may include:

○ goals, linked to organisational continuous improvement or strategic goals for which the individual has agreed to be responsible

○ training and development opportunities

○ improvements in behaviour and performance beyond that required by the standard, perhaps identified through team or organisational continuous improvement events.

In an organisation that is implementing continuous improvement, organisational and individual performance plans are necessary to assign and allocate responsibility for continuous improvement.

In addition to formal training and performance appraisal, you will need to provide or encourage ongoing support to employees through informal performance management activities. Common ongoing activities include mentoring and coaching. You will also need to encourage regular monitoring and feedback to ensure employees continue to perform at their potential and in alignment with organisational needs.



Training and development For individuals to embrace continuous improvement, they must perceive they have enough control to execute the tasks and exhibit the behaviours expected of them.

Their perceived control is high when they have the right data available to make appropriate decisions, when they have the authority to make the decisions and, above all, when they believe they have the competence to undertake the tasks and model the targeted behaviours.

Training and development is a cornerstone strategy for implementing continuous improvement successfully. Training can take multiple forms, including:

● accredited training, leading to a nationally recognised qualification

● classroom or off-the job training

● self-paced manuals

● video demonstrations or explanations of processes

● online live and synchronous e-learning

● asynchronous, self-paced e-learning

● guided on-the-job training

● action learning, or projects set for teams and individuals to plan, undertake and reflect upon for continuous improvement of on-the-job skills and team cohesion.

Learning activity: Training and development – Six Sigma, DMAIC, TQM

Watch the Cisco systems videos on Six Sigma on YouTube

● 2006, ‘Cisco - process improvement training video’, YouTube, viewed January 2015, <http://www.youtube.com/watch?v=-9hYCBz-q-U>.

● 2009, ‘‘Modern chairs’ - a total quality management training video’, YouTube, viewed January 2015, <https://www.youtube.com/watch?v=L--Oyw6V8gI>.

How could you create a similar training piece to get interest in the DMAIC process, TQM or other processes or CI methodologies your organisation uses?

Note: This does not necessarily mean creating a video – think about other ways of building knowledge about, improving ability to use, and engaging people in some of the tools and techniques of continuous improvement systems.


http://www.youtube.com/watch?v=-9hYCBz-q-U


Mentoring Mentoring is a performance management process in which a more expert or senior practitioner, manager or colleague undertakes to meet regularly with an individual and facilitate their professional development, essentially acting as a role model and source of advice.

Mentoring can take the form of buddying or job shadowing, in which newer employees watch an expert perform, can ask questions, and perform real job tasks, gradually becoming more competent on the job. Mentoring may also take the form of formal mentoring sessions in which senior professionals provide career advice to junior employees or private clients and assist in planning professional development.

The role of a mentor typically involves:

● acting as a role model by freely giving their own time to help guide the employee

● guiding the employee to further their personal goals

● discussing possible solutions to difficulties or issues

● helping the employee to reflect on their thoughts, beliefs, feelings and behaviour

● freely sharing their own experience and knowledge to help the employee develop their own talents

● helping the employee to build confidence in using their own judgement and problem-solving abilities.

Mentoring may resemble coaching on a superficial level, but differs from coaching in key respects. First, mentors are always more expert or more experienced than mentees. This is not always true with respect to coaches or those whom they coach. Second, the purpose of coaching is more specifically geared to core features of performance management, namely collaborative goal-setting and performance monitoring. The purpose of mentoring, on the other hand, tends to be more focused on inducting new employees on the job or career counselling.

Buddy systems In a buddy system, new employees or people starting very different new processes are given support, encouragement, expertise and a friendly environment, which helps to make them more productive at a faster pace. By providing immediate access to operationally necessary information, a buddy accelerates the new employee’s ability to deal with early confusing issues and becoming comfortable in their new workplace. A buddy is someone who:

● demonstrates high performance ● is skilled in the new employee’s job ● is proud of the organisation ● is a peer of the new employee ● volunteers to be a ‘buddy’ ● has a genuine interest in that role

who can motivate and help the new joiners in all aspects

● is a positive role model ● is knowledgeable and able to share ● is a good listener ● can explain things well ● has good interpersonal skills ● has good communication skills ● is open-minded ● has a positive attitude.



Coaching Coaching is a collaborative process in which a coach, often but not necessarily a supervisor or manager, works closely with a coachee to identify performance goals, establish the current reality and performance gaps or shortfalls, discusses various options for achieving potential and helps to plan concrete actions aimed at achieving agreed performance objectives.

Case study: Workplace coach

Steve is a department manager at Australian Hardware with a team of eight employees. He notices that one of his staff members, Alex, seems to lack direction, displays low self-esteem and has a number of performance issues (regularly shows up late for work and takes more sick days that the other employees). Steve has tried a number of things, but has had little or no success.

Steve spoke to Susan Black in HR at the Australian Hardware head office who suggested he might try coaching Alex. Steve approached Alex and asked if he wanted to try coaching. They both agreed it was worth trying and they agreed to work together once a week over three months.

The first thing Steve asked was for Alex to write a list of the things he wanted to improve, things that would help him perform better in his role. This gave them both a focus on the areas they could work on to help him improve over the coaching and monitoring period.

Six months later the improvements were noticeable. Alex is now the first one at work every day and is being recognised as a motivated team member. Instead of potentially losing a staff member, Steve has gained a valuable asset and is now looking at more training to help Alex develop his career.

It is important to know when to coach individuals, how to coach informally while providing effective feedback, and how to undertake more formal coaching.

When should you coach? Coaching is different to formal training, in that it can be relatively unplanned and spontaneous and opportunistic, but how do you know when you should step in, or let employees work through the problems for themselves?

● Observe the employee’s work and be alert for certain triggers or signs. For example, you may notice an attitude or behaviour creeping in that will negatively affect performance, or you discover a slump in performance.

● Coach when you want to focus attention on any specific aspect of the employee’s performance.

● Don’t hesitate – do it now. Coaching is a process that is most effective when it happens daily.

● Be sure you document any key elements that come out of your coaching sessions and store them in the employee’s file.



Informal feedback: The AID feedback model A great way to coach informally and to deliver performance feedback at the time you observe poor performance is to deploy the AID (Action, Impact, and Development) feedback model. The three phases of this model are described in the following table. 14

Phase Description

1. Action Describe the employee’s actions. It is a good idea to focus on one or two actions so as not to overwhelm the feedback recipient. In this phase, focus on the facts of the behaviour, use concrete examples and provide context.

2. Impact Describe the performance impact on people, workmates and customers. It is best to describe the impact rather than judge the person or focus on blame. In this way, feedback recipients are less likely to identify personally with their behaviour and will be able evaluate it and its impact on others more objectively.

3. Development Describe and/or collaborate on identifying a concrete course of action to take to modify or regulate the behaviour. It is best to focus on existing strengths to leverage or get better at than to focus on deficiencies and behaviours to eliminate.

Formal coaching: GROW coaching model From time to time as a manager, you will need to personally undertake or develop processes to support more structured, formal coaching. One useful model for this purpose is the GROW model. GROW stands for Goal, Reality, Options, Will. The GROW model is often used in the context of performance management to coach underperforming employees, but may easily be adapted to apply more generally to developing individuals’ potential for improved performance.

Coaching phase

Activities/questions

Goal First, collaborate with the underperforming team member to establish reasonable performance goals.

Ask questions to establish the individual’s understanding of performance expectations, personal goals and aspirations.

14 Adapted from: A. Roberts, 2013, ‘Effective feedback – AID model’, Master facilitator, viewed January 2015, <http://masterfacilitator.com/aidmodelforeffectivefeedback/>.



Reality Next, establish the reality of their current performance and the existence of a skills/performance gap to overcome. Obviously, if the team member doesn’t believe there is a gap to overcome, the improvement process will stall. You may need to come prepared to coaching sessions with evidence of underperformance or skills deficiencies.

Ask questions to establish understanding of:

● the real gap between the individual’s performance and expectations or performance goals

● potential obstacles to achievement, such as their technical skills, knowledge of continuous improvement processes, and personal or work situation.

Options/ opportunities

Next, you should discuss options for closing the gap. It is important to use active listening to uncover root causes for poor performance and talk through the possible options to generate effective solutions.

Ask questions to help the individual generate options or opportunities to help achieve goals and close gaps.

Will Finally and, perhaps most importantly, you need to establish the willingness of the individual to improve. Encourage the individual to commit to taking practical, observable measures to achieve performance goals. In this way, the individual will be unable to hide a lack of commitment (from you or from themselves) through making vague promises.

Ask questions to establish willingness to agree to concrete and timeframed measures to improve performance.

Note: The coaching conversation does not need to rigidly follow the order above. Any genuinely two-way conversation will develop in unplanned ways. Nevertheless, each element of the GROW model should be addressed at some point in any coaching session in order for it to be effective.

Team coaching In many ways, team coaching is more directly relevant to process improvement because processes involve individuals working together to provide customer value as a holistic unit. Problems, such as bottlenecks, overproduction, or wastage are team performance issues deserving of team solutions.

In team coaching (the process of identifying goals and performance gaps, or gaps between the current performance and the ideal performance), generating solutions and committing to action remains the same as in individual coaching. The main difference is that team coaching requires the coach to facilitate group interaction and communication, employing a high degree of interpersonal skills to ensure successful sessions.



Learning activity: Reflect on training, mentoring and coaching

Consider performance management in your organisation and on your individual practice and answer the following questions:

● How do you integrate performance management with continuous improvement to ensure your people have their ability to effect required changes to processes?

● How do you coach team members? How do you provide feedback? What coaching model do you use? How do you coach teams?

You will need to consider the following tips when preparing for team coaching:15

● Understand team dynamics – Team members will have different personalities and dispositions that may affect their behaviour within the coaching session and in their work interactions with colleagues. For example, introverts may be unwilling to share information, extroverts may dominate the group and prevent innovative ideas from being aired or implemented if they think they know best. Personality and leadership type inventories you may wish to explore are DISC, Myers-Briggs and Big-5 personality types.

● Establish ground rules and behavioural expectations for coaching or continuous improvement sessions.

15Adapted from: Mind tools, 2014, ‘Coaching for team performance: improving productivity by improving relationships’, Mind tools, viewed January 2015, <http://www.mindtools.com/pages/article/newTMM_66.htm>.



● Understand what motivates your team – If you want to improve performance you need to align rewards and recognition processes with the desired team behaviours and outcomes. For example, if your performance-based pay is not linked to participation in continuous improvement activities, it may not be reasonable to expect it.

● Be flexible – As with individuals not all teams are alike. Be prepared to switch tools or change approaches when required.

Develop and use knowledge management systems

In order to implement continuous improvement, you will need to develop systems to manage information flow. You will need to ensure the right people have the right information at the right time to create maximum value at whatever point or points in the process of customer and stakeholder value creation they are responsible for. To avoid overwhelming employees, and in conformity to Lean principles, for example, it may also be important to ensure employees have just the right amount of information at the time they need it. After all, people’s memories may be taxed by too much information in the same way as a worker’s capacity to function is impeded by holding more parts in hand than necessary to perform an assembly line task. To manage knowledge, you will need to manage hard and soft forms of knowledge as well as supporting technologies and frameworks.

Hard and soft knowledge According to knowledge management (KM) experts Hildreth, Wright and Kimble, hard knowledge is knowledge that is able to be codified; that is, knowledge that can be put in the form of a document and made explicit. It can be clearly articulated.

Hard knowledge is usually thought of and managed through a process of capture-codify-store:

First, rules, processes and key pieces of information are captured from the experts, or teams of expert workers (perhaps after participation in continuous improvement sessions). Second, these are then written into policies, knowledge bases and procedures. And, finally, they are stored for later retrieval particularly by novices but also anyone who needs it at any time.

Capture Codify Store



Importantly, knowledge is not always translatable into words or able to be contained in documents or written procedures. Soft knowledge, on the other hand is tacit, non-verbal and based on practice; it includes internalised experience, automated skills, and the capacity for professional judgement in non-standard activities, workarounds, and context-specific and time-bound team activities.16 In short, while hard knowledge is knowing ‘what’, soft knowledge is knowhow. For example, an expert team of professional salespersons may have multiple ways of sharing information and making judgements in work contexts that simply cannot be written out in a procedure. Even if such a procedure were available, it might tax the working memory of employees to the point of impeding performance.

Knowledge management researchers including Kimble, Wenger and others argue that a form of apprenticeship called ‘communities of practice’ provides a framework for managing soft knowledge. In a workplace community of practice, new team members must be gradually initiated into the culture of the team, perhaps guided, coached or mentored by more senior members who act as role models and embody soft knowledge.

Knowledge management tools and technologies There are a range of knowledge management tools and technologies for managing both hard and soft knowledge. In the case of hard knowledge, knowledge may be captured through paper-based or digital tools such as brainstorming, through interviews, or through various other continuous improvement facilitation tools. Knowledge may then be codified into improved procedures. It may then be stored in databases or online document management software for controlled distribution. Such software may allow documents to be checked for editing purposes and also manage version control, so new users always access the latest versions of procedures. Many large business have their own systems for document management and storage.

Soft knowledge management may involve a number of tools and examples of hard knowledge, such as workplace documents shared or collaborated on by teams of individuals; however, such knowledge management differs in that it is highly context-specific, time-bound, and often embodied in the actions and activities of teams and individuals. Online tools that can facilitate soft knowledge transfer and management include:

● ‘collaborative authoring’ software, such as organisational wikis or Google Docs, which allow multiple users to modify a document at the same time and to communicate through the document

● telecommunication or messaging software, such as Skype

● project management software, with task coordination, document management and social functions, such as Microsoft SharePoint

● dedicated workplace social media platforms, such as Yammer or Slack

● enterprise resource planning (ERP) software such as SAP, for example, to track resource use and inventory in real-time.

16 P. Hildreth, P. Wright and C. Kimble, 1999, ‘Knowledge management: are we missing something?’, in L. Brooks and C. Kimble, Information systems: the next generation. Proceedings of the 4th UKAIS Conference, University of York, York, UK, pp. 347–356.



Many of these tools may be used together. Such tools allow local and geographically dispersed workplace communities and teams to coordinate activities and work together to solve unpredictable problems as they arise, or share insights on how best to implement improved processes in particular circumstances.

In practice, software tools often, and, in most cases, cross boundaries between hard and soft knowledge categories. For example, there are many software tools that facilitate the production of key documents that many consider (wrongly) to be the main purpose of continuous improvement events and sessions, for instance, affinity diagrams, flow charts, value stream mapping. Such software, however, if truly worthwhile, should promote the more efficient sharing of ideas, resulting in better process outcomes overall – not just in more efficiently produced and professional-looking historical records of continuous improvement activities.

Knowledge management and continuous improvement Knowledge management is intricately related to continuous improvement methodologies and philosophies such as TQM, Lean Manufacturing and Six Sigma.

First, using both hard and soft forms of knowledge management systems allows people to ‘pull’ knowledge as they need it (with the least amount of effort and expense) to carry out processes and provide value to customers. Time-critical information may also be pushed out to others in an efficient and seamless way; for example, new orders completed through order-fulfilment systems.

Second, since online tools allow workers to interact with each other to complete processes without requiring physical presence in a single location, they may eliminate wastage due to travel times and expense.

Finally, knowledge management systems allow employees to focus on using their core competencies, in the same way as businesses strategically focus on what they do best, and then outsource the rest. Consider, for example, how context-specific help in a software application (such as pressing the F1 key) allows users to focus on the one task at hand without having to sort through an entire manual for information. Information retrieval has been automated in this case, because on balance, the human operator’s time is better spent using the software to perform a valuable task. Knowledge management includes continuous improvement in the design of software, software deployment, facilitation tools, machinery and workplaces to facilitate the flow of the information necessary to create value.



Learning activity: Reflect on knowledge management systems

Consider your organisation or an organisation you wish to research. Identify and describe one form of hard knowledge management and one form of soft knowledge management.

Type of knowledge

Example of use/management Tool/technology if applicable

Hard

Soft

Section summary

This section provided a summary of continuous improvement methodologies and their application to organisations. You should now understand how to lead continuous improvement systems and processes through identifying methodologies to build a culture of continuous improvement and accountability for quality and performance; communicate information to various stakeholders; and integrate continuous improvement with various related organisational requirements and systems, including meeting sustainability goals, performance management and capability building, and knowledge management.

Further reading

● Camp, R. C., 1989, Benchmarking: the search for industry best practices that lead to superior performance, ASQC Quality Press, Milwaukee, Wisconsin.

● Crosby, P. B., 1980, Quality is free: the art of making quality certain, Mentor, New York.



● ecoBiz Queensland, ‘Eco-efficiency for small business’, Queensland Government: Environment and Resource Management, viewed January 2015, <http://www.nra.net.au/images/Eco-efficiencyFactSheet-Office.pdf>.

● EPA Victoria, EcoRecycle and DIIRD, 2005, Product and business improvement through the application of life cycle management and approaches, available online, EPA Victoria, viewed January 2015, <http://www.epa.vic.gov.au/our-work/publications/publication/2007/march/1109>.

● Fisher, D., Farb, D. and Gordon, B., 2007, Lean Six Sigma guidebook: the formation of lean enterprises using the principles of Six Sigma and Total Quality Management, for managers and employees, UniversityOfHealthCare/ UniversityOfBusiness, Los Angeles.

• George, M. L., Rowlands, D. T., Price, M., and Maxey, J., 2004, The Lean Six Sigma pocket tool book: a quick reference guide to nearly 100 tools for improving process quality, speed and complexity, McGraw-Hill, New York.

• Hildreth, P., Wright, P. and Kimble, C., 1999, ‘Knowledge management: are we missing something?’, in L. Brooks and C. Kimble, Information systems: the next generation. Proceedings of the 4th UKAIS Conference, University of York, York, UK, pp. 347–356.

• Mind tools, 2014, ‘Coaching for team performance: improving productivity by improving relationships’, Mind tools, viewed January 2015, <http://www.mindtools.com/pages/article/newTMM_66.htm>.

• Plenert, G., 2011, ‘Chapters 3 and 4’, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York.

• Pyzdek, T. and Keller, P., 2014, The Six Sigma handbook: a complete guide for greenbelts, black belts, and managers at all levels, 4th edn, McGraw-Hill, Sydney.

• Quast, L., 2012, ‘Why knowledge management is important to the success of your company’, Forbes, viewed January 2015, <http://www.forbes.com/sites/ lisaquast/2012/08/20/why-knowledge-management-is-important-to-the-success-of-your-company/>.

• Reh, F. J., 2002, ‘Pareto’s principle - The 80-20 rule: how the 80/20 rule can help you be more effective’, About money, viewed January 2015, <http://management.about.com/cs/generalmanagement/a/Pareto081202.htm>.

• Roberts, A., 2013, ‘Effective feedback – AID model’, Master facilitator, viewed January 2015, <http://masterfacilitator.com/aidmodelforeffectivefeedback/>.

• Standards Australia, 2004, AS/NZS ISO 14001:2004 environmental management systems - requirements with guidance for use, SAI global, Sydney, p. 4.

• Teece, D. J., 2010, ‘Business models, business strategy and innovation’, Long range planning, vol. 43, no. 2–3, pp. 172–194, doi:10.1016/j.lrp.2009.07.003

• University of Melbourne, ‘Sustainability action plan template for business plans’, University of Melbourne, viewed January 2015, <http://sustainablecampus. unimelb.edu.au/business_plans/docs/Sustainability%20Action%20Plan%20Template%20for%20Business%20Plans%20%282%29.pdf>.

• Wells, P. E., 2013, Business models for sustainability, Edward Elgar, Cheltenham, UK.



Section checklist

Before you proceed to the next section, make sure that you are able to:

develop strategies to ensure that team members are actively encouraged and supported to participate in decision-making processes, assume responsibility and exercise initiative as appropriate

establish systems to ensure that the organisation’s continuous improvement processes are communicated to stakeholders

ensure that change and improvement processes meet sustainability requirements

develop effective mentoring and coaching processes to ensure that individuals and teams are able to implement and support the organisation’s continuous improvement processes

ensure that insights and experiences from business activities are captured and accessible through knowledge management systems.


Student Workbook Section 2 – Monitor Continuous Improvement

Section 2 – Monitor Continuous Improvement

The focus of this section is on monitoring and adjusting continuous improvement and performance strategies. This section will introduce approaches to monitoring performance that provide essential support to continuous improvement methodologies by providing the information necessary to identify opportunities for process improvement and remedial action. This section also includes information on continuous improvement tools associated with the methodologies discussed in Section 1, which can be used in conjunction with monitoring activities to identify areas for improvement. Finally, this section includes information on adjusting strategies and communicating changes to stakeholders.

Scenario: Monitoring continuous improvement at Australian Hardware

Pat Lee is the Garden Products Manager at the Australian Hardware Wollongong store. Pat is responsible for ensuring her team performs to the standards required and identifies opportunities for improvement.

Pat takes a proactive approach to building capacity within her team to achieve goals and continuously improve performance.

As part of continuous improvement processes, Pat collaborates with her team to set targets and KPIs that align with organisational objectives. Pat deploys a monitoring strategy to ensure team performance is measured regularly and information is available to support and prompt continuous improvement efforts.

She regularly meets with her team to discuss performance and opportunities to improve. When regular monitoring or feedback triggers a response, Pat organises team coaching and continuous improvement sessions or continuous improvement/Kaizen events to get to root causes of performance issues. She also uses tools such as fishbone diagrams and value stream mapping to help her facilitate sessions effectively.

After these sessions, Pat needs to communicate the changes to both planning and operations to her team and relevant stakeholders.


In order to monitor continuous improvement, you must be able to:

develop strategies to ensure that systems and processes are used to monitor operational progress and to identify ways in which planning and operations could be improved

adjust and communicate strategies to stakeholders according to organisational procedures.


Section 2 – Monitor Continuous Improvement Student Workbook

Develop monitoring strategies

To monitor operational progress against planned improvements in areas such as safety, customer service, productivity and other goals, you will need to develop a monitoring strategy. As a manager working in the context of a performance management system, you will need to set clear expectations for people working in particular roles. You will need to set a quantitative baseline for performance by developing performance metrics to enable monitoring, align performance metrics to organisational goals, and use tools such as balanced scorecards to track organisational and individual performance against key result areas. Above all, a system for monitoring quality should be used to motivate improved performance in the areas that matter, not simply to collect data.17

Let’s look more closely at developing an effective monitoring strategy.

Develop performance metrics First, in order for performance to be effectively monitored and evaluated, it needs to be measured. Performance is generally measured using key performance indicators (KPIs).

KPIs measure an organisation’s performance in critical areas, often called key result areas (KRAs). KRAs may include general areas of performance important to the business or the employee’s role such as: financial measures, productivity, customer focus or training and development.

To be useful in the context of performance management, KPIs should generally conform to the following three requirements:

1. KPIs should promote common, clear understanding. They must be:

a. simple enough for anyone to understand

b. calculated in a standard way across the organisation

c. documented.

2. KPIs should correlate with performance. They must:

a. directly measure the results of a process

b. be directly affected by changes to that process

c. not be directly affected by factors outside of that process.

3. KPIs, even ‘soft’ KPIs (i.e. those relating to behaviours and attitudes), should be quantifiable, that is they should be expressed as a number or a percentage so that they can be measured.




KPI types Objectives, targets and the KPIs that measure performance against objectives and targets can be classified into three types: input, process and output.

● Input KPIs measure the activities that are designed to facilitate improvements in performance results. These activities include management actions to implement performance management and achieve organisational goals such as holding performance review meetings, coaching or providing training.

● Process KPIs measure the efficiency of processes, for example, the number of times stock is sold or used over a period of time (inventory turnover or stock turn). Another example, more geared towards the measurement of individual performance, might be contribution to the improvement of team processes or the support of co-workers to do the same.

● Finally, output KPIs measure the results of inputs and processes. These could include, for example, productivity levels or number of sales per month.

Lag, current and lead indicators KPIs are often said to be leading, in that they indicate future performance, or lagging, in that they reflect past performance. For example, sales training numbers may indicate future sales performance, while current sales figures reflect past activity.

While lagging indicators such as sales revenue are important for establishing where an organisation or employee is in relation to a set goal, leading indicators are essential tools in performance management. This is both because they are focused on the future and are therefore compatible with performance management practices, which seek to develop the potential of employees but also because, more importantly, they identify what drives success – on the terms defined by the particular organisation.

The timing of KPIs, relative to the achievement of corporate goals, is fundamental in choosing good KPIs. Financial results, such as last quarter’s revenue, are typically lagged by two months and more. Annual results, especially fiscal year results, can be much more delayed. With such lags, the problem arises as to what action might be appropriate to alter the direction of the department’s performance, when the KPIs are measuring results in the past. A correction may be inappropriate when the current performance has already significantly altered from that measured some time ago, resulting in overcorrection.

Lag indicators should rarely be considered as a KPI, as the benefit of KPIs is to adjust processes and behaviour to get better performance. KPIs measuring current performance are more useful. Examples include today’s bookings, sales or production level. As always, care must be taken not to allow instant results to result in instant reactions which, in turn, reinforce the original problem.

Other KPIs are of the leading type; their measures are predictive of desired results at the next higher level. An example of such a leading indicator for market share is customer satisfaction with the organisation’s products and service. It is important to note, however, that customer satisfaction survey output is a lagging indicator of customer service.

The primary difficulty with leading KPIs is to be sure that they are strongly correlated with the required corporate goals; modelling and understanding of key business drivers is necessary. Following on from this, of course, is that taking the time and effort to determine the key business drivers will result in a useful KPI, rather than a number which is reported on a monthly basis but has caused no action to happen even when it strays outside its range of limits.



Example KPIs Example KPIs may include such measures as the following:

● Financial outcomes and ratios: For example, profit, % profit per sale, break-even point, stock turns and gearing ratio. These metrics and metrics like them can usually be calculated and monitored through your organisation’s financial package, which may range from spreadsheets to sophisticated elements of full enterprise management systems, e.g. SAP.

● Safety targets: For example, lost time injury frequency ratio (LTIFR) and medical treatment case frequency ratio. This requires managers of organisations to develop definitions of industry standard ratios and definitions of their calculation. Collecting data for safety indicators involves setting up a widely communicated and audited system of manual reporting for when, for example, a lost time injury occurs. Persistence and insistence is required to maintain a system of collecting and reporting safety metrics. To be effective, safety targets and the collection of data must be a part of personal performance plans, especially if you are in the set-up phase.

● Customer service targets: These are developed through an iterative process of understanding customers’ needs and their interaction with an organisation’s internal business drivers, such as costs and resource use. Targets can be monitored using process KPIs, such as lead time for delivery, and from survey data such as satisfaction with delivery lead times and indicators of the importance of delivery lead times.

● Productivity outcomes: These are mostly measured by process KPIs (for example, lead times), although some overall measures of productivity use a combination of financial system measures and process measures, for example, stock turns.

Generating KPIs When generating specific team or individual KPIs, there are three commonly used methods:

● Setting KPIs at organisational, departmental, team, and individual level by identifying what success looks like at each level and what drives it.

● Setting KPIs based on different organisational stakeholder perspectives, e.g. ‘balanced scorecard’.

● Cascading corporate goals and objectives down by:

○ determining what drives corporate and departmental goals and objectives and breaking larger, more generic goals up into their component parts; namely, determine what the achievement of goals at that level in turn depends upon or is driven by:

– e.g. sales = prospects x conversion rate x average sale

– average sale = average items per sale x average cost per item

○ designing the work of departments, teams and individuals based on cascading KPIs.



Learning activity: Research or develop KPIs

There are many standard KPIs used in industry, although care must be taken in defining measurements so that the KPIs are like-for-like if you are considering benchmarking.

There are many online resources available, just search the internet for:

● ‘KPI forums’

● ‘KPI libraries’.

Consider your own organisation and role in an important value-creating process and answer the following questions:

● What KPIs are applicable?

● How are KPIs in your organisation set: by perspective or by cascading?

● What KPIs are relevant to your organisation and your staff?



● How can you ensure that you set KPIs to measure what you need to measure in order to understand what drives success in your organisation and to performance manage to achieve success through your people?

Monitoring strategies Finally, monitoring strategies are a way of planning the implementation of measuring activities so that employees have the information on hand to improve performance or take corrective action when necessary. To be most effective, a KPI must be understood by all employees involved in the process. Further, they must know the corrective action to be applied and have the capability and authority to act.

Monitoring strategies are focused on the organisation or team’s approach to gathering required information to effectively monitor and evaluate performance. The key features of a monitoring strategy are:

● a description of what outcomes are desired

● a description of how success will be measured

● a baseline, where relevant, to compare previous performance or performance against an industry benchmark

● targets

● a description of how the information will be gathered.

Before turning to an example, first let’s look at a summary of some key terms for organisational planning and for monitoring implementation within that context.

Term Definition Example/s

Objective Something you aim to do to achieve a strategy; a measurable or observable step. A strategy may have several objectives associated with it.

● Increase employee satisfaction.

● Retain talented, motivated staff.

● Reduce resource usage.

Outcome The desired end result of a process or activity.

Completion of performance management process



Term Definition Example/s

Activities and tasks

Units of work that have specific beginnings and endings but that should be connected with important, ongoing work processes or with achieving specific objectives.

● Implementation of new, efficient machinery.

● Implementation of training programs for sales staff.

● Communicating changes to employees.

● Drafting of continuous improvement or performance management policies.

Metric How you measure success; a number, fraction, percentage or category or quality.

● Litres of water/per garden centre revenue dollar.

● Stock turn ratio = Cost of goods sold ÷ average stock holding.

Baseline/ benchmark

A standard level of performance as defined by previous measurements or by industry averages.

● Last year’s number of customer complaints.

● Industry average wastage.

Target Success described in terms of a metric; a number.

3% reduction in energy usage.

Data collection methods

How or where you will gather information on the relevant metrics.

● Accounting systems.

● ERP software.

● Control charts.

● Defects tracking.

● Audit reports.

● Customer satisfaction surveys.

Now let’s look at an example document in which the various elements above are brought together into a coordinated monitoring strategy.



Australian Hardware sustainability monitoring strategy

Description of objective/outcome/ activity/task

Metric Baseline (previous year’s performance)

Target Data collection methods

Improve management of inventory

Stock turn ratio = Cost of goods sold ÷ average stock holding

6 8 Australian Hardware ERM.

Improve customer service

Customer positive approval rating 70% 90% Customer survey.

Improve resource usage efficiency

Electricity use in KW/h (5% reduction on 2014 levels)

To be confirmed from records

5% reduction in electricity usage

Audit records. Monthly resource use reports. Water use in litres 3% reduction

Improve sustainability Recognition of sustainability achievements N/A Fair trade certification

Positive impact on local environment 3 tonnes/ $100,000 sales revenue

CO2 emissions (5% reduction on 2013 levels)

Triple bottom line accounting data.

Communicate and negotiate team and individual KPIs for managers and employees

Completion of performance management: appraisals, KPI setting, coaching

N/A Completion by June 30 Managerial reports Collection of PDPs.



Learning activity: Monitoring methods and strategies

Consider your organisation or an organisation you wish to research and complete the following:

● Use the KPIs you identified in the previous activity.

● Using the example supplied as a rough guide, develop a monitoring strategy to ensure the implementations of monitoring activities and methods.

Identify improvements: Continuous improvement tools

There are a number of common continuous improvement tools and techniques you should know and understand how and when to use. Understanding these common tools will enable you to talk with authority and empathy when implementing them with your team.

Let’s look at a summary of some of the key tools.

Process mapping Process mapping is completed at different levels of detail. The highest level map, a ‘Level 0’ map, contains the inputs and outputs with the process designated in one box.

A ‘Level 1’ process map has more detail showing the relationships of the output of one sub-process as the input of another sub-process.

Most process maps do not go below ‘Level 4’ maps, which are more like work instructions due to the level of detail.

An example of a ‘Level 1’ process map for the DMAIC process in Six Sigma is shown here on the right.

A process map may also include the results of a RACI analysis. That is, an analysis of the personnel who are:

● responsible for a process

● accountable for a process

● must be consulted about a process

● must be informed about a process.

In continuous improvement systems, a specific approach to flow charting is often used. It is called ‘value stream mapping’.

Define



Value stream mapping Value stream mapping is a tool to assist teams to visualise all the value-creating steps, and sources of waste, which occur from the procurement of inputs to delivery to the customer and all the information flows which support the process. The ultimate objective is to reduce waste, defined as steps or activities associated with the process that do not add to value to the customer. Consider the following example.

Example: Value stream mapping customer service process at Australian Hardware

To improve service times, the continuous improvement team at Australian Hardware created the following value stream mapping, looking at the current process of taking a customer service order.

The team identified that the supervisor approval step required six minutes of additional wait time for the customer. The team recommended raising delegation limits and empowering sales teams to make own credit decisions thereby improving customer value and reducing wastage (time delay).

The method has four stages:18

1. Preparation, including defining the scope, or the precise problem to be focused on; building the cross-functional team to develop the value stream mapping and determining key stakeholders to consult.

2. Draw the current state.

3. Work with the same team, including representation from all stakeholders to draw the ideal future state.


Check product in stock

Supervisor credit approval

Customer service and advice

Customer

Inventory

~5 minutes

30 seconds

1 minute

5 minutes

1 minute



4. Work with the team to develop an improvement plan to close the gap between the ideal future state and the current state. The improvement plan will include lists of activities to undertake to reduce waste in a document sometimes called the ‘Lean Newspaper’.

Brainstorming Brainstorming is a tried-and-true way to come up with ideas in a group. The method is simple. The problem is stated, and a designated recorder stands in front of a room with a flip chart or whiteboard. People in the group say whatever ideas pop into their minds. The recorder writes down all of the comments made.

Consider the following tips for getting the most out of brainstorming improvements:

1. Quantity is wanted:

The whole point of brainstorming is that you don’t stop the flow of ideas to separate good and bad ones. Obviously, your chances of finding good ones go up if you have a really long list of ideas to choose from. In a ten-minute brainstorm, you should generate at least 10 to 20 ideas.

2. Free-wheeling is necessary:

You can’t generate a good number of ideas if you restrict them in any way. Don’t worry about saying something ‘silly’. Silly ideas may not be so silly, or may inspire you or someone else to say something less silly. So say anything that pops into your head; say variations on what other people have said; just say things!

3. Defer judgement:

Don’t judge or shoot down other people’s ideas. Saying things like ‘but we’ve tried that and it didn’t work’ goes against the principles of brainstorming. The purpose of brainstorming is to get all of the ideas out on the table and then start sifting through them.

4. Tag on:

If you start slowing down, take a previous idea and change it a little. For example, if your problem is lack of broad participation in continuous improvement, and you have already said, ‘Pay people to participate in continuous improvement,’ you can add to it to make: ‘Give free concert tickets to people to participate,’ or ‘Punish people for not participating,’ or ‘Hand out certificates to people who participate’. As you can see, there are many variations to any idea.

Affinity diagram An affinity diagram is a special type of brainstorming process that is used for organising large groups of information into meaningful categories. It helps us to clarify and make sense of a large or complex problem. Consider the following example process:

1. Define the problem or issue to be explored.

2. Brainstorm for ideas, but instead of everyone shouting out ideas, everyone silently writes down their ideas on sticky notes or cards.

3. When the brainstorm is complete, mix up all the notes and stick them on a wall.



4. Arrange the notes or cards into related groups as follows:

a. Take two notes that are related in some way and put them together.

b. Find other notes that belong to this group and put them with the first two.

c. Build other groups of notes in the same way until all of the notes have been grouped (a maximum of about ten groups).

5. Now you can decide what to call each grouping. Header notes or cards are created and placed at the top of each grouping. The header note should clearly define the common thread that ties all of the notes in the group together (usually a three- to five-word description).

6. You may now find that some notes do not belong to a group. If so, continue sorting until everyone is satisfied with the final picture.

See the example below of a documented affinity diagram.

Solution to maintaining successful process

Customer requirement

Understand requirement

Consult customer

Interpret customer

needs

Provide operational

output

Identify customer

Provide training Know quality improvement

tools

Investigate efforts

Communications Access to

information Employee

involvement Break down

barriers

Controls Establish

measurement systems

Develop corrective

action system

Determine process

capability Define process

Project improvement

Management Establish

reward system Provide job

security Staff support

Clear program goals

Create steering

committee

Force field analysis A useful technique for looking at all the forces working for and against the implementation of an improvement is force field analysis. By carrying out the analysis, you can plan to strengthen the forces supporting a decision and reduce the impact of opposition to it.

At times when we want to change something, we tend to concentrate on the things we need to do more of to get change to happen. For example, when faced with speaking to another person who does not speak English well, you may fall into the trap of speaking loader in an effort to be understood. It does not work, does it?

What does work is finding a phrase book, working with pictures, maps or even hand signals. Removing the barrier to communication, in this case the English language, works better than speaking English more forcefully.



Force field analysis is focused on finding out the things that help us make the change we want, and those things that make it difficult to make the change. When we can identify what is stopping change, it is often better to eliminate the obstacle (e.g. removing a chock from behind a wheel) than it is to push harder on something which will make change happen.

Learning activity: Force field analysis

Consider your organisation or an organisation you wish to research. Identify a possible change to effect a process improvement.

Complete the steps below to fill out the blank spaces in the diagram that follows:

1. Describe your plan or proposal for change in the middle.

2. List all forces for change in left arrows, and all forces against change in the right arrows.

3. Assign a score to each force, from 1 (weak) to 5 (strong).

4. Total the scores.

Reduction in number of students from

40 to 30.

Better output by students (4)

Less stressful to teachers (4)

More facilities available to students (3)

Better attention to students (5)

Higher fees to be charged (5)

More infrastructure needed (5)

Larger staff to be managed (2)

Forces for change Forces against change

TOTAL: 16 TOTAL: 12

The consequence of the reduction in class size: A completed force field analysis.



Use force field analysis to work out how to make change happen. You have two choices:

● to reduce the strength of the forces opposing a change (No change), or

● to increase the forces pushing a change (Change).

Cause and effect diagram (fishbone or Ishikawa) Ishikawa, who pioneered quality management processes in the Kawasaki shipyards in the 1960s, developed what is commonly called a fishbone diagram.

To create a fishbone or Ishikawa diagram, follow these steps:

1. Determine the problem.

2. Determine the major possible cause categories – the standard causes are: Materials, Machines, Methods, People and Environment.

3. Determine subsidiary causes and keep determining subsidiary causes until you have got to a root cause (see the example below of a car that will not start).



5-Whys The 5-Whys technique was originally developed by Sakichi Toyoda and was later used within Toyota Motor Corporation. 5-Whys is used often in conjunction with a cause and effect diagram.

The process for the 5-Whys technique is to state the problem and ask the question ‘Why?’ about the outcome five consecutive times. For example, if the problem is, ‘My car will not start’, the sequence may go something like the following.

Problem: My car will not start.

Question: Answer:

Why will the car not start? The battery is dead.

Why is the battery dead? The alternator is not working.

Why is the alternator not working? The timing belt is slipping.

Why is the timing belt slipping? It is old and has been stretched over time.

Why is it so old? I have not been maintaining the car according to its maintenance schedule.

Other tools There are a range of continuous improvement tools available for qualitative analysis of work processes. Consider the following list.

Tool Description

Ladder of inference A method of problem-solving aimed at forcing teams to undertake a number of consecutive steps, including collecting all available data before drawing conclusions and determining a course of action.

Swim lane chart A process map, or flow chart, depicting the flow of information but also showing the interactions between different functional areas (lanes).

Spaghetti chart A floor plan of a workspace showing how people must move to complete a process. Shows the sometimes unanticipated consequences of work design and wastage due to unnecessary movement.

Cellular work design A process map that shows how work flows through functional areas and departments with the aim of improving the flow by eliminating unnecessary and inefficient movement.



Tool Description

SWOT analysis A tool that analyses a business process by Strengths, Weaknesses, Opportunities and Threats.

SIPOC or COPIS An analysis of a process on the basis of looking at key nodes in the production process: Supplier, Inputs, Processes, Outputs, and Customer (or the reverse, COPIS, which focuses on the customer first and their point of view).

You may wish to undertake reach on some of these tools or identify others used in your organisation or within your industry.

Learning activity: Tools and techniques part 1

From the information provided above, note tools that are useful for the following needs, and explain your reason for choosing the tool.

Need Most useful tool and your rationale

You need to identify major themes from a large number of ideas.

You need to generate a large volume of ideas for improving a broken process.

You need to develop a complete and clear picture of what customers (internal and external) expect to receive when they acquire products and services.



You need to understand what happens in a given process from start to finish.

You need to identify root causes of a performance issue.

You need to identify parts of a process that the customer is not willing to pay for.

You need to identify and clarify relationships between ideas, concepts, issues or actions.

You need to thoroughly understand a customer’s needs.

You need to understand why employees are not implementing a great idea to improve inventory management.



Identify improvements: Quantitative monitoring, analysis and control tools

In addition to qualitative tools for identifying performance problems and identifying potential improvements, there are a range of quantitative tools for monitoring and controlling performance. Such tools facilitate and rely on statistical inference to identify issues and trigger remedial action. As such, qualitative tools are essential to statistically focused continuous improvement methodologies such as Statistical Process Control and Six Sigma as discussed in the previous section.

Let’s look at a summary of popular qualitative tools.

Histograms and frequency distributions The histogram evolved to meet the need for evaluating data that occurs at a certain frequency. This is possible because the histogram allows for a concise portrayal of information in a bar graph format.

For example, in the Australian Hardware Garden Centre a sample of 60 seeds was used to evaluate the germination process. The data taken from this sample appears in the frequency distribution table below:

Days after planting 0 1 2 3 4 5 6 7 8 9 10

Seedlings germinated 0 0 0 3 7 12 12 13 7 4 2

In this example, the histogram provides a rapid visual insight into the average time to germination and the pattern of germination.

The average time to germination is about six days. Note the overall shape of the histogram example.



Because frequency distributions of process variables typically have bell-shaped histograms, which taper slowly down from a central mean, this kind of distribution is called ‘normal’.

Let’s briefly compare normal and non-normal histograms.

Normal

A normal distribution:

● is depicted by a bell-shaped curve

● the most frequent measurement appears as centre of distribution

● the less frequent measurements taper gradually at both ends of distribution

● indicates that a process is running normally (only common causes of variation are present).

Non-normal

A non-normal (or bi-modal) distribution:

● appears to have two peaks

● may indicate that data from more than one process are mixed together:

○ materials may come from two separate vendors

○ samples may have come from two separate batches.

Cliff-like

A cliff-like distribution:

● appears to end sharply or abruptly at one end

● indicates possible sorting or inspection, or other kind of artificial manipulation or intervention.

Saw-toothed

A saw-toothed (or comb) distribution:

● appears as an alternating jagged pattern

● often indicates a measuring problem, i.e.:

○ improper readings

○ measuring equipment not sensitive enough for readings.



What is the value of normal? A normal distribution is desirable because it allows for the use of statistical inference. Consider that, in a normal distribution:

● 68.3% of the population is between +/–1 standard deviation from the mean.

● 95.4% of the population is between +/–2 standard deviations from the mean.

● 99.7% of the population is between +/–3 standard deviations from the mean.

For instance, the frequency distribution in the germination example above has a mean of about 6 (6.2) and a standard deviation of about 2 (1.715). Therefore we could infer that, in this process, there is a 68.3% chance that a seed will germinate between 4 and 8 days; between 10 and 2 days there is a 94.4% chance.

How could you use this information to improve performance and quality? Well, if you could reduce variation, for example, by bringing the standard deviation down closer to 1, you would be able to claim that 95.4% of seeds will germinate between 4 and 8 days. Perhaps you could standardise processes for planting, try a more reliable supplier, or use a more reliable type of seed.

Note, however, that while quantitative analysis of frequency distributions and histograms can supply an answer to the question of whether a process is performing optimally and is amenable to statistical analysis and control, it can provide only limited answers as to what to do to improve quality. Moreover, you might ask yourself whether an ‘improvement’ really makes any difference to your business, for example, to cost control, wastage expense, competitiveness, or how much your customer is willing to pay for more certainty. Recall that, according to Juran, quality means only meeting customer expectations. Anything done over and above this represents waste. To answer qualitative questions such as these, you will need to supplement quantitative analysis with the use qualitative tools such as value stream mapping or brainstorming.

Control chart A control chart measures the variation of a measure over time. The measure has control limits around an average target figure. See the example below of the proportion of defects per day.



Control charts:

● demonstrate how consistently a process is performing and whether an attempt should be made to adjust it

● compare the process performance to the customers’ requirements

● facilitate quick evaluation of the results of quality initiatives designed to improve process consistency.

Control limits are generally set at three standard deviations above and below the mean. Therefore, for example, if an organisation is using Six Sigma methodology to define a defect as occurring six standard deviations from the mean, this practice provides a margin in which a process that appears to be crossing control limits can be brought under control before actual wastage occurs.

Learning activity: A guide to control charts

Reade the following article:

● C. Berardinelli, 2014, ‘A guide to control charts’, iSixSigma, viewed January 2015, <http://www.isixsigma.com/tools-templates/control-charts/a-guide-to-control-charts/>.


● What is the purpose of control charts?

● What are the four process states?



● What are the elements of a control chart?

● What is controlled variation?

● What is uncontrolled variation? How can control charts be used to identify uncontrolled variation to bring it under control?

Scatter diagrams Scatter diagrams make the relationship between two continuous variables stand out visually on the page in a way that raw data presented in a table cannot. Scatter diagrams may be used in examining a cause and effect relationship between variables, such as cost and quantity. They can also show relationships between two effects to see if they might stem from a common cause or serve as surrogates for each other. They can also be used to examine the relationship between two causes. Let’s look at how to construct scatter charts, interpretations, correlation, and problems with interpreting causality.

Scatter diagrams are easy to construct. The steps to creating a scatter diagram are as follows:

1. Collect data points: ‘paired’ data are measures of both the cause being tested and its supposed effect at one point in time. To ensure reliability, it is best to have at least 50 data points.



2. Draw a grid, with the ‘cause’ on the horizontal axis and the ‘effect’ on the vertical axis.

3. Determine the lowest and highest value of each variable and mark each axis accordingly.

4. Plot the paired points on the diagram. If there are multiple pairs with the same value, draw as many circles around the point as there are additional pairs with those same values.

5. Identify and classify the pattern of association, using the graphs below of possible shapes and interpretations.

Scatter diagram interpretations

Correlation Correlation is a measure of the relation between two or more variables. If one variable increases, does the other always increase too? Does it always decrease? For example, are we able to establish a relationship between the two variables of sales achieved and the amount spent on advertising?



The following table provides some figures for investigation.

Training hours per employee

Returns $

20 305,500 50 183,500 30 250,000 60 150,000 35 200,000

Let’s look at the data in a scatter chart:

In this case, a scatter chart gives us a quick visual intuition that increasing training hours for sales staff might decrease the rate of product returns. We can check our visual intuition mathematically.

Correlation calculation in Excel While the correlation calculation can be complicated, using software like Microsoft Excel makes the process easier. Correlation may be expressed using the Pearson Coefficient or ‘r’. When calculating correlation, the result will always lie between –1.00 and 1.00. So a value that is close to zero indicates a low level of correlation between the two data sets, while a value close to 1.00 represents a high level of positive correlation. Finally, a value close to –1.00 represents a strong level of negative correlation.

Using the data in the table above, an example of a correlation calculation follows:

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

0 10 20 30 40 50 60 70

Returns $



According to the calculation, r = -0.948104163. The negative sign indicates that the dependent variable, the y-axis number or supposed ‘effect’, gets smaller as the independent or x variable gets larger.

Correlation and causality There are a number of dangers inherent in confusing correlation, either calculated or apparent in scatter charts, with causation. Note that there are not enough data points to be sufficiently certain of the correlation in the above example. More importantly, correlation does not necessarily mean causation. Other interpretations include that the variables are related but are both caused by some common factor. For example, an improved management team might increase training hours while taking a range of actions to reduce returns. The relationship, therefore, between training hours and returns would be apparent but not necessarily real. Note also that a correlation exists both ways: would it be reasonable to say that fewer returns caused more training hours?

In interpreting causality for the purpose of improving operations, you will need to be careful not to make unwarranted or invalid assumptions. It is important to know how your business works, bringing your common sense, technical expertise, and experience to bear on quality problems. Qualitative techniques, discussed previously, are useful for determining valid root causes and sources of value. In general, quantitative statistical techniques improve reliability of mathematical inferences and are more effective and reliable with more data; qualitative techniques, on the other hand, can help establish the validity of fundamental claims and relationships between factors and elements of business processes.

Learning activity: Tools and techniques part 2

From the information provided above, note tools which are usefulfor the following needs. Explain your reason for using the tool.Consider both qualitative and quantitative tools.

Need Tool/rationale

You need to determine if a frequency distribution is normal.

You need to determine why customer traffic is down this Christmas



You need to understand whether customers will pay more for a higher quality product

You need to determine if employee satisfaction is related to lost time injuries

After noticing one or two near-defects, you need to determine if a manufacturing process is veering out of control

Adjust and communicate strategies and tactics as needed

As a result of monitoring and improvement activities, it may become necessary to adjust strategies and tactics and communicate changes to various stakeholders. Overall, your process improvement approach may not be aligned to strategic objectives. For example, you may have chosen the wrong continuous improvement methodology or tools to address the particular performance issues that exist within your organisation. Ineffective implementation of the right approach may also be the problem. You will need to identify a range of strategic issues, consider a range of tactics to correct performance issues, and communicate changes in accordance with organisational requirements.

Strategic issues Monitoring activities may indicate an adjustment to the overall continuous improvement strategy is required. This may mean reviewing any of the elements of strategy, such as:

● planning processes that engage employees in the development of short- and long-term plans

● clarity in roles and responsibilities

● the development of individual and workgroup performance plans

● effective communication of the plans, roles and responsibilities for the implementation of continuous improvement systems, techniques and tools, and the results obtained from their implementation

● mentoring and coaching of existing and new employees in the use of continuous improvement systems, techniques and tools

● training and development of employees in continuous improvement systems, techniques and tools



● rewards and recognition for employees who embrace continuous improvement

● ensuring that the right methodologies and tools are deployed to suit the overall business model and competitive strategies deployed by the organisation to reach its goals – for example, Six Sigma may be appropriate for a high-volume manufacturer or service provider, but not for a provider of highly personalised services.

In general, the continuous improvement strategy must tightly align to the overall goals of the organisation. In fact, you may use the continuous improvement tools described in this section that are normally used for incremental process improvements (such as value stream mapping and affinity diagrams), to ensure alignment and identify opportunities to improve the strategy with regard to one or more of the elements discussed above, or their implementation.

Types of corrective action Performance issues may indicate problems with the overall continuous improvement strategy or implementation. In the latter case, there are five types of corrective action that can be used:

Let’s look at these types of corrective action in more detail.

Interim action This is action that aims to buy time until the real cause of the performance problem or implementation issue can be identified using continuous improvement tools and fixed. Interim measures aim to minimise the damage of a performance problem until it can be properly addressed – so the actions are temporary actions, for example, temporarily using manual systems to deliver services until technologies can be restored.

Adaptive action Sometimes performance targets for processes are set unrealistically high. There may be a number of valid reasons: errors, management over-enthusiasm, changes in circumstances and so on. At some point it becomes clear that a performance deficit is inevitable. Adaptive action involves reviewing the performance standards and bringing them in line with the new reality. Care should be taken that this response is not used to ‘cover up’ poor performance and cause a misalignment with organisational goals and individual and team performance targets.

Corrective action Ideally, corrective action targets the cause of the substandard performance. It is designed to get the performance back on track. Examples of corrective action with respect to personnel delivering services include training or coaching.

Interim Adaptive Corrective Preventative Contingency



Preventative action Preventative action removes the cause of potential performance shortfalls before they occur. Effective monitoring, for example, using control charts to identify potential for future defects, provides the early warning system that enables appropriate preventative action to be taken.

Contingency action Contingency action is action taken ‘just in case’ or as ‘Plan B’. It includes actions that are planned during the process improvement planning process, to be taken should risks be realised. Your monitoring system may hint that there is a problem looming that is deemed to be serious enough to warrant contingency action. In many cases the contingency action would be guided by the contingency plan developed as part of the planning process.

Communicating adjustments to strategy You will need to follow organisational requirements to communicate strategic or operational and procedural changes to stakeholders. You will need to consider:

● organisational policies for communication and use of media

● organisational codes of conduct

● compliance with external requirements such as legislation and codes of practice, for example:

○ privacy legislation

○ mandatory industry codes of practice

● stakeholder power and influence

● communication strategies, discussed in Section 1, that provide a framework for communicating to different audiences, message and media and achieving set objectives

● organisational approaches to knowledge management

● unwritten or informal organisational practices.

Learning activity: Reflect on communication processes and adjust communication strategy

Consider the communication strategy you developed in Section 1. Imagine a strategic change, such as a change to continuous improvement methodology, and one of the following types of operational change:

● interim action

● adaptive action

● corrective action

● preventative action

● contingency action.

Make the appropriate changes or additions to your communication strategy, bearing in mind the overall aims of the organisation are paramount.



Section summary

This section provided an overview of monitoring performance and a summary of continuous improvement tools used in conjunction with the general approaches to continuous improvement and methodologies discussed in Section 1. You should now understand how to monitor and adjust performance strategies, including developing monitoring strategies and using tools to identify ways in which planning and operations can be improved; and how to respond to underperformance or implementation issues by adjusting strategies and communicating changes to stakeholders.

Further reading

● Andersen, B., 2007, Business process improvement toolbox, 2nd edn, ASQ Quality Press, Milwaukee.

● Berardinelli, C., 2014, ‘A guide to control charts’, iSixSigma, viewed January 2015, <http://www.isixsigma.com/tools-templates/control-charts/a-guide-to-control-charts/>.

● Plenert, G., 2011, ‘Chapter 6’, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York.

● ReVelle, J. B., 2004, Quality essentials: a reference guide from A to Z, ASQ Quality Press, Milwaukee, Wisconsin.

Section checklist


develop strategies to ensure that systems and processes are used to monitor operational progress and to identify ways in which planning and operations could be improved

adjust and communicate strategies to stakeholders according to organisational procedures.


Section 3 – Manage Opportunities for Further Improvement Student Workbook

Section 3 – Manage Opportunities for Further Improvement

The focus of this section is on managing opportunities for further improvement. This section discusses how to inform teams of outcomes of continuous improvement processes by establishing communication processes and managing change. It will also cover recording and reporting performance to identify opportunities for improvements. Finally, Section 3 will also cover future planning and the importance of taking an iterative and systematic approach to continuous improvement.

Scenario: Looking to the future at Australian Hardware

For Australian Hardware, it is essential that continuous improvement processes as well as improvements to operations never cease. Improvement efforts and monitoring activities must continually feed information back to decision-makers who make the incremental changes that are the hallmarks of continuous improvement.

Pat Lee, the Garden Centre Manager at the Wollongong Australian Hardware store will need to ensure her team is informed of the latest changes to operations and that they are managed through the transition process. She will need to ensure she establishes processes that ensure information flow and embed change. She will need to continue to monitor performance and collaborate with her team, as well as with cross-functional teams from across the organisation, to identify opportunities to respond better to customer demand and achieve organisational objectives.

Over its long history, Australian Hardware has overcome many challenges by addressing change, particularly in how its customers and stakeholders perceive value in its product range and service offering. For Australian Hardware ‘no problems means a big problem’ – in other words, the process of continuous improvement has stopped helping its people to identify opportunities for positive change.


In order to manage opportunities for further improvement, you must be able to:

establish processes to ensure that team members are informed of outcomes of continuous improvement efforts

ensure processes include recording of work team performance to assist in identifying further opportunities for improvement

consider areas identified for further improvement when undertaking future planning.


Student Workbook Section 3 – Manage Opportunities for Further Improvement

Establish communications processes

To ensure that process improvements identified through team Kaizen events or monitoring activities are effectively embedded in the way teams work, you will need to develop and carry out processes and procedures to promote effective communication. Communication processes and procedures should align with your communication strategy, help build enthusiastic support for change, and manage hard and soft knowledge effectively.

Communication strategy Whatever communication process you determine, you should ensure it aligns with your organisation’s overall communication strategy, as discussed in Section 1, for continuous improvement. Processes should therefore take into account the importance of building support through encouraging participation, ownership and opportunities for providing feedback. Processes should also make it easier for those responsible to carry out their duties providing access to resources or information necessary.

Learning activity: Communicating at SPH

Watch the video ‘BSBMGT516A: Communicating at SPH’ on IBSA’s YouTube channel at <http://www.youtube.com/ibsachannel>, then answer the following questions.

Sample answers are provided in Appendix 1 of this Student Workbook.

● Greg Webb talks about how Simon Haidamous can help his company, Speedy Parcel Handlers (SPH). What does Greg think Simon should change about the way he manages the business?

● What formal communication channel does Greg suggest SPH use to communicate with his team? Is it a one-way channel or a two-way channel?



● Name three characteristics SPH’s newsletter would require to be successful.

● What other communication channels could Simon use to communicate a continuous improvement message to his staff?

● What kind of culture does Greg think Simon needs to build within SPH?

● How does Louis suggest Simon achieve his objective?



Develop and integrate change strategies into communications Important decisions involve some degree of organisational change. When people from within a workplace are faced with change, for example, a major change to processes, as a manager and a leader, it is your job to help stakeholders engage with and implement the change. There are four stages at which strategic communication is key to keeping change on track. The stages include:19

1. Recognising the need for change.

2. Adapting and keeping ideas flowing.

3. Implementation and structural change.

4. Broad-based implementation affecting all aspects of the organisation.

Your communication strategy, and processes for implementing it will need to take account of the way people may react to decisions at different stages in the implementation of the decision.

To do this, you will need to overcome resistance and manage people’s emotional reaction to changes related to process improvement.

Overcoming resistance Recall from Section 1 that different stakeholders have different levels of power and interest. Sometimes you will be confronted with the need to move powerful stakeholders from actively resisting to actively supporting changes in order to make the changes to processes actually happen.

Consider the levels of resistance and associated problems that may need to be addressed through communication channels.

● Level 1: Resisting the idea itself, a cognitive difference of opinion.

Misinformation, missing data, conflictive data, misunderstandings about the benefits of the change and the risks of not implementing it.

● Level 2: Resistance due to deeper emotional issues.

Feelings of being undervalued, taken advantage of, distrust, fear of isolation, lack of incentives, loss of respect, cultural issues. Comfortable with and competent with regard to old ways of doing things

● Level 3: Deeply embedded.

Historic animosity, basic differences in values, totally different goals. Strong commitment to old ways of doing things




When you try to implement continuous improvement tools and techniques, look out for the classic signs of resistance:

● confusion

● immediate criticism

● denial

● malicious compliance

● sabotage

● easy agreement

● deflection (changing the subject)

● silence

● in-your-face criticism.

Before you create your communication strategies and associated procedures, you will need to anticipate the kind of resistance you might encounter. Some of the tools mentioned in Section 2 may be useful. For example, consider using force field analysis as a means to identify reasons why people may not wish to implement a change and what barriers may stand in the way of them accepting or supporting the change. What approach can you to take to reduce the resistance? Is retraining possible? Can technology be used to aid the transition? Can other people, such as co-workers, be used to support one another through the change?

Learning activity: Levels of resistance

Consider a change initiative in your organisation involving a range of stakeholders who may be resistance to the change.

Determine their level of resistance and communication strategies for overcoming their resistance.

Communication objective:

Stakeholder/ team member

Anticipated level of resistance/strategy to overcome resistance



Emotional process Even with regard to embedding change among enthusiastic supporters, or potential supporters of change, you will need to take an approach to communication that keeps change moving along. It is easy for people to become discouraged, for example, when they find that a new process is harder to implement than at first thought. Note that the change curve always indicates that productivity decreases before increasing with better processes.

For most people, accepting change is essentially an emotional process:20

People experiencing change go through the following five stages:

1. Uninformed optimism – This is where people go into the change process with a belief that it will be good for the organisation or for them. It is an optimism based around the individual’s perception of the outcomes, rather than detailed information about the change.

2. Informed pessimism – After the change process has commenced, a form of ‘reality’ surfaces and the individual is able to see some of the drawbacks in the process. Initial optimism is now coloured by the individual’s experiences, which may not be all that they had hoped for.

3. Hopeful realism – This stage is where people are able to develop a picture of the change, which is closer to the actual reality and see more clearly the process and the outcomes.

20 Source: D. Kelley and D. Connor, 1979, ‘The emotional cycle of change’, The 1979 annual handbook for group facilitators, available online, I/O psychology blog, viewed January 2015, <http://www.executivepsychology.com/ workpsychology/2010/04/the-kelley-conner-emotional-cycle-of-change/>.



4. Informed optimism – By this stage, the individual has developed pragmatism in relation to the change and can see an end to the change process.

5. Rewarding completion – The individual can see the end result and may be satisfied with the outcomes from a change project perspective. It can also be an expression of relief that the change process is concluded and people can ‘get back to normal’.

When developing a plan for communicating and managing change, it is important to understand the range of emotions people may experience when a change occurs. The following strategies and actions provide the basis for minimising resistance to change and are based on dealing with the impacts of change on people:

● Communicate effectively:

○ Keep people fully informed.

○ Give them the facts that are relevant to them.

○ Use technology if appropriate.

● Involve people:

○ Raise potential issues and ask for input and suggestions.

○ Ask for help when implementing change.

● Mentor and coach people through the change:

○ Provide support and encouragement.

○ Provide training and coaching.

○ Provide reassurance to overcome fears.

● Reframe people’s perceptions:

○ Encourage people to see the advantages of the change and the disadvantages of not changing.

○ Reframe people’s perceptions and reduce their fears by helping them to put the change and its effects into perspective.

Understanding the emotional process entailed by change means that you can develop and deploy communication and training activities for new processes, for example, to ensure your decisions are accepted by the people who must implement them so that the objectives can be met.

Learning activity: Manage change successfully

Watch the video ‘BSBHRM504A: Managing workforce change effectively’ on IBSA’s YouTube channel at <http://youtu.be/xW48ZO5oFZY>, then answer the following questions.




● The owners of Coffee Guru want to focus more on the growth and development of their business. In order to do this they need to make some big changes to the current workforce. How did Andrew Walker and Glenn Keys from Aspen Medical manage change in their workforce when they expanded their business from two projects to five?

● How does Glenn Keys suggest Coffee Guru go about getting the best team together? Explain the example he gives to demonstrate what he means.

● What do you think the emotional process was for all the organisational stakeholders who were involved in the change? Do you think there was immediate enthusiastic acceptance?

● How would you communicate the changes in such a way to different stakeholders to smooth implementation?



Manage soft knowledge to effect change Communicating change is rarely as simple as publishing a procedure and having everyone access and follow it. As we have seen, there are many forms of resistance, and people undertake an emotional journey – even when they are initially well disposed to the change or its objectives.

As discussed in Section 1, you will need to develop strategies and processes to manage soft forms of knowledge as well as hard. In this way, you will smooth the transfer of information as it is needed by teams and, perhaps more importantly, ensure changes are truly socialised throughout the organisation, involving changes in actual practice.

The concept of ‘socialising strategy’ is relatively new in the business world. It takes communicating your message to a higher level; having your message heard is not enough. Socialising your strategy ‘is about the social impact and the conversation within groups, and amongst people, about the strategy … it has a life of its own. Individuals are owning a part of it, talking to each other about it and adopting and adapting what it means for them. Socialising strategy also suggests that it becomes part of the social fabric.’21

People need to feel a part of a team and generally learn best from putting knowledge into practice. Two important ways in which new processes can be learned and embedded are communities of practice and action learning.

Communities of practice Communities of practice are increasingly popular ways in which organisations promote performance by encouraging employees to learn from one another or from more senior members of the team or workforce on the job. Communities of practice may be leveraged to distribute knowledge as part of the natural social process in which individuals learn – not just intellectually, but as part of part of being situated in a society with rules, taboos and social rewards. Communities of practice promote high performance by recognising an essential social component to work and the change process.

Learning activity: Manage knowledge

Read the following article on knowledge management:

● M. E. D. Koenig, 2012, ‘What is KM? Knowledge management explained’, KMWorld, viewed January 2015, <http://www.kmworld.com/Articles/Editorial/ What-Is-.../What-is-KM-Knowledge-Management-Explained-82405.aspx>.


● What is KM?

21 P. Jones, 2010, ‘Socialising strategy (or socializing strategy)’, Communicating strategy, viewed January 2015, <http://www.communicating-strategy.com/?p=47>.



● What are the forms of KM? Describe them in the context of a work environment, particularly in relation to continuous improvement

● How can you manage both soft and hard forms of knowledge?

● Is KM here to stay?

Next, read the following article on communities of practice:

● J. Pesci, 2011, ‘Designing for communities of practice’, GenslerOn: work, viewed January 2015, <http://www.gensleron.com/work/2011/7/21/ designing-for-communities-of-practice.html>.


● What are communities of practice?



● Are they a new phenomenon in vocational education?

● How could you deploy a community of practice (or take advantage of an already existing informal community) to promote change or the use of new procedures in your organisation?

Action learning Another option for promoting effective learning and take-up of new procedures is action learning. Action learning involves actually setting real work or business problem-solving tasks for individuals and teams, regularly monitoring progress and providing feedback. Individuals become better at new processes by asking questions and reflecting on performance in order to apply insights gained from previous practice to future work.

The only real differences between action learning and regular work reside in that action learning involves rapid, recursive cycles of planning, performance, monitoring, reflection and intervention, may involve the key role of a coach to facilitate problem-solving and reflection, and it is focused on particular key practices.

In the case of communicating changes to procedures, you may use action learning in several ways. For example, you might, as part of your overall strategy, involve team leaders in engaging teams to implement a new process and meet regularly to discuss experiences and problems and the refine implementation. In this way, team members learn the procedure from both doing and reflecting on it. Procedures related to implementing the communication strategy may involve concrete actions the team leader should take in order to set tasks and run reflection sessions. To ensure consistency, procedures may specify that particular tools or templates should be used for managing sessions and reporting on results for further improvement.



Communication processes and procedures Procedures are tools to help employees implement a policy of strategy determined at a higher level.

Written procedures, as discussed in Section 1, are a form of hard knowledge management. In the capture-codify-store model, procedures and processes are developed by teams of experts, cross-functional teams, or workers with experience in carrying out the processes. Information is gathered (sometimes using a variety of the tools discussed in Section 2), the procedure is written down, and then stored appropriately for distribution to those that need to follow the procedure to complete their work.

Similarly, a communications process for informing team members of changes would be developed in the same way. Ideally, a cross-functional team should assemble to determine the best way to ensure team members receive updated information on process improvement as they need it. To determine the best way, you may need to consider time, cost and technologies available to the organisation for communication and knowledge management.

When codifying the process, you will need to consist the best way to ensure clarity. Some possible approaches include:

● written step-by-step processes

● work flows and flow charts

● diagrams

● illustrations.

Other things to consider include who has the authority to initiate communication and tools and resources required by the use of the procedure.

Learning activity: Design a communication procedure

Consider the communication strategy you developed in Section 1 and adapted in Section 2. Develop a procedure for embedding the changes in procedures and communicating changes to employees expected to carry out he change.

Consider the following in your design:

● The strategic objectives of the communications strategy, for example, building support and buy-in; effecting structural changes in processes. Consider, at a top level, the strategic context of the procedure:

○ How are changes to operational processes to be socialised?

○ How are managers, team leaders and individual employees to be informed of changes through the organisational hierarchy?

● The purpose of the procedure (What communication objective does it help to achieve, in explicit terms?)

● Presentation of communication processes, for example, will you use step-by-step, written instructions or flow charts to illustrate the process of communicating changes?



● Resources, tools required to use the procedure.

● Responsibility and authorisation for carrying out the procedure.

● Knowledge management, for example:

○ How are documents to be created and stored?

○ How exactly, under the general communication strategy, are teams to be provided the right information as they need it, and the opportunity to physically commit to the changes in a team context – in such a way as to embed real cultural change?

Note: Consider methods to be mentioned in procedures, such as encouraging action learning or leveraging communities of practice.

Record and report on team performance

You will need to follow your monitoring strategy and report to various stakeholders to adhere to organisational reporting requirements, assist in identifying potential improvements, and trigger corrective action or continuous improvement team sessions or events. Reporting may be to senior management for the purpose of high-level strategic planning, or to team members to promote understanding of organisational aims or to provide feedback on performance to facilitate recognition and improvement of personal or team performance. Reporting may also be used for special purposes, such as sustainability improvement.

Let’s look at the range of possible types of reporting and report formats relevant to continuous improvement.

Management reports and presentations Many organisations will require you to present continuous improvement data or recommendations in the form of management reports. Reports may differ from organisation to organisation, but generally contain four parts:

1. Executive summary.

2. Discussion and presentation of evaluation data.

3. Conclusions.

4. Recommendations for action or change.

To win credibility or support for recommendations, you will need to understand the purpose of your report and the requirements of your business audience. You will also need to adhere to the organisation’s formatting requirements .Ensure you follow organisational style guides and use appropriate templates for reports.

In many cases, particularly in the context of business meetings, you will need to present management reports or information and feedback in the form of presentations, for example, using Microsoft PowerPoint or Apple Keynote. When preparing slides, ensure you summarise information and provide dot points. Consider interesting ways to present data using colour charts and graphs.



Global Reporting Initiative As discussed in Section 1, sustainability is highly relevant to continuous improvement, particularly Lean Manufacturing and reduction of the Seven Wastes. Sustainability is also important in its own right as a focus of continuous improvement.

As with as all aspects of operational improvement, measurement is key to effecting continuous improvement in sustainability. Once you have determined the processes or methods you will implement to achieve sustainability, you will need to determine how you will report on success or failure. Measurement is a key process in recognised standard approaches to environmental management, such as is set out by the Australian Standard AS/NZS ISO 14001:2004 environmental management systems - requirements with guidance for use.

The Global Reporting Initiative (GRI) is a not-for-profit organisation that promotes the use of sustainability reporting through its Sustainability Reporting Framework (SRF). The SRF is described in various organisational publications providing guidance on implementation to organisations.

Sustainability reporting includes accounting for measures of organisational success beyond market-based measures such as profitability, customer satisfaction, process efficiency and organisational learning. In addition to these, sustainability reporting also includes measures such as those often referred to as triple bottom line (TBL) reporting, economic measures, environmental measures and social measures. For example, GRI’s guidelines on reporting principles and standard disclosures summarises categories of reporting and associated performance measures as:22

Economic Economic performance, market presence, indirect economic impacts and procurement practices.

Environmental Materials, energy, water, biodiversity, emissions, effluents and waste, products and services, compliance, transport, supplier environmental assessment and environmental grievance mechanisms.

Social Many aspects, grouped under the following sub-categories: labour practices and decent work, human rights, society, and product responsibility.

As a manager or company officer responsible for developing sustainability policy, you may wish to consider integrating sustainability reporting with financial reporting processes. A key outcome of such an undertaking may be integrated reporting or a separate sustainability report detailing the organisation’s sustainability performance. At senior levels of strategic planning, such reporting may form the basis for future target setting and further sustainability improvements.

22 Adapted from: Global Reporting Initiative, 2013, G4 sustainability reporting guidelines: reporting principles and standard disclosures, Global Reporting Initiative, Amsterdam. Available online, Global Reporting Initiative, viewed January 2015, <https://www.globalreporting.org/resourcelibrary/GRIG4-Part1-Reporting-Principles-and-Standard-Disclosures.pdf>, p. 9.



Strategy on a page A key principle of performance management and continuous improvement is to ensure accountability for strategic goals at every level. To do this, you need to ensure everyone understands the importance of their work in the greater scheme.

A good means of communicating a strategy set at more senior levels of the organisation and socialising it (as discussed on page 88) through the hierarchy is to develop a ‘strategy on a page’.

In its simplest form, this form of reporting is a PowerPoint slide or a Word document in landscape format that articulates the strategy as sentences or bullet points within a box in a specified order down the page.

Plan Title

Future state Short description of the future state

Business objectives Numeric outcome by a date

Strategic platform

(sometimes by division or function)

Strategy 1: Title

Strategy 2: Title

Strategy 3: Title

Strategy 4: Title

Objective statement

Description of the objective/s of

Strategy 1


Strategy 2


Strategy 3


Strategy 4

Initiative/s by teams

Task 1

Task 2

Task 3

Task 4

Task 5

Task 1

Task 2

Task 3

Task 4

Task 5

Task 1

Task 2

Task 3

Task 4

Task 5

Task 1

Task 2

Task 3

Task 4

Task 5

As shown in the example above, the strategy on a page is divided into separate columns that relate to each individual strategy. Each row relates directly to the strategy platform column in which it sits, as follows:

● The first row contains the title of the strategic plan.

● The second row is a short memorable description of the future state; a vision statement.

● The third row is the numeric goal of the organisation to be achieved by a date.

● The fourth row contains the strategic platforms upon which the vision will be delivered. Such platforms may be defined, for example, by function (i.e. HR) or product division.



● The fifth row briefly describes the strategic platforms in a sentence or two.

● The sixth row contains all the tasks that need to be completed to implement each strategic platform. This row should contain enough specificity to show how the work of specific teams relates to the overall goal of achieving the ideal future state of the organisation.

Developing a one-page document such as this requires a series of planning sessions or workshops, preferably involving input from many levels of the organisation. The time and effort, however, is rewarding. You will have a one-page centrepiece developed by a cross-section of staff, which ultimately may be used in planning documents, presentations and meetings to communicate a common view of the organisation’s overarching approach to doing business and everyone’s place within it.

Balanced scorecards Balanced scorecards were developed by Kaplan and Norton in the 1990s as a strategic management technique. A balanced scorecard is a way of translating a business model or particular business strategy into strategic objectives at every level of the organisation.

Balanced scorecards are ways of presenting reporting on or measuring an organisation’s (or an individual’s) performance based on a number of different but equally important perspectives:

● the perspective of the shareholder:

○ financial goals

○ return on investment

● the perspective of the customer (customer focus):

○ customer value

○ environmental responsibility

○ market share

● the internal process perspective

● the perspective of the employee:

○ professional development and training opportunity, fairness

● non-market perspectives

○ sustainability

○ triple bottom line.

Because balanced scorecards specify performance measures and expectations at organisational, team and individual levels for performance management purposes, they can be an effective way of cascading responsibility for continuous improvement initiatives.

Let’s look at an example balance scorecard with sustainability KPIs included.



Example: Balanced scorecard

Australian Hardware uses the following balanced scorecard to represent its organisational and sustainability performance. Scorecards for individual managers and employees are based on the KPIs in the organisational scorecard but depend on the individual’s own areas of responsibility.

Note: Result areas that have failed to meet targets are shown in bold text.

Perspective KPI Target Results

Financial Sales revenue 6% increase 7% increase

Cost savings through increased efficiency

5% savings 1% savings

Customer focus Market share 35% market share 32% share

Internal process Electricity use in KW/h (5% reduction on 2013 levels)

5% reduction in electricity usage

3% reduction

Water use in litres 3% reduction 1% increase

Employee Employee satisfaction 90% satisfaction 70% satisfaction

Employee turnover 5% exit rate 9% exit rate

Sustainability Recognition of sustainability achievements

Fair Trade certification

Fair Trade certification granted

Positive impact on community

5% increase in youth, aged and disadvantaged hires

2% increase

Sell Australian-grown timber products

80% timber derived from Australian plantations

86% Australian-grown timber

Positive impact on local environment

5% CO2 emissions reduction on 2013 levels

3 tonnes CO2/ $100,000 revenue (4% reduction)

The organisation intends to focus on wastage in future continuous improvement planning to overcome the identified performance gaps.



A3 reporting One of the most important forms of continuous improvement reporting, particularly in Lean Manufacturing, is the A3 report.23 The name of the report reflects the fact that it is designed to represent the key information required to undertake a continuous improvement project on one A3 sheet of paper.

In one version of this report, there are nine boxes, containing planning information and results for nine stages of the continuous improvement process:

1. Clarify and validate the problem: Identify real (as opposed to merely apparent) constraints, bottlenecks and waste.

2. Perform a purpose expansion on the problem: Explain why the problem is actually a problem. Briefly explain the problem and its real relation to organisational objectives.

3. Breakdown the problem and identify performance gaps: Identify the relevant measures and how much performance needs to improve.

4. Set improvement goals.

5. Determine the root cause or causes of the performance problem.

6. Develop an improvement task list: Set out several key activities, such as developing procedures or implementing training.

7. Execution of improvement tasks: Include key dates and milestones and links to project plans.

8. Confirm results: Summarise the results.

9. Standardise successful processes: List control or maintenance actions to keep performance on track; include summaries of relevant knowledge management practices to embed behaviour.

An example of an A3 report is provided in Appendix 2 of this Student Workbook.

Learning activity: A3 reporting

Identify a completed or ongoing continuous improvement initiative in your organisation or an organisation you wish to research.

Using the template provided in Appendix 2, create an A3 report to capture the essential information.




Progress reports Implementation and monitoring plans for continuous improvement projects and initiatives may require regular reporting to senior management or project sponsors to keep them informed and to trigger remedial action should it be necessary to keep plans on track.

One common tool for progress reporting is the traffic light report. Let’s look at an example.

Example: Traffic light report

Pat has provided the following progress report to the continuous improvement project lead.

Objective/ activity

Status Notes

Increase employee satisfaction

Green Climate survey has been delivered.

90% completion rate.

Results are currently being tabulated and analysed.

Implementation of communications strategy

Yellow Volume of complaints from line managers indicates confusion among workers over the implementation of continuous improvement. Many do not understand how to use Lean tools.

Completion of training

Green 95% employees completed training.

Pat will now need to take action to revise her communications strategy. Her manager will require a further update in two days’ time.

Dashboard report A dashboard report is a one-page display of the all the key metrics essential to understanding the status of an operational process or project. Dashboard reporting could be used in continuous improvement to report to senior managers or project team leads on the overall progress of the implementation of the continuous improvement strategy.

At a lower level in the organisational hierarchy, a dashboard could be used by line managers to display up-to-date data on the team’s performance in key areas. Such a report could then be used as a springboard to discussing potential improvement measures.



Learning activity: Dashboard reporting

Read the following article:

● M. Treacy, 2013, ‘Excel dashboard reports – 5 simple steps to building killer dashboards’, Udemy, viewed January 2015, <https://www.udemy.com/blog/ excel-dashboard/#more-10762>.


● What are the five steps to creating a dashboard in Excel?

● What are the ‘bells and whistles’ to avoid?

Defect check sheet Finally, a defect check sheet is a form for collecting and analysing data. It is a generic tool that can be adapted for a wide variety of purposes, including continuous improvement.

To create a defect check sheet, complete the following steps:

1. Determine what problem will be observed. There may be multiple problems. You may want to brainstorm the problems with the team doing the work being observed.

2. Determine when, and for how long, to collect data.

3. Design the form – see a generic form below for measuring on each day. The form may be designed to collect data.

4. Label all the spaces on the form.

5. Test the check sheet to be sure it collects the test data you want.

6. Record the data whenever a problem occurs with a tick or cross and total the problems observed across shifts, days, people, machines, sources of raw materials, etc.



Example of a defect check sheet

Defects/ mistakes

Shifts

Monday Tuesday Wednesday Thursday Friday Total

Total

Like many other forms of reporting, defect check sheets may be used to ensure the team is aware of how they are progressing in order to make corrections when necessary. They may also be used to introduce continuous improvement or Kaizen events. Importantly, they may also be used to highlight and reward high performance.

Learning activity: Create a report

Identify a continuous improvement report type that would be of use in your organisation or an organisation you wish to research to identify opportunities for improvement.

Create a report or report template to be used to display the required information.

Incorporate information into future planning

To facilitate ongoing continuous improvement, you will need to rely on up-to-date monitoring and reporting activities. You will also need to ensure continuous improvement activities and the views of all stakeholders feed into future planning.

The planning process itself should ensure this inclusion as well as including all areas of importance to achieving strategic goals and practically embedding change within the organisation. In this way, planning allows for strategies to stay aligned with organisational goals and to evolve to meet future challenges. By way of review, let’s take a look at the planning process, including the key elements of planning future improvements and the importance of including the perspectives of all stakeholders through a ‘top-down, bottom-up’ approach.

Elements of planning Leaders of organisations or sections of organisations must design and implement continuous improvement strategies that, at a minimum, address the need to provide:

● planning processes that engage employees in the development of short- and long-term plans

● clarity in roles and responsibilities



● development of individual and work group performance plans

● effective communication of the plans roles and responsibilities for the implementation of continuous improvement systems, tools and techniques and the results obtained from their implementation

● mentoring and coaching of existing and new employees in the use of continuous improvement systems, techniques and tools

● training and development of employees in continuous improvement systems techniques and tools

● rewards and recognition for employees who embrace continuous improvement.

The following diagram summarises the elements of planning:

Top-down and bottom-up planning There are two basic approaches to planning. Firstly, planning may be completed as a top-down process, beginning with the end in mind and cascading from an organisational goal through key result areas (KRAs) to key performance indicators (KPIs) at the process output level. Planning may also be completed as a bottom-up process. In a bottom-up process, employees in each section determine what process improvements they can implement to meet customer needs and improve productivity.

A hybrid is often the best method for developing a realistic plan, with enough ‘stretch’ to motivate teams of employees to achieve improved performance.

Customers

Regulations Economy

Competitors

Plan to achieve

goal

Performance plans

Roles and responsibilities

Effe

ctiv

e Co

mm

unic

atio

n

Rew

ards

and

re

cogn

ition

Training and developm

ent

Mentoring and coaching



The hybrid process works as follows:

1. The top-down process creates the goal of the organisation and the subordinate business objectives.

2. Business objectives cascade either directly down to divisional level if a division ‘owns’ a complete business objective or is allocated to divisional level by breaking the objective up into sub-objectives which can be owned at a divisional level.

3. Objectives cascade further through the organisation until the lowest practical level of planning is reached. The lowest practical level is determined by the competence of the employees involved to plan and retain sight of the overall goal and business objectives above them. This quality is not required in all employees in a planning group but must be demonstrated by the leader of the planning group.

4. The smaller planning groups review their processes, and the results of those processes, to find innovative ways to meet or exceed the business objective required of them using continuous improvement techniques and tools.

5. The resultant plan, including resource requirements, is ‘rolled up’ with other plans to aggregate back to the organisational plan.

6. A gap analysis highlights areas requiring further attention and plans requiring adjustment are sent back to the planning groups for revision. One or two iterations may be required.

7. The final plan is a plan agreed with by all levels of management as being achievable.

Quite often there will not be agreement on the achievability of the components of the final plan. This is normal. However, by planning in this hybrid way, all employees involved in the planning are aware of where the risks to the plan exist and actions can be taken to reduce the risk during the life of the plan.

Learning activity: Plan continuous improvement

Review the implementation action plan you created in connection to sustainability improvements in Section 1. Consider:

● Whether actions are aligned to organisational objectives

● Whether the elements of planning are reflected in implementation activities

● Whether the views of all important stakeholders at different levels of planning and implementation have been considered and incorporated.

Revise your action plan accordingly.

Note: For examples of action planning, see:

● The sustainability improvements planning example in Section 1.




● Department of Social Services, 2014, ‘Template 10 - continuous improvement plan’, Department of Social Services: Aging and aged care, viewed January 2015, <https://www.dss.gov.au/sites/default/files/documents/05_2014/template_10_-_continuous_improvement_plan_accessible.pdf>

Section summary

This section provided an overview of managing opportunities for further improvement. You should now understand how to communicate changes effectively to team members; report on performance; and incorporate information into future planning.

Further reading

● Armstrong, M., 2006, Performance management: key strategies and practical guidelines, 3rd edn, Kogan Page, London.

● Department of Social Services, 2014, ‘Template 10 - continuous improvement plan’, Department of Social Services: Aging and aged care, viewed January 2015, <https://www.dss.gov.au/sites/default/files/documents/05_2014/template_10_-_continuous_improvement_plan_accessible.pdf>

● Dwyer, K., n.d., ‘Essentials of performance management’, Change factory, viewed January 2015, <http://www.changefactory.com.au/our-thinking/articles/ essentials-of-performance-management/>.

● Global Reporting Initiative, 2013, G4 sustainability reporting guidelines: reporting principles and standard disclosures, Global Reporting Initiative, Amsterdam. Available online, Global Reporting Initiative, viewed January 2015, <https://www.globalreporting.org/resourcelibrary/GRIG4-Part1-Reporting-Principles-and-Standard-Disclosures.pdf>.

● Jones, P., 2010, ‘Socialising strategy (or socializing strategy)’, Communicating strategy, viewed January 2015, <http://www.communicating-strategy.com/?p=47>.

● Kelley, D. and Connor, D. 1979, ‘The emotional cycle of change’, The 1979 annual handbook for group facilitators, available online, I/O psychology blog, viewed January 2015, <http://www.executivepsychology.com/workpsychology/2010/04/ the-kelley-conner-emotional-cycle-of-change/>.

● Koenig, M. E. D., 2012, ‘What is KM? Knowledge management explained’, KMWorld, viewed January 2015, <http://www.kmworld.com/Articles/Editorial/ What-Is-.../What-is-KM-Knowledge-Management-Explained-82405.aspx>.

● Pesci, J., 2011, ‘Designing for communities of practice’, GenslerOn: work, viewed January 2015, <http://www.gensleron.com/work/2011/7/21/designing-for-communities-of-practice.html>.

● Plenert, G., 2011, ‘Chapter 7’, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York.



● Tovey, M., Uren, M.-A. L. and Sheldon, N. E., 2010, Managing performance improvement, 3rd edn, Pearson, Frenchs Forest, NSW.

● Treacy, M., 2013, ‘Excel dashboard reports – 5 simple steps to building killer dashboards’, Udemy, viewed January 2015, <https://www.udemy.com/blog/ excel-dashboard/#more-10762>.


Section checklist


establish processes to ensure that team members are informed of outcomes of continuous improvement efforts

ensure processes include recording of work team performance to assist in identifying further opportunities for improvement

consider areas identified for further improvement when undertaking future planning.


Student Workbook Glossary

Glossary

Term Definition

Action learning Action learning involves actually setting real work or business problem solving tasks for individuals and teams, regularly monitoring progress and providing regular feedback. Learners learn by asking questions and reflecting on performance in order to apply insights gained from previous practice to future work.

The only real differences between action learning and regular work are that action learning involves rapid, recursive cycles of planning, performance, monitoring, reflection and intervention, may involve the key role of a coach to facilitate problem-solving and reflection, and it is focused on particular key skills seen to drive overall competency for teams and individual roles.

Audit A methodical examination and review with the intent to verify the measure/procedure/process/activity.

Balanced scorecard Balanced scorecards present an organisation’s (or an individual’s) performance based on a number of different but equally important perspectives: the perspective of the shareholder; the perspective of the customer (customer focus); the internal process perspective; the perspective of the employee; and other, non-market perspectives such as sustainability.

Benchmarking Searching for the best practices or competitive practices that will help define superior performance of a product, service, or support process.

Competitive benchmarking allows a company to know precisely where their operation is in relation to a direct competitor, to determine the company’s competitive position, and to identify major performance gaps.

Process benchmarking searches out the best practices of a particular industry process and compares the performance of the company to a recognised performance leader. It focuses on the process, not who the company is or whether or not they are a competitor.

Business model The overall approach an organisation takes to providing a product and service in a way that extracts value for organisational stakeholders from the productive process. Less developed than a business strategy


Glossary Student Workbook

Term Definition

Business strategy The planned approach an organisation takes to achieving business goals, for example, one of the generic strategies put forward by Porter: cost leadership, differentiation, focus on niche markets, and strategies include not only the broad approach but also metrics such as KPIs and goals and objectives at different levels of the organisation.

Check sheets A simple means of data collection. This type of data collection can be used for almost anything from checking off the occurrence of particular types of defects or the counting of unexpected items (e.g. the number of times the telephone rings before being answered).

Common variations Also known as common cause variations. Claimed by Deming to be 94% of variation. System-wide causes of random error, including poor workstation or equipment design, inadequate monitoring, dirty work equipment, or inadequate training methods. System-wide problems require system-wide solutions; for example, machines recalibrated, cleaned or an effective, modern, induction program implemented, with outcomes that reflect organisational quality and performance goals.

Note: Methodologies such as Statistical Process Control and Six Sigma control aim to ensure processes contain only common cause variation. This enables operators and managers to use statistical methods of inference to understand and make system-wide changes.

Communities of practice

Communities of practice, a form of on-the-job learning, is an increasingly popular way in which organisations promote performance by encouraging employees to learn from one another or from more senior members of the team or workforce. Communities of practice promote high performance by recognising an essential social component to work and learning in practice.

Control charts A kind of chart used to distinguish between normal and abnormal variation, i.e. defects. Shows whether or not the process is performing correctly or if there is a problem (but does not necessarily help solve it).

Defect Operationally, it is useful to work with two definitions of a defect: (1) from the producer’s viewpoint: a product requirement that has not been met or an attribute of a product that is not in the statement of specifications that define the product; and (2) from the customer’s viewpoint: anything that causes customer dissatisfaction, whether in the statement of requirements/ specifications or not.



Term Definition

Deming cycle See PDCA cycle.

Fishbone diagrams Also known as cause and effect or Ishikawa diagrams, these are a kind of diagram that examines root causes of problems, continually asking ‘Why?’ until the real cause is revealed. They are typically used to depict causes of a certain problem and to group them according to categories, often ‘people’, ‘equipment’, ‘supplies’, and ‘procedures’.

Flow chart A diagram consisting of a set of symbols (such as rectangles or diamonds) and connecting lines that shows step-by-step progression through a procedure, process, or system.

Functional flow charts picture movement between different work units. They identify how vertically oriented functional departments affect a process flowing horizontally across an organisation.

Geographical (or physical layout) flow charts analyse the physical flow of activities and help to minimise the time wasted while work output and/or resources are moved between activities.

Histograms Bar charts that show the distribution of a variance. They are used to display the frequency with which something occurs.

ISO 9000 A series of three international standards and supplementary guidelines on quality management and quality assurance, which were first published in 1987. The standards can be used by both manufacturing and service industries.

The standards require that a basic quality system be in place to ensure that the company has the capabilities and systems to provide its customers with quality products and services.

To become registered to ISO 9001, ISO 9002, or ISO 9003, a company must have an accredited, independent, third party conduct an on-site audit of the company’s operations to verify that it meets the requirements of the appropriate standard.

Kaizen Japanese word for continuous incremental improvement of work processes. A Kaizen event is a continuous improvement instance, including facilitator-led sessions using a range of tools or approaches.

Knowledge management (KM)

The process of capturing, distributing and effectively using knowledge. Can be subdivided into hard (explicit) and soft (implicit and tacit) forms. Also known as information management.


Glossary Student Workbook

Term Definition

PDCA cycle Also known as the Deming cycle, PDCA stands for ‘Plan, Do, Check, Act’. The PDCA cycle is derived from the science of system analysis. The main goal of the PDCA cycle is to eliminate variation in a process.

Performance management cycle

This cycle involves three phases: Plan, Manage, and Review. Plan goals and metrics for performance; manage performance through coaching and development; and review performance through monitoring and feedback.

Process Any activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer.

Run (trend) charts Plot data and show results of a process over a period of time (day, month, etc.), for example, sales per month. They provide some preliminary indications of trends, cycles and other patterns on the process.

Scatter diagrams Diagrams that show the correlation between variables but not necessarily the cause and effect relationship. They show the relationship between two variables – for example, as one increases, so does the other. Analysis should allow for possible intervening variables that may be the true ‘drivers’ or causes.

Socialising strategy The concept of ‘socialising strategy’ is relatively new in the business world. It takes communicating your message to a higher level; having your message heard is not enough. Socialising your strategy ‘is about the social impact and the conversation within groups, and amongst people, about the strategy … it has a life of its own. Individuals are owning a part of it, talking to each other about it and adopting and adapting what it means for them. Socialising strategy also suggests that it becomes part of the social fabric.’24

Special variations Also known as special cause variations, these are non-random sources of error that individuals can control and can be held accountable for. These require information and training to eliminate. Special variation may include poorly trained individuals making multiple errors, improper use of machinery, or switching to unreliable suppliers. Note that, according to Deming, a process is considered in control when it can be controlled by individuals, after sources of common variation have been eliminated.

24 P. Jones, 2010, ‘Socialising strategy (or socializing strategy)’, Communicating strategy, viewed January 2015, <http://www.communicating-strategy.com/?p=47>.



Term Definition

Standards The measures used to evaluate products and services and identify non-conformance. Standards are yardsticks for measuring quality, performance, duration, and so forth. Standards can relate to work output and performance and customer service.

Performance standards link performance expectations of a position to customer requirements, customer satisfaction, and competitive performance.

Work standards refer to the amount and quality of work or output employees are expected to produce within a given time frame. They are often referred to as measures of productivity. Some companies call these performance standards.

Customer service standards reflect the levels of service that a company has decided it needs to provide to meet marketing goals and profit and market share objectives.

Statistical Process Control (SPC)

Statistical Process Control is the use of statistical techniques and tools to measure an ongoing process for change or stability.

Total Quality Management (TQM)

A management approach of an organisation, centred on quality, based on participation of all its employees and aiming at long-term success through customer satisfaction and benefits to the employees of the organisation and to society.


Appendices Student Workbook

Appendices

Appendix 1: Answers to selected learning activities

Learning activity: Lean Manufacturing practices in the workplace

Watch the video ‘BSBMGT516A: Lean manufacturing practices in the workplace’ on IBSA’s YouTube channel at <http://www.youtube.com/ibsachannel>, then answer the following questions.

1. At the beginning of the video clip, Jack Parr is showing employees at Australian Combined Resources an example of how a tool box is set up. Which of the Five S’s does this situation promote? Explain your answer.

a. Answer: Seiton – Neatness/Set. Every tool has its place in the tool box. All the tools are arranged the so they can be quickly and easily accessed and put away. (Seiri – Organisation would also be an acceptable answer here as long as the student justifies their answer based on what they have seen in the video clip).

2. What are the Five S’s listed by Jack Parr?

a. Answer:

i. Sort

ii. Set

iii. Shine

iv. Standardise

v. Sustain.

3. According to Jack Parr, what kind of workplace do the Five S’s help to build?

a. Answer:

i. a workplace that has good housekeeping

ii. a safe workplace

iii. a workplace that is guaranteed to produce excellent quality.

4. Other than keeping the machine clean and tidy, what is an important part of the Standardise step?

a. Answer: Doing the job on the machine in the same sequence every time.

5. How does Jack Parr define the Sustain step?

a. Answer: Maintaining/sustaining standards over time.


Student Workbook Appendices

Learning activity: Communicating at SPH

Watch the video ‘BSBMGT516A: Communicating at SPH’ on IBSA’s YouTube channel at <http://www.youtube.com/ibsachannel>, then answer the following questions.

1. Greg Webb talks about how Simon Haidamous can help his company, Speedy Parcel Handlers (SPH). What does Greg think Simon should change about the way he manages the business?

a. Answer:

i. Greg thinks Simon should release some of his control over the business and let the people in his business have more input into the decision-making and planning of the business for the future.

ii. He also believes there should be more communication in the business.

2. What formal communication channel does Greg suggest SPH use to communicate with his team? Is it a one-way channel or a two-way channel?

a. Answers:

i. an internal newsletter

ii. a one-way channel.

3. Name three characteristics SPH’s newsletter would require to be successful.

a. Possible answers include:

i. topics reinforcing the goal of the organisation

ii. organisational propaganda is banned

iii. employees contribute to topics and to writing segments regularly

iv. recognition and success are celebrated in print

v. employee family information is included without invading privacy

vi. academic/sporting triumphs, interesting history

vii. graphics are used to entice readership or amuse

viii. competitions and quizzes about continuous improvement processes and methods are included

ix. policy, quotas and guidelines are not included – use another communication vehicle

x. interesting articles and case studies build on continuous improvement knowledge newsletter by newsletter

xi. all content is written with the employee in mind, not the organisation.


Appendices Student Workbook

4. What other communication channels could Simon use to communicate a continuous improvement message to his staff?


i. policy documents

ii. standards of performance

iii. work instructions

iv. meetings.

5. What kind of culture does Greg think Simon needs to build within SPH?

a. Answer:

i. A culture that says we are here to provide customer service and everyone knows what we’re about and where we’re going.

6. How does Louis suggest Simon achieve his objective?


i. By getting his staff involved in developing a plan to get consistency of delivery and stop staff turnover.

ii. By making sure that every courier that works for SPH has the same standard, is a salesperson for the organisation and is supported by the team in the office.

Learning activity: Manage change successfully

Watch the video ‘BSBHRM504A: Managing workforce change effectively’ on IBSA’s YouTube channel at <http://youtu.be/xW48ZO5oFZY>, then answer the following questions.


● The owners of Coffee Guru want to focus more on the growth and development of their business. In order to do this they need to make some big changes to the current workforce. How did Andrew Walker and Glenn Keys from Aspen Medical manage change in their workforce when they expanded their business from two projects to five?


i. looking for key people to step up

ii. delegating and empowering managers.

● How does Glenn Keys suggest Coffee Guru go about getting the best team together?

b. Possible answers include:

i. giving a career path

ii. offering opportunities such as ownership of franchises.


Student Workbook Appendices

Appendix 2: A3 reporting

A3 report: Nine-step problem-analysis tool Adapted from: G. Plenert, 2011, ‘Chapter 3’, Strategic continuous process improvement: which quality tools to use, and when to use them, Kindle edn, McGraw-Hill Professional, New York.

Team members:

1. Clarify and validate the problem: Identify real (as opposed to merely apparent) constraints, bottlenecks and waste.

5. Determine the root cause/s of the performance problem.

7. Execution of improvement tasks: Include key dates and milestones and links to project plans.

2. Perform a purpose expansion on the problem: Explain why the problem is actually a problem; briefly explain its relation to organisational objectives.

8. Confirm results: Summarise the results.

3. Breakdown the problem and identify performance gaps: Identify the relevant measures and how much performance needs to improve.

6. Develop an improvement task list: Set out several key activities, such as developing procedures or implementing training.

4. Set improvement goals. 9. Standardise successful processes: List control or maintenance actions to keep performance on track; include summaries of relevant knowledge management practices to embed behaviour.

Approval/signatures:


Documents

Facilitate continuous improvement (BSBMGT516)