Improvement work almost always involves trade-offs. How much time and money do you invest in data collection and in-field work before making the decision to proceed? When do you switch from insight gathering to implementation? To what extent do you consider implementation readiness versus duration versus its pay-off?
The ideal balance generally changes for each unique context. Getting it right can be the difference between success and failure. As just one example, a common frustration in the early days of Six Sigma adoption was the conflict between following a disciplined, data-driven approach, which could easily take months to achieve ‘required’ confidence levels, in contrast with the opportunity cost of delaying the actual implementation of change and its expected benefits.
Whether you are weighing up trade-offs in your early stages of discovery to find where improvement effort may be needed, or you have done that work and now you’re looking at which of maybe many improvements you’ll invest in, there are four major types of trade-offs we encourage clients to consider.
Trade-off #1 – insight…what kind and how much
This set of trade-offs typically relate to the initial stages of improvement work, but can also relate to ongoing monitoring and evaluation. There are many methods that can be used to gain insight, including data collection, in-field observation, direct engagement with team members and the experience of those involved. These all come with different time and cost impacts and different ‘confidence’ levels as you work through what kind of information, and how much information, is needed to make strong decisions.
Trade-off #2 – complexity…what problem you’re solving
This considers the complexity of the problem being solved including the time it may take to work through to a suitable solution. For example, a problem where all stakeholders are led by the same manager would usually be preferred over one that spans multiple managers. In these instances, we talk with clients about the benefits of limiting the number of handoffs across silos. That’s because the effort to align more managers to a common business goal, and the need to engage more stakeholders, both increase the complexity, time and experience required to successfully deliver results. Improvements that relate to technology, human resources or supply chains are some examples of those that can often mean higher levels of complexity for these reasons. Complexity also involves what it may take to reach sustainability and avoid incremental failure.
Trade-off #3 – implementation…what action really looks like
This is primarily around ease of implementation. It can cover areas such as:
- The number of people involved, from those changing their core work practices to those changing peripheral practices to those being informed and so on
- Timeframes such as length of implementation and wait-time before benefits are delivered
- Level of innovation – for example, replicating an improvement delivered elsewhere versus something being tried for the first time have varied influence over ease of implementation.
Trade-off #4 – impact…what the gains will be
This is simply about the value you expect to see from the change, whether cost, productivity, risk reduction or another area of value. Higher value seems like an obvious choice. However, an improvement opportunity that presents moderate value, and offers lower complexity and easier implementation, may be a worthy contender over a tougher though higher perceived value.
Each of these are ultimately about making better decisions and weighing up how much information you need to have confidence that each decision you’re making is the right one to take the next step. We’ll share more on that balancing line in our next blog.