It's All About Value

Michael R. Wood is a Business Process Improvement & IT Strategist Independent Consultant. He is creator of the business process-improvement methodology called HELIX and founder of The Natural Intelligence Group, a strategy, process improvement and technology consulting company. He is also a CPA, has served as an Adjunct Professor in Pepperdine's Management MBA program, an Associate Professor at California Lutheran University, and on the boards of numerous professional organizations. Mr. Wood is a sought after presenter of HELIX workshops and seminars in both the U.S. and Europe.

When you think process improvement, keep in mind that the real goal is VALUE IMPROVEMENT.  The expectation of management is that by improving the process, the outcomes--the value delivered to stakeholders--will be improved as well.  With that in mind it is imperative that the project's objectives quantitatively define the value added by  the process improvement project.  In addition, the project’s objectives should align directly with the strategic and business objectives of the company.  Failure to do this will significantly increase the risk of failure for the project (and for the project leader).

This is not rocket science, but it does require effort and the ability to facilitate management to quantify their expectations.  Once these expectations are transformed into measurable project outcomes, the ROI is easy to calculate.  

Start with the business plan and test it for quantitative measurement.  Be careful not to accept vague measures like percentage improvements.  If the objective is to increase sales by 10 percent, quantify that in terms of units to be sold by product line.  If cost reduction is the objective, quantify it in terms of how much in what operational areas and find out why there is a perception of inefficiency.  If …

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