For ease of readability, the term “Productivity” will be utilized in this article to talk about LEAN, Six Sigma, OEE, Continuous Improvement or any other productivity program title that exists today.
Please note that intent of this article is to get people to think about how to best focus their Productivity program (long term) so as to generate quantifiable sustainable results for their organization.
What is the “Rubberband Effect”? The “Rubberband Effect” occurs when the results of your Productivity effort go away after a year or two. By that, we are talking about how when you first start out with a Productivity program, you will get some great initial results, and then as time passes, these results go away, and things go back to how they were before.
What causes the “Rubberband Effect”? There can be many reasons for the “Rubberband Effect”. For purpose of brevity, we will focus in this article on the most common ones:
1) Focus on the wrong measures, such as:
1A) Number of Green/Black Belts generated in a year – The number of belts generated does not directly lead to improvements in the bottom line. It also tends to drive people to get certified as a Green/Black Belt for the associated “prestige” with having this on their resume, while most of these people have a career goal that does not have “process improvement” as part of their job definition. Over time, the leadership team sees the company spending a lot of money on certifying people, without an associated improvement in the company’s bottom line. At this point, their support for the productivity effort starts to diminish.
1B) Number of projects completed in a year – The number of projects completed in a year also does not directly lead to improvements in the bottom line. All it does is generate a lot of activity that uses up people’s time, without necessarily driving bottom line results.
1C) Dollars Saved within a Silo of the company – Many Productivity projects are rationalized with an exaggerated number for dollars saved within a specific department. One problem with this approach is that the project may drive additional costs in another department that could exceed the savings anticipated from the project. Another problem with this approach is that, quite often, when management adds up all the expected savings from various projects, they tend to be significantly less than the total bottom line savings that the organization actually achieves
2) Lack of clear understanding of how to effectively implement these Productivity tools – Most Productivity tools have both a technical and a cultural aspect to them. To instill tools that require front line support in a culture where the front line and management have been at odds for years, requires a focus on culture/behavior change. For example, trying to implement a Continuous Improvement mentality in an organization that relies on a “heavy handed” approach to management is not effective. Many organizations have not put much effort into improving workforce engagement, and if they have, they tended to rely strictly on recognition programs to drive workforce engagement (which is far from sufficient).
3) Starting workforce engagement at the front lines only – Workforce Engagement is a must for many reasons (see Newsletter Vol 1 No 5). Many companies have worked on driving workforce engagement in the last 20 years through Quality Circles, Teams, and Kaizens (all good things to do). To be effective, though, it takes more than just these activities to drive workforce engagement. If the Leadership Team is not involved in the Workforce Engagement effort, the tendency is for workforce engagement effort to fall flat. The front line workers are smart. They will not buy into a Workforce Engagement program that does not include a change in the executive leadership team’s behavior.
Steps to Avoiding the “Rubberband Effect”:
1) the Leadership team needs to own the Productivity Program. As often as they meet to review
financial numbers, they also need to meet to review the progress of the Productivity
Program. First, this shows the whole organization that the leadership team takes the
Productivity Program seriously; which drives support in the ranks. A more important benefit
is that the preparation for the review (and the discussions at it), will drive the direction of
the Productivity Program and ensure that the program will deliver the results that the
leadership team will value.
2) measures used to evaluate the Productivity Program’s effectiveness need to migrate from
“effect” oriented data at the highest levels of the organization, to “causal” oriented data at
the front lines of the organization. This will drive the organization to better understand
the relationship between cause and effect data, which will help the Productivity Program to
better generate effective sustainable solutions that deliver quantifiable positive results.
3) the organization needs to assign an individual, who reports to the leadership team directly,
to own the Productivity Program. This direct reporting to the leadership team allows this
individual to communicate directly to the leadership team about:
A) what behavior they need to change, so as to more effectively support the Productivity Program
B) how to garner additional resources/support as needed.
4) the Productivity program needs to drive “process” thinking at all levels of the organization.
A) making process mapping of all critical processes mandatory
B) utilizing Visual Management techniques to support Standard Work
C) generating a consistent understanding within the organization of what defines
“Value Added”, “Non Value Added”, and “Business Value Added”.
5) utilize control charts when looking at data, at all levels of the organization so as to:
A) steer the organization away from the perils of over-emphasizing the significance
of point to point changes
B) increase both the understanding of variability by all team members, and the ability
of team members to recognize process behavior patterns so as to reduce variability.
The assumption here is that Reducing Variability (just like adhering to Standard Work)
increases “process speed”.
6) workforce engagement efforts need to start at the top levels of the organization. Quite often,
organizations focus their workforce engagement training efforts on the front line managers
and mid-level managers, without providing training on increasing workforce engagement to
the higher levels of the organizations. By having Workforce Engagement training start at
the top, it makes it easier for workforce engagement training to stick, when it is rolled out to the
front line management team.