What’s Your Next Move?

How to find the right improvement strategy and methods for your organization

This article was originally published in Quality Progress  /  2015 June

by David Hansen

In 50 Words Or Less

• Many continuous improvement programs focus on realizing improvements through problem solving but neglect to address areas with insufficient capabilities in place.
• Often, these programs lack a clear improvement strategy and organizations choose inadequate methods to support that strategy.
• Learn about a framework for designing improvement methods to increase capability building.

We want to solve problems, but how should we? Continuous improvement initiatives are deployed everywhere, and we use all types of improvement methods based on the scientific method—such as root cause analysis—to identify and solve problems, and resolve conflict and issues.

The focus on eliminating problems, however, draws attention away from another aspect of continuous improvement: strengthening the capabilities that an organization needs to achieve
operational goals. Competence building is best achieved with improvement methods that focus on reinforcing competences by learning from successful experiences and discussing preferred future states.

So, should shop floor management focus on problem solving or competence building?

This article presents an improvement framework for deciding whether to focus on realizing improvements or building competences, taking into account the role of different improvement methods. The framework builds on a European multiyear case study at a manufacturing facility and has been empirically tested for designing better methods to match improvement strategies.

Understanding improvement

Organizations’ ability to learn and improve has been a critical competence in operations and quality management for decades,¹ but improvement comes in different shapes, as this anecdote reveals:

Sam was frustrated because the machine had been down for days due to a trivial problem. Finally, the defect was found, and the machine was running again, but Sam was not yet satisfied. He knew this would happen again and that the organization was incapable of coordinating improvement efforts well. He invited key stakeholders to a workshop series that eventually redesigned the daily performance meeting structure and training of team leaders. The result was better coordination among units, faster problem solving, and better quality and efficiency.

First, Sam eliminated a performance problem, and second, he strengthened the organization’s competence to solve future problems. Improvement activities can either target productivity directly or enhance the ability to identify improvement potential in the organization. Continuous improvement programs therefore should consider how they affect two dimensions:

1. Realization efficiency.
2. Improvement competence.

Both are important dimensions, but the optimal balance depends on the organization’s operations strategy.

Realization efficiency is the ability to achieve improvement based on the existing improvement potential. For example, how well an organization executes on the available ideas for increasing quality or efficiency (as in Sam’s story) and how they affect lead times, scrap, the work environment and the development of new products.

Improvement competence is defined as the organization’s ability to identify improvement potential, and it can be quantified as the rate that new improvement ideas are developed multiplied by their average improvement potential. Improvement competence thus depends on the engagement of people (their ability to identify problems and opportunities), analytical skills, and organizational elements such as management, coordination (as in Sam’s story), alignment between improvement goals and organizational direction.

Choosing an improvement strategy

High levels of realization efficiency and improvement competence are often described as dynamic capability—that is, "a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness."²

An organization cannot focus all of its efforts on realization without losing focus on competence building, and vice versa. Consequently, an explicit choice of where to focus efforts should be made. A shrinking telecom business, for example, may need expert-driven rationalization for awhile to survive, while a new manufacturing facility may need to focus on employee empowerment to begin its improvement journey.

Consequently, every organization should actively decide on an improvement strategy—balancing efforts between realization efficiency and improvement competence, depending on current needs and future plans. This also implies a strategic decision of how much effort to invest in continuous improvement. Figure 1 shows an improvement strategy framework that can be used to assess an organization’s current state and choose a desired future state.

The figure shows four generic strategies:

1. Expert-driven rationalization means focusing on realization over competence building.
2. Employee empowerment means building competence with limited focus on realization.
3. Firefighting means only limited investment in realization and competence building.
4. Effective continuous improvement means dedicated focus on realization efficiency and competence—that is, dynamic capability.

Aligning the strategy and methods

An organization’s improvement strategy goals can be achieved through an improvement program that appropriately balances improvement realization and improvement competence.
Researcher Gopesh Anand and colleagues described how a program should consider three elements:³

1. Purpose (aligning improvement goals with organizational goals, for example).
2. People (developing employee skills, for example).
3. Process (improvement methods, for example).

While most improvement programs actively consider the purpose and people elements, few discuss the process element, and thus unconsciously use problem solving based on the scientific method.

Other improvement methods are centered on learning processes, co-creation of visions and enhancement of strengths.⁴ Competence building demands weeks of reinforcing positive experiences and repeating desired behavior to develop new neurological pathways⁵—sometimes requiring daily focus on positive deviations and practice. The palette of
improvement methods leads to how an organization develops its realization efficiency and improvement competence.

Consider this example: A machine cleaning process had doubled in the time it took. During daily performance monitoring, the concern was raised, and a team was assigned to solve the issue. Through problem solving, the team quickly identified the cause of poor performance, fixed it and efficiently realized an improvement for returning performance to standard. A subsequent interview with the team revealed an increase in realization efficiency but no increase in improvement competence because team members had focused on fixing rather than learning.

Later, the team tried an alternative improvement method—appreciative inquiry—on a similar problem. Instead of analyzing causes of poor behavior, the team identified factors that would improve performance. Through a creative process, the team hit on the novel idea of cleaning the machine during maintenance stops. Another interview revealed this method increased the team’s improvement competence by including broader scope and more ideas, although it did not increase its realization efficiency.

Consequently, the improvement strategy should explicitly determine the choice of improvement method instead of having the method inadvertently dictate the strategy.

The power of problem solving

Different methods balance the development of realization efficiency and improvement competence. In continuous improvement, problem solving by root cause analysis is a widely
used method. Through investigating undesired events and understanding their causes, the method ensures permanent solutions to problems by eliminating the problem’s root cause.^6,7 Specific methods include W. Edwards Deming’s plan-do-check-act cycle, Six Sigma’s define, measure, analyze, improve and control method, and lean’s A3 systematic problem solving (Toyota business processes).^{8, 9}

Most problem-solving activities¹⁰ are initiated as the result of a gap between a target condition and the measured actual condition. In general, most problem-solving methods can be simplified into three steps, known as the three C’s:¹¹

1. Understand the concern.
2. Investigate the root cause.
3. Implement the countermeasure.

After stating the problem concern and grasping the current situation, more and more information is gradually collected to identify the direct cause of the problem—that is, where the problem occurs. Next, the underlying root cause can be found by analysis—for example, by asking Why questions such as, "Why did the direct cause happen?" and "Why did the cause of the cause happen?" Finally, a countermeasure is devised that can eliminate the root cause and ensure the problem will not recur.

Root cause problem solving can lead to single or double-loop learning,¹² depending on how the root cause analysis is conducted and the chosen countermeasure.

Figure 2 illustrates the problem-solving method. The planning phase shows the concern step followed by cause analysis. During the doing phase, cause knowledge is used to identify a countermeasure to solve the problem.

The power of problem solving is its efficiency in finding a solution through a systematic approach that enables it to be taught and used widely in organizations.¹³ Problem solving is criticized for inhibiting learning, however, because it can limit the problem space with constraints created by the initial problem definition.^14,15 Root cause analysis uses reasoning based on normative causality—that is, solutions within existing mental models that tend to focus on incremental improvements rather than architectural or systemic
improvements.^16,17 Furthermore, problem solving tends to focus on technical improvements and not sufficiently on the necessary cultural transformation and competence building of people and teams.¹⁸

Appreciative inquiry

David L. Cooperrider and Suresh Srivastva developed the appreciative inquiry improvement method, which focuses on building improvement competence.¹⁹ Cooperrider’s research showed cultural change occurred faster and more creatively when change efforts focused on expanding existing success experiences rather than identifying problems to eliminate.²⁰
Based on this finding, appreciative inquiry was developed as a method for defining preferred future states and building competence to reach them. Table 1 describes the underlying principles of appreciative inquiry.

The appreciative inquiry method can be initiated from either a problem or an opportunity through:

1. Defining an affirmative topic—a compelling and attractive question for which the answer initiates desired change. An affirmative topic reformulation transforms a statement such as: "The problem to solve is the team’s low productivity and high absenteeism" into the question, "How do we become a high-performance team in which everyone uses their top strengths every day?" The difference in engagement and opportunities for action is remarkable and shows the simultaneity principle in action. This question alone begins an improvement journey.
2. Discovery of success factors already existing in the organization for answering the affirmative topic (for example, positive experiences, strengths, knowledge and motivations). By sharing stories that illuminate success factors, the positive principle is put into action.
3. Creation of a shared future state. Here, as many participants as possible are engaged in co-creating and visualizing the preferred future state. This activates constructionist and anticipatory principles.
4. Design of solutions for realizing the future state. The solutions should be provocative in that they make people think and act in new ways.²¹ Successful initiatives often create a guiding metaphor that continues all the way until implementation.²²
5. Implementation and turning designs into action. Often, initiatives that create transformational change drive prioritization based on engagement and personal initiative rather than planning the change.²³

Figure 3 illustrates appreciative inquiry. First, the problem (or opportunity) is reframed into an affirmative topic, success factors are identified and a desired future state is visualized. The doing phase uses the success factors for designing and realizing the improvement.

Figure 3 shows appreciative inquiry as future oriented, creating improvement by elevating competence in the system. The method assumes that cause-relationship understanding is not necessary to create improvement; you need to understand only the desired future state and how to get there.

Frank C. Johnston and Duane P. Beck highlight the power of the positive approach applied to lean Six Sigma and highlight how elements from positive psychology can help create an empowered and a more productive workforce.²⁴ Accordingly, appreciative inquiry brings competence-building elements into the improvement method:

• In the affirmative topic step, by broadening the solution space and generating new social assumptions.^{25, 26}
• In the success factor analysis by accelerating learning through success experiences focus,^{27, 28} reinforcement of positive behavior,²⁹ surfacing tacit knowledge³⁰ and by raising social relations and expectations.³¹
• In the future state visualization step by creating shared purpose and positive future images.³²

Broader framework

As illustrated, problem solving and appreciative inquiry methods differ in how they initiate improvement, describe goals and collect knowledge. Problem solving focuses on realization and appreciative inquiry on competence building.

The two methods’ steps can be used to form an improvement method framework that visualizes a combination of possibilities (see Figure 4). The six circles represent improvement steps, and the arrows show possible combinations. Each combination represents an alternative improvement method. For example:

• Problem solving starts with the problem statement (one), followed by cause analysis (three) and finishes with the design of solutions (six).
• Appreciative inquiry starts with affirmative topic choice (two), success factor analysis (four), followed by future state visualization (three) and finally the design of solutions (six).

Although the two methods seem mutually exclusive, they are not. Some methods combine steps from each. For example, the Toyota Kata³³ (steps one, three, four and six) and the Solutions Focus method³⁴ (steps one, two, five and six).

Adding new methods to your palette

The improvement method framework can be used to design a palette of methods supporting any specific improvement strategy, as steps on the left side in Figure 4 emphasize realization and the steps on the right side emphasize competence building. Here are three methods based on empirical exploration of the framework:

1. Learn from daily success. Step two: Ask, "How can we elevate the best of what we already do?" Step five: Monitor daily performance and use anything exceeding the expected as an opportunity to initiate systematic success factor analysis. Step six: Reinforce the success factors and repeat the successes in the future.
2. Share the problem-solving perspective. Step one: Define the problem and grasp the current situation. Step three: Gather stakeholders and create a shared visualization about the future. Step four: Analyze problem causes to the root. Step six: Identify countermeasures to eliminate problems and realize the desired future state.
3. Solve problems by competence building. Step one: Define the problem and grasp the current situation. Step three: Gather stakeholders to create a shared vision of the future. Step five: Identify success factors for realizing the shared vision’s elements. Step six: Identify initiatives that turn the success factors into solutions to the problem.

Taking the next step

Improvement efforts should address realization efficiency and competence building. An improvement strategy should explicitly choose how to balance efforts. Because different improvement methods develop realization efficiency and competence building differently, the methods also should be actively chosen.

Examples in the article show how improvement methods can be designed to support different improvement strategies. A framework for designing methods for a particular improvement strategy shows how elements of problem solving and appreciative inquiry can be combined for more comprehensive improvement methods for daily improvement activities.

The art of defining and operating an improvement strategy is a key competence in successful quality and operations management. What’s your next step?

References and Notes

1. Chris A. Voss, "Paradigms of Manufacturing Strategy Revisited," International Journal of Operations and Production Management, Vol. 25, No. 12, 2005, pp. 1,223-1,227.
2. Maurizio Zollo and Sidney G. Winter, "Deliberate Learning and the Evolution of Dynamic Capabilities," Organization Science, Vol. 13, No. 3, 2002, pp. 339-351.
3. Gopesh Anand, Peter T. Ward, Mohan V. Tatikonda and David A. Schilling, "Dynamic Capabilities Through Continuous Improvement Infrastructure," Journal of Operations Management, Vol. 27, 2009, pp. 444-461.
4. Pernille H. Brun and Mikkel Ejsing, Leading From a Strength-Based Perspective, Danish Psychological Publishers, 2012.
5. David Rock and Jeffrey Schwartz, "The Neuroscience of Leadership," Strategy+Business, Issue 43, 2006.
6. John R. Dew, "In Search of the Root Cause," Quality Progress, March 1991, pp. 97-102.
7. A.V. Hill, The Encyclopedia of Operations Management, Pearson Educational, 2012.
8. Jeffrey K. Liker, The Toyota Way—14 Management Principles From the World’s Greatest Manufacturer, McGraw-Hill, 2004, pp. 256.
9. John Shook, Managing to Learn—Using the A3 Management Process to Solve Problems, Gain Agreement, Mentor and Lead, Lean Enterprise Institute, 2008.
10. In this article, all these scientific methods are referred to as problem solving.
11. Rick Delbridge and Harry Barton, "Organizing for Continuous Improvement: Structures and Roles in Automotive Components Plants," International Journal of Operations and Production Management, Vol. 22, No. 6, 2002, pp. 680-692.
12. Chris Argyris, "Double Loop Learning, Teaching and Research," Academy of Management Learning and Education, Vol. 1, No. 2, 2002, pp. 206-218.
13. Mike Rother, Toyota Kata—Managing People for Improvement, McGraw-Hill, 2010.
14. Michel Avital, "Innovation in Information Systems Education: Accelerated Systems Analysis and Design With Appreciative Inquiry—An Action Learning Approach," Communications of the Association for Information Systems, Vol. 15, 2005, pp. 289-314.
15. Frank J. Barrett, "Creating Appreciative Learning Cultures," Organizational Dynamics, Vol. 24, 1995, pp. 36-49.
16. Mark Paradies, "Under Scrutiny," Quality Progress, April 2010, pp. 32-37.
17. Mary J. Benner and Michael L. Tushman, "Exploitation, Exploration and Process Management: The Productivity Dilemma Revisited," Academy of Management Review, Vol. 28, No. 2, 2003, pp. 238-256.
18. Jeffrey K. Liker and Gary Convis, The Toyota Way to Lean Leadership, McGraw-Hill, 2011.
19. David L. Cooperrider and Suresh Srivastva, "Appreciative Inquiry in Organizational Life," Research in Organizational Change and Development, Vol. 1, 1987, pp. 129-169.
20. Ibid.
21. David L. Cooperrider, Diana Whitney and Jackie M. Stavros, Appreciative Inquiry Handbook, Crown Custom Publishing, 2008.
22. Ibid.
23. Gervashe R. Bushe and Aniq F. Kassam, "When Is Appreciative Inquiry Transformational? A Meta-Case Analysis," Journal of Applied Behavioral Science, Vol. 41, No. 2, 2005, pp. 161-181.
24. Frank C. Johnston and Duane P. Beck, "The Power of Positive," Quality Progress, February 2012, pp. 18-23.
25. Avital, "Innovation in Information Systems Education: Accelerated Systems Analysis and Design With Appreciative Inquiry—an Action Learning Approach," see reference 14.
26. Kenneth J. Gergen, "Toward Generative Theory," Journal of Personality and Social Psychology, Vol. 36, No. 11, 1978, pp. 1,344-1,360.
27. Daniel S. Kirschenbaum, Arnold M. Ordman, Andrew J. Tomarken and Robert Holtzbauer, "Effects of Differential Self-Monitoring and Level of Mastery on Sports Performance: Brain Power Bowling," Cognitive Therapy and Research, Vol. 6, No. 3, 1982, pp. 335-342.
28. Barrett, "Creating Appreciative Learning Cultures," see reference 14.
29. Rock, "The Neuroscience of Leadership," see reference 5.
30. Ikujiro Nonaka, "The Knowledge-Creating Company," Harvard Business Review, Vol. 7, 2007, pp. 162-171.
31. Robert Rosenthal, "Interpersonal Expectancy Effects: A 30-Year Perspective," Current Directions in Psychological Science, Vol. 3, No. 6, 1994, pp. 176-179.
32. David L. Cooperrider, "Positive Image, Positive Action: The Affirmative Basis of Organizing," which appears in Cooperrider, Peter F. Sorensen, Diana Whitney and Therese F. Yaeger’s Appreciative Inquiry: Rethinking Human Organization Toward a Positive Theory of Change, Stipes Publishing, 2000, pp. 29-53.
33. Rother, Toyota Kata—Managing People for Improvement, see reference 13.
34. Paul Z. Jackson and Mark McKergow, The Solutions Focus: Making Coaching and Change Simple, Nicholas Brealey Publishing, 2007.

David Hansen is a senior consultant at Resonans in København, Denmark. He holds a doctorate in management engineering from the Technical University of Denmark in Lyngby. He is an associate member of ASQ.