Process improvement: Initiative‐driven versus process‐driven approaches

Any organization that manufactures a product or offers a resource-intensive service can find itself getting into a financial slump in a highly competitive market. Management typically addresses the problem by seeking to lower the cost of producing the product or offering the service. Some organizations try to decrease costs by laying off employees and squeezing suppliers for immediate price concessions. More proactive companies seek ways to improve processes so they can “do more with less.” Many companies that opt for process improvement try to find quick fixes, especially ones that come in the form of initiative-driven “best practice” programs. Others seek to institute more wideranging improvement by learning how to conserve resources and eliminate waste in their processes. This column considers the two proactive alternatives—initiative-driven best practices improvement and process-driven improvement. Rather than “pitching” either alternative, I try to view the issues from the perspective of an organization that is experiencing financial problems. After outlining the two alternatives, I conclude with some ideas on how best to utilize aspects of both approaches. I emphasize ideas that offer beneficial short-term effects, while also creating an imperative for continuous improvement. The goal is to ensure that process-improvement efforts help keep the organization ahead of the market, instead of lagging behind. In a previous column, I compared initiativedriven programs (there called the “traditional approach”) to a type of process-driven program known as the Systems Approach.1 In that column, the topic was presented in analytical fashion. This column presents the information with a different perspective and from the point of view of a typical organizational program. By the way, in focusing on companies with financial problems, I do not mean to suggest that financially healthy companies cannot benefit from process improvement. Quite the contrary! In fact, I always wonder why more companies don’t start process-improvement projects when the financial conditions are more conducive to such efforts. But the fact is that many do not. Fortunately, process improvement can be effective regardless of the financial pressures the company is experiencing. Once the process-improvement lesson is learned, it becomes much easier for the organization to incorporate continuous improvement into its overall management system.