Prioritised, actionable set of programs and initiatives that will bridge the gap (to target)
Improvement programs should have well defined goals or objectives when they are created. And those objectives should align with the organization’s strategic targets. Creating the program and then defining the detailed initiatives that support the program are key steps needed before implementation can start.
Ideally,
- Program objectives align with strategic targets
- Initiatives are well defined and actionable
- Initiatives collectively deliver the required program’s objectives
This guide will review each of these in detail.
Program objectives align with strategic targets
Improvement programs are created to help ensure that organization’s reach their strategic objectives. Those objectives are usually identified in the organization’s planning cycle (likely in the 1-3 years time horizon planning).
The planning cycle will identify at a very high level what is needed to ensure the organization remains healthy and may have identified strategic objectives for the year. These might relate to multiple levers e.g.,:
- Cost: Reduce unit cost by 10%,..
- Revenue: Increase top line revenue by 5% by expending into region x,…
- Quality: Improve product quality, reduce existing losses by 30% and increase customer satisfaction,…
- Environmental: Reduce CO2 emissions by 20%,…
These high-level objectives will likely have little supporting detail of how the organization will deliver on these other to say an ‘improvement program’ will be set-up to deliver on the specified strategic objective.
Defining the program objectives, timeline, approach, resources needed, expected costs and issues/risks requires up-front program planning. This program planning might also utilise some high-level analysis to define what is doable and the potential approach needed.
This planning effectively puts some much needed detail on the bare bones suggested in the organization’s strategic plan explicitly defining how the original objectives will be delivered.
The program plan will need approving by Senior leadership before progressing so the information in the program plan is essentially a business case supporting the proposed effort.
Initiatives are well defined and actionable
Defining the supporting initiatives in an improvement program is where the bulk of the diagnostic work is done.
Note that the way a diagnostic is defined varies considerably – particularly in the case of Continuous Improvement vs major Transformations. In Continuous Improvement, the diagnostic work may effectively be done in parallel with execution – whilst one area is being identifying improvement opportunities another area might be implement opportunities already defined. In a Transformation, typically all areas are reviewed initially and initiatives defined and planned on the same timeline.
However, in both instances of Continuous Improvement and Transformations, the intention of the diagnostic phase is similar in both instances: ideally, the end result of the diagnostic is a set of actionable initiatives, each with a specific, expected business outcome.
The diagnostic phase will typically run between 4-12 weeks depending on the complexity of the organization. During this time the Improvement team needs to
- Identify the root causes for the current performance by reviewing historic performance and understanding the core issues being faced by the organization
- Identify performance levers or drivers that can be used to improve performance (often using a driver tree approach)
- Generate ideas/improvement opportunities that will change those levers/drivers – some of which will come from ideas from the floor whilst other ideas will be generated from analysis and workshops
- Prioritise those opportunities into agreed initiatives (using a value/ease matrix)
Later in the diagnostic phase, the Improvement team will also need to identify for each agreed, priority initiative:
- Define a work plan to deliver each initiative
- Quantify the expected performance uplift
- Define KPIs to measure both the expected impact and also track progress with process KPIs
- Identify key implementation risks and issues
Its critical that the initiatives are actionable – in other words that they are sufficiently well defined and that its clear what the current state is, what the expected future state is and the specific actions that will bridge the gap between the current state and the future state.
These actions should clearly link to the future state and deliver the specific, expected business outcome.
Additionally, the measures of success for the initiative should also be clearly defined
- Impact KPI – stating what current ‘output’ metric is that will measure overall if the initiative is successful (with baseline and expected target)
- Process KPIs – defining the leading metrics that will track if the initiative is working ie the low level physical levers are changing to deliver the expected impact
Initiatives collectively deliver the required program’s objectives
Each initiative should be aligned with the program’s objectives – otherwise, you need to ask yourself why are we doing this initiative. The initiative may still be worthwhile and deliver value, but the program is only allowed an agreed number of resources and implementing initiatives non-aligned initiatives is putting at risk the program’s objectives.
Its worth reviewing proposed initiatives in the planning stage and check if they do actually fit with the program’s objectives. If not, then propose that the initiative be deferred for another time or program.
Collectively, the proposed initiatives should deliver the target value proposed in the overall program (which should also align with the strategic objectives set by the strategic/annual plan).
If the initiatives come-up short, then there are two alternatives:
- Dive back into the diagnostic phase and find additional value; this can either be immediately, in parallel with the rest of the initiatives progressing or even in a later round of the improvement program after the first set if initiatives have been successfully implemented
- Accept that the program will fall short of target in delivering the proposed benefits (e.g., because the targets were too high or you have insufficient time/resources to reach those targets this time round)
Its worth noting that there will almost inevitably be some shrinkage in the final delivered value vs the original proposed value of the initiatives. As initiatives progress through the execution pipeline, some initiatives will face unforeseen issues and/or not reach the originally identified potential value. This can be counteracted to some extent by adding additional initiatives identified as execution progresses but, in summary, if you want to ensure that the final value delivered satisfies the target, you’ll need to start with a higher value that end target e.g., allow 30+% natural shrinkage in initiative value.
Conclusion
This guide has covered how:
- Program objectives should align with strategic targets and the steps behind creating a program
- Initiatives need to be well defined and actionable and what that actually means in the specifics of what is needed for each initiative
- Initiatives collectively need to deliver the required program’s objectives and allow some factor of shrinkage that will naturally occur during execution, if the program is going to deliver on its targets
Each of these factors can be a major failure mode in the success of the improvement program i.e.,
- Program did not support strategic priorities
- Program initiatives did not deliver sufficient performance uplift (either because the initiatives were not sufficiently actionable or because there were insufficient initiatives)
Read further for more information on identifying and implementing improvement opportunities for your Improvement Program: