The key point about any project definition is that it clearly states the objectives to be achieved and the methodology to be employed. Again, some examples:
Although this all sounds very simple, it can in fact be very difficult, for a number of reasons. In large organisations the issue may be that of conflict between departmental, divisional and corporate goals. Very often the performance measurements in place can distort people's perception of what they should be seeking and we must always remember the adage 'what we measure is what we get.'
Another factor complicating the definition phase is that of establishing goals that are, firstly, of sufficient value to justify and generate commitment, but equally, sufficiently limited in scope to be attainable. There exists a temptation in all organisations to try to go just that little bit too far and this can be dangerous, leading to considerable effort expended for little benefit. Perhaps a struggling business that has identified specific forms of waste that can be addressed by elements of the 'Lean' toolbox should be thinking of a project with very specific aims and objectives but instead launches an initiative to become a shining example of Lean excellence, Shigeo Shingo's Toyota reborn. Such an exercise is, sadly, doomed. A transformation of this nature is simply too much to undertake in one pass.
The reverse, however, can also be true. We may perhaps think of government departments who launch radical transformations with alarming frequency. Why is it that so little progress appears to be made? One cause may be that the 'before' and 'after' ways of working are so fundamentally different that all short term effort must be dedicated to developing the future vision. After this a series of incremental steps will move slowly towards the ultimate goal, whilst delivering little benefit until the whole package of change is delivered.
(As a side issue we have to recognise that somewhere in all this there are political goals - driven by the need to show significant savings or improved service. All too often the short-term fixes driven by these factors take the operation in completely the wrong direction. This may apply particularly in government initiatives but people in large commercial organisations may also recognise the symptoms.)
So, who defines objectives? This, of course, varies from one organisation to another, and from one project to another. One common factor must be that the functional / process managers in the areas affected must at least share the vision. Ideally they will set some targets, though often the first stage of the improvement programme must be to identify the potential. How would UK automobile manufacturers have approached quality improvement in the nineteen-seventies when Japanese achievements were as yet concealed from Western companies? Well, yes, they would have addressed this issue in the way that they did - additional inspection and exhortations rather than radically different approaches to product design, to plant, to supplier relationships, and so on.
This leads onto how objectives should be expressed. In some cases a very simple statement can be made - for example that through a broadened product range the company is seeking growth to 25% of the domestic market share, or by improved plant utilisation overtime costs will be reduced by 20%. In others, however, we may be simply looking to reduce the average age of debts through procedures to improve the accuracy of certification provided with goods. In this case we may know that 58 days is too long to fund customers, but can we really say how much of this is the result of queries relating to certification? Setting a definitive quantified target may not always be a good move.
Even in such cases, however, we should always be able to express the ways in which progress is to be measured. Debtor days is in fact a very relevant measure for many businesses and its reduction is a suitable long term deliverable for any improvement activity. Of course, we need to recognise that other factors, such as our customers running into cash flow problems, can play a major part in this measurement. If we choose this as our goal we should have a more detailed measurement of the project - perhaps the number of invoices that require subsequent re-issuing of any paperwork.
These more detailed measurements are Key Performance Indicators, or KPIs. They are now firmly entrenched in the day to day running of most organisations. Their use in projects is subject to nothing more than the usual caution. We must always be sure that the measurements we use do not send the wrong signal. The most glaring example from UK manufacturing down the years has been 'hours recovered' where factory supervision have been driven to 'cherry picking' from next week's planned work to ensure that this week's hours target was met, when doing so guaranteed failure to meet customer demand.
The lessons? Well, one is that we should avoid too many broad, or nebulous, aims. We should always specify measurable indicators and should set targets where this is realistic, but not seek to do so where doing so will send a clear signal to all that the exercise is being launched by people who don't really understand the issues.
The second lesson, and the one that may be difficult to accept, is that we cannot lay down a rule as to who should define the objectives of a project.
Another Hammer & Champy contribution is the term 'process owner' and although in their book this term seems to wander between the person with line responsibility for a process and the person responsible for its reengineering, it introduces an important precept. The person with responsibility for a part of the operation must own the objectives of any improvement programme. A common term for a key executive in the area of the business under scrutiny, who takes this ownership, is 'sponsor' and this is a key role. Any project seeking significant change must have the total commitment of the owner or owners of the associated process or processes.
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