How to Measure Process Improvement Effectiveness
Measuring process improvement effectiveness is a challenge to many. This post explores how the best organizations track ideas, best practices, and innovations to help overcome this challenge.
This post began as one of my Industrial and Systems Engineer magazine articles. Back then, I had just completed another national Malcolm Baldrige Performance Excellence Program site visit. On that site visit, my role was to evaluate the organization’s processes for information capture, analysis, and use.
As I prepared questions for the visit in this area, some new questions arose. How should an organization measure organizational progress in idea, best practice, and innovation generation? Unfortunately, few organizations do little more in this area than count the number of ideas they capture and implement over time.
For starters, what is the difference between an idea, a best practice, and an innovation? Also, does it make sense to track the frequencies at which we generate, evaluate, and implement each of these items? Such questions help me generate a variety of possible process improvement measures in my mind. As a set, these metrics represent an ‘effectiveness snapshot’ of an organization’s process improvement system.
EXPERIMENT MORE: Example Process Improvement Effectiveness Measures
Exploring the Idea – Best Practice – Innovation Definition Difference
I suspect that most people would struggle to explain the difference between an idea, a best practice, and an innovation. I did at first. But the more I thought about it, clarity and distinctions began to emerge. Ideas come first. Some ideas are good, and some are not. Some have been tried before, and worked. Others have failed time after time. We all get ideas, all of the time. It is the ones that give us ‘step change’ results that we’re after.
Best practices are ideas that have been proven to work. Their results compare well against relevant benchmarks. Do you want to be one of the best hospitals, school systems, or small businesses nationally for a given measure? If so, results for that measure should compare favorably with national top percentiles.
You need best practice work systems to sustain such results. However, a caution exists. As with innovations, best practice claims are made much more often than they are proven.
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What is True Innovation?
True innovations are even more difficult to find. Innovations lead to breakthrough results. Such results are what some call step changes in performance, or hopping ‘S curves.’ As with best practices, innovative claims tend to be overstated.
Often, people often think something is innovative simply because it is new to them. In other cases, a change may be new within a given business sector, but commonplace in other sectors. Best practice or innovation? I want to see the results before I make a choice.
EXPLORE MORE: Do Empowerment, Engagement, and Creativity Drive Innovation in Your Organization?
How Many Ideas, Best Practices, and Potential Innovations Do You Implement?
As I thought about ideas, innovations, and best practices an organization generates daily, possible effectiveness measures came into my mind. First, we have to capture, count, and trend the three improvement types. Also, we must consider the status of each of the three improvement types. Post-idea capture, what becomes of your ideas, best practices, and innovations as they move towards evaluation? How many of your key work processes do the ideas you capture impact?
At what rate do you identify best practices and innovations, versus ‘mere’ ideas? Most importantly, what are the different implementation rates for each type of improvement? High performance organizations know their process improvement rates. Plus, they know the degree that improvement affects all key processes. What do you think?
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How Do You Measure Process Improvement Effectiveness?
Test yourself. Can you describe the difference between an idea, a best practice, and an innovation? If so, do you know the rates at which you generate each type of improvement across your work teams? Do you also know your respective evaluation and implementation rates?
Don’t worry if the use of such rates sounds a bit foreign to you. Sadly, few organizations can provide evidence of such process improvement rates. One only wonders how their leaders determine if their current improvement rate is sustainable. What keeps them ahead of the competition without trends for these measures?
Most organizations struggle to provide evidence of their process improvement effectiveness. They don’t know the rates at which they generate ideas of any type – good or bad. Also, evaluation and implementation rates are unclear, or unknown. Ask for similar rates for higher order improvements, like best practices and innovations. Often, the reaction tends to be the ‘deer in the headlights’ look. How fast do your processes improve? Do you have enough great ideas in the process improvement bank for future use?
FIND OUT MORE: Process Improvement Strategies
How Can You Measure Process Improvement Effectiveness?
Leaders can create a variety of rates to gauge process improvement effectiveness. These rates go beyond the basic ‘how many ideas do we capture?’ monthly counts. To start, simply sort the total ‘improvement options’ you capture for a given time period into nine groups.
Then, calculate a ‘percent of total’ rate for the nine different idea, best practice, and innovation counts. Also, you can use a time period as the denominator, such as ‘per day’ or ‘per month.’
Since the nine count totals exist, I trend these nine percentages over time as a baseline indicator. More importantly, I look at (1) percentage of total work processes in play and (2) ideas per employee work hour. For starters, only track the idea, best practice, and innovation generation rates to gauge process improvement effectiveness.
Over time, you can trend all nine types of improvement rates. Consider the use of total employee work hours as a denominator. Such an approach provides a much better reflection of effective staff engagement.
LEARN MORE: How to Measure and Improve Your Process Improvement Work System