Wednesday, December 21, 2011
by Brad Power
If you picked a dream team to improve the way your organization does business, who would be on it?
I know who would be on my team. Besides front-line people who know how things work today and process improvement experts who know how they could work tomorrow, I’d want team members who could contribute to improvements that would stick. My team would have people with deep functional knowledge and skills (strategy, sales, marketing, finance, and information technology) to align surrounding processes. And I’d also want team members who knew how to get people to adopt new skills and attitudes — experts in incentives, training and development, culture, communication, stakeholder management, and redeployment. These are “people skills.”
I’d like to focus on the people skills you’d want to have on a performance improvement team because the much-quoted line “the soft stuff is the hard stuff” is so, so true. Many studies conclude that 70% of change efforts fail, and in my experience it’s usually because people didn’t want to change their way of working, not because a new process was flawed.
Consider Lowe’s, America’s second-largest home improvement retailer worldwide, with revenue of $49 billion and more than 1,700 stores. When Cedric Coco, senior vice president of learning and organizational effectiveness, joined the company in 2008, he quickly moved its learning and development group closer to the firm’s internal performance improvement consulting team. Coco has a unique background because he’s not a career HR professional; he started in operations at GE, where he was trained as a Six Sigma Black Belt process improvement expert.
He told me that Lowe’s set up a governance structure for teams charged with process improvement (called performance support teams) that joined the operations and learning and development consultants at the hip. “Most process engineering starts out as a project,” Coco explained. “We bring everybody together in a work group and create an integrated strategy on how they’ll work together.”
Lowe’s has learned the hard way that unless you have all the right skills on a process improvement team, the team will fail. “What we find is that job design, hiring profiles, and business processes play a significant part in optimizing a work system,” Coco said. “But no matter how you change the work, unless you look at the people strategy, you won’t realize the results — return on capital.”
To make sure that the “people change” aspects of performance improvement don’t lag behind the process change parts, Lowe’s has quarterly meetings to review progress of performance improvement teams. “We have an open dialog to make sure we are aligned on a unified cadence,” Coco said. “If you do Six Sigma in isolation, the work force doesn’t have time to implement the changes.”
Lowe’s also tries to assess the “people change” needs that will be required in future operational improvement initiatives — as much as three years out. To do this, Coco added outside consultants with experience in performance and process design.
Lowe’s is spot-on in adding HR professionals to its process improvement teams. But it’s also unusual. I have rarely seen companies do this. Why?
The issue I see is that HR management spends a lot of time on the transactions it must oversee (paychecks, health insurance claims, etc.), administration, policies, and compliance (which can be a brake on changes in processes). But for HR to play the outsized role that it must in process improvement, it must play a very different game. And to succeed at that game, HR professionals must make fundamental changes in the way they operate.
For example, HR managers tend to defend the status quo. Their primary mission is to protect the organization’s policies and procedures by worrying about compliance with laws, regulations, codes, contracts, and agreements. That means they are risk-averse by nature and on the lookout for threats. And HR people have to worry about the risks and secondary effects of big process changes: changing the reward system, rewriting job descriptions, handling terminations, and training and developing the people who keep their jobs.
Any performance improvement dream team must have members conversant in organizational and individual behavioral — people who really understand what matters to employees. They need to help make tradeoffs between the needs of employees and the needs of highly efficient processes and information systems, and thus must define the new skills and training required for people to thrive in their new jobs, and coach people who may need to change jobs.
In my next post, I’ll look at ways that HR functions are reinventing themselves to play their critical role in process improvement.