CHAPTER 16

Involvement of People in Continual Improvement Process

He knew how to enlist in his service man better than himself

– On the tombstone of Andrew Carnegie

Background

Every institution—governmental as well as non-governmental—is in a competitive mode to attract capital and entrepreneurs. At the state level, competitive mode is characterised by efficient governance, speedy action and excellent infrastructure related to water, roads, transportation and communication. At the institutional level, competitive edge is determined by ‘total’ productivity level of an institution to have the strength to outwit, outflank and outperform the competitors.

Productivity

Today, broadly two major types of industry have come into existence, namely the ‘making and moving industry’ like manufacturing, mining, construction and transportation, and ‘knowledge and service industry’ like information technology (IT), biotechnology, healthcare, education and hospitality. Although the word productivity was not even listed according to its present meaning in the 1950 edition of the Concise Oxford Dictionary, there has been a productivity explosion in the making and moving sector in many advanced nations of the world.

The knowledge and service industry has come to represent an area which is labour intensive as well as capital intensive but not yet cost-effective to customers. This is evident in hospitals. Diagnostics are excellent with instruments such as ultrasound, body scanners, nuclear magnetic images and blood and tissue analysers. New methods of treatment are in place. These mean more capital to the hospitals and more expenditure to the people with no reduction in healthcare costs. This is the typical situation in the knowledge and service industry. Knowledge industries are those that are related to technologies of information, bio and nano knowledge-based manufacturing, knowledge-based agriculture comprising transgenic crops, new fertilisers, advanced technologies of food processing and food storage and the conventional ones such as nuclear, space and material sciences. The answer to this situation lies in improving productivity in the knowledge and service industry, where the productivity is not increasing and the issue of productivity is yet to catch up.

In India, there is a need to improve the productivity in ‘making and moving’ as well as ‘knowledge and service’ industries in order to make them competitive.

Organising an enterprise

In Chapter 2 it was noted that change is a sweeping force. It affects every institution/organisation including the way it organises itself. The evolving pattern is briefly described here under as per fading style, new style and role of knowledge worker.

Fading style

The following, hitherto commonly found pattern of management no longer works.

1. Command and control. Management style, is through a kind of benign dictatorship, inspired by military role models. The manager dictates his/her employees on what to do and then supervises them.
2. One right way. The instructions of the management are assumed to be right. The role of those who are managed is not to question or suggest alternative approaches. There is a belief in that there is one right way to undertake tasks and that the management has all the wisdom to decide on that way.
3. Subjugation. Commands have to be obeyed. If commands are not followed, it is perceived as subversion. The machine age is built around subjugation.
4. Labour not human resources. The workforce is labour—hired hands with no stake in the organisation. Labour is generally in plentiful supply and the company does not owe them anything, though they are expected to demonstrate loyalty to the company.
5. National not global. Perspectives are generally national, sometimes regional and rarely international.
6. Security not insecurity. While employees are not offered recognition or responsibility, there is an unspoken contract built around security. Companies have a feel of permanence, dominating towns and their markets. The future seems predictable and their place in the future even more predictable. Hence, security is assured.

In enterprises subscribing to the above pattern of management, employees use their hands and feet; and not their creative abilities. Thus they lose their sense of pride and self-esteem. The management also looks upon its employees as a cost and not as an investment that can generate wealth. Thus both the employer and employees suffer under the above pattern of management.

New style

The new pattern of management replaces the command, control, direct, manage, supervise style by coach, mentor, delegate and develop pattern to have people who achieve better results continually with self-assurance, self-confidence and self-esteem in order to make the organisation grow exponentially. To facilitate this process of exponential growth, the organisation promotes the following features:

1. Flexible and free flowing. It consists of a stable core of permanent employees driven by corporate goals and supported by an array of contractual arrangements—temporary, casual, part-time employees, sub-contractors, franchise and outsourcing arrangements. In other words, enterprises with only few employees possibly linking to one another like event-managers, but richly capable of networking with several specialist groups.
2. Non-hierarchical. Hierarchy cannot disappear, but their levels are reduced and each level is lean in number but fit, capable and performing.
3. Participation. In the new set-up, people who are hired are those who recognise that he/she does not possess all the best ideas and hence he/she has to seek those ideas from everyone inside and outside the organisation.
4. Creative and entrepreneurial. These provide the muscle to seek and seize new opportunities as well as to create new business.
5. IT is a key resource. Extensive use of IT in every activity is the corner stone of the organisation.
6. Ad-hochism, not permanent features. The nature of work changes at short intervals of time. There are no fixed/standardised jobs. Work can be associated to the nature of projects involving new objectives, people, places and no two jobs can have any semblance to each other, not even remote. Hence, there is a greater challenge to be flexible and adaptive, to be adept in quickly learning the new things and adapting to new environments.

In each of these features of the organisation, the point to be noted is the wide scope present for the involvement of people. Here, involvement is not a matter of obligation or courtesy, but that of the economic need to survive, grow and prosper.

Role of knowledge worker

Knowledge workers have given an impetus to bring about empowerment as well as the new pattern of management stated earlier.

The expression knowledge worker is used in a special context and in a restricted manner. It does not admit a liberal interpretation to cover any one who has knowledge, skill, experience and ability to use computers in his/her work. This understanding is important to attract and retain knowledge workers.

A knowledge worker belongs to the information technology field, provides systems for the system user irrespective of the area of work and the type of work, gets information and arrives at decisions based on the information provided at any given point of time. He/she builds versatile, flexible, adaptive systems through connectivity, accessibility, convertibility and linkages. He/she also provides adequate safeguards against virus attack, system crashing, data corruption and tampering, hacking, etc. He/she strengthens systems through back-up arrangements and data security measures. These are the areas of work of the knowledge worker. His/her resources are primarily imagination, knowledge, ingenuinity and to link them to come out with a system that provides instantaneous information-based solution. The shape, size, structure and mode of operating the system would not be known even to the knowledge worker except perhaps in its wide vague vision like form and would get evolved over time in the same way as it happens to a work of art—painting, music, novel. Hence, the knowledge worker is also referred to as an ‘industrial artist’. All artists are workers; but all workers are not artists. Such ‘industrial artists’ can be found in any field of work, research and study, business, industry, services like health, transport, engineering, medicine, social, cultural, political, etc.

Their number is not large in an enterprise. But their influence is significant on the enterprise as a whole. They have certain distinct characteristics as listed hereunder. These need to be taken note of, supported and accommodated by management to retain them and use them productively.

1. He/she is dependent on learning and not experience. Hence, continual learning is his/her compulsory habit.
2. He/she has high manual skill as well as the ability to do work with his/her own hands.
3. He/she is not amenable to command and control methods of the past.
4. He/she has to have the freedom to change the work itself as a rational step in the task of increasing productivity.

Continual improvement and productivity in an organisation

Productivity increase in an organisation is the cumulative impact of several continual improvement efforts in a functional area. Continual improvement for its success depends on people and their involvement. Therefore, continual improvement has to be a people’s movement in every organisation. This is the focal point of involvement of people. It depends on the new pattern of organisation stated earlier in this chapter. In addition, it is necessary to have certain distinct features as mentioned to render the working environment more people-oriented and people-friendly.

Distinct features of a people-friendly environment

The distinct features in a people-friendly environment of an institution that pave the way for effective and committed involvement in CIP are listed in Table 16.1 and each one is outlined in the following sections. These features are extremely relevant to the knowledge industries because success in these industries depends on how well their human resources are nurtured and grown.

TABLE 16.1 People-Friendly Environment: Distinct Features

Inner democracy Learning environment Education and training Decentralisation Customer and competitor orientation Value addition and blind spots to avoid CEO concern and task

Inner democracy

• Free and full communication.
• Consensus, not coercion or compromise, as a basis of managing.
• Influence based on competence and technical knowledge; not personal whim or prerogative of power or closeness to power centre.
• Uncompromising adherence to core values and deeds.
• No individual can operate the business like a fiefdom in spite of one’s good track record, capabilities and contributions; Anyone who cannot work in a team proactively may not have gainful employment for long. Even at senior levels, a person’s continued value to the organisation is not judged by his individual competence and capability but his ability to forge the team, guide the team, work through the team, and achieve results through team effort.

Learning environment

• Immense capacity to learn from mistakes.
• Ability to make bold midterm corrections.

Education and training

• Knowledge is capital; timeliness is crucial.
• Competitive edge lies in the ability to learn and master quickly compared to the rest.
• Organisation focus: nurture, develop, manage and channelise human imagination in employees to create new and different values, products, services and information.
• Training for everyone: technical and conceptual skills, tools and techniques.
• Everyone needs to be a computer literate and proficient in the use of IT.

Decentralisation

• Radical type, not incremental.
• High degree of autonomy and empowerment focused on delegation and empowerment.
• Creating any number of new business units with ease.
• Farming out the activities.

Customer and competitor orientation

• Intense customer orientation is evident throughout the organisation.
• Focused competitor orientation to be in readiness to outwit, outflank and outplay the competitor.
• Understanding the future in terms of
  • customers to serve,
  • competitors to face,
  • channels to reach the customers,
  • source of margins and
  • requirements of unique skills and capabilities.
• Recognising that the understanding on each of these terms has to be significantly different from what it is today (step function) and not just as an exercise in extending the curve.
• Preparing for future needs.

Value addition

• Be known for innovativeness.
• Attract exciting people.
• Question organisational myths, assumptions and taboos.
• Absence of politics, ‘I am proud I cannot handle political manipulations’ said Ratan Tata.
• Environment: collegial, supportive, laughter-filled.
• Ethics: beyond all doubts.
• Attention to details: a must, as the devil lies in the details.
• Work with lead suppliers.
• Work with lead customers.
• Belief system as under.

Belief System to Succeed

Aspect	Success feature
Thought on tomorrow Outlook on change	Not like today (like today)* Comes swiftly predictable (evolutionary, unpredictable)
Outlook on innovation	Innovation is the key to be an attacker Innovation is risky; not to be innovative, is riskier (riskier than defending the present)
Focus on technology	Have the right one at the right time (more on cost-effective)

Blind spots to avoid

• Not noticing the change.
• Ignoring change.
• Not invented here (NIH) syndrome. (Late Peter Drucker describes NIH as “the arrogance that leads a company or an industry to believe that something new cannot be any good unless they themselves thought of it. So the new invention is spurned”. The classic example of the world-supremacy of Japan in consumer electronics owes its origin to the neglect of transistor by the American electronics manufacturer due to NIH syndrome.)
• Strong economic performance-induced sense of security and complacency.
  (These blind spots lead to doing too little too late.)

CEO’s concern/task

The CEO task includes positive support to all the features explained earlier in addition to the following.

• Managing major transitions relevant to the company.
• Courage to go against the grain when felt convinced about an issue.
• Support when new products and processes inevitably go astray.
• Creating the future, not just replacing a new product or service.
• Rewrite the rules of the industry, reinvent, cause revolution to humble copycats and discounters.
• Building shared destiny relationships across the supply chain.
• Articulating the view of the corporation as a value-creating entity of the society—an institution of social legitimacy.

These features empower the employees and render the work and place of work a source of joy.

This empowerment is a key element that promotes love of work, joy from work and together commitment to work. Love is a powerful emotion. It establishes an emotional bond, motivates and energises human endeavour to achieve better results; blossoms a shriveled mind and a sunken heart and spurs action. Such a powerful emotion must be built into the ethos of work. Love in the context of quality means ‘Love of work and its output or product meaning goods of the enterprise or the services offered by it or both’. In short, when love mingles with work, the quality gets reflected in the job of everyone right from upper management to the grass root level.

Attachment to work enables one to acquire thorough knowledge of the process and product—their touch, look, smell, feel, performance and anatomy; types of failures they suffer from and the several ways of their misuse/wrong use; the nature of charm they hold to the customer as well as the seemingly simple things that hurt the customer, etc. Individually all these things are minor. But collectively they are formidable and valuable in the task of achieving quality and productivity.

Reality check: involvement

The direction of involvement of people comprises the following and with respect to each, the response in an enterprise has to be in the affirmative, for every employee at all times. This has to be ensured through verification and appropriate action, both termed as reality check.

Once the reality check is found to be satisfactory, the stage is set for continual improvement exercise. It is better to start with housekeeping as explained in Chapter 32. Focus on housekeeping makes a visible impact through changes in work place—its set-up and up keep, encouraging people to contribute ideas and suggestions for improvement, transparently selecting the worthwhile ones and implementing them, both without delay. This gives confidence to people in their ability to cause a change and also make them trust the organisation in its earnestness to implement the worthwhile ideas.

Impact of continual improvement

The enormity of the scope and challenge of continual improvement in an organisation can be gauged by the type of achievements to be accomplished with respect to the parameters listed in Table 16.2.

TABLE 16.2 Parameters to be Covered

Parameter	Reference to requirement/criteria to be achieved
Quality and customer Cycle time Financial measures Physical plant Product creation process Supplier base management Environment Features of self-managing culture of work	Annexure 16A Annexure 16B Annexure 16C Annexure 16D Annexure 16E Annexure 16F Annexure 16G Annexure 16H

The characteristics enumerated and requirement/criteria specified for each characteristic with respect to every parameter stated in Table 16.2 are illustrative and not exhaustive. They can be updated regularly.

At the employee level, the impact of continual improvement is to promote the spirit of self-managing. The type of transformation that an organisation undergoes through the spirit of self-managing is illustrated in Annexure 16H. Man is born free, desires to grow with freedom, is willing to contribute his/her might through a feeling of being free with self-control. This is the life of freedom with responsibility and accountability and such a life is promoted through the instrument of continual improvement.

Conclusion

Business is people. It is people who make the real difference between two organisations/institutions commanding the same type of physical resources. An organisation that creates an inspirational environment for its employees to use their power of creativity and innovation need not be uncertain on achieving its goals and ambitions. People never fail an institution/organisation. But the reverse can be a reality. Hence, every institution/organisation must not be lax in its effort, dedication and commitment to build an inspirational environment. An outline of building such an environment is dealt with in this chapter.

Annexure 16A

Quality/Customer Satisfaction

Characteristic	Requirement/criteria
1) Process capability (Design tolerance Process variance)	Process variation controlled Wide margin between design tolerance and process variance, Cpk > 2.0
2) Product reliability (external)	Field failure rate <100 ppm (0.01%) to start with No significant warranty costs
3) Defects (internal)	<100 ppm to start with
4) Customer satisfaction Delivery commitment Quality requirement Complaints Measurement	100% 100% 100% of all complaints, say, in 5 days Measured. Direct contacts to verify the feedback system. Improvement actions to meet targets set by the customer
5) FTY(first time yield)	>97% to start with
6) Scrap/rework	<2% to start with
7) QA system	QA system in each section certified as supporting TQM

Annexure 16B

Cycle Time

Characteristic	Requirement/criteria
1) Total business cycle (make to market)	Faster than competition Early supplier involvement Concurrent process–product engineering
2) Supplier lead times	Direct supplier delivery to line Supply synchronised with production without contributing to excess inventory or WIP
3) New product introduction	Consistently beat competition ‘Six Sigma’ right from the start Concurrent design, engineering and manufacturing
4) Set-up/changeover times	Minimum

Annexure 16C

Financial Measures

Characteristic	Requirement/criteria
1) Asset utilisation	Better than competition
2) Inventory turns (WIP, purchased, finished)	>5
3) Labour productivity (direct, indirect)	Consistently improved
4) Product costs	Consistent use of value analysis/engineering Lowest in industry/country Lowest in the world

Annexure 16D

Physical Plant

Characteristic	Requirement/criteria
1) Equipment layout	Product oriented Continuous-flow production Multipurpose layouts Group technology
2) Batch sizes	Least size, can be even ‘one’
3) Distribution and warehousing	No warehousing. Incoming materials flow into and through the process to customer
4) Information	Integrated system Production information shared with all employees
5) Maintenance	TPM Expert system for diagnosis Performed by operators Maintenance scheduling synchronised with production
6) Rush orders	Rare
7) Housekeeping	Clean, orderly Minimum WIP Self-maintained and always tour ready

Annexure 16E

Product Creation Process (PCP)

Characteristic	Requirement/criteria
1) Customer orientation	Clear satisfaction Meets customer, environmental, statutory needs Use of QFD Customer effectively integrated into the process
2) Cross-functional involvement	Multifunctional cooperation from the beginning Concurrent engineering Team work
3) Product technology planning	Reliable input of information Control on time and budget Fast manufacturing start-ups
4) Engineering data management (EDM)	Consistent use of design for manufacturing and recycling Use of process technology and current parts Optimum commonality of parts and processes Family design
5) Capabilities	Optimum availability of skills: technical, social and organisational
6) Development through time	Shorter than competition

Annexure 16F

Supplier Base Management

Characteristic	Requirement/criteria
1) Supplier involvement	Key suppliers involved in early stages of PCP Suppliers involved in continual improvement processes
2) Supplier assessment	All key and preferred suppliers have their quality assurance system Some have won recognised awards—national, international
3) Member of suppliers	Minimum supporting excellence in manufacturing
4) Vendor rating	Well-structured system focused on price, quality, time, reliability, technology, performance and partnership attitude

Annexure 16G

Environment

Characteristic	Requirement/criteria
Pollution of air, water, and land	Compliance to national/international standards. Continuous measures to improve the following: Reducing waste in the use of natural resources Use of environment friendly products Use of non-conventional energy
Pollution due to noise and power generator	Upgradation of technology and process to make it more efficient in the use of energy and water Noise suppression and/or isolation Recycling of resources like water Waste heat, recovery process Reducing the effluent (even treated) let off outside the company

Annexure 16H

Features of Self-Managing Culture of Work

Ownership

Various nomenclatures like Private Limited Co., Public Limited Co., Public Sector, Joint Sector, indicate the nature of ownership of an enterprise from a legal stand point of view. It is concerned with the rules and regulations of the government that an enterprise is expected to comply with. Ownership is an external label. It is a legal entity.

A person or a group of persons claiming to be owners of an enterprise may not mean that they would achieve the purpose of ownership of an enterprise or institution. Instances are not few wherein ‘owners’ have been responsible for milking the enterprise dry or mismanaging the enterprise to impoverish its employees and leave the stakeholders high and dry. This implies that ‘owners’ are not ‘owning’; ‘ownership’ is not ‘owning’.

Owning

Owning is an emotional bond. This is reflected in instances where employees impoverished by the owner, struggle to wrest the ownership into their hands to nurse the enterprise back to health. Here owning, the emotional bond, asserts itself to become a legal entity to take charge of the enterprise.

Ownership and owning

It is important to know the difference between ownership and owning. An owner owns the enterprise when he/she manages it well and he/she does not own the enterprise when he/she mismanages the enterprise. Thus, there can be an owner without owning. An employee does own the enterprise when he/she works with commitment, efficiency and diligency. Thus, there can be owning without being an owner. Therefore, owner does not always imply owning and owning does not mean owner. The impact owner and owning have on an enterprise is shown as under.

Enterprise: Owner and Owning

	Owner
Employee	With owning	Without owning
Owning without being an owner	Owning—with owning Reaches the star Solid citizen Faces challenges ably	Owning—without owning Survives with difficulty Has good potential to grow Waits for an emancipator
Not owning	Not owning—with owning Surviving with difficulty Internal vitality: mediocre/feeble Cannot face challenges	Not owning—without owning Dead Dead even at birth

Thus, the challenge for any institution or enterprise is to ensure that the emotional bond that owning represents is always manifested properly and in adequate measure among the owners and employees of the organisation. This is facilitated through self-managing for which the building block is CIP.

Continual improvement, one of the eight managing principles of TQM, can bring out changes in certain aspects and promote self-managing as

1. Designations. Designations such as chairman, managing director, secretary, director are only of external significance especially where they are also mandated by law.

   Internally, everyone is an employee with a specific agenda of work and designations serve no purpose except as a symbol of power and authority, which the self-managing process intends to dilute and delegate across the work force. Hence, it is better to have a nomenclature free from hierarchy. For example, every employee of the Indian Statistical Institute used to be designated as worker. In many new organisations, organisational hierarchy stands considerably reduced 3 to 4 levels; Workmen are referred to as associates.

2. Status symbols. There are many practices which reflect status symbols, “pomp and power”; and not work, task and results. For example, a manager is served tea in a cup and saucer; workman in a steel tumbler, leave alone the question of quality of tea served to each. Does such a distinction on such an ordinary matter lead to establishing even a feeble emotional bond of owning the work? Such practices are there in plenty. They need to be consciously identified and eliminated. With this goes the culture of one group dominating over the other yielding place to self-managing through synergistic support and understanding.
3. Transparency and sharing information. Information is power in the present age of IT. Connectivity and speed of action are the watch words of the day. Hence, decision-making power has to be shifted to cutting edge level in every functional area. This is facilitated through transparency and sharing of information.

   For example, a packer with the information on cost of a cardboard box he/she handles sensitises himself and others concerned on preventing spoilage and misuse of card board boxes; a loader with the information on the value of the packed box he/she is loading brings ‘mother care and touch’ to handling. A sense of belonging and owning the work gets heightened when needed information flows freely. The employee who gets the information that he/she was denied all these days, feels that he/she is trusted. Thus free flow of information is not a mere mechanical act but a manifestation of trust in the employee.

   An attempt must be made to identify all the information which needs to flow to the cutting edge to make it knowledgeable, capable and sensitive to take decisions, actions and achieve results. Technology is available to provide the up-to-date information to decide and act.

4. Lead, coach and facilitate. Self-managing is not control through domination. Hence, the words direct, control, command, supervise become obsolete and get replaced by lead, coach, teach, self-example and facilitate.

   With such a change, the immediate task of supervisory personnel and others would be to enable everyone in every functional area to be

   • data literate and data dependent to judge performance,
   • problem focused and problem solvers and
   • adept in preventing problems instead of doctoring problems.

   Thus, supervisory personnel and other senior levels become facilitators to guide, coach and teach self-managing teams besides removing constraints/bottlenecks, which can impair the work of self-managing teams.

5. Learning environment. For self-managing to be effective, access to knowledge must be easy. It starts from creating an awareness that one can be a living dead if one’s knowledge is obsolete and the rate of obsolescence of knowledge is high. Library must be accessible to every employee. Every employee’s curiosity must be raised to acquire knowledge. It can start with one’s work, products of the company—what they are, how they work, where they are used, etc. Resource persons can be identified who can provide generic and specific inputs. A minimum knowledge kit has to be established as relevant and applicable to an organisation and every employee has to know it well.

   Thus, for example, it is necessary for an employee to know how he/she can be time-efficient, good at communication and be a value-adding person. These and several other skills needed for self-managing are briefly dealt with in the subsequent chapters.

6. Self-control/empowerment. Control through self-managing/empowerment is far superior to control through subjugation

Control through
Self-managing/empowerment	Subjugation
Seeks the job to be done	Waits to be alloted
Checks the details of what is required and what is given Ensures their compatibility prior to start of job	Assumes what has been given is correct and proceeds with the work
Self-checks the first few items, finds OK, takes to bulk lot	Waits for supervisor’s clearance
In case of doubt and difficulty, stops the work, seeks clarification and then proceeds with the work	Supervisor is the shield. So, doubt and difficulty do not arise. Any problem in the work done is placed at the doorstep of the supervisor
Eager to know the quality of job done and learn from the difficulties. Develops pride of workmanship Work is a self-lifting and satisfying agent	Work is related to wage and nothing else
Enforces from within a strict, exacting, and effective control	Generates a work culture that is debasing—hold some one responsible, pass on the buck to next one