PDSA Cycles Reduce Risk
When seeking options to improve the performance of their organization, many managers believe they need to go “all in” with the full-scale implementation of an existing program. While the potential rewards of such an approach can be significant, the risk involved is often too high for the management team to take on. Instead, they simply continue to live with the inefficiencies thinking, “The devil I know beats the devil I don’t know!”
And there is no denying the implementation of a business improvement program can be very expensive. Hard dollar costs include the cost of consultants and training, and softer costs include the impact of organizational disruption. But perhaps one of the greatest, least quantifiable costs is the damaged reputation of management. If the program ultimately fails, it could adversely impact the organization’s future willingness to adopt change.
Yet, if approached differently, a prudent management team can simultaneously increase the likelihood of sustained success and reduce the upfront investment of financial resources and reputation. To do so they simply need to apply a fundamental tool of Process Excellence, the PDSA cycle.
PDSA is an acronym the stands for: Plan—Do—Study—Act, based on the work of W.Edwards Deming. It can be an incredibly valuable tool to gain an understanding of the organization’s readiness for change. It is this readiness for change (or lack thereof) that will ultimately have the most impact on whether or not ANY improvement program will have sustained success.
Plan and Do are straightforward. A project needs to be selected that is small enough to be manageable, yet large enough to be meaningful. It is critical to restrict the scope of the project to facilitate completion in 6 months or less.
Next, a small team (one or two individuals) successfully delivers the project following an established improvement methodology or components of different methodologies as appropriate. Here again, a key consideration is size. A small team will be less disruptive to the larger organization. It can simply pull in subject matter experts on an “as needed” basis. To maintain independence, this team should report directly to senior management.
The next phase, Study, is one of the most important phases. Throughout the life of the project and upon completion, the project team will provide an objective analysis of the organization’s readiness for change. The analysis will focus on major components of the management system: the existing metrics and their use, the understanding of key processes, the performance management systems, etc.
The final phase is an opportunity for senior management to Act by either moving forward with a larger implementation, delaying full-scale implementation in favor of another PDSA cycle(s), or, based upon the findings of the team, investing time and resources to strengthen aspects of the management system identified as major concerns.
The benefits of utilizing the PDSA cycle include a reduction in the upfront financial and reputational investment reducing the cost of failure. A small team of consultants on a short-term project should be able to successfully deliver a project and potentially cover most of the incremental cost of the project. Additionally, the use of consultants reduces the disruption to the organization and enables access to a wide range of potential tools for evaluation.
Using this approach also provides senior management an opportunity to understand what will be required of them to successfully implement structured, sustainable improvement. Some things can’t be learned by reading a book.
But the biggest value is in the objective assessment of the organization’s readiness for change gained by evaluating the existing management system. Regardless of the improvement program selected or designed, one of the major factors determining the likelihood of sustained success is the organization’s management system. Thus, it only makes sense to gain as much understanding of it PRIOR to making major decisions.
Content contributed by NouvEON, a management consulting firm. To learn more about Business Process Excellence, visit www.nouveon.com or e-mail firstname.lastname@example.org. To contact NouvEON’s Business Process Improvement expert, e-mail him at email@example.com.