Contents
Change Models:
Balanced Scorecard
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CHANGE MODELS
Balanced Scorecard
A strategic planning and performance management tool that can be used by managers to keep
track of the execution of activities by the staff within their control and to monitor the
consequences arising from these actions. The Balanced Scorecard presents a mixture of financial
and non-financial measures (typically, no more than 20 to 25 of the most critical indicators) each
compared to a 'target' value within a single concise report. It articulates the links between leading
inputs (human and physical), processes, and lagging outcomes and focuses on the importance of
managing these components to achieve the organization's strategic priorities. The Balanced
Scorecard depicts the organizations success at aligning organizational improvement efforts to
strategies to meet customer needs by focusing on the four perspectives. Those four
"perspectives" are designed to answer the following questions:
Financial: encourages the identification of measures that answer the question How do
we optimize expenditures for maximum mission effectiveness?
Customer: encourages the identification of measures that answer the question "To
achieve our vision, how should we appear to our customers?
Internal Business Processes: encourages the identification of measures that answer the
question "To satisfy our stakeholders, which processes must we excel at?"
Learning and Growth: encourages the identification of measures that answer the question
"To achieve our vision, how can we continue to improve and create value?"
Historically, organizations measured financial measures almost exclusively. In recent decades, this
approach has been criticized as lacking predictive power, reinforcing functional silos, rewarding
short-term target achievement to the detriment of long-term goals, and irrelevant to most levels
of an organization. The Balanced Scorecard grew out of the need to measure not only the
successes of the past but also the value-creating and destroying mechanisms of the organization,
that ultimately are reflected in financial results including the ability to attract funding. Thus the
balance in the Balanced Scorecard, relates to three areas:
Balance between lad and lead indicators of performance Lag indicators, such as
revenue or customer satisfaction, represent past performance. These types of measures
lack predictive power, therefore it is necessary to include lead indicators which are the
performance drivers that lead to the achievement of the lag indicators. These often
include the measurement of processes and activities that ultimately lead to results.
The Balanced Scorecard is utilized as a strategic management system in several ways other than
mere review of past results:
Communication Cascading the scorecard that is, driving it down into all levels of the
organization gives employees the opportunity to demonstrate how their day-to-day
activities contribute to the organizations strategy. This creates a line of sight between
the front-line employee and top leaders.
Continuous Improvement Balanced Scorecard results form the basis for reviewing,
questioning, and refining the strategies and tactics needed to achieve the organizations
goals.
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According to Kotters research, 70% of all major change efforts in organizations fail, because
organizations often do not take the holistic approach required to see the change through. By
following Kotters 8 Step Process, organizations can avoid failure and become adept at change.
By improving their ability to change, organizations can increase their chances of success, both
today and in the future. Without this ability to adapt continuously, organizations cannot thrive.
Create Urgency Kotter suggests that for change to be successful, 75% of a company's
management needs to support the change, so a key early task is to develop a sense of
urgency around the need for change. This can involve a full SWOT analysis, scenario
planning and full deployment of all the strategic planning tools. Results of analysis and
early conclusions should be thoroughly tested with informed third party opinion and a
wide cross section of all stakeholders.
2.
Form a guiding coalition Managing change is not enough change must be led. Building
the momentum for change requires a strong leadership and visible support from key
people within the organization. The coalition will involve a wide representation of the
formal and informal power-base within the organization. By working as a team, the
coalition helps to create more momentum and build the sense of urgency in relation to
the need for change. Kotter recognizes the importance of the emotional dimension and
the energy that is generated by a mastermind group all working together.
3.
Develop a vision and strategy A drive for change without a clear focus will rapidly fizzle
out unless leaders develop a clear vision of the future that is accompanied with a clear
description about how things will be different in the future. The vision must be defined in
such a way that it is capable of expression in a short vision speech that conveys the
heart of the change in less than 5 minutes. This then needs to be encapsulated in a
powerful one or two sentence summary. All members of the coalition must be fluent in
both of these vision statements, and leaders must with the coalition to develop the
strategies that will deliver the vision.
4.
communication vehicle, except in support of prior face-to-face contact. The leaders must
also walk the talk visibly, and at all times be available and accessible to people, openly
and honestly and addressing the emotional dimension of the fears and concerns.
5.
Enable action and removal of obstacles In this stage, the change initiative moves
beyond the planning and the talking, and into practical action, as leaders put supportive
structures in place and empower and encourage people to take risks in pursuit of the
vision. This is where the change leader identifies and removes obstacles and obstructions
to change. This may also involve addressing resistant individuals and/or groups and
helping them to reorient themselves to the requirements of the new realities
6.
Generate short-term wins Success breeds success. Kotter advises that an early taste of
victory in the change process gives people a clear sight of what the realized vision will be
like. This is important as a counter to critics and negative influencers who may otherwise
impede the progress of the initiative. It is also important to recognize and reward all
those people who make these early gains possible. Change leaders must look for and
create opportunities for these early wins.
7.
Hold the gains and build on change Kotter argues that many change initiatives fail
because victory is declared too early. An early win is not enough. This is the time to
increase the activity, change all systems and structures and processes that dont fit with
the change initiative, and bring new blood into the coalition. This now all about
continuous improvement and each success (and failure) is an opportunity to analyze what
worked, what did not, and what can be improved.
8.
Anchor changes in the culture Kotter says that for any change to be sustained, it needs
to become embedded in the new way we do things around here that is, the culture. A
major part of this is for the change leader to articulate the connections between new
behaviors and organizational success. This is where the coalition tea talks about progress
at every opportunity. Tell success stories about the change process, and repeat other
success stories. This is successful if change leaders put forth continuous efforts to ensure
that the change is seen in every aspect of the organization.
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The Shingo Model is based on the lean management approach and model taught by Dr. Shigeo
Shingo. Shingos teachings described 3 levels of business improvement (transformation):
Principles, Systems, Tools and Techniques.
True innovation is not achieved by superficial imitation or isolated or random use of Tools &
Techniques and Systems (know how) but requires the understanding of the underlying Principle
(know why). Both know-how and know-why at the lowest level of the organization are required
for cultural transformation. The Shingo model is a principles-based process for embedding the
principles of organizational excellence into the organizational culture. The ultimate goal when
pursuing the model is cultural transformation through the integration of principles of operational
excellence across the enterprise to create a complete, systemic view that leads to consistent
achievement of results. The broader goal is to serve as a roadmap for organizations to a better
future state based on universal and timeless principles.
Tools and systems have been traditionally viewed as linear and independent, which causes slow
growth curve and a drop off of sustainment. Principles are not enough to accelerate a cultural
transformation. All three (principles, systems and tools) must be aligned to create the desired
traction required to transform a culture.
Principles and Values guide this thinking, which in turns guides behaviors. Behaviors define
culture. Principles guide the what, why and how of actions. Without constant attention, the
principles will fade, so they must be ingrained.
The Shingo model is both behavior driven and performance driven. Organizations must identify
what specific measures align with their goals and objectives, and they must also identify what
specific behaviors would be expected to accomplish those goals and objectives. The goal is to
create consistent, repeatable behavior to accomplish the performance measures. The Model is a
baseline to help managers identify where their company is on the journey to operational
excellence, and to assess the breadth and depth of transformation within the organization. It is an
engine for transforming the culture of an organization.
In short, the Shingo model encompasses the following view:
1. There is a clear and strong relationship between principles, systems, and tools.
2. Operational excellence requires focus on both behaviors and results.
3. Business and management systems drive behavior and must be aligned with correct
principles.
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Diffusion is based on innovations, communication channels, time, and social systems. The five
stages of adoption are: Knowledge, Persuasion, Decision, Implementation and Confirmation. The
five adopter categories are: Innovators, Early Adopters, Early Majority, Late Majority, and
Laggards
Knowledge: In this stage the individual is first exposed to an innovation but lacks
information about the innovation. During this stage of the process the individual has not
been inspired to find more information about the innovation.
2.
Persuasion: In this stage the individual is interested in the innovation and actively seeks
information/detail about the innovation.
3.
Decision: In this stage the individual takes the concept of the innovation and weighs the
advantages/disadvantages of using the innovation and decides whether to adopt or reject
the innovation. Due to the individualistic nature of this stage Rogers notes that it is the
most difficult stage to acquire empirical evidence (Rogers 1964, p. 83).
4.
Implementation: In this stage the individual employs the innovation to a varying degree
depending on the situation. During this stage the individual determines the usefulness of
the innovation and may search for further information about it.
5.
Confirmation: Although the name of this stage may be misleading, in this stage the
individual finalizes his/her decision to continue using the innovation and may use the
innovation to its fullest potential.
Adopter Categories:
1.
Innovators: Innovators are the first individuals to adopt an innovation. Innovators are
willing to take risks, youngest in age, have the highest social class, have great financial
lucidity, very social and have closest contact to scientific sources and interaction with
other innovators. Risk tolerance has them adopting technologies which may ultimately
fail. Financial resources help absorb these failures. (Rogers 1962 5th ed, p. 282)
2.
Early Adopters: This is the second fastest category of individuals who adopt an
innovation. These individuals have the highest degree of opinion leadership among the
other adopter categories. Early adopters are typically younger in age, have a higher social
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status, have more financial lucidity, advanced education, and are more socially forward
than late adopters. More discrete in adoption choices than innovators. Realize judicious
choice of adoption will help them maintain central communication position (Rogers 1962
5th ed, p. 283).
3.
Early Majority: Individuals in this category adopt an innovation after a varying degree of
time. This time of adoption is significantly longer than the innovators and early adopters.
Early Majority tend to be slower in the adoption process, have above average social
status, contact with early adopters, and seldom hold positions of opinion leadership in a
system (Rogers 1962 5th ed, p. 283)
4.
Late Majority: Individuals in this category will adopt an innovation after the average
member of the society. These individuals approach an innovation with a high degree of
skepticism and after the majority of society has adopted the innovation. Late Majority are
typically skeptical about an innovation, have below average social status, very little
financial lucidity, in contact with others in late majority and early majority, very little
opinion leadership.
5.
Laggards: Individuals in this category are the last to adopt an innovation. Unlike some of
the previous categories, individuals in this category show little to no opinion leadership.
These individuals typically have an aversion to change-agents and tend to be advanced in
age. Laggards typically tend to be focused on traditions, likely to have lowest social
status, lowest financial fluidity, be oldest of all other adopters, in contact with only family
and close friends, very little to no opinion leadership.
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Forming
In the first stages of team building, the forming of the team occurs. The individual's behavior is
driven by a desire to be accepted by the others, and avoid controversy or conflict. Serious issues
and feelings are avoided, and people focus on being busy with routines such as team organization,
who does what, when to meet, etc. Individuals are also gathering information and impressions
about each other, and about the scope of the task and how to approach it. This is a comfortable
stage, but the avoidance of conflict and threat means that not much actually gets done.
The team meets and learns about the opportunities and challenges, and then agrees on goals and
begins to tackle the tasks. Team members tend to behave quite independently. They may be
motivated but are usually relatively uninformed of the issues and objectives of the team. Team
members are usually on their best behavior but very focused on themselves. Mature team
members begin to model appropriate behavior even at this early phase. Sharing the knowledge of
the concept of "Teams - Forming, Storming, Norming, Performing" is extremely helpful to the
team. Supervisors of the team tend to need to be directive during this phase.
The forming stage of any team is important because in this stage, the members of the team get to
know one another, exchange some personal information, and make new friends. This is also a
good opportunity to see how each member of the team works as an individual and how they
respond to pressure.
Storming
Every group will next enter the storming stage in which different ideas compete for consideration.
The team addresses issues such as what problems they are really supposed to solve, how they will
function independently and together and what leadership model they will accept. Team members
open up to each other and confront each other's ideas and perspectives. In some cases, storming
can be resolved quickly. In others, the team never leaves this stage. The maturity of some team
members usually determines whether the team will ever move out of this stage. Some team
members will focus on minutiae to evade real issues.
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The storming stage is necessary to the growth of the team. It can be contentious, unpleasant and
even painful to members of the team who are averse to conflict. Tolerance of each team member
and their differences should be emphasized. Without tolerance and patience, the team will fail.
This phase can become destructive to the team and will lower motivation if allowed to get out of
control. Some teams will never develop past this stage.
Supervisors of the team during this phase may be more accessible, but tend to remain directive in
their guidance of decision-making and professional behavior. The team members will therefore
resolve their differences and members will be able to participate with one another more
comfortably. The ideal is that they will not feel that they are being judged, and will therefore
share their opinions and views.
Norming
The team manages to have one goal and come to a mutual plan for the team at this stage. Some
may have to give up their own ideas and agree with others in order to make the team function. In
this stage, all team members take the responsibility and have the ambition to work for the success
of the team's goals.
Performing
It is possible for some teams to reach the performing stage. These high-performing teams are
able to function as a unit as they find ways to get the job done smoothly and effectively without
inappropriate conflict or the need for external supervision. By this time, they are motivated and
knowledgeable. The team members are now competent, autonomous and able to handle the
decision-making process without supervision. Dissent is expected and allowed as long as it is
channeled through means acceptable to the team.
Supervisors of the team during this phase are almost always participative. The team will make
most of the necessary decisions. However, even the most high-performing teams will revert to
earlier stages in some circumstances. Many long-standing teams go through these cycles many
times as they react to changing circumstances. For example, a change in leadership may cause the
team to revert to storming as new people challenge the existing norms and dynamics of the team.
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create a successful action plan for personal and professional advancement during change
This model can identify why changes are not working and help leaders in taking the necessary
steps to make the change successful. Leaders will be able to break down the change into parts,
understand where the change is failing and address that impact point.
The ADKAR model was first created by Prosci Research, a change management company, after
research with more than 300 companies undergoing major change projects. In 2006, Prosci
released the first complete text on the ADKAR model in Jeff Hiatt's book ADKAR: A Model for
Change in Business, Government and Our Community. This model is intended to be a coaching tool
to help employees through the change process. To use the ADKAR model effectively, leaders must
understand the underlying framework for change initiatives. Change happens on two dimensions:
the business dimension and the people dimension. Change is successful when both dimensions of
change occur simultaneously.
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These are the standard elements of a business change that managers feel most comfortable
managing.
Awareness of the need to change Do you (or your staff) understand why the desired
change is needed? (What will be the result of the transition?)
Desire to participate and support the change Are you (or your staff) motivated to make
the desired change?
Knowledge of how to change (and what the change looks like) Do you (or your staff)
know how make the desired change happen?
Ability to implement the change on a day-to-day basis Have you (or your staff) been
given the right information and training?
Reinforcement to keep the change in place Do you (or your staff) have a system of
encouraging or keeping the change in place?
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1. Ending, Losing, Letting Go - helping people deal with their tangible and intangible losses
and mentally prepare to move on. Initially most of the activity in managing the emotional
and psychological journey of transition is related to the letting go of the past and later
related to investing in and transitioning to the future. Bridges identifies five aspects of the
natural ending experience: Disengagement, Dismantling, Dis-identification, Disenchantment
and Disorientation. The process of letting go of the past can bring up feelings of sadness,
grief and loss as well as some relief or anticipation about the possible new future. The
starting point for dealing with transition is not the outcome, but the ending the person must
make to leave the old situation behind. Endings can be managed by treating the past with
respect, helping compensate for losses, giving people plenty of the right information,
marking the endings, and helping define what is over and what isnt.
2. The Neutral Zone - The neutral zone is that in-between place where one loses the sense of
relatedness and purpose, because much of ones identity is tied up in the old way of life. At
this stage, there are no new anchors to give any context or meaning, and that can be
difficult, confusing and painful. Critical psychological realignments and repatterning takes
place. This stage involves helping get people through it, and capitalizing on all of the
confusion by encouraging them to be innovators.
The neutral zone is a place of both risk and opportunity. It is risky because people are unsure
of the process being created and may become anxious, during which time productivity may
fall. Old weaknesses, compensated for in the old arrangements, may rise to the surface.
People may get mixed signals between the old regimen and the new, and people may
become polarized one way or the other, leading to tension and discord. In addition, until
the new regimen becomes embedded, the new arrangements are vulnerable to internal or
external shocks.
For all these reasons, transitions through the neutral zone need to be managed carefully.
Bridges provides a number of mechanisms for this, including creating temporary support
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systems and short term goals, and redefinition of the activity in the neutral zone in terms of
more familiar activity or metaphors.
The neutral zone is also, however, a point of creative opportunity: as people and systems
unfreeze from the old systems and have not yet frozen back into the new systems, there
is tremendous opportunity to identify and realize changes and find new ways of doing
things.
3. The New Beginning - Assisting people develop the new identity, experience the new
energy, and discover the new sense of purpose that make the change begin to work.
Bridges distinguishes between starts and beginnings. A start occurs when people start
doing new things, when they start enacting the changes. A beginning occurs, however, only
when the personal psychological and behavioral change takes place and people take on new
behaviors and identities.
Transition managers must define the 4Ps defining the path into the future:
The plan
In addition, being consistent (avoiding conflicting messages), building momentum with quick
successes, symbolizing the new entity, and celebrating successes can all help with successful
transitions.
Bridges book also has some excellent tools. For example, Bridges provides the following tool to
identify what is ending and who is losing what:
Identify the secondary changes that the change will probably cause and the further
changes that those changes will cause
Determine how people will be affected who will have to let go of something?
Another useful recommendation that Bridges proposes is the creation of a Transition Monitoring
Team a group composed of individuals from across the organization holding various roles, whose
sole purpose is to provide a feedback on the status of the transition across the organization.
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model starts with the observation that life is full of cycles that are natural, normal,
historical facts of life, and that the pace of change is accelerating.
Haines believes that the concept of organizational change is a myth, and that change is
an individual, emotional, and psychological matter for each of us. The bigger the
organization, the more difficult it is to get everyone to change and focus on the customer
instead of on oneself alone. Thus, productivity, quality, and other results take a nose dive.
Things will almost always get worse before they get better. Therefore, leaders must
manage and lead themselves first, and only then, help others through the six stages of the
Rollercoaster. Everyone goes through these stages at different rates, depths, and times.
another Rollercoaster, only this time from the spot at which the reversal attempt
was made. Since this is usually at Stage 3 , this new Rollercoaster will take
employees deeper down into depression. What helps people through Stage 3 is
the sequence of managers 1) listening, 2) asking questions, 3) empathizing, and,
only then, 4) explaining the vision and why it is significant. Letting people
experience firsthand the executive decision-makers presence and rationale for the
change is also crucial.
4. Rollercoaster Stage 4: Hang-In and Persevere Perseverance is key at this step. It
is where change often fails because people cant stand the pain and emotion and
try to quit the change, only to have it get worse (a new change curve kicked off
from a lower point). The need for hanging in and persevering during the change is
the essence of good change management
5. Rollercoaster Stage 5: Hope and Readjustment- At this stage, leaders must help
clarify each persons new role and the required new expectations of performance,
then find ways to gain maximum involvement and understanding of WIIFM
(Whats In It For Me) by everyone on how it is to their personal advantage to
achieve the firms new vision and/or values and culture. The only way through
Stage 5 is through leadership. Involving people in some aspect of the change to
control their destiny is essential for the adjustment and hope of Stage 5. The key
is involvement in the how to; the what should already have been decided in a
participative fashion, since People support what they help create.
6. Rollercoaster Stage 6: Rebuilding and Productivity Refreezing/renewing and
maintaining stability/flexibility at this stage is the key to recovering productivity.
All of the first 5 Stages are about focusing on the person and not the organization;
customers often get ignored until Stage 6, in which leaders empower the fully
committed individuals and teams toward their vision and values. This stage
highlights the difficulty in creating a critical mass in support of the desired
changes. The importance of getting people to not only buy-in, but also to stayin throughout the Rollercoaster (and its bottoming out) process is critical. At this
point, leaders will begin to make other incremental changes in response to
changing conditions. This continues indefinitely (i.e., continual improvement).
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This phase can become destructive to the team and will lower motivation if allowed to get out of
control. Some teams will never develop past this stage.
Supervisors of the team during this phase may be more accessible, but tend to remain directive in
their guidance of decision-making and professional behavior. The team members will therefore
resolve their differences and members will be able to participate with one another more
comfortably. The ideal is that they will not feel that they are being judged, and will therefore
share their opinions and views.
Norming
The team manages to have one goal and come to a mutual plan for the team at this stage. Some
may have to give up their own ideas and agree with others in order to make the team function. In
this stage, all team members take the responsibility and have the ambition to work for the success
of the team's goals.
Performing
It is possible for some teams to reach the performing stage. These high-performing teams are
able to function as a unit as they find ways to get the job done smoothly and effectively without
inappropriate conflict or the need for external supervision. By this time, they are motivated and
knowledgeable. The team members are now competent, autonomous and able to handle the
decision-making process without supervision. Dissent is expected and allowed as long as it is
channeled through means acceptable to the team.
Supervisors of the team during this phase are almost always participative. The team will make
most of the necessary decisions. However, even the most high-performing teams will revert to
earlier stages in some circumstances. Many long-standing teams go through these cycles many
times as they react to changing circumstances. For example, a change in leadership may cause the
team to revert to storming as new people challenge the existing norms and dynamics of the team.
Adjourning (and Transforming)
In 1977, Tuckman, jointly with Mary Ann Jensen, added a fifth stage to the 4 stages: adjourning,
that involves the process of "unforming" the group, letting go of the group structure and moving
on. Some authors describe this stage as Deforming and Mourning, recognizing the sense of loss
sometimes felt by team members. Adjourning involves dissolution. It entails the termination of
roles, the completion of tasks and reduction of dependency. The process can be stressful,
particularly when the dissolution is unplanned.
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2.
Communication channels: The ways in which messages travel from one individual to
another
3.
Time: Time is relevant to both the innovation-decision period (the length of time required
to pass through the innovation-decision process) and the rate of adoption (the relative
speed with which an innovation is adopted by members of a social system).
4.
Social Systems: defined as a set of interrelated units that are engaged in joint problem
solving to accomplish a common goal
According to Rogers, the innovation decision process consists of five stages of adoption:
Knowledge, Persuasion, Decision, Implementation and Confirmation.
1.
Knowledge: In this stage the individual is first exposed to an innovation but lacks
information about the innovation. During this stage, the individual has not been inspired
to find more information about the innovation.
2.
Persuasion: In this stage the individual is interested in the innovation and actively seeks
information/detail about the innovation.
3.
Decision: In this stage the individual weighs the advantages/disadvantages of using the
innovation and decides whether to adopt or reject it. Due to the individualistic nature of
decision-making, Rogers notes that it is the most difficult stage about which to acquire
empirical evidence (Rogers 1964, p. 83).
4.
Implementation: In this stage the individual employs the innovation to a varying degree
depending on the situation. During this stage the individual determines the usefulness of
the innovation and may search for further information about it.
5.
Confirmation: Although the name of this stage may be misleading, in this stage the
individual finalizes his/her decision to continue using the innovation and may use the
innovation to its fullest potential.
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In Rogers model, the five adopter categories are: Innovators, Early Adopters, Early Majority, Late
Majority, and Laggards:
1.
2.
Early Adopters: This is the second fastest category of individuals who adopt an
innovation. These individuals as a group have the highest degree of opinion leadership
among the other adopter categories. Early adopters are typically younger in age, have a
higher social status, have more financial lucidity, advanced education, and are more
socially forward than late adopters, but are more discrete in adoption choices than
innovators. They realize judicious choices of adoption will help them maintain central
communication position (Rogers 1962 5th ed, p. 283).
3.
Early Majority: Individuals in this category adopt an innovation after a varying degree of
time. This time of adoption is significantly longer than the innovators and early adopters.
Early Majority tend to be slower in the adoption process, have above average social
status, contact with early adopters, and seldom hold positions of opinion leadership in a
system (Rogers 1962 5th ed, p. 283)
4.
Late Majority: Individuals in this category will adopt an innovation after the average
member of the society. This group approaches an innovation with a high degree of
skepticism and after the majority of society has adopted the innovation. Late Majority
typically have below average social status, very little financial lucidity, are in contact with
others in late majority and early majority, and have very little opinion leadership.
5.
Laggards: Individuals in this category are the last to adopt an innovation. Unlike some of
the previous categories, individuals in this category show little to no opinion leadership.
These individuals typically have an aversion to change and tend to be advanced in age.
Laggards typically tend to be focused on traditions, are likely to have lowest social
status, lowest financial fluidity, be the oldest of all other adopters, and in contact with
only family and close friends.
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2.
Compatibility: The ease with which the innovation can be assimilated into an individuals
life.
3.
4.
Trialability: The ease with which the individual can experiment with the innovation. If a
user is able to test an innovation, the individual will be more likely to adopt it.
5.
Observability: The extent to which the innovation is visible to others. An innovation that
is more visible will drive communication among the individuals contacts and will, in turn,
create more positive or negative reactions.
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John P. Kotter is professor emeritus at Harvard Business School and a well-known speaker and
consultant on the topics of leadership and change. According to Kotters research, 70% of all
major change efforts in organizations fail, because organizations often do not take the holistic
approach required to see the change through. By following Kotters 8 Step Process, organizations
can avoid failure and become adept at change. By improving their ability to change, organizations
can increase their chances of success, both today and in the future. Without this ability to adapt
continuously, organizations cannot thrive.
The eight steps are as follows:
1.
Create Urgency Kotter suggests that for change to be successful, 75% of a company's
management needs to support the change, so a primary early task is to develop a sense of
urgency concerning the need for change. This can involve a full SWOT analysis, scenario
planning and full deployment of all the strategic planning tools. Results of analysis and
early conclusions should be thoroughly tested with informed third party opinion and a
wide cross section of all stakeholders.
2.
Form a guiding coalition Change must be led, not merely managed. Building the
momentum for change requires a strong leadership and visible support from key people
within the organization. The coalition will involve a wide representation of the formal and
informal power-base within the organization. By working as a team, the coalition helps to
create more momentum and build the sense of urgency in relation to the need for change.
Kotter recognizes the importance of the emotional dimension and the energy that is
generated by a mastermind group all working together.
3.
Develop a vision and strategy A drive for change without a clear focus will rapidly lose
momentum unless leaders develop a clear vision of the future that is accompanied with a
clear description about how things will be different in the future. The vision must be
defined in such a way that it is capable of being expressed in a short vision speech that
conveys the heart of the change in less than 5 minutes. This also should be encapsulated
in a powerful one or two sentence summary. All members of the coalition must be fluent
in both of these vision statements, and leaders must work with the coalition to develop
the strategies that will deliver the vision.
4.
Communicate the vision Kotter maintains that change leaders must use every means at
their disposal to constantly communicate the new vision and key strategies that support
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that vision. This goes beyond the special announcement meetings and involves frequent
and informal face-to-face contact with people by all individual members of the coalition.
Email is not the appropriate communication vehicle, except in support of prior face-toface contact. The leaders must also visibly set the example, and at all times be available
and accessible to people, openly and honestly and addressing the emotional dimension of
the fears and concerns.
5.
Enable action and removal of obstacles In this stage, the change initiative moves
beyond the planning and the talking, and into practical action, as leaders put supportive
structures in place and empower and encourage people to take risks in pursuit of the
vision. In this stage, the change leader identifies and removes obstacles and obstructions
to change. This may also involve addressing resistant individuals and/or groups and
helping them to reorient themselves to the requirements of the new realities
6.
Generate short-term wins Kotter advises that early wins in the change process gives
people a clear sight of what the realized vision will be like. This is important to counteract
critics and negative influencers who may otherwise impede the progress of the initiative.
It is also important to recognize and reward the individuals who make these early gains
possible. Change leaders must look for and create opportunities for these early wins.
7.
Hold the gains and build on change Kotter argues that many change initiatives fail
because victory is declared too early; an early win by itself is not enough. In this stage,
leaders must increase the activity, change all systems and structures and processes that
dont fit with the change initiative, and bring new blood into the coalition. This point
focuses on continuous improvement and each success (and failure) is an opportunity to
analyze what worked, what did not, and what can be improved.
8.
Anchor changes in the culture Kotter says that for any change to be sustained, it needs
to become embedded in the new way we do things around here that is, the culture. A
major part of this is for the change leader to articulate the connections between new
behaviors and organizational success. The coalition team should talk about progress at
every opportunity. Tell success stories about the change process, and repeat other
success stories. This is successful if change leaders put forth continuous efforts to ensure
that the change is seen in every aspect of the organization.
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ADKAR
ADKAR is a goal-oriented change management model that focuses on change at an individual level
and the individuals specific needs that will cause the individual to change behaviors to the desired
ways of working; thus, it allows change management teams to focus their activities on specific
business results. ADKAR was developed by Jeff Hiatt of Prosci Research in 1998, and was initially
used to determine whether change management efforts were bringing about the desired results.
It is now also used in planning and executing change within an organization.
ADKAR is the acronym for Awareness, Desire, Knowledge, Ability, and Reinforcement. These are
the elements of the most fundamental requirements for anyone to succeed and maintain change.
The model is a results-oriented change management tool that is simple and easy to understand,
yet very effective for leaders and change management teams. It was initially used as a tool for
determining if change management activities like communications and training were having the
desired results during organizational change. The model has its origins in aligning traditional
change management activities to a given result or goal. By identifying the required outcomes or
goals of change management, ADKAR becomes a useful framework for change management
teams in the planning and execution of their work.
The goals or outcomes defined by ADKAR are sequential and cumulative. An individual must
obtain each element in sequence in order for a change to be implemented and sustained.
Leaders can use this model to identify gaps in their change management process and to provide
effective coaching for employees. The ADKAR model can be used to:
create a successful action plan for personal and professional advancement during change
This model can identify why changes are not working and help leaders in taking the necessary
steps to make the change successful. Leaders will be able to break down the change into parts,
understand where the change is failing and address that impact point.
The ADKAR model was first created by Prosci Research, a change management company, after
research with more than 300 companies undergoing major change projects. In 2006, Prosci
released the first complete text on the ADKAR model in Jeff Hiatt's book ADKAR: A Model for
Change in Business, Government and Our Community. This model is intended to be a coaching tool
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to help employees through the change process. To use the ADKAR model effectively, leaders must
understand the underlying framework for change initiatives. Change happens on two dimensions:
the business dimension and the people dimension. Change is successful when both dimensions of
change occur simultaneously.
Business dimension of change
The business dimension of change includes the typical project elements.
These are the standard elements of a business change that managers feel most comfortable
managing.
People dimension of change
Research shows that problems with the people dimension of change are the most commonly cited
reasons for project failures. In a study with 248 companies, effective change management with
employees was listed as one of the top-three overall success factors for the project. Helping
managers to be effective sponsors of change was considered the most critical success factor.
Effective management of the people dimension of change requires managing five key goals that
form the basis of the ADKAR model:
Awareness of the need to change Do you (or your staff) understand why the desired
change is needed? (What will be the result of the transition?)
Desire to participate and support the change Are you (or your staff) motivated to make
the desired change?
Knowledge of how to change (and what the change looks like) Do you (or your staff)
know how make the desired change happen?
Ability to implement the change on a day-to-day basis Have you (or your staff) been
given the right information and training?
Reinforcement to keep the change in place Do you (or your staff) have a system of
encouraging or keeping the change in place?
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and positions are open to evaluation. The Applied Strategic Planning Model
looks at the values held and articulated by the organization and fits those
values into the mission of the organization and the plans that are made.
Decisions are made more easily and are consistent with predetermined goals,
values and missions.
Another goal of strategic planning is to transform the strategic plan into
Strategic Planning in a
Higher Education Setting
Features that distinguish strategic planning from prior management methods to help plan and make
decisions.
Academic strategic decision making means that a college, school, or university and its
leaders are active rather than passive about their position in history.
Strategic planning looks outward and is focused on keeping the institution in step
with the changing environment.
Academic strategy making is competitive, recognizing that higher education is subject
to economic market conditions and to increasingly strong competition.
Strategic planning concentrates on decisions, not on documented plans, analyses,
forecasts and goals. Strategic planning is people acting decisively (and roughly in
concert) to carry out a strategy they have helped devise.
Strategy making is a blend of rational and economic analysis, political maneuvering
and psychological interplay. It is therefore participatory and highly tolerant of
controversy.
Strategic planning concentrates on the fate of the institution above everything else.
- George Keller
Phases of Planning:
Planning to Plan
Done in conjunction with the top level management in the department or
planning effort
Phases of Planning:
Values Audit
This phase includes two parts:
Second, a look at the current values of the organization, and how those
values are articulated or presented to the staff and constituencies. This is a
very important section of the strategic planning process because the values
held and espoused directly affect what will or will not be accomplished
within the work unit.
Outcomes:
Phases of Planning:
Mission Formation
During this section of strategic planning the group will write a mission
statement that clearly defines answers to three questions and defines the
most important element: 1) what function does the department perform, 2)
for whom and 3) how? Identifying the answers to these questions is often
fairly easy; writing the mission statement to the groups satisfaction is most
difficult.
Outcomes:
Identification of organizations primary mission and what makes it
distinctive
Understanding of who the organization is primarily serving
Understanding of how the organization does its work
Agreed upon mission statement (Clear, brief, realistic, reflective of values,
energizing)
Consideration of the positive and negative consequences of expanding or
contracting the current mission
Phases of Planning:
Strategic Goal Setting
This phase works on envisioning the future, and defining goals
Phases of Planning:
Performance Audit
This audit analyzes the current or recent performance of the
Phases of Planning:
Gap Analysis
The gap analysis is a comparison of the performance audit and
Phases of Planning:
Contingency Planning
This phase includes considerations of any opportunities or threats
Phases of Planning:
Functional Plans
This phase includes the development of functional plans and budgets
Phases of Planning:
Implementation
The final phase involves taking the action plans and integrating them
Financial
Customer
Internal Process
Financial performance
Vision
We are a leader, catalyst and trusted consultant in managing
strategy, learning and continuous improvement
Consistently
exceed customer
expectations
Lead strategic
UW-wide
Projects and
initiatives
Foster
collaborative
relationships
Enhance
leadership
effectiveness
Develop
individuals
to their full
potential
Recognize
performance
excellence
Enhance Resources
Create and lead F2-wide metrics
and information management
tools
Vision
Values
UW achieves climate
neutrality by 2050 and is
a world wide leader in
environmental stewardship
Collaboration
Diversity
Excellence
Innovation
Integrity
Respect
Teamwork
Sustainability
Support UW sustainability
network
Provide project
management
support to solve
sustainability
issues/problems
Foster faculty,
student, staff
collaboration
Acknowledge/
reward
sustainability
leadership
Enhance Resources
Identify funding to
support CAP and UW
sustainability
Timeline Example
February 11:
Those things that you do well, the high value or performance points
Strengths can be tangible: Loyal customers, efficient distribution
channels, very high quality products, excellent financial condition
Strengths can be intangible: Good leadership, strategic insights,
customer intelligence, solid reputation, highly skilled workforce
Often considered Core Competencies Best leverage points for
growth without draining your resources
Opportunities
Potential areas for growth and higher performance
External: marketplace, unhappy customers using your competitors,
better economic conditions, alternative funding sources
Internal: classified as strengths
Timing may be important for capitalizing on opportunities.
Those things that prevent you from doing what you really need to do
Since weaknesses are internal, they are within your control
Weaknesses include: Bad leadership, unskilled workforce, insufficient
resources, poor product quality, slow distribution and delivery
channels, outdated technologies, lack of planning . . .
Threats
Challenges confronting the organization, external in nature
Threats can be wide-ranging bad press coverage, shifts in consumer
behavior, substitute products, new regulations . . .
It may be useful to classify or assign probabilities to threats
The more accurate you are in identifying threats, the better position
you are for dealing with the sudden ripples of change
Visioning
POINT 2
Where we are
now
POINT 3
POINT 1
Implementation Questions
How do you know you are future-focused, rather than
today/to-do focused?
How will you free up time to do this?
Do you have a method for rewarding efforts to make
strategic change?
How will you make new improvements?
How will you keep track of the changing environment?
What metrics will you use?
organizational involvement
Allows contention within the
broad framework of the
organizations goals
Creates broad objectives that
encompass organization
purpose and culture
Produces a plan that is
widely understood and
accepted
32
Mission Building
What?
(Content of what you do)
How?
(Methods)
Mission
Who?
(Students, faculty,
donors, customers,
suppliers)
33
VISION
FINANCIAL
CUSTOMER
INTERNAL PROCESS
Resources
Articles and Books
Academic Strategy: The Management Revolution in American Higher Education, George Keller, 1983
Changing the Role of Top Management: Beyond Strategy to Purpose, Christopher A. Bartlett and Sumantra
Ghoshal, Harvard Business Review, NovemberDecember 1994
Reviewing Objectives and Strategies: A Planning Task for Managers, 1982 Annual for Facilitators, Trainers and
Consultants, University Associates
Steps to Strategic Success, Robert Kaufman, Training and Development, May 1992
Strategic Planning: An Overview, Robert C. Shirley, New Directions in Higher Education, No. 64, Winter 1988
Stress-Test Your Strategy: The 7 Questions to Ask., Robert L. Simons, Harvard Business Review, November 2010
The Balanced Scorecardtranslating Strategy Into Action. Boston: Harvard Business School, 1996.
Using The Balanced Scorecard As A Strategic Management System. HBR 74, no.1 (JanuaryFebruary 1996):
75+.
Tips for Effective Strategic Planning, Christine D. Keen, HR Magazine, August 1994
Resources
Trainers/Consultants/Facilitators
UW Professional and Organizational Development (206-543-1957) has a staff of facilitators who can help
guide the strategic planning effort
website: https://depts.washington.edu/oei/
email: oei@uw.edu
SWOT Analysis
Discover new opportunities. Manage and eliminate threats.
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both
the Opportunities open to you and the Threats you face. What makes SWOT particularly powerful is that, with a
little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the
weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares.
More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a
strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your
market.
How to Use SWOT Analysis
Originated by Albert S Humphrey in the 1960s, SWOT Analysis is as useful now as it was then. You can use it in two
ways - as a simple icebreaker helping people get together to "kick off" strategy formulation, or in a more
sophisticated way as a serious strategy tool.
Tip:
Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate
to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT
Matrix is sometimes called an IE Matrix.
To help you to carry out a SWOT Analysis, write down answers to the following questions.
Strengths:
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can't?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
What is your organization's Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your customers and
people in your market. You should also be realistic - it's far too easy to fall prey to "not invented here syndrome."
Also, if you're having any difficulty with this, try writing down a list of your organization's characteristics. Some of
these will hopefully be strengths! When looking at your strengths, think about them in relation to your
competitors. For example, if all of your competitors provide high quality products, then a high quality production
process is not a strength in your organization's market, it's a necessity.
Weaknesses:
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you
don't see? Are your competitors doing any better than you? It's best to be realistic now, and face any unpleasant
truths as soon as possible.
Source: http://www.mindtools.com/pages/article/newTMC_05.htm Last accessed 11.21.2011
Opportunities:
What good opportunities can you spot?
What interesting trends are you aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale.
Changes in government policy related to your field.
Changes in social patterns, population profiles, lifestyle changes, and so on.
Local events.
Tip:
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open
up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up
opportunities by eliminating them.
Threats
Tip:
When looking at opportunities and threats, PEST Analysis can help to ensure that you don't overlook external
factors, such as new government regulations, or technological changes in your industry.
Further SWOT Tips
If you're using SWOT Analysis as a serious tool (rather than as a casual "warm up" for strategy formulation), make
sure you're rigorous in the way you apply it:
Only accept precise, verifiable statements ("Cost advantage of US$10/ton in sourcing raw material x",
rather than "Good value for money").
Ruthlessly prune long lists of factors, and prioritize them, so that you spend your time thinking about the
most significant factors.
Make sure that options generated are carried through to later stages in the strategy formation process.
Apply it at the right level - for example, you might need to apply SWOT Analysis at product or product-line
level, rather than at the much vaguer whole company level.
Use it in conjunction with other strategy tools (for example, USP Analysis and Core Competence Analysis)
so that you get a comprehensive picture of the situation you're dealing with.
Example SWOT
A start-up small consultancy business might draw up the following SWOT Analysis:
Strengths:
We are able to respond very quickly as we have no red tape, and no need for higher management
approval.
We are able to give really good customer care, as the current small amount of work means we have
plenty of time to devote to customers.
Our lead consultant has strong reputation in the market.
We can change direction quickly if we find that our marketing is not working.
We have low overheads, so we can offer good value to customers.
Source: http://www.mindtools.com/pages/article/newTMC_05.htm Last accessed 11.21.2011
Weaknesses:
Our company has little market presence or reputation.
We have a small staff, with a shallow skills base in many areas.
We are vulnerable to vital staff being sick, and leaving.
Our cash flow will be unreliable in the early stages.
Opportunities:
Our business sector is expanding, with many future opportunities for success.
Local government wants to encourage local businesses.
Our competitors may be slow to adopt new technologies.
Threats:
Developments in technology may change this market beyond our ability to adapt.
A small change in the focus of a large competitor might wipe out any market position we achieve.
As a result of their SWOT Analysis, the consultancy may decide to specialize in rapid response, good value services
to local businesses and local government. Marketing would be in selected local publications to get the greatest
possible market presence for a set advertising budget, and the consultancy should keep up-to-date with changes
in technology where possible.
Key Points
SWOT Analysis is a simple but useful framework for analyzing your organization's strengths and weaknesses, and
the opportunities and threats that you face. It helps you focus on your strengths, minimize threats, and take the
greatest possible advantage of opportunities available to you.
SWOT Analysis can be used to "kick off" strategy formulation, or in a more sophisticated way as a serious strategy
tool. You can also use it to get an understanding of your competitors, which can give you the insights you need to
craft a coherent and successful competitive position.
When carrying out your SWOT Analysis, be realistic and rigorous. Apply it at the right level, and supplement it with
other option-generation tools where appropriate.
PEST Analysis
Understanding "Big Picture" Forces of Change
Also PESTLE, PESTEL, PESTLIED, STEEPLE & SLEPT.
PEST Analysis is a simple but important and widely-used tool that helps you understand the big picture of the
Political, Economic, Socio-Cultural and Technological environment you are operating in. PEST is used by business
leaders worldwide to build their vision of the future.
It is important for these reasons:
By making effective use of PEST Analysis, you ensure that what you are doing is aligned positively with the
forces of change that are affecting our world. By taking advantage of change, you are much more likely to
be successful than if your activities oppose it.
Good use of PEST Analysis helps you avoid taking action that is condemned to failure for reasons beyond
your control.
PEST is useful when you start operating in a new country or region. Use of PEST Analysis helps you break
free of unconscious assumptions, and helps you quickly adapt to the realities of the new environment.
How to Use the Tool:
PEST is a simple mnemonic standing for Political, Economic, Socio-Cultural and Technological. Please see
worksheet on the following page. Using the tool is a three stage process:
First, you brainstorm the relevant factors that apply to you, using the prompts below.
Second, you identify the information that applies to these factors.
Third, you draw conclusions from this information.
Tip:
The important point is to move from the second step to the third step: it is sterile just to describe factors without
thinking through what they mean. However, be careful not to assume that your analysis is perfect: use it as a
starting point, and test your conclusions against the reality you experience.
The following prompts may help as a starting point for brainstorming (but make sure you include others that may
be appropriate to your situation):
Political:
Government type and stability.
Freedom of press, rule of law and levels of bureaucracy and corruption.
Regulation and de-regulation trends.
Social and employment legislation.
Tax policy, and trade and tariff controls.
Environmental and consumer-protection legislation.
Likely changes in the political environment .
Economic:
Stage of business cycle.
Current and projected economic growth, inflation and interest rates.
Unemployment and labor supply.
Labor costs.
Levels of disposable income and income distribution.
Impact of globalization.
Likely impact of technological or other change on the economy.
Likely changes in the economic environment.
Source: http://www.mindtools.com/pages/article/newTMC_09.htm Last accessed 11.21.2011
Socio-Cultural:
Population growth rate and age profile.
Population health, education and social mobility, and attitudes to these.
Population employment patterns, job market freedom and attitudes to work.
Press attitudes, public opinion, social attitudes and social taboos.
Lifestyle choices and attitudes to these.
Socio-cultural changes.
Technological Environment:
Impact of emerging technologies.
Impact of Internet, reduction in communications costs and increased remote working.
Research & Development activity.
Impact of technology transfer.
Other forms of PEST PESTLE, PESTLIED, STEEPLE and SLEPT:
Some people prefer to use different flavors of PEST Analysis. These are:
PESTLE/PESTEL: Political, Economic, Sociological, Technological, Legal, Environmental.
PESTLIED: Political, Economic, Social, Technological, Legal, International, Environmental, Demographic.
STEEPLE: Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical.
SLEPT: Social, Legal, Economic, Political, Technological.
Choose the flavor that most suits you!
Key Points:
PEST Analysis is a useful tool for understanding the big picture of the environment in which you are operating,
and for thinking about the opportunities and threats that lie within it. By understanding your environment, you
can take advantage of the opportunities and minimize the threats.
PEST is a mnemonic standing for Political, Economic, Social and Technological. These headings are used first to
brainstorm the characteristics of a country or region and, from this, draw conclusions as to the significant forces of
change operating within it. This provides the context within which more detailed planning can take place, so that
you can take full advantage of the opportunities that present themselves.
Plan-Do-Check-Act (PDCA)
Implementing new ideas in a controlled way
Also known as the PDCA Cycle, or Deming Cycle
Something needs to change: Something's wrong, and needs to be fixed, and you've worked hard to create a
credible vision of where you want it to be in future. But are you 100% sure that you're right? And are you
absolutely certain that your solution will work perfectly, in every way?
Where the consequences of getting things wrong are significant, it often makes sense to run a well-crafted pilot
project. That way if the pilot doesn't deliver the results you expected, you get the chance to fix and improve things
before you fully commit your reputation and resources. So how do you make sure that you get this right, not just
this time but every time? The solution is to have a process that you follow when you need to make a change or
solve a problem; A process that will ensure you plan, test and incorporate feedback before you commit to
implementation.
A popular tool for doing just this is the Plan-Do-Check-Act Cycle. This is often referred to as the Deming Cycle or
the Deming Wheel after its proponent, W Edwards Deming. It is also sometimes called the Shewhart Cycle.
Deming is best known as a pioneer of the quality management approach and for introducing statistical process
control techniques for manufacturing to the Japanese, who used them with great success. He believed that a key
source of production quality lay in having clearly defined, repeatable processes. And so the PDCA Cycle as an
approach to change and problem solving is very much at the heart of Deming's quality-driven philosophy.
The four phases in the Plan-Do-Check-Act Cycle involve:
Plan: Identifying and analyzing the problem.
Do: Developing and testing a potential solution.
Check: Measuring how effective the test solution was, and analyzing whether it could be improved in any
way.
Act: Implementing the improved solution fully.
These are shown in Figure 1 below.
Figure 1. Plan-Do-Check-Act Cycle
There can be any number of iterations of the "Do" and "Check" phases, as the solution is refined, retested, rerefined and retested again.
Mind Maps
Mind Maps : A Powerful Approach to Note-Taking
(Also known as Mind Mapping, Concept Mapping, Spray Diagrams, and Spider Diagrams)
"Mind Map" is a trademark of the Buzan Organization.
Have you ever studied a subject or brainstormed an idea, only to find yourself with pages of information, but no
clear view of how it fitted together? This is where Mind Mapping can help you. Mind Mapping is a useful
technique that helps you learn more effectively, improves the way that you record information, and supports and
enhances creative problem solving. By using Mind Maps, you can quickly identify and understand the structure of
a subject. You can see the way that pieces of information fit together, as well as recording the raw facts contained
in normal notes. More than this, Mind Maps help you remember information, as they hold it in a format that your
mind finds easy to recall and quick to review.
About Mind Maps
Mind Maps were popularized by author and consultant, Tony Buzan. They use a two-dimensional structure,
instead of the list format conventionally used to take notes. Mind Maps are more compact than conventional
notes, often taking up one side of paper. This helps you to make associations easily, and generate new ideas. If you
find out more information after you have drawn a Mind Map, then you can easily integrate it with little disruption.
More than this, Mind Mapping helps you break large projects or topics down into manageable chunks, so that you
can plan effectively without getting overwhelmed and without forgetting something important.
A good Mind Map shows the "shape" of the subject, the relative importance of individual points, and the way in
which facts relate to one another. This means that they're very quick to review, as you can often refresh
information in your mind just by glancing at one. In this way, they can be effective mnemonics - remembering the
shape and structure of a Mind Map can give you the cues you need to remember the information within it. As
such, they engage much more of your brain in the process of assimilating and connecting information than
conventional notes do. When created using colors and images or drawings, a Mind Map can even resemble a
work of art!
Uses
Mind Maps are useful for:
Brainstorming - individually, and as a group.
Summarizing information, and note taking.
Consolidating information from different research sources.
Thinking through complex problems.
Presenting information in a format that shows the overall structure of your subject.
Studying and memorizing information.
Drawing Basic Mind Maps
To draw a Mind Map, follow these steps:
1. Write the title of the subject you're exploring in the center of the page, and draw a circle around it. This is shown
by the circle marked in figure 1, below.
(Our simple example shows someone brainstorming actions needed to deliver a successful presentation.)
Figure 1
2. As you come across major subdivisions or subheadings of the topic (or important facts that relate to the subject)
draw lines out from this circle. Label these lines with these subdivisions or subheadings. (See figure 2, below.)
Figure 2
3. As you "burrow" into the subject and uncover another level of information (further subheadings, or individual
facts) belonging to the subheadings above, draw these as lines linked to the subheading lines. These are shown in
figure 3.
Figure 3
4. Then, for individual facts or ideas, draw lines out from the appropriate heading line and label them. These are
shown in Figure 4.
Source: http://www.mindtools.com/pages/article/newISS_01.htm Last accessed 11.21.2011
Figure 4
5. As you come across new information, link it in to the Mind Map appropriately.
A complete Mind Map may have main topic lines radiating in all directions from the center. Sub-topics and facts
will branch off these, like branches and twigs from the trunk of a tree. You don't need to worry about the structure
you produce, as this will evolve of its own accord.
Tip:
While drawing Mind Maps by hand is appropriate in many cases, software tools like MindGenius, iMindMap, and
Mindjet can improve the process by helping you to produce high quality Mind Maps, which you can then easily
edit or redraft.
Using Mind Maps Effectively
Once you understand how to take notes in Mind Map format, you can develop your own conventions for taking
them further. The following suggestions can help you draw impactful Mind Maps:
Use Single Words or Simple Phrases Many words in normal writing are padding, as they ensure that
facts are conveyed in the correct context, and in a format that is pleasant to read. In Mind Maps, single
strong words and short, meaningful phrases can convey the same meaning more potently. Excess words
just clutter the Mind Map.
Print Words Joined up or indistinct writing is more difficult to read.
Use Color to Separate Different Ideas This will help you to separate ideas where necessary. It also helps
you to visualize the Mind Map for recall. Color can help to show the organization of the subject.
Use Symbols and Images Pictures can help you to remember information more effectively than words,
so, where a symbol or picture means something to you, use it. (You can use photo libraries like
iStockPhoto to source images inexpensively.)
Using Cross-Linkages Information in one part of a Mind Map may relate to another part. Here you can
draw lines to show the cross-linkages. This helps you to see how one part of the subject affects another.
Visual Example
The visual below is a great example of a Mind Map that has high visual impact:
Key Points
Mind Mapping is an extremely effective method of taking notes. Not only do Mind Maps show facts, they also
show the overall structure of a subject and the relative importance of individual parts of it. They help you to
associate ideas, think creatively, and make connections that you might not otherwise make. Mind Maps are useful
for summarizing information, for consolidating large chunks of information, for making connections, and for
creative problem solving. To use Mind Maps effectively, make sure you print your words, use different colors to
add visual impact, and incorporate symbols and images to further spur creative thinking
Affinity Diagram
Organizing ideas into common themes
Is it ever a bad thing to have too many ideas? Probably not, but if you've ever experienced information overload or
struggled to know where to begin with a wealth of data you've been given, you may have wondered how you can
use all of these ideas effectively.
When there's lots of "stuff" coming at you, it is hard to sort through everything and organize the information in a
way that makes sense and helps you make decisions. Whether you're brainstorming ideas, trying to solve a
problem or analyzing a situation, when you are dealing with lots of information from a variety of sources, you can
end up spending a huge amount of time trying to assimilate all the little bits and pieces. Rather than letting the
disjointed information get the better of you, you can use an affinity diagram to help you organize it.
Also called the KJ method, after its developer Kawakita Jiro (a Japanese anthropologist) an affinity diagram helps to
synthesize large amounts of data by finding relationships between ideas. The information is then gradually
structured from the bottom up into meaningful groups. From there you can clearly "see" what you have, and then
begin your analysis or come to a decision.
Here is a step-by-step guide to using affinity diagrams along with a simple example to show how the process
works.
How to Use the Tool
1. Describe the problem or issue
2. Generate ideas by brainstorming. Write each idea on a separate sticky note and put these on a wall or flip
chart. Remember to:
Emphasize volume
Suspend judgment
Piggyback on other ideas
6. Continue to group the themes/headers until you have reached the broadest, but still meaningful,
categories possible
Draw lines connecting the super-headers, themes/headers, and sub-headers
You'll end up with a hierarchical structure that shows, at a glance, where the relationships are
Tip:
Grouping ideas under headings, and then grouping headings under super-headers in an affinity diagram is a
practical way of "chunking" information generated in brainstorming sessions, during process mapping, or even a
planning exercise.
Key Points
Affinity diagrams are great tools for assimilating and understanding large amounts of information. When you work
through the process of creating relationships and working backward from detailed information to broad themes,
you get an insight you would not otherwise find. The next time you are confronting a large amount of information
or number of ideas and you feel overwhelmed at first glance, use the affinity diagram approach to discover all the
hidden linkages. When you cannot see the forest for the trees, an affinity diagram may be exactly what you need
to get back in focus
Brainstorming
Generating many radical, creative ideas
Brainstorming is a popular tool that helps you generate creative solutions to a problem. It is particularly useful
when you want to break out of stale, established patterns of thinking, so that you can develop new ways of
looking at things. It also helps you overcome many of the issues that can make group problem-solving a sterile and
unsatisfactory process.
Used with your team, it helps you bring the diverse experience of all team members into play during problem
solving. This increases the richness of ideas explored, meaning that you can find better solutions to the problems
you face. It can also help you get buy in from team members for the solution chosen after all, they were
involved in developing it. Whats more, because brainstorming is fun, it helps team members bond with oneanother as they solve problems in a positive, rewarding environment.
Why Use Brainstorming?
Conventional group problem-solving can be fraught with problems. Confident, "big-ego" participants can drown
out and intimidate quieter group members. Less confident participants can be too scared of ridicule to share their
ideas freely. Others may feel pressurized to conform with the group view, or are held back by an excessive respect
for authority. As such, group problem-solving is often ineffective and sterile.
By contrast, brainstorming provides a freewheeling environment in which everyone is encouraged to participate.
Quirky ideas are welcomed, and many of the issues of group problem-solving are overcome. All participants are
asked to contribute fully and fairly, liberating people to develop a rich array of creative solutions to the problems
they're facing.
Brainstorming 2.0
The original approach to brainstorming was developed by Madison Avenue advertising executive, Alex Osborn, in
the 1950s. Since then, many researchers have explored the technique, and have identified issues with it.
The steps described here seek to take account of this research, meaning that the approach described below differs
subtly from Osborn's original one.
What is Brainstorming?
Brainstorming combines a relaxed, informal approach to problem-solving with lateral thinking. It asks that people
come up with ideas and thoughts that can at first seem to be a bit crazy. The idea here is that some of these ideas
can be crafted into original, creative solutions to the problem you're trying to solve, while others can spark still
more ideas. This approach aims to get people unstuck, by "jolting" them out of their normal ways of thinking.
During brainstorming sessions there should therefore be no criticism of ideas: You are trying to open up
possibilities and break down wrong assumptions about the limits of the problem. Judgments and analysis at this
stage stunt idea generation. Ideas should only be evaluated at the end of the brainstorming session this is the
time to explore solutions further using conventional approaches.
Individual Brainstorming
While group brainstorming is often more effective at generating ideas than normal group problem-solving, study
after study has shown that when individuals brainstorm on their own, they come up with more ideas (and often
better quality ideas) than groups of people who brainstorm together.
Source: http://www.mindtools.com/brainstm.html
Partly this occurs because, in groups, people arent always strict in following the rules of brainstorming, and bad
group behaviors creep in. Mostly, though, this occurs because people are paying so much attention to other
peoples ideas that they're not generating ideas of their own or they're forgetting these ideas while they wait for
their turn to speak. This is called "blocking".
When you brainstorm on your own, you'll tend to produce a wider range of ideas than with group brainstorming you do not have to worry about other people's egos or opinions, and can therefore be more freely creative. For
example, you might find that an idea youd be hesitant to bring up in a group session develops into something
quite special when you explore it with individual brainstorming. Nor do you have to wait for others to stop
speaking before you contribute your own ideas. You may not, however, develop ideas as fully when you
brainstorm on your own, as you do not have the wider experience of other members of a group to help you.
Tip: When Brainstorming on your own, consider using Mind Maps to arrange and develop ideas.
Group Brainstorming
When it works, group brainstorming can be very effective for bringing the full experience and creativity of all
members of the group to bear on an issue. When individual group members get stuck with an idea, another
member's creativity and experience can take the idea to the next stage. Group brainstorming can therefore
develop ideas in more depth than individual brainstorming.
Another advantage of group brainstorming is that it helps everyone involved to feel that theyve contributed to
the end solution, and it reminds people that other people have creative ideas to offer. Whats more, brainstorming
is fun, and it can be great for team-building!
Brainstorming in a group can be risky for individuals. Valuable but strange suggestions may appear stupid at first
sight. Because of this, you need to chair sessions tightly so that ideas are not crushed, and so that the usual issues
with group problem-solving dont stifle creativity.
How to Use the Tool:
You can often get the best results by combining individual and group brainstorming, and by managing the process
carefully and according to the "rules" below. That way, you get people to focus on the issue without interruption
(this comes from having everyone in a dedicated group meeting), you maximize the number of ideas you can
generate, and you get that great feeling of team bonding that comes with a well-run brainstorming session!
To run a group brainstorming session effectively, do the following:
Find a comfortable meeting environment, and set it up ready for the session.
Appoint one person to record the ideas that come from the session. These should be noted in a format
than everyone can see and refer to. Depending on the approach you want to use, you may want to
record ideas on flip charts, whiteboards, or computers with data projectors.
If people arent already used to working together, consider using an appropriate warm-up exercise or icebreaker.
Define the problem you want solved clearly, and lay out any criteria to be met. Make it clear that that the
objective of the meeting is to generate as many ideas as possible.
Give people plenty of time on their own at the start of the session to generate as many ideas as possible.
Ask people to give their ideas, making sure that you give everyone a fair opportunity to contribute.
Encourage people to develop other people's ideas, or to use other ideas to create new ones.
Encourage an enthusiastic, uncritical attitude among members of the group. Try to get everyone to
contribute and develop ideas, including the quietest members of the group.
Ensure that no one criticizes or evaluates ideas during the session. Criticism introduces an element of risk
for group members when putting forward an idea. This stifles creativity and cripples the free running
nature of a good brainstorming session.
Source: http://www.mindtools.com/brainstm.html
Let people have fun brainstorming. Encourage them to come up with as many ideas as possible, from
solidly practical ones to wildly impractical ones. Welcome creativity!
Ensure that no train of thought is followed for too long. Make sure that you generate a sufficient number
of different ideas, as well as exploring individual ideas in detail.
In a long session, take plenty of breaks so that people can continue to concentrate.
Source: http://www.mindtools.com/brainstm.html
Reverse Brainstorming
A different approach to brainstorming
Reverse brainstorming helps you solve problems by combining brainstorming and reversal techniques. By
combining these, you can extend your use of brainstorming to draw out even more creative ideas. To use this
technique, you start with one of two "reverse" questions:
Instead of asking, "How do I solve or prevent this problem?" ask, "How could I possibly cause the problem?"
Instead of asking "How do I achieve these results?" ask, "How could I possibly achieve the opposite effect?"
How to Use the Tool:
1. Clearly identify the problem or challenge, and write it down.
2. Reverse the problem or challenge by asking:
"How could I possibly cause the problem?", or
"How could I possibly achieve the opposite effect?"
3. Brainstorm the reverse problem to generate reverse solution ideas. Allow the brainstorm ideas to flow
freely. Do not reject anything at this stage.
4. Once you have brainstormed all the ideas to solve the reverse problem, now reverse these into solution
ideas for the original problem or challenge.
5. Evaluate these solution ideas. Can you see a potential solution? Can you see attributes of a potential
solution?
Tip:
Reverse brain-storming is a good technique to try when it is difficult to identify solutions to the problem directly.
Example:
Luciana is the manager of a health clinic and she has the task of improving patient satisfaction. There have been
various improvement initiatives in the past and the team members have become rather skeptical about another
meeting on the subject. The team is overworked, team members are "trying their best" and there is no appetite to
"waste time" talking about this. So she decides to use some creative problem solving techniques she has learned.
This, she hopes, will make the team meeting more interesting and engage people in a new way. Perhaps it will
reveal something more than the usual "good ideas" that no one has time to act on. To prepare for the team
meeting, Luciana thinks carefully about the problem and writes down the problem statement:
"How do we improve patient satisfaction?"
Then she reverses problem statement:
"How do we make patients more dissatisfied?"
Already she starts to see how the new angle could reveal some surprising results.
At the team meeting, everyone gets involved in an enjoyable and productive reverse brainstorming session. They
draw on both their work experience with patients and also their personal experience of being patients and
customers of other organizations. Luciana helps ideas flow freely, ensuring people to not pass judgment on even
the most unlikely suggestions.
Blocked Out
(Step 3)
Blocked Out
(Step 4)
Blocked Out
(Step 4)
Blocked Out
(Step 4)
Blocked Out
(Step 3)
Blocked Out
(Step 4)
Blocked Out
(Step 4)
Blocked Out
(Step 3)
Blocked Out
(Step 4)
Quality (D)
Blocked Out
(Step 3)
Then she compares options, writes down the letter of the most important option, and scores their difference in
importance. An example of how she might do this is shown in figure 2:
Figure 2: Example Paired Comparison Analysis Table (filled in):
Overseas Market (A) Home Market (B)
Overseas Market (A)
Home Market (B)
Customer Service (C)
Quality (D)
A,2
Quality
(D)
A,1
B,1
C,2
Finally she adds up the A, B, C and D values, and converts each into a percentage of the total. This gives these
totals:
A = 3 (37.5%)
B = 1 (12.5%)
C = 4 (50%)
D = 0.
Here it is most important to improve customer service (C) and then to tackle export markets (A). Quality is not a
high priority perhaps it is good already.
Key Points
Paired Comparison Analysis is a good way of weighing up the relative importance of different courses of action. It
is useful where priorities are not clear, or are competing in importance.
The tool provides a framework for comparing each course of action against all others, and helps to show the
difference in importance between factors
Pareto Analysis
Using the 80:20 Rule to Prioritize
Imagine that you've just stepped into a new role as head of department. Unsurprisingly, you've
inherited a whole host of problems that need your attention. Ideally, you want to focus your
attention on fixing the most important problems. But how do you decide which problems you
need to deal with first? And are some problems caused by the same underlying issue?
Pareto Analysis is a simple technique for prioritizing possible changes by identifying the problems
that will be resolved by making these changes. By using this approach, you can prioritize the
individual changes that will most improve the situation.
Pareto Analysis uses the Pareto Principle also known as the "80/20 Rule" which is the idea that
20% of causes generate 80% of results. With this tool, we're trying to find the 20% of work that
will generate 80% of the results that doing all of the work would deliver.
Note: The figures 80 and 20 are illustrative the Pareto Principle illustrates the lack of symmetry
that often appears between work put in and results achieved. For example, 13% of work could
generate 87% of returns. Or 70% of problems could be resolved by dealing with 30% of the causes.
Step 5: Add up the Scores for Each Group You can now add up the scores for each cause group.
The group with the top score is your highest priority, and the group with the lowest score is your
lowest priority.
Step 6: Take Action Now you need to deal with the causes of your problems, dealing with your
top-priority problem or group of problems first. Keep in mind that low scoring problems may not
be worth bothering with; solving these problems may cost you more than the solutions are worth.
Note: While this approach is great for identifying the most important root cause to deal with, it
doesn't take into account the cost of doing so. Where costs are significant, you'll need to use
techniques such as Cost/Benefit Analysis, and use IRRs and NPVs to determine which changes you
should implement.
No.
Problem (Step 1)
Cause (Step 2)
Score
(Step 3)
15
Lack of training.
30
Lack of training.
21
Jack then groups problems together (steps 4 and 5). He scores each group by the number of
complaints, and orders the list as follows:
1. Lack of training (items 5 and 6) 51 complaints.
2. Too few service center staff (items 1 and 42) 21 complaints.
Source: http://www.mindtools.com/pages/article/newTED_01.htm last accessed 11-10-2011
60
50
40
30
20
10
0
Lack of Training
Causes of Complaints
As you can see from figure 1 above, Jack will get the biggest benefits by providing staff with more
training. Once this is done, it may be worth looking at increasing the number of staff in the call
center. It's possible, however, that this won't be necessary: the number of complaints may
decline, and training should help people to be more productive.
By carrying out a Pareto Analysis, Jack is able to focus on training as an issue, rather than
spreading his effort over training, taking on new staff members, and possibly installing a new
computer system to help engineers be more prepared.
Key Points:
Pareto Analysis is a simple technique for prioritizing problem-solving work so that the first
piece of work you do resolved the greatest number of problems. It's based on the Pareto
Principle (also known as the 80/20 Rule) the idea that 80% of problems may be caused
by as few as 20% of causes.
To use Pareto Analysis, identify and list problems and their causes. Then score each
problem and group them together by their cause. Then add up the score for each group.
Finally, work on finding a solution to the cause of the problems in group with the highest
score.
Pareto Analysis not only shows you the most important problem to solve, it also gives you
a score showing how severe the problem is.
You can apply Root Cause Analysis to almost any situation. Determining how far to go in your
investigation requires good judgment and common sense. Theoretically, you could continue to trace
root causes back to the Stone Age, but the effort would serve no useful purpose. Be careful to
understand when you've found a significant cause that can, in fact, be changed.
The Root Cause Analysis Process
Root Cause Analysis has five identifiable steps.
Step One: Define the Problem
What do you see happening?
You need to analyze a situation fully before you can move on to look at factors that contributed to the
problem. To maximize the effectiveness of your Root Cause Analysis, get together everyone experts
and front line staff who understands the situation. People who are most familiar with the problem can
help lead you to a better understanding of the issues.
A helpful tool at this stage is CATWOE. With this process, you look at the same situation from different
perspectives: the Customers, the people (Actors) who implement the solutions, the Transformation
process that's affected, the World view, the process Owner, and Environmental constraints.
Step Three: Identify Possible Causal Factors
What sequence of events leads to the problem?
During this stage, identify as many causal factors as possible. Too often, people identify one or two
factors and then stop, but that's not sufficient. With RCA, you don't want to simply treat the most
obvious causes you want to dig deeper.
Use these tools to help identify causal factors:
Appreciation Use the facts and ask "So what?" to determine all the possible consequences of a
fact.
5 Whys Ask "Why?" until you get to the root of the problem.
Drill Down Break down a problem into small, detailed parts to better understand the big
picture.
Cause and Effect Diagrams Create a chart of all of the possible causal factors, to see where the
trouble may have begun.
Use the same tools you used to identify the causal factors (in Step Three) to look at the roots of each
factor. These tools are designed to encourage you to dig deeper at each level of cause and effect.
Step Five: Recommend and Implement Solutions
What can you do to prevent the problem from happening again?
Analyze your cause-and-effect process, and identify the changes needed for various systems. It's also
important that you plan ahead to predict the effects of your solution. This way, you can spot potential
failures before they happen.
One way of doing this is to use Failure Mode and Effects Analysis (FMEA). This tool builds on the idea of
risk analysis to identify points where a solution could fail. FMEA is also a great system to implement
across your organization; the more systems and processes that use FMEA at the start, the less likely you
are to have problems that need Root Cause Analysis in the future.
Impact Analysis is another useful tool here. This helps you explore possible positive and negative
consequences of a change on different parts of a system or organization.
Another great strategy to adopt is Kaizen, or continuous improvement. This is the idea that continual
small changes create better systems overall. Kaizen also emphasizes that the people closest to a process
should identify places for improvement. Again, with kaizen alive and well in your company, the root
causes of problems can be identified and resolved quickly and effectively.
Key Points
Root Cause Analysis is a useful process for understanding and solving a problem.
Figure out what negative events are occurring. Then, look at the complex systems around those
problems, and identify key points of failure. Finally, determine solutions to address those key points, or
root causes.
You can use many tools to support your Root Cause Analysis process. Cause and Effect Diagrams and 5
Whys are integral to the process itself, while FMEA and Kaizen help minimize the need for Root Cause
Analysis in the future.
As an analytical tool, Root Cause Analysis is an essential way to perform a comprehensive, system-wide
review of significant problems as well as the events and factors leading to them.
Stepladder Technique
Making better group decisions
Making decisions within a group can often be challenging. When things go well, they can go very well. However,
when things go wrong, you can end up mired in conflict. Some people may fight for recognition and position, others
may be over-critical or disruptive, while others may sit quietly and not contribute anything to the overall effort.
Because of this, groups often spin out of control and make worse decisions than individuals working on their own.
When this happens, it's easy to see why some people throw their hands up in frustration and give up. However,
when a group works in the right way, it really WORKS. Groups that function effectively together can outperform
individuals and make much better decisions.
But how do you make your group effective? How do you get all group members to contribute and inspire one
another to create great ideas and solutions? The Stepladder Technique is a useful method for encouraging individual
participation in group decision making.
What is the Stepladder Technique?
The Stepladder Technique is a simple tool that manages how members enter the decision-making group. Developed
by Steven Rogelberg, Janet Barnes-Farrell and Charles Lowe in 1992, it encourages all members to contribute on an
individual level BEFORE being influenced by anyone else. This results in a wider variety of ideas, it prevents people
from "hiding" within the group, and it helps people avoid being "stepped on" or overpowered by stronger, louder
group members. All of this helps the group make better decisions.
How to Use the Tool
The Stepladder Technique has five basic steps. Here's how it works.
Step 1: Before getting together as a group, present the task or problem to all members. Give everyone
sufficient time to think about what needs to be done and to form their own opinions on how to best
accomplish the task or solve the problem.
Step 2: Form a core group of two members. Have them discuss the problem.
Step 3: Add a third group member to the core group. The third member presents ideas to the first two
members BEFORE hearing the ideas that have already been discussed. After all three members have laid
out their solutions and ideas, they discuss their options together.
Step 4: Repeat the same process by adding a fourth member, and so on, to the group. Allow time for
discussion after each additional member has presented his or her ideas.
Step 5: Reach a final decision only after all members have been brought in and presented their ideas.
The Stepladder Technique is similar to the Delphi Method, another tool that's often used in groups to prevent
Groupthink and to encourage participation. While both tools have the same objective, they differ in a few key ways:
In the Delphi Method, an objective facilitator or leader manages the group. In the Stepladder Technique, all
members are equal.
The Delphi Method keeps members anonymous. The facilitator manages the flow of information, and
members may have no idea who else is in the group. The Stepladder Technique involves face-to-face
meetings, so everyone knows who the other members are.
The Delphi Method is a lengthy process, while the Stepladder Technique is much quicker.
The Delphi Method is often used for major decisions that need input from a large number of people. The
Stepladder Technique works best with smaller groups that make a wide range of decisions.
Source: http://www.mindtools.com/pages/article/newTED_89.htm Last accessed 11.21.2011
Tip:
Groups can begin to lose their effectiveness and ability to make good quality decisions if they have too many
members. Keep your group small four to seven team members to maximize effectiveness.
Key Points
The Stepladder Technique is a step-by-step approach that helps you ensure that all members of a group participate
and are heard. The technique allows shy, quiet people to present their ideas before other group members can
influence them, and it allows everyone to hear many different viewpoints before reaching a final decision.
Tip: If you carry out the brainstorming behind the Activity Analysis and Value Analysis with your team, you'll
almost certainly get a richer answer than if you do it on your own. You may also find that your team is more likely
to "buy into" any conclusions you draw from the exercise. After all, the conclusions will be as much theirs as yours.
Once you've brainstormed the activities which add value for your company, list them. A useful way of doing this is
to lay them out as a simplified flow chart running down the page this gives a good visual representation of your
"value chain". You can see an example of this in Figure 1 below.
Step 2 Value Analysis
Now, for each activity you've identified, list the "Value Factors" the things that your customers' value in the way
that each activity is conducted. For example, if you're thinking about a telephone order-taking process, your
customer will value a quick answer to his or her call; a polite manner; efficient taking of order details; fast and
knowledgeable answering of questions; and an efficient and quick resolution to any problems that arise.
If you're thinking about delivery of a professional service, your customer will most likely value an accurate and
correct solution; a solution based on completely up-to-date information; a solution that is clearly expressed and
easily actionable; and so on.
Next to each activity you've identified, write down these Value Factors. And next to these, write down what needs
to be done or changed to provide great value for each Value Factor.
Step 3 Evaluate Changes and Plan for Action
By the time you've completed your Value Analysis, you'll probably be fired up for action: you'll have generated
plenty of ideas for increasing the value you deliver to customers. And if you could deliver all of these, your service
could be fabulous!
Now be a bit careful at this stage: you could easily fritter your energy away on a hundred different jobs, and never
really complete any of them. So first, pick out the quick, easy, cheap wins go for some of these, as this will
improve your team's spirits no end. Then screen the more difficult changes. Some may be impractical. Others will
deliver only marginal improvements, but at great cost. Drop these. And then prioritize the remaining tasks and
plan to tackle them in an achievable, step-by-step way that delivers steady improvement at the same time that it
keeps your team's enthusiasm going.
Tip:
If you have a strong enough relationship with one or more of your customers, it may be worth presenting your
conclusions to them and getting their feedback this is a good way of either confirming that you're right or of
getting a better understanding of what they really want.
Example:
Lakshmi is a software development manager for a software house. She and her team handle short software
enhancements for many clients. As part of a team development day, she and her team use Value Chain Analysis to
think about how they can deliver excellent service to their clients.
During the Activity Analysis part of the session, they identify the following activities that create value for clients:
Order taking
Enhancement specification
Scheduling
Software development
Programmer testing
Secondary testing
Delivery
Support
Lakshmi also identifies the following non-client-facing activities as being important:
Recruitment: Choosing people who will work well with the team.
Training: Helping new team members become effective as quickly as possible, and helping team
members learn about new software, techniques and technologies as they are developed.
Lakshmi marks these out in a vertical value chain on her whiteboard (you can see the first three client-facing
activities shown in the "Step 1: Activity Analysis" box in Figure 1 below):
Next, she and her team focus on the Order Taking process, and identify the factors that will give the greatest value
to customers as part of this process. They identify the following Value Factors:
Giving a quick answer to incoming phone calls.
Having a good knowledge of the customer's business, situation and system, so that they do not waste the
customer's time with unnecessary explanation.
Asking all the right questions, and getting a full and accurate understanding of the customer's needs.
Explaining the development process to the customer and managing his or her expectations as to the likely
timetable for delivery.
You can see these in the "Value Factors" column of figure 1.
They then look at what they need to do to deliver the maximum value to the customer. These things are shown in
the Figure 1's "Changes Needed" column.
They then look at what they need to do to deliver the maximum value to the customer. These things are shown in
the Figure 1's "Changes Needed" column.
They then do the same for all other processes.
Once all brainstorming is complete, Lakshmi and her team may be able to identify quick wins, reject low yield or
high cost options, and agree their priorities for implementation.
Key Points:
Value Chain Analysis is a useful way of thinking through the ways in which you deliver value to your customers,
and reviewing all of the things you can do to maximize that value. It takes place as a three stage process:
Activity Analysis, where you identify the activities that contribute to the delivery of your product or
service.
Value Analysis, where you identify the things that your customers value in the way you conduct each
activity, and then work out the changes that are needed.
Evaluation and Planning, where you decide what changes to make and plan how you will make them.
By using Value Chain Analysis and by following it through to action, you can achieve excellence in the things that
really matter to your customers.
An agreed upon set of actions or tactics that are the particular means used
to achieve objectives.
Balanced Scorecard:
Benchmarking:
Business Drivers:
Communication Plan:
Continuous
Improvement:
Continuous quality
improvement (CQI):
Customer:
Dashboard:
A data visualization resource that displays the current status of metrics and
performance indicators for an organization. A dashboard consolidates and
arranges numerical results that are often produced on a monthly or
quarterly basis. A dashboard is distinguished from a performance scorecard
(such as Balanced Scorecard) in that the dashboard indicates status at a
specific point in time, whereas a scorecard displays progress over time
towards specific goals. Dashboard and scorecard designs are increasingly
converging.
Effective:
Produces the desired quality result and works well as measured by your
customers, stakeholders and staff.
Efficient:
External Customer:
Goal:
Internal Customer:
Lean:
Macro-environmental
Factors:
The larger external factors that affect an organizations ability to fulfill its
mission, e.g.: political, legal, economic, and sociocultural. See PEST.
Measures of Success:
Metric:
Micro-environmental
Factors:
The external factors specific to an organization that affect its ability to fulfill
its mission e.g.: external customers, agents, distributors, suppliers,
competitors, etc.
Milestone (project
management):
The end of a stage that marks the completion of a work package or phase,
typically marked by a high level event such as completion, endorsement or
signing of a deliverable, document or a high level review meeting. A large or
complex project may have numerous milestones before the project is
complete.
Mission:
An organizations purpose.
Objective:
A four-step process for quality improvement. In the first step (plan), a way to
effect improvement is developed. In the second step (do), the plan is carried
out, preferably on a small scale. In the third step (check), a study takes place
between what was predicted and what was observed in the previous step. In
the last step (act), action is taken on the causal system to effect the desired
change. The plan-do-check-act cycle is sometimes referred to as the
Shewhart cycle, (Walter A. Shewhart discussed the concept in his book
Statistical Method From the Viewpoint of Quality Control) and as the Deming
cycle, because W. Edwards Deming introduced the concept in Japan. Also
called the plan-do-study-act (PDSA) cycle.
Performance
Management:
An agreed upon set of activities that ensure that goals are consistently being
met in an effective and efficient manner. Performance management can
focus on the performance of an organization, a department, employee, or
the processes to build a product or service, as well as many other areas.
Performance Standards:
PEST Analysis:
Prioritization Matrix:
Process Improvement:
Process Management:
Process Map:
Process Partner:
The next person in a production line or the next department in the flow of
production. Provides support, advice, and guidance in respective area of
expertise. Supports and participates to create vision and implement
changes.
Quality Improvement:
Quality management
(QM):
Quality management
system (QMS):
Describes the work to be done in detail, specifies the hardware and software
involved and the exact nature of the work to be done.
SMART Goals:
Acronym for goals which satisfy the SMART framework of: Specific,
Measurable, Attainable, Relevant and Time-bound. Specific goals detail what
is expected, why it is important, who is involved, where it will occur, and
which attributes are important. Measureable goals allow progress to be
clearly quantified and demonstrated. Attainable goals that stretch the
employee but can be accomplished serve to motivate. Relevant goals answer
the question of why the activity is worthwhile. Time-bound goals establish a
sense of urgency by setting a deadline. Goals written in this manner are
clear, motivating, easily understood, and result in a much higher likelihood
of success than vague, unclear, general goals.
Spider Map:
Stakeholder:
Standard Operating
Procedures (SOPs):
Reliable instructions that describe the correct and most effective way to get
a work process done.
Strategic Planning:
Strategy Map:
Strategy Plan:
SWOT Analysis:
Systems Thinking:
Target:
Tasks which have the following characteristics: (1) tasks which the customer
is willing to pay for, (2) tasks which transform the product or service, and (3)
tasks which are performed correctly the first time.
Visual map of work flow from beginning to end, which produces an outcome
or product (services, materials, information, etc.). Value is defined from the
customers perspective. It is a tool to document the current process, point to
problems and focus direction.
Value Stream:
All of the activities that a company must do to design, order, produce and
deliver its products or services to customers.
Values:
Vision:
Stra
te
gy P
l
ann
in
Evaluate, Adjust
and Sustain
Success for
Ongoing Process
Improvement
Continuous
Process
Improvement
Ongoing
Process
Improvement
Loop
Measure Success
Performance
Standards
Ongoing Metrics
Balanced Scorecard
Dashboards