In the last few months, I have expressed my views on the challenges that shroud most established companies to innovate as much as they could. Most challenges and related solutions have been discussed in details in my book. During the presentations that I have made in the recent past to explain the key concepts of my book, some new issues have been raised by the audience. I know that the issues raised are confusing and debatable and I too have my own views on them. In this post, I will attempt to explain my response on one such issue raised by several audience – ‘We have been doing PDCA. Doesn’t it enable innovations? If not why?’
Popularity of PDCA
Before I share my views, I thought it would be good to know the perception that has been built on this subject. The perceptions on management subjects like this get built majorly through the books and publications. Hence I started by googling on various words and here are the results:
- PDCA: 51,60,000
- PDCA and continuous improvement: 3,35,000
- PDCA and innovation: 2,65,000
The above data doesn’t provide any useful information to us and hence I performed Ngram search on these words (Innovation, Improvement, PDCA and added Deming also) to check the number of books written on these subjects. Below is the trend. . The ‘Deming’ line shows an interesting bump in the decade of 1990-2000 , which perhaps had some effect on PDCA curve as well. Interestingly the slope of the curve for innovation increases after the peak of Deming.
Armed with this information, I did some deeper dive on the information that google was throwing. The tone of the top few google results for ‘PDCA and continuous Improvement’ was dominantly to explain PDCA and its role in achieving continuous improvement. There were a few case studies and a few offerings of consultants. Interestingly there was one that explained the difference between PDCA and 6 sigma. On the other hand, the top few results for ‘PDCA and Innovation’ were surprising and unfortunately misleading. They were thrown by google simply because the authors had chosen ‘innovation’ as one of the tag words while uploading their documents although the contents had nothing about innovation. A few documents were on the debate between PDCA, continuous improvement and innovation.
In the 3rd stage, I used the ‘carrot search’ (http://search.carrot2.org/stable/search) which analysis the top few results on the web and throws the results after creating themes. The results of four different searches are shown below with the search keyword in the center and the themes around each one of them.
We know that W. Edwards Deming, in the 1950’s, proposed that business processes should be analyzed and measured to identify sources of variations that cause products to deviate from customer requirements. As a teacher, Deming created a (rather oversimplified) diagram to illustrate this continuous process, commonly known as the PDCA cycle. Deming recommended that business processes be placed in a continuous feedback loop so that managers can identify and change the parts of the process that need improvements I strongly believe that Deming did not limit the PDCA to improvement but perhaps because the need of the hour at that time for companies was to focus on continuous improvement and improve the quality standards of manufacturing companies, the bond between PDCA and improvement became stronger. It got reinforced with the publishing of successful case studies and the phenomenal results obtained by most Japanese companies. I don’t know if people tried to use PDCA for innovations at that time or not but unfortunately, in absence of data I would conclude that they either didn’t try or failed to get noteworthy results. No wonder in the carrot diagram above, the themes in ‘PDCA and innovation’ have no reflection of various aspects of innovation.
Let us now look at PDCA with some more details and also look at the tools that are used to rotate the PDCA cycle:
Plan: Identify the problem and analyze data/information to find the root cause. Tools like process mapping/flow chart, ‘fishbone’ diagram (cause and effect diagrams), Pareto analysis, 5 whys, frequency charts etc. are helpful to find the root cause(s) of the problem. Develop and test a potential solution. Explore different possible solutions. This could involve experimental design, conflict resolution or other approaches. Develop an implementation plan for the selected solution
Do: Communicate the implementation plan to all concerned and execute the solution as per the plan. Review the progress
Check: Measure how well the solution worked in solving the problem by comparing the actual with the plan and whether it could be improved further. If it succeeds, then implement it fully and standardize for sustenance. But if the result achieved is not as per plan, this becomes a deviation (a problem again) which will need the next step of “Act”.
Act: Find out why the implemented solution did not give desired result. It may be either due to faulty root cause analysis, inadequate/insufficient/inappropriate selection of solutions and/or improper implementation of the selected solution. Do more in-depth analysis to find out the right root cause/right solution and Implement the new/modified solution and ensure that it now gives the desired result. If yes, standardize it to make it part of the new operating procedure. Process monitoring and control and standardization are the tools that are recommended for this last step for the standardization and sustenance of the achieved result.
Having studied and analyzed the prevailing perception using the information available on the web about PDCA, I will now like to share my views and explain the reasons for this perception.
There is no doubt that PDCA is used by companies in situations that need continuous improvement. As mentioned earlier, the concept started at the time when the focus in companies was on continuous improvement and make quality products. It gave fabulous success to companies and companies in the later years started using it to create a culture of continuous improvement. Successful case studies and conferences reinforces this adoption of PDCA. The question is: “Does PDCA trigger, enable and support innovations?”
We want to move PDCA cycle fast
I would suggest that that getting entrenched in PDCA with the prime objective of driving continuous improvement could create a culture in the long term that might not deliver innovations. When I checked with some of the experts of PDCA, I came to know that typical PDCA cycles are of a few days or few weeks. Only in some complex cases which needs in-depth data collection and analysis, the cycle could last 3-6 months. The ‘C’ stage of PDCA checks if the outcome was delivered as per expectations. If it didn’t deliver, the focus is mostly on how well the plan was executed. It is extremely rare that the adequacy of the Plan itself is questioned.
Problem with ‘D’
Let me highlight problem associated with ‘D’ while using PDCA approach for innovation. In most innovation projects, the time gap between P and C is expected to be large (means that ‘D’ is comparatively longer for innovation projects). It could be months and years and surely it is much more that what one would expect for continuous improvement projects. This large time gap has a negative effect on ‘D’ as managers prioritize those projects where the ‘D’ is comparatively shorter and could fetch them the desired raises and better performance appraisals for that year.
Problem with ‘P’
Now let me come to the problems associated with ‘P’. The P for continuous improvement projects mostly need linear thinking. This is perhaps the reason why stretch targets have been advocated strongly under the TQM/Deming Assessment program. In my view, ‘P’ is most crucial for innovation projects too and I believe that we need to be unreasonable and non-linear most of the times while making ‘P’ for innovations. The content of ‘P’, which is the first stage of PDCA predominantly decides if the outcome of the project would result in an innovation or not. I believe that while continuous improvement on a regular basis is necessary for any company to make better profits, Innovation is equally crucial for the long-term survival – although the frequency of innovations would be less than that of continuous improvement. To draw an analogy from the game of cricket, (and would be true in all other sports), taking singles and twos are equally or even more important than hitting fours and sixes.
I therefore recommend the following two changes in PDCA to drive innovations better:
PDCA to PCDCA:
‘C’ should not only check the outcomes of ‘D’ and question for under-achievement, it should also have the ability to inform if the ‘P’ was appropriately defined to trigger/demand innovations. I also feel that using ‘C’ for checking the contents ‘P’ and correcting it after the ‘D’ is complete is too late and perhaps a wasteful exercise. I therefore recommend a small change in PDCA – We need to modify PDCA to PCDCA. I have introduced a ‘C’ after ‘P’ only to check if the plan is audacious (non-linear or non-obvious) enough to demand and deliver innovations. If we do this, I think that the process and tools used for ‘P’ would automatically get further enriched. In other words, I recommend that before embarking on ‘D’, the project teams should paint a complete picture of the expected outcomes of ‘D’ and test if the outcomes would result in innovation or not and if it meets the expectations of the company. If the answer is ‘no’, the team has two choices – continue with the ‘P’, accomplish ‘D’ and deliver the improvement OR revisit the Plan and modify it. To understand this even better, let us look at the two key aspects of the ‘Plan’– (1) The plan itself which depends on the problem definition and also the solution chosen by the team to solve the problem. This component would majorly decide if the end result would be an innovation or not. Let me give an example of how the problem statement could have major impact on the Plan is: The problem statement of ‘cutting the grass efficiently’ would result in very different Plan as compared to the problem of ‘Keeping the grass at the height of 1 inch”. The evaluation of this aspect of ‘Plan’ is neither covered explicitly in ‘P’ nor in the ‘C’. This is where I have proposed to introduce an extra ‘C’ after ‘P’ (2) Robustness of the plan so that it has a reasonably high probability of getting the desired outcome. This aspect is addressed in the PDCA through “Necessity and Sufficiency” checks and hence I don’t recommend any change.
Sustain focus and interest on Long duration ‘D’
Similarly I feel that ‘D’ of PCDCAinnovation needs some more tools that will ensure that managers focus and invest on the execution (D) of long haul innovation projects as much as they focus on short haul improvement projects. We might need to add more tools related to Risk Assessment and mitigation, Designing new business models, Open Innovation etc. But I am a strong believer that while tools do help and bring efficiency in accomplishing the desired job, it is the behavior which is most critical. The behavior decides if one would like to start a journey of innovation or not. We need a method that encourages all managers (top to bottom) to start the longer term journey of ‘D’ and sustain it to deliver innovations. I do have some suggestions on this and will share in one of my future posts.