• Make sure the right people are involved in the team. Relative to the task at hand, make sure participants are cross-functional, cross-level, and representative of all relevant stakeholders.
• Teams must be given a clear mission, and the boundaries of their activities carefully defined. Without such clear definitions, coordination among teams becomes extremely difficult.
• Teams must be empowered. Within the boundaries of their mission, they should be left alone to act as they see fit.
• Keep team membership to a workable number. If "having all the right people involved" requires more than ten people, there is probably a need to establish sub-groups.
• People's roles in the group must be clear and well defined. We have found it useful to assign one of four roles to each individual.
  1. Authority -- Implies that the person has the decision making power and legitimacy needed to commit to action.
  2. Responsibility -- Conveys major responsibility for the conduct of an activity. Whether personally or through delegation, those with responsibility must make sure a job gets done.
  3. Support -- Provides important support for an activity. This support might be in the form of providing information, resources, or performing specific delegated tasks.
  4. Inform -- People who must be informed about the progress of an activity, even though they are not taking actions directly affecting outcome of the activity.

• Set up rules which:
  • Remove the possibility of inappropriate vetoes by individual group members
  • Assure all group members a legitimate role in decision making
  • Guarantee that once a group arrives at a decision, all group members will support that decision

Discussion: We recommend that groups balance two modes of discussion, both of which are legitimate and necessary for good decision making. In one mode there are "arguments" in which people with strongly held opinions attempt to convince others of the correctness of their views. Argument is important because good decisions depend on rigorous comparisons of the advantages and disadvantages of different points of view. The second mode sets confrontation and argument aside. In this mode group members commit themselves to truly listening to each other, and to trying to understand why particular views are held. So doing will promote understanding that lead to consensus. More important, this non-confrontational mode surfaces assumptions and beliefs that provide important insight as to the correct course of action.

Decision rules: It is unlikely that when important issues and strongly held views are involved, any group will reach a state in which all group members completely agree with a single course of action. What is needed is a method to assure concerted action without 100% agreement. The solution is an operational rule for groups that recognizes the difference between "comfort" and "buy-in." One useful rule is that if a group member is 70% comfortable with a decision, he or she will agree to 100% "buy-in," i.e., support for the decision. If groups are to be effective, the "100% buy-in" criterion is critical. Experience shows the "70%" comfort criterion to be useful, but the exact number (as if such a concept can actually be quantified) can be determined locally. In determining a comfort level criterion, however, keep the trade-offs in mind. Higher levels make for longer decision times and more arguments. Lower values lead to dissatisfied group members.

• Assume that groups are temporary, and always be ready to reconstitute them in light of changing circumstances. Because your company's environment is dynamic, so too must be the group structure you establish for decision making.

1 = This statement does not describe our situation.
2 = This statement has some relevance to our situation.
3 = This statement is highly descriptive of our situation.

Leadership in support of a common vision—Because successful change requires a common view of goals, it is critical for participants in a change process to share a common vision. It is one thing to agree on such a vision at some particular point in time. It is quite something else to establish an atmosphere in which a common vision affects what people do on a day-to-day basis. Without "practicing the vision," agreement on the vision will quickly become an interesting group exercise that fades as an ongoing determinant of decision making and behavior. Consequently, leaders at all levels and all parts of your company must visibly demonstrate their commitment to a common vision.

Leadership in support of organizational culture—We view "organizational culture" as a set of collective (and usually unspoken) norms and beliefs that affect daily activity within an organization. Culture is a critical concept because it is impossible for formal procedures, or even informal but overtly negotiated rules, to cover all activities that make up organizational life. Although extremely powerful, culture is subtle. While one can make and enforce rules about vacation policy or promotions, one cannot simply decree a new policy about "respect for others" or "trust among departments" or "the importance of quality." As with a common vision, leadership, i.e., a commitment to showing by example, is a critical element in promoting any cultural changes that are needed to align a company with a new set of objectives.

Formal and informal reward systems—Both or these are powerful determinants of behavior, and as such must be carefully constructed to support desired outcomes. As examples, consider:

• Are raises tied to performance at the level of the individual, group, department, or company?
• Do rewards for "product quality" take precedence over rewards for "on time delivery"?
• Are rewards tied to what the company cares about? If so, is that connection clear in people's minds?

Human resource management—Moving an organization (or a part of it) from one state to another may require new talent. As an example, a greater reliance on Electronic Commerce may require a new EDI expert in an Information Systems department, and also a greater understanding of electronic commerce in departments such as Sales, Accounting, Manufacturing, and Materials Management. As with "authority," companies undergoing change must consider the distribution of talent across their organization, analyze how that talent must change, and then use hiring or training to close the gap.

Information infrastructure—Coordinated change requires shared information. As an example, the implementation of a "Just-In-Time" system requires shared information among Information Systems, Materials Management, and Manufacturing. Thus, one "tool for change" is analysis of what information is needed, and taking the steps to assure that valid information is available to all concerned parties.

Information technology infrastructure—Much change cannot take place without supporting technology. One obvious example is the case of a company that wants better communication among departments, but has no Local Area Network, no shared data bases, and few desk top computers. Critical to thinking about technology infrastructure is an appreciation of the need to combine the virtues of two quite different views of technology.

One view holds that business objectives are determined first, and technology is then deployed to help meet those objectives. The advantages here are the avoidance of "technolust" and maintaining a focus on business.

The second view holds that the potential of technology should help determine business objectives. The advantage here is that desirable possibilities may come to be seen as viable. As an example, a company may wish to provide additional design services for its customers, but may not be able to do so because of a lack of sophistication in the use of CAD and CAD data exchange.

In order to determine your present in-house ability to use these tools constructively, we recommend filling out Table 3. Again, higher scores imply a greater need for outside assistance.

1 = This statement does not describe our situation.
2 = This statement has some relevance to our situation.
3 = This statement is highly descriptive of our situation.

• Minimize coordination requirements by identifying and focusing on critical activities coordination, minimizing the overall investment needed in coordination.
• Decentralize responsibility for coordination via:
  • clearly defined team boundaries
  • clearly defined task definitions
  • making responsibility for coordination a team function
  • insisting on each team's commitment to the boundaries of its mission

These tactics are valuable because they will:

• decrease the complexity involved in centralized control
• allow a greater level of effort
• Use common processes and terminology, thus assuring that:
  • coordination is not lost due to simple misunderstandings or miscommunications
  • effort does not have to be wasted (or error increased) as a result of needing to translate from one frame of reference to another
• Choose appropriate coordination mechanisms for each task. Important tools for coordination include:
  • informal meetings
  • formal meetings
  • informal communication (e.g., e-mail)
  • formal communication (e.g., reports)
  • data and information repositories
  • co-location
  • telephone or video conferencing

1 = Happens infrequently or never.
2 = A common occurrence.
3 = A frequent occurrence.

It is, however, possible to articulate general principles that should apply to any set of metrics. These principles are important because the use of metrics can be equally constructive or destructive. These principles constitute a quality assurance process to ensure the constructive use of metrics.

• Set up a system that tries to jointly optimize between 3 and 5 metrics. Never use only a single metric because so doing will cause people to optimize that metric to the great detriment of the organization as a whole. As an example, consider what would happen if "on time delivery" were used exclusively, while ignoring "functionality," "cost," or "maintainability." On the other hand, too many metrics will result in an unwieldy system, or worse, will allow individuals and groups to pursue their own agendas.
• Reward problem solving. When metrics are used for punishment and blame, powerful forces are sure to develop which will subvert the intent of setting up the measuring system.
• Base reward systems on metrics, and link their application to reward systems for individuals and groups.
• Integrate assessments into ongoing activities. Without integration, metrics loose much of their value, i.e., their ability to guide mid-course corrections.
• Metrics must be:
  • easily observable
  • reliable
  • well defined
• Data must be available to groups who can act.

1 = This statement does not describe our situation.
2 = This statement has some relevance to our situation.
3 = This statement is highly descriptive of our situation.

• Business Process Re-engineering (BPR)
• Continuous Improvement (CI)

As-is analysis—The concept of "re-engineering" implies a change from some existing state of affairs. One large problem that many companies have is that its staff has an unclear idea of what that "present state" is. Ask yourself these questions:

• Outside of my immediate group, how much do I really know about how my colleagues do their work?
• Do I understand how they do routine business?
• Do I know what exceptions and emergencies they have and how they handle those problems?
• Do I have a feel for the concerns and priorities of levels of the organization that are above or below me?
• If someone asked me to explain what other groups did, how good a job could I do?
Now ask:
• How well do I understand my own work and how it affects the productivity of others?
• When was the last time I collected information on my colleagues' views about how I can be improve what I do?
• How well do I communicate to others how changes in their activity could improve my value to our company?
• Of all the work I do, what are the essential functions that I perform?

To-be analysis—Once change is contemplated, it is easy to envision many different futures. Some of these futures may be compatible or even synergistic, as in the case of improved manufacturing efficiency and high levels of customer service. On the other hand, incompatibilities are also possible, for example, with a company that wishes to increase both market share and profit per item sold. Effective change requires taking full advantage of mutually beneficial goals while recognizing and minimizing incompatibilities. Further, productive action requires that all involved in effecting a change share a common vision of that change. Two requirements apply to visions of change: (1) their critical elements must be compatible and (2) there must be agreement on what those elements are. Neither of these requirements can be met without a carefully worked out "to-be" analysis.

Models—Pictures are useful both in describing complicated business processes and in assuring common understanding of "as-is" and "to-be" situations. These pictures may contain greater or lesser amounts of information, be detailed or general, automated or hand drawn. In any form, they are valuable because of they represent a library of information about "as-is" and "to-be" states.

The critical issue is to make sure that the model has a level of detail that is appropriate for its intended use. As an example, consider how "payment history" may play a part in processing new orders. In terms of the concerns of a Vice President of Finance, the model in Figure 1 may be entirely adequate for understanding the advantages of a proposed new business process. As far as the Vice President is concerned, all the essential information is available. Under the present system:

• The Accounts Receivable department checks all incoming orders to assure that the customer is viable.
• If no problems are found, Accounts Receivable passes the order to Manufacturing.
• If the customer has a credit problem, the decision about filling the order is passed to Sales, who then has to make a judgement call about what to do.

Figure #1

Under the proposed new system:

• The order entry function is automated.
• Accounts Receivable is out of the loop, except in cases of a bad credit report from the order entry system, because its other routine activities feed an automated order entry system with credit information.

Cross-functionality—What makes one business process better than another? One important factor is the extent to which a business process meets the requirements of all who depend on that process. Consider for example, two scenarios in which a company's sales function could be redesigned. In case number one representatives of the company's market research group are present when the sales function is redesigned. In case number two those representatives are missing. Clearly, the different group membership will result in a different "look" for the redesigned sales group. In one case a mechanism is likely to be established that will transfer useful information from sales to marketing. In the other case such a mechanism is likely to be absent.

Designing process to add value—Two of the above elements—"to-be vision" and "multiple levels of detail"—combine here. The existence of a vision implies that alternate changes will be made. The multiple levels imply that the notion of "vision" manifests itself differently in different parts of the organization. The trick is to assure that multiple visions remain compatible, and that they are pursued in an effective manner.

As an illustration, consider the example of Acme Widget, who has developed a "to-be vision" of greatly increased market share. Working from that vision, various departments and subgroups within departments may develop the following visions:

• Sales and Marketing—Acme will be first in the minds of customers whenever they experience a need for Acme's products.
• Sales and Marketing's marketing group—Acme Widget will always have the best possible information on trends in the widget market, on potential new customer groups, and on the evolving needs of Acme's present customers.
• Market Liaison (a two person group within the Sales organization)—All information collected by the sales force that provides market research information will be organized and provided to the Marketing group in a timely fashion.

Data based—Business process re-engineering requires people to put considerable energy and time into making important decisions. To assure that good decisions are made, it is important to have as much reliable information as possible. Three guidelines are useful:

• Everything you believe is based on an invalid assumption.
• What you believe is wrong.
• Data to validate your assumptions is always available.

• Acme believes its customers base their decisions on price, while in fact delivery time and customer service are more important.
• Acme personnel have a belief that their "Research and Development" department wants to act unilaterally, when in fact that department is starved for input and closer cooperation from groups such as Marketing and Manufacturing.

As an example of varying degrees of connection, consider the likely set of relationships among: product design, manufacturing, marketing, sales, human resources, finance, information systems and facilities. It would be difficult to re-engineer product design without a major redesign in manufacturing. Also, changes in product design may affect other functions. Human resources may need to change their hiring or training activities. Information Systems may need to improve networking and common data bases. Marketing may have to provide more consistent information to design groups. Still, it is clear that re-engineering of design must involve the re-engineering of manufacturing, but may not require a similarly heavy commitment to the redesign of other functions.

Continuous Improvement (CI)
CI is based on the assumption that no process or product is perfect, and that one can always make improvements. CI further assumes that great gains in overall productivity can be obtained from the aggregation of incremental, ongoing improvements. Essentially, CI is the ongoing application of small experiments and innovations in support of broad organizational goals. The essence of CI is that it is not special, it is not an "add on" to routine. Rather, it is a fundamental part of the daily routine, driven by:

• Common goals
• Management and employee commitment
• Incentive systems
• Empowered groups
• Useful information

• Organizational culture—The culture must encourage the identification and solution of problems, often in creative ways driven by the people directly involved.
• Organizational structure—The organization's structure may need to change to support greater flexibility and the empowerment of the personnel to identify and address problems.
• Management policies—Managers need to support their personnel, helping them identify and solve problems rather than dictating actions to them.
• Labor relations—Existing labor agreements may not support the concept of management working with the shop floor personnel to identify and solve problems; the relationship cannot be confrontational if CI is going to work.
• Data systems—Many problems stem from weaknesses in Information Systems, and the CI approach is likely to highlight weaknesses in the information flowing to and from the company's different activities.

1. Plan—determine what specific problem you are going to address and propose a solution
2. Do—implement the proposed solution
3. Check—measure the improvement gained from the change
4. Act—base your next planning process on the previous solution, modifying the solution, if necessary, or expanding its application