Making Process Improvements Stick

Early excitement usually leads to backsliding.

- Matthias Holweg, Bradley Staats, & David M. Upton

STARTING WITH Frederick Taylor and W. Edwards Deming, managers have long been obsessed with ways to improve business processes. And in the past 20 years, a host of improvement initiatives, including lean production, Six Sigma, and agile, have swept through a range of industries. Studies show that companies embracing such techniques may enjoy significant improvements in efficiency and costs. But when the University of North Carolina’s Brad Staats and the University of Oxford’s Matthias Holweg and David Upton looked at the benefits, they noticed a gap. “These things always work well initially, but often the gains fade very quickly,” Holweg says. “It’s always felt like researchers were telling only half the story. It’s not just about putting the programmes in place – it’s also about making them stick.”

To understand why some improvements are sustained and others aren’t, the researchers examined 204 lean projects launched from 2012 to 2017 at a European bank with more than 2,000 branches in 14 countries and serving more than 16 million customers. The lean initiative, started by the head office, was supported by a global consulting firm, which helped create an in-house academy to train lean “champions” at each regional subsidiary. Initial projects focussed on processes (such as opening an account and making a wire transfer) that could benefit from decreased hand offs and fewer steps and were common to all regions. The regional offices subsequently identified additional projects according to their needs. The projects shared an overarching goal: to increase labour productivity, a key variable in service operations.