Lean Sigma Six and 5 Process Improvement Strategy Trends of Future-Ready Firms
Process strategy is defined as the pattern of decisions made in managing processes to achieve competitive priorities. This is a hot topic within firms, where the decisions made surrounding process strategy and decision making can determine the success or failure of a company. Here, we will be looking at an example of how process strategy can be improved by way of focusing on specific aspects of elements within the firm.
Wolters Kluwer Tax and Accounting is a leader is providing resources, information, and analysis to tax and accounting professionals. Wolters Kluwer claims to “deliver insightful, industry-leading resources as well as step-by-step guidance, on a wide variety of tax and accounting issues” (cchgroup.com). Headquartered in the Netherlands, Wolters Kuwer also provides software solutions and expertise in the area of tax, accounting, and audits that give professionals the ability to manage their businesses and advise clients in a much more effective manner.
Wolters Kluwer (WK) published an article in August of 2017 that discusses 5 ways to improve process strategies within your firm for “future-ready” firms. This article directly relates to our discussions in the area of process strategy. In doing so, WK outlines methods that will boost productivity within the firm and position the firm for future success. WK prefaces the bulk of the article by mentioning the use of an industry-wide method for process strategy called Lean Six Sigma (LSS). Essentially, LSS is a method of efficiently solving a problem (goleansixsigma.com). In using LSS, firms will reduce the number of defective products (or services rendered) manufactured within their processes, thus increasing revenue and increasing customer satisfaction.
LSS appears to be a useful tool when looking at process strategy within a firm. Named after a statistical concept, LSS operates on the idea of reducing “waste” within a firm. This might include reducing the physical waste of a manufacturing firm’s processes, extra time surrounding the firm’s operations, or even reducing the variability in consistency for firms who solicit services. WK utilizes the LSS model within their operations management system and feels very strongly that this is a formidable tool for professionals who want to operate both effectively and efficiently. LSS finds a home within the topic of process strategy as it is a direct method for outlining your firms processes in order to operate most efficiently. Prior to reading the rest of this post, I encourage you to visit the LSS site at the link below and view the statistical representation of Six Sigma in order to further grasp what it is LSS accomplishes.
https://goleansixsigma.com/what-is-six-sigma/
I can attest to the need for more efficient processes in the workplace even at the entry level. For two years, I worked for a restaurant that was located in the Hyatt Regency Lost Pines Resort and Spa outside of Austin, Texas. This resort sits on a huge property which facilitates the need for coordination between many different departments in order to function properly. Working in this environment afforded me a basic understanding of the complexity of what I now know as operations management and process strategy. Now, see the WK article that identifies trends within the area of process improvement here: http://news.cchgroup.com/2017/08/29/5-process-improvement-strategy-trends-future-ready-firms/
WK, though in a much different industry, feels the same. In their article, “5 Process Improvement Strategy Trends of Future-Ready Firms,” WK states that those who are “interested in being a change agent within your firm” should move towards these five major trends.
Process Improvement Strategy Trend #1: Process is a core strategic pillar of the firm
Here, WK discusses the utter importance of strong process strategies and how they should be one of the main operating elements within the firm. No longer is process something of low level importance. Today, innovation and continual improvement in process strategy is key.
Process Improvement Strategy Trend #2: The Digital Client Experience
The modern business world is built around the digital sphere. Consumer demands for online interface and concepts like the internet of things inherently create a need for more wholesome processes and operations. Personal communication is still key, but in an ever-changing and evolving market, embracing technologically driven methods are beneficial.
Process Improvement Strategy Trend #3: Openness to Automation and Growth
Much like the importance of the digital client experience, being open to growth and automation can be crucial to the success of your firm. Improving your processes by way of automation can impact your current operations and provide the means for future success.
Process Improvement Strategy Trend #4: Simplicality
Do not exclude the old-fashioned notion of keeping things simple. Simple, in many cases, is a more efficient way to operate if simplicity aligns with the processes you have in place. There is definitely a need to work towards appealing to the ever-increasing digital climate. But, adding unnecessary elements to your process strategy can complicate your decisions.
Process Improvement Strategy Trend #5: Partners get out of the way (if they’re in the way)
Lastly, do not be afraid to move past those who are stuck in “old-school” ways of thinking about process and decision making. Move in the direction that will best suit your firm and create a “future-ready” environment for your company.
According to WK, adhering to these trends and utilizing process systems like LSS will create a progressive environment within the firm, letting those who indulge enjoy the benefits of a more efficient operating environment.
What are your thoughts? Do you agree? What ideas are proposed here that resonate with you or do not resonate at all?
Kyle, the article “5 Process Improvement Strategy Trends of Future-Ready Firms” is very interesting. According to the article, these 5 process improvement strategies are being implemented in best firms. I would like to see more evidence supporting this statement although. But I am very intrigued by the second (The Digital Client Experience) and third (Openness to Automation and Growth) strategies. These are progressive ideas which highlight the direction society is leaning towards: a more digital world with a focus on automation which leads to efficiency. The advancement of technology is rapid and cannot be ignored. I agree with the article, “future-ready firms” must be able to advance with new technology. The third strategy (Openness to Automation and Growth) is intertwined with the second strategy. Automation is a result of the advancement of technology and has become popular because of its efficiency. These two strategies are processes that must be recognized if a company would like to succeed.
Hi Kyle,
There was so much interesting content to explore after reading this. Although the WK article was more interesting to me, I was very curious in the Lean Sigma Six program and decided to look more into it. My cynicism put me right past the colorful and well-designed website to see that this organization’s headquarters was in Hawaii, which for some reason made me think it was just a shiny scam with no substance. However, in reading some of the success stories on the website, I found countless specific examples of where LSS has been applied. I even found a couple examples from very close to my home in East Lansing, MI. As a note, most of these articles mentioned the management philosophy of LSS rather than the specific training and certification provided by this site. Anyways, it was clear that, as you said, process analysis such as LSS is growing in popularity with the concept of waste eliminations encompassing new process improvement projects that save millions across several industries.
Continuing, WK’s 5 process improvement strategies which you mentioned seemed more like advice to established companies using the diagnosis of what the up-and-coming companies are doing “right.” Simple, digital, automated, and innovative process strategies developed by “future-ready” executives are already what has led to some of our most recent breakthrough companies. Blockchain companies such as Ripple (https://ripple.com/) are a good example of a firm using all of these things not to fill a new demand, but to improve upon an existing process and create a demand that many people didn’t know they had. Ripple is simplifying, digitizing, and automating cross-border payments using instant blockchain verification to eliminate the wait-time and complexity of existing systems such as SWIFT. SWIFT, stuck in its old ways, is now forced to play catch of on these improvement strategies, rather than having taken the initiative several years back. Just one example of the many ways in which these 5 strategies are becoming ever more important.
Joe, your comment sparked my interest. Kyle’s post and the LSS program seems to typically reference more typical manufacturing- or service-based companies, but you mentioned Ripple and other blockchain companies.
We have to ask whether these kinds of consulting services will be able themselves to pivot towards internet-only services that operate over remote servers. This digital age has brought on so many new kinds of business models that offer atypical services, so we’re seeing a new kind of development, and at some point these new businesses will need customized consulting products.
It’s a new world out there!
Kyle,
I think that was a really well thought out post and your references to other articles along the way were helpful in strengthening my understanding. I was very skeptical of the topic at first. As interesting as it was to read about, I thought this was all seemingly too good to be true. I understand the statistics behind their idea and how they claim it will drastically cut mistakes, but I was left wanting more from them. Every company is different in many ways, so it would be more helpful if they showed how they helped more individual firms instead of giving their basic rules.
At the same time, I think the ideas presented have so much potential. If nothing else, this would force a company to take a step back and look at its entire operation. What works? What does not? How could we make it better? Even if they do not follow WK’s philosophy point for point, this would be a valuable exercise for any firm to undergo. My favorite part of your post was the timing of one of the outside articles you referenced. Just as I was growing more skeptical and thinking it would take someone who is not afraid to take a leap to introduce this to their company, the article said, “You are not comfortable with the status quo. That’s good – we love people like you!” This to me is one of the most important part. It is impossible to objectively reconsider the operations of a company without being able to let go of the past. Some practices are simply not effective as they once were and it takes a future-ready company to change that. All in all, I really enjoyed your post and could tell you spend a good amount of time researching. Thanks for sharing!
Kyle,
Wolters Kluwer raises some interesting points about how to better improve process strategy. Specifically, I find his third point about an “openness to automation” to be interesting. Automation in moderation is important. However, I feel that excessive automation could be detrimental to a firm from the aspects of social responsibility.
Just as a company is expected to provide a good or service to the people, it is almost expected to provide employment to society as well. Without opportunities for work, people will not be able to earn the money necessary to fulfill their daily needs. In fact, automation has proven to already increased the unemployment rate. According to a study posted by the US News, one in six working age men (25-54) do not have a job. This is in contrast to 100% of the men in that age range having a job just 50 years earlier. In addition to this, a study posted by the Pew Research Center states that 72% of Americans are worried about the effects of automation.
With this being said, I feel that it is important to take into account the backlash that a company could receive if they automate too much. If too many people end up losing their jobs, consumers could view this negatively and take their business elsewhere.
I also found his 5th point about creating a future ready environment. During my internship with Deloitte & Touche this summer, the CEO and Partners of the firm emphasized the importance innovation. In the accounting realm, innovation means more efficient audits, which leads to client satisfaction, which leads to recurring services and more revenue. Moreover, the more efficient the audit, the more clients that Deloitte can offer their services to, generating even more revenue. Therefore, I can attest to the importance of innovation within a company.
References:
https://www.usnews.com/opinion/articles/2017-05-01/economists-cant-ignore-the-problem-of-automation-for-american-workers
http://www.pewinternet.org/2017/10/04/americans-attitudes-toward-a-future-in-which-robots-and-computers-can-do-many-human-jobs/