Defining improvement opportunities is the third vital step, following prioritization and selection, to ensure that the right opportunities are addressed correctly to maximize efficiency and effectiveness benefits to the advantage of all stakeholders.
Why should a leader take time for defining improvement opportunities?
Benefits forDefining Improvement Opportunities
While several benefits can be linked to thedefining improvement opportunities, the top reasons include:
- Opportunity clarification: Bring all stakeholders onto the same page by instilling full understanding of all aspects of the opportunity.
- Focus: Focus efforts on delivering specific outcomes within the scope of the opportunity.
- Goal: Define and deliver on measurable process and benefit targets.
- Scope: Narrow the scope of the opportunity and define the process from its beginning to its end.
- Resources: Assemble a team to deliver on the opportunity and define roles and responsibilities.
- Execute: Have a plan, set milestones, conduct reviews and remove roadblocks.
Consequences of No or PoorDefined Improvement Opportunities
What are the consequences when a process excellence opportunity definition is nonexistent or poor? Apart from frustration on the part of the team members, team leader, and their sponsor, the following typically results:
- The most often found ill is “boiling the ocean” which is when the opportunity is too widely or generally defined providing insufficient focus to the opportunity teams. This often results in confusion, project delays and long project times.
- An opportunity is addressed that is not the true or real opportunity. Thus means that much of the resources efforts are ineffective with the risk that the opportunity is ultimately abandoned.
- Waste will result as the team address wrong or unrelated aspects of the opportunity.
- The opportunity team may adopt of sort of panic fire fighting approach, jumping from one issue to another without clearly knowing what to focus on.
- When opportunities are addressed based on assumptions, e.g. where an appropriate measure is incorrect or not used:
- the root of the opportunity is missed
- the incorrect root issues are worked on, and
- predetermined solutions are implemented that do not deliver on the goal or the benefits of the opportunity.
Defining Improvement Opportunities – The Charter
Taken from the project management world, a proven tool used when defining an opportunity is the “Charter”. Thus is a document, typically a template of some sort that contains at least the following nine elements:
- Opportunity Background or the burning platform
- Problem statement
- Goal statement which includes a measurable outcome
- Financial benefit
- Team, roles and responsibilities
- Plan and milestones
- Risks and limitation
- Leadership approval
Defining Improvement Opportunities – Measurment Metrics
So far in this article, we made several references to the proper measurement of the opportunity at hand. After all, good data is unbiased and offers a true view of performance.
For example, when the opportunity definition centers on innovation, appropriate and accurate data indicating market share growth, innovation success rate, commercialization rate, and others are required.
When the opportunity definition is about improving process performance, reliable and valid data showing for example cycle time, defect rate, first time through, etcetera is required.
Often the performance of a process is based on assumption and not based on good measurement data often as it is not available. In such a case the first step would be to install the right measurement system. Once good data is gathered it may turn out that the magnitude of the problem is not as severe as perceived, or even worst than expected.
Often it is required that more than one aspect of the opportunity is measured. This is to avoid opportunity teams working away at improving one particular measure at the expense of another factor of the opportunity.
Typically two-measure plus a countermeasure suffices to avoid passing on a problem. The countermeasure is what keeps the project team ‘honest’. It aids in tracking potential negative consequences of the work undertaken.
The targets of one or two main measures often referred to as the ‘primary’ and ‘secondary’ measures, should be based on ‘entitlement’. Entitlement is derived from research, benchmarking, the best that has already been achieved (whether by the same company or process, or outside the company), or scientific or engineering prediction of the possible.
Ideal measures should be specific, uncomplicated to measure, have a clear operational definition, is regularly sampled or measured, and visibly graphically displayed.
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