"Avoiding Repetitive Change Syndrome"

Eric Abrahamson

MIT Sloan Management Review

Winter 2004, pp. 93-95

The author of this article says that change is not always constructive, and organizations need to constantly monitor for symptoms of what he called "Repetitive Change Syndrome." This syndrome has three components:

1. Initiative overload—This symptom "manifests itself when organizations launch more change initiatives than anyone could ever reasonably handle."
2. Change-related chaos—This symptom is defined as "the state of upheaval that results when so many waves of initiatives have washed through the organization that hardly anyone knows what change he or she is implementing or why. Such chaos leads not only to anxiety and political infighting; it also makes it difficult for employees and customers to find out what procedures to follow, who has responsibility for what tasks, and who to turn to when they cannot find the answers to those questions."
3. Employee burnout—This symptom is often expressed as cynicism in the employees.

Repetitive change syndrome harms a company's capacity to make further needed changes, and it also starts taking time away from routine operations.

The author of this article recommends surveying small samples of employees at regular intervals, in order to measure the current rate of organizational change, the degree of organizational stability, and the damage that excessive change might have inflicted upon the organization.

Back to top of page

"Measuring the Strategic Readiness of Intangible Assets"

Robert Kaplan and David Norton

Harvard Business Review

February 2004, pp. 52-63

Among the "intangible assets" discussed in this article are employee skills, IT systems, and organizational cultures. These assets are more difficult for competitors to imitate, thus providing potential sustainable competitive advantage.

The authors state: "Although these characteristics make it impossible to value intangible assets on a freestanding basis, they also point the way to a new approach for quantifying how intangible assets add value to the company. By understanding the problems associated with valuing intangible assets, we learn that the measurement of the value they create is embedded in the context of the strategy the company is pursuing."

Drawing on their work as creators of the Balanced Scorecard concept, the authors present a method to systematically measure the company's strategic readiness—the alignment of the company's human, information, and organization capital in the service of its strategy.

Human capital is the skills, talent, and knowledge that a company's employees possess. Measuring human capital readiness involves identifying the critical few job families that have the greatest impact on successful strategy implementation, and then assessing the current capabilities and competencies of the employees in those positions. 360 degree feedback or self-assessment are the most common methods used.

Information capital is the company's databases, information systems, networks, and technology infrastructure. Measuring information capital readiness involves defining a portfolio of IT needs, and then assessing to what extent these needs are being met.

Organization capital is the company's culture, its leadership, how aligned its people are with strategic goals, and the employees' ability to share knowledge. Assessing organizational capital readiness is primarily about "assessing how well the company can mobilize and sustain the organization change agenda associated with its strategy." The areas that are assessed include culture, leadership, customer focus, fostering teamwork, open communication, alignment, and teamwork/knowledge-sharing. The article discusses how to measure each of these.

Back to top of page

"The 10 Steps to Lean Production; Step Four: Reliability Through Integrating Preventive Maintenance"

Steven Hunter

FDM

January 2004, pp. 30-33

In this continuing series of articles, the author this time explores the role of Maintenance in Lean Production.

The key point of this article is that "An essential element in the lean manufacturing system is system reliability. Lean systems have serial, linked processes, and by definition, do not have redundant components or duplicated machinery. Every component must operate properly every time."

In the Lean Production system, operators "are required to become aware of their equipment and its routine problems, such as process drift, loss of stability or loss of accuracy…workers carry out low level preventive maintenance tasks that take little effort or technical expertise. They include checking fluid levels, process alignment and other low-tech tasks."

The Maintenance Department carries out the maintenance tasks that are beyond the expertise of operators. These include process overhaul, replacing computer boards, and other high-level tasks.

The article also briefly discusses the 5S principles of workplace housekeeping (Sorting, Simplifying, Systematic Cleaning, Standardizing and Sustaining), as well as Nakajima's 5 pillars for integrated preventive maintenance:

1. Eliminate the six production losses
2. Develop an autonomous maintenance program involving workers in daily equipment maintenance
3. Develop a company maintenance policy
4. Increase operator and maintenance personnel skill
5. Develop an equipment management program, including a record of machine and tool use that notes how much they were used and who used them.

Back to top of page

"The 100 Best Companies to Work For"

Julia Boorstin

Fortune

January 12, 2002, pp. 58-78

This yearly list provides interesting reading on what various companies are doing to provide a great place to work. There is a brief description of the innovative programs at each company. The top 50 on this year's list are:

1. J.M.Smucker (jams and other foods)
2. Alston & Bird (law firm)
3. Container Store (container products)
4. Edward Jones (financial services)
5. Republic Bancorp (financial services)
6. Adobe Systems (publishing software)
7. TDIndustries (construction)
8. SAS Institute (software)
9. Wegmans Food Markets (grocery)
10. Xilinx (specialty chipmaker)
11. CDW (computer products)
12. W.L. Gore (Gore-Tex fabric and guitar strings)
13. Quicken Loans (mortgage broker)
14. Third Federal S&L (financial services)
15. Genentex (biotech)
16. Milliken (textiles)
17. Vision Service Plan (vision benefits plans)
18. Plante & Moran (accounting)
19. JM Family Enterprises (automobile distributor)
20. Synovus (financial services)
21. Bronson Healthcare (health-care group)
22. Pella (window and door maker)
23. S.C. Johnson & Son (household products)
24. REI (sports retailer)
25. Microsoft (software)
26. Griffin Hospital (healthcare)
27. Sterling Bank (financial services)
28. Cisco Systems (networking)
29. SEI Investments (investment services)
30. Stew Leonard's (grocery)
31. American Fidelity Assurance (insurance and financial solutions)
32. Valero Energy (refinery and gasoline retailer)
33. Amgen (biotech)
34. Starbucks (coffee)
35. Mayo Clinic (healthcare)
36. American Express (travel and financial services)
37. VHA (hospital staffing and equipment)
38. MITRE (technology consulting)
39. HomeBanc Mortgage (mortgages)
40. SRA International (information technology)
41. Goldman Sachs (investment)
42. Arnold & Porter (legal services)
43. Baptist Health Care (healthcare)
44. Hot Topic (clothing)
45. American Cast Iron Pipe (iron pipe)
46. Intel (computer products)
47. Whole Food Markets (health-food grocery)
48. Network Appliance (network-hardware)
49. Monsanto (agricultural technology)
50. Timberland (footware)

Back to top of page

"Managing Organizational Forgetting"

P. de Holan, N. Phillips, and T. Lawrence

MIT Sloan Management Review

Winter 2004, pp. 45-51

Over the past decade, there has been much interest in how organizations manage their organizational knowledge. The authors of this article say that the focus on organizational learning has tended to overlook the importance of organizational forgetting. The involuntary loss of organizational knowledge is costing companies large sums of money every year. Also, organizations must often forget old knowledge that traps them in the past.

Forgetting can be categorized along two dimensions: (1) accidental vs. intentional forgetting—"Accidental forgetting is most often associated with the loss of valuable knowledge, which reduces a company's competitiveness…Intentional forgetting, on the other hand, can result in increased competitiveness. If a company manages it properly, intentional forgetting can rid the organization of knowledge that has been producing dysfunctional outcomes"; and (2) entrenched vs. new knowledge—"Processes associated with forgetting things deeply embedded in a company's memory are very different from those associated with new knowledge, which can be shed more easily before it becomes widely known and established."

Combining the possibilities from the above dimension, there are four different possible forms of organizational forgetting:

• Memory decay—This is accidental forgetting of entrenched knowledge. Methods to deal with this are: Finding the true locations of organizational knowledge, and maintaining organizational memory as a strategic imperative.
• Failure to capture—This is accidental forgetting of newly innovated knowledge. Methods to deal with this are: Replicating new knowledge across individuals and linking the old to the new.
• Unlearning—This is intentional forgetting of entrenched knowledge. Methods to deal with this are: Breaking routines and practices, and divesting businesses.
• Avoiding bad habits—This is intentional forgetting of newly innovated knowledge. Methods to deal with this are: Don't over-learn from either failure or success, and isolate yourself from partners' bad habits.

Back to top of page

Finding the Six Losses

John McNeil, GP Deltapoint

The Hunter article refers to the six production losses. GP Deltapoint often uses these measures with clients to improve productivity and profits quickly and directly. Often these losses are referred to as the "Six Big Losses" and link Total Productive Maintenance activities with the OEE (Overall Equipment Effectiveness) measure.

OEE is an enormously powerful operating measure. It is the ratio of fully productive time to planned production time. To calculate it, multiply availability, performance, and quality percentages together to arrive at a total score against potential throughput. World-class availability is 90% or better. World-class performance is 95% or better and world-class quality is 99.9% or better. Multiplied together, world class OEE is 85% or better. Most manufacturing operations hover around 60% or so. Availability is the proportion of time that a process is operating. Performance is the speed versus full potential and quality is the percentage of customer-acceptable products produced.

In practice there are six main reasons that OEE is not world class in a particular situation: the six production losses.

The first loss is breakdowns. These are unplanned stoppages in production and often arise from equipment failures. Breakdowns affect availability.

The second loss is setup and adjustment. This affects availability, too, and generally arises from changeovers, material and operator shortages, and warm-up time.

The third loss is small stoppages and idling, which affect performance.

The fourth loss is reduced speed (due to rough running and equipment wear), which directly affects performance.

The fifth and sixth losses affect quality. They are startup rejects and production rejects. The difference is only in the time they are detected: during regular production or during warm-up, startup, or early production.

Equipment uptime tracking and the SMED techniques address availability. Cycle time analysis helps to pinpoint performance shortfalls while counting rejects and conducting root cause analysis help to reduce quality shortfalls. Of these, SMED changeover techniques are particularly powerful and increasingly relevant in a world of shortened lead times and mass customization. Our clients find that patient application of standard methods and constant, consistent data tracking are the surefire ways to find those losses.

Back to top of page