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Examples of the failure of single-initiative "magic pills" abound. Recent work indicates that nearly two out of three companies launching quality programs to increase worker involvement are dissatisfied with their progress. Other equally well-intentioned initiatives face similar difficulties. One industrial firm began its aggressive efforts in the mids by cascading, top down, a well-crafted vision of change throughout the company. Each mill and factory took the corporate vision and developed its own companion vision. Senior executives traveled the country describing their objectives and signaling their personal commitment.

An ambitious array of corporate training programs was developed, emphasizing participative management and situational leadership skills, team development, and group problem solving. Managers were called in to head office every quarter to describe how they were implementing the program in their area. After three years, however, it became clear that only sporadic progress was being made. Top-down assertions of the need for change were not enough. No agreed-on process existed for translating broad objectives into specific, focused performance goals at functional, plant, or machine-operation level.

Nor did managers have the skills to define these goals in a way that would engage their people in finding new ways to improve performance—not once, but continually.

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Though the new training programs were useful, they had no vital or clear-cut connection to the primary levers of performance improvement. Of the dozens of leading US companies that have embarked on transformational change efforts in recent years, we have looked in detail at the experience of more than thirty.


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Although each company's program is unique, the successful programs have developed points of view on all three types of initiative. Where any one is absent, the ill-matched collection of initiatives under way is falling short. Poor results are invariably the result of focusing efforts along only one or two—rather than all three—of the key axes of change:. Top-down direction setting to create focus throughout an organization and develop the conditions for performance improvement. Broad-based, bottom-up performance improvement to get people at all levels to take a fresh approach to solving problems and improving performance.

Cross-functional core process redesign to link activities, functions, and information in new ways to achieve breakthrough improvements in cost, quality, and timeliness. Together, these three axes make up what we think of as a "transformation triangle"—a balanced, integrated framework for combining separate initiatives into a coherent overall program.


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  • Each axis is necessary. If top-down initiatives are lacking or faulty, managers will be left to guess where to aim new skills or activities.

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    If bottom-up involvement is absent, motivation will falter, momentum will flag, opportunities for improvement will be overlooked, and the new skills and behavior will not be built. If horizontal core processes are ignored, function-specific efforts will never add up to the critical mass of change required. A quality program here, a new training program there, a set of internal strategy taskforces, and an executive team-building exercise may not add up to anything other than a jumble of parts that can sap, rather than build, energy.

    Real transformations in performance come only when efforts along all three axes are coordinated and engaged. To develop the necessary preconditions for performance improvement, successful transformations start with clear, consistent, and ongoing direction-setting initiatives. In almost all the efforts we examined, the leadership team made a concerted effort to clarify priorities, create energy, and signal commitment to change in performance and behavior through a variety of approaches: everything from new themes and visions General Electric's "Boundaryless Organization" or Motorola's "Six Sigma" to new measures and objectives.

    Federal Express, for example, has twelve closely-watched numbers it publishes every day. These numbers reflect the corporation's customer service goals, and management has put a lot of thought into how to express them.

    2. More time appears.

    On-time performance, for instance, is not expressed as a percentage. If it were So the company publishes the number as an absolute tally of late deliveries.

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    If 1, packages were delivered late yesterday, everyone can understand that there were 1, customers who were inconvenienced or annoyed. No single initiative offers a "magic bullet" to unfreeze and redirect an organization. What distinguishes success here is consistency among initiatives, as well as their continuing refinement and development.

    Most companies start their transformation efforts with very broad objectives—say, "to lead the industry in customer satisfaction. Successful efforts push over time for increasing clarity and specificity in top-down direction as change pushes toward tangibility at the front line. At one railroad, for example, the vision and goals started broadly "be the quality leader in the transportation industry" and became more specific "achieve the three Rs of precision execution: right car, right train, right time" as customer needs and operational requirements came into sharper focus.

    This clarity helped align other change efforts to make it evident how they contributed to the overall goal. That way, a headquarters taskforce could redesign train scheduling while front-line teams attacked execution problems with individual trains. Although top-down efforts create the focus and the necessary preconditions for transformational change, they alone are not sufficient to achieve it. One of the biggest challenges to overcome is the widely held management view that "all we have to do is tell employees what we want, provide some training and rewards, and change will happen.

    But it falls far short when the change requires fundamentally new ways of doing business—like moving from a product to a customer orientation. In these cases, embedded skills, systems, and attitudes are usually so at odds with the new requirements that a much more intensive process is needed to retool the organization to effect lasting change. What's needed, therefore, is to get large numbers of people throughout an organization in operations, support units, and business management teams alike aggressively and creatively working to improve performance. This, in turn, depends on the availability—or the creation—of disciplined processes for identifying opportunities and developing plans to close clearly identified performance gaps.

    Many such problem-solving processes exist, most of which are rooted in the Quality movement and share common principles: set goals, determine gaps, understand root causes, brainstorm and try out solutions, monitor results, and make adjustments. To be truly effective, however, these approaches must be tailored to the specific challenges, skills, and change readiness of a given part of the organization.

    This requires, among other things, designing a methodology for setting appropriate goals and performance objectives, developing analytical templates to guide problem solving, and determining specific information needs that, of course, will vary by level and unit. For most parts of an organization, this effort will start simply and become more advanced over time. Front-line operations will tend to focus on improving the cost, quality, or timeliness of products and services. At one railroad, for example, front-line teams in each terminal analyzed their operational delays and helped move on-time performance from 20 to 79 percent.

    Staff functions will tend to work on aligning their activities to increase the value of products or services through joint efforts with front-line operations. At one insurance company, finance and human resource teams redesigned planning and compensation systems to be consistent with desired new agent behavior. Management groups will tend to concentrate on identifying the most attractive performance improvement opportunities and on designing the processes to exploit them.

    Over a two-year period, a steel company's management team started with relatively simple efforts to improve safety and housekeeping and moved on to design advanced processes to address yields, labor productivity, and throughput time. The net effect of launching such team-based problem-solving efforts is much like getting a flywheel spinning. Initially, tremendous inertia exists, and the first cycle can be lengthy and difficult, requiring substantial energy from outside the group to get it started.

    But if the process continues to be supported and rewarded by management, momentum gradually builds, improvements are achieved, the problem-solving cycle runs a more regular course, and the promise of "continuous improvement" becomes a real possibility. Tapping the brains and energy of thousands of people is powerful in itself, but there is a second reason for using bottom-up problem solving. In many cases, you already know what needs to be done, but you don't believe that people can change their behavior just because they are told—with good reason—to do so.

    What does it actually take to create new behavior? Think, for a moment, about the mechanics of a golf swing. You know you have to set up square to the target. You know you have to take the club head back slowly. You know, because a golf pro has told you at one time or another, each of the fifteen things you have to do to hit a golf ball well. But knowing is not enough. You have to experience it. You have to be able to try it in a risk-free environment, get the feel of it.

    In other words, you have to go through the process of finding the right answer yourself. For these reasons, bottom-up initiatives go far beyond the familiar "pilot testing and implementation. In most cases, intensive problem-solving efforts ultimately have to spread across an entire enterprise.

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    With pilots, by contrast, the normal pattern is to try them in one or two isolated locations, watch them for a year or so, and then re-evaluate the effort. Bottom-up efforts go beyond simply implementing a new solution. They have wider objectives: rapid and sustained performance improvements, development of new skills, increased change readiness, and deeper insights into how an organization must adapt to sustain the improvements.

    These efforts depend on effective "problem solving for process"—that is, developing creative ways to involve people in improving performance and redesigning their work. Again, this goes well beyond the top-down implementation of a solution defined by others. Bottom-up activities are not one-off initiatives. They call for successive rounds of effort to improve performance and build skills.

    There are, however, limits to what can be achieved through both top-down and broad-based efforts that fundamentally operate within existing organizational boundaries. Some opportunities for breakthrough improvements in performance can be addressed only through a cross-functional core process redesign perspective, in which people, activities, and information are linked in new ways. The goal of CPR is to produce simultaneous, dramatic improvements 25 to 75 percent or more in cost, quality, and time by shifting the focus of work and decision making from hierarchical channels to new horizontal flows across functions, locations, and organizational boundaries.

    All companies, whether they recognize it or not, have a few three to five core processes that deliver the majority of an enterprise's value to its customers. In a sense, of course, companies have always had cross-functional initiatives. But CPR takes them much further with its intense performance orientation, its focus on the few processes that drive value and competitive differentiation, and its support for the changes in organization structure, management, and communication systems needed to "institutionalize" new levels of performance.

    Top-down, bottom-up, and core process activities are not ground breaking in and of themselves. What is important is that they are:. Organizations can perform well with less than perfect strategies, but not with unclear objectives. Especially during periods of change, it is easy to let attention drift away from tangible performance goals toward a more general concern for effecting the necessary shifts in organizational culture. But this puts things the wrong way around.

    The best way to change culture is to work on improving performance at the same time. When, for example, management and union are at loggerheads, direct attacks on each other's entrenched position are seldom a constructive way to more forward. If, however, both sides can agree on new, shared performance goals—better on-time performance, say, or improved customer service—possible areas of cooperation begin to open up. Similarly, GE's "Workout" program may provide secondary cultural benefits in terms of how people work together. But the driving force and primary aim is to get them collaborating to solve a specific performance-related problem.

    All three axes are worked on simultaneously and in a way that is mutually reinforcing. Emphasis will fall in different places depending on the problem and the goal. Where the issue is to do with strategic focus or direction setting, the main action will probably be top down; where it is front-line involvement, bottom up; and where it is multiple inefficient handoffs across functions, redesign of cross-functional core processes.