Behavior-Based Performance Excellence Fuller, Jones & Associates, Inc. “A Radically Simple Approach to Improving Performance” April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 1 FJA-301-06 Leading Enterprises … Identify and Avoid Unnecessary Costs Maintain Superior Levels of Customer Satisfaction Optimize Organizational Performance What Are the Barriers to Achieving the Above? April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 2 FJA-301-06 What Are The Barriers To Success? System Barriers Business flows (inputs) Performance indicators (outputs) Waste Focus of Lean People and process Material Variability Focus of 6s Information Quality Cost Inflexibility Focus of Theory Of Constraints Time Feedback Loop Waste = High Cost Variability = Low Customer Satisfaction Inflexibility = Sub-optimization April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 3 FJA-301-06 The Manifestation of Barriers “The Iceberg Analogy” Cost Of Poor Quality “Above The Waterline” ~5% of Operating Expense* Examples: • Scrap • Rework • Downtime • Warranty Cost Of Poor Quality “Below The Waterline” ~35% of Operating Expense* Examples: • Incorrect Billing • Improper Tools • Lack of Training • Overtime • Unclear Requirements • Absenteeism / Tardiness • Lack of Process • Accidents * Philip Crosby & Associates Estimate Does Your Organization Understand the Hidden COST of Poor Quality? April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 4 FJA-301-06 What Choices Existed Before BBPE? PDCA 8Disciplines (8D) 7-Step PLAN 1st Discipline - Form Team 2nd Discipline - Define Problem 4th Discipline - Contain the Problem 1. Define and Contain the Problem Theory of Constraints Identify Constraint Lean Mfg, JIT, DFT Six Sigma / Design for Six Sigma Identify cycle time and WIP reduction as major issue Define / Identify Establish cycle time and WIP baselines Conduct Analysis: Value Stream 7 "Deadly" Waste 5S Measure / Design 1st Discipline cont. 2. Measure the Problem 3rd Discipline - Root Cause Description 3. Root Cause Analysis Decide How To Exploit Constraint DO 5th Discipline - Permanent CA Plan 4. Plan and Implement Improvement Subordinate Everthing To The Above CHECK ACT 6th Discipline - Verify Effectiveness 7th Discipline - Prevent Recurrence 5. Evaluate effectiveness 6. Standardize & Control Elevate Constraint Analyze / Design Improve and verify effectivess Improve / Optimize Establish controls Control / Validate 7. Realize & Reflect 8th Discipline - Congratulate Team Many Choices To Traditional Approaches, All Essentially The Same April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 5 FJA-301-06 Drawbacks to the Traditional Approaches Why Can’t You… Leverage existing people/practices Have management lead and train their employees Deploy in all areas at once, with focus on key problems Use your existing infrastructure Reduce problem solving cycles Generate results beyond traditional expectations Transform management and staff behaviors Many Of The Drawbacks To 6s, Lean, etc Are Attributable To The Overemphasis Given To Sophisticated, Rarely Used Tools. April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 6 FJA-301-06 Responding to Industry’s Needs The Evolution of Performance Excellence (PE) Measures Of Success & Deployment Criteria Traditional PE Methods BBPE 80~160 hours 8-12 hours External Experts Managers and Leaders Low – stays with a few experts High – deploys across an enterprise Project Cycle time 4-6 months 4- 6 weeks Program Scalability Few “Experts” Enterprise-wide Training time Trainers Org. Knowledge Transfer Types of Defects/Symptoms Addressed 6s - Process Variability • Lean – Process Waste TOC – Process Inflexibility • • BBPE draws best practices from all PE methodologies This Evolution From Contemporary Tools To Progressive Behavior Change Is Achieving Greater Results In Shorter Time In All Areas April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 7 FJA-301-06 What is Behavior-Based Performance Excellence? The BBPE methodology contains two key components: • Process Management: Changes leadership and management practice behaviors • Process Improvement: Changes problem solving behaviors April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 8 FJA-301-06 The Behavior-Based Performance Excellence Model Document and Benchmark Process, Metrics & Objectives Behavior-Based Process Improvement April 2006 Process Management Activities Identify Key Process Leverage Points Process Improvement Activities Review Performance And Identify Opportunities Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 9 Combining Process Creation and Process Improvement FJA-301-06 Select Yes Significantly New Feature / Process Design/Develop New Process/Product No Improve Existing Process/Product Yes More Improvement Needed? No Monitor April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 10 FJA-301-06 Behavior-Based Process Creation Steps Deliverables Select Problem Measure Problem Solving Behavior… Define and Contain the Problem Measure the Problem … Through Key Deliverables … Root Cause Analysis Implement and Assess Solution Control and Standardize Solution April 2006 … At Every Step Tools Typically Requires Only Basic Tools Such As Run Charts, Pareto Charts, 5-Why Analysis, Basic Stat, Simple DOE, etc Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 11 FJA-301-06 Behavior-Based Process Improvement Steps Deliverables Select Problem Measure Problem Solving Behavior… Define and Contain the Problem Measure the Problem … Through Key Deliverables … Root Cause Analysis Implement and Assess Solution Control and Standardize Solution April 2006 … At Every Step Tools Typically Requires Only Basic Tools Such As Run Charts, Pareto Charts, 5-Why Analysis, Value Stream, Risk Analysis, etc Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 12 FJA-301-06 BBPE Optimizes Cost, Time, Effectiveness and Development Better Leadership / Organizational Development Low PDCA High 7-Step Behavior-Based Performance Excellence Training Better 8D Traditional Green Belt Six Sigma Training Training Cost Traditional Lean Manufacturing Training Business Process Reengineering High Short (weeks) Cycle Time TOC Traditional Black Belt Six Sigma Training Long (months) Low Problem Solving Effectiveness High Better April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 13 Better Low FJA-301-06 BBPE Is Highly Effective • Works Across the Enterprise • Employees, Managers, Leaders all follow the same methodology • BBPE permanently changes behavior and the way staff do their jobs each day • Eliminates process waste and reduces variability • Solves problems for the “last” time • Identifies and develops future leaders BBPE Is Based On An Integration Of Best Practices From Leading Process Excellence Methods April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 14 FJA-301-06 BBPE Enables More Rapid Leadership and Organizational Development BBPE Supports Organizational Transformation and Leadership Development: Skills And Traits Of Successful Leaders Include: Open minded, willing and able to change Data driven, process oriented Customer focused Must be able to teach, then learn, then teach and be an effective coach Consistently behaviors models winning April 2006 Facilitates top-down and bottom-up change across the organization Identifies and develops the next generation of leaders Compliments other leadership development programs Leaders serve as the problem solving experts capable of leading and training their own team Problem solving behaviors demonstrated as part of their normal work activity Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 15 FJA-301-06 FJ&A Experience Deploying Performance Excellence Many leading Fortune 100 and 500 Companies including: Lexar Media Cisco Systems Extreme Networks GMAC Mortgage Ingram Micro Logistics Lawrence Livermore Lab Sony Pictures Cholestech Lockheed Martin Seagate Technology Solectron Corporation SonyBMG, USA Arvato Services, Inc. PeopleSoft Intuit SonyBMG, International High Tech, Software, Medical, Finance, Defense, Entertainment, Manufacturing April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 16 BBPE Success Stories – Achieving Results in 6-8 Wks , by Regular Staff as Part of Their Normal Work FJA-301-06 Improved Customer Fulfillment to 99.7% from 89% – Conventional Wisdom: Most orders arriving were incomplete – FJ&A approach showed missing information not an issue; equipment and timeliness of information were the major obstacles Reduced Cycle Time Avg, Variability & WIP 50% – Conventional Wisdom: Testing equipment was a bottleneck, needed to purchase more equipment and hire more people – FJ&A approach showed test equipment idle ~50% of the time; upstream product grouping and synchronization were the primary issues Reduced Complaint Mean Time To Resolution (MTTR) by 50% – – Conventional Wisdom: People not working hard enough or competent FJ&A approach showed no clear operational definitions for prioritizing, navigating and escalating issues Business Goal Returns Rate of < 12% from 19% – Conventional Wisdom: Industry is too unpredictable to manage shipments – FJ&A approach showed initial shipment sell-off highly variable but initial ship eventually consumed, and reshipments recreated exposure and very predictable April 2006 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 17 FJA-301-06 Thank You! FULLER, JONES & ASSOCIATES, INC. www.fullerjonesassociates.com 4000 Pimlico Drive, Suite 114 Pleasanton, CA 94588 Tel: 866-479-4979 Fax: 925-931-0136 Dr. Howard T. Fuller hfuller@fullerjonesassociates.com Direct: 925-413-2255 April 2006 Andrew M. Jones, MBA ajones@fullerjonesassociates.com Direct: 925-922-1225 Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 18 FJA-301-06 Background Dr. Howard T. Fuller: – – – – – – – Corporate VP of Quality & Reliability – SanDisk Corporate VP of Quality & Functional Excellence – Solectron Corporation Corporate Director of Design For Six Sigma – Seagate Technology Manager, Process Improvement – LifeScan, a Johnson & Johnson Co. Adjunct Professor at San Jose State University ISE Ph.D. in Quality Engineering, M.S. in Math/Statistics Published over 25 papers in leading journals Andrew M. Jones, MBA: – – – – – – – April 2006 Director, Process Excellence - Intuit Director, Performance Improvement Office – GMAC Mortgage Sr. Manager, Business Process Development Group - Cisco Consultant, Reengineering & Change Management Office – Sony Pictures Sr. Examiner, Baldrige National Quality Program Six Sigma Program Manager, Master Black Belt MBA, International Business Confidential – Do Not Distribute - Property of FULLER, JONES & ASSOCIATES, INC. 19