Monday, May 21, 2012

4P’s - People, Process, Product, Performance

Why should I focus on 4P’s?

I sometimes get the question from Leaders, “Why do I need to focus on the 4P’s?  We hire the best for the position and provide the fastest computers and software with all the bells and whistles.”  While this is all true and done with the best intentions, the “People” focus is only one piece of the puzzle that will only provide you with heroes.  Having a few of these on staff is good when the situation comes along that requires it, we don’t need this type of thinking all day and every day.  We have seen this often enough with our heroes, and we remember Dr. Eldon Tyrell saying, “the light that burns twice as bright burns for only half as long.” [Bladerunner, 1982]   And since hard workers are rewarded with more work, we could eventually find ourselves all out of heroes.

Keeping the other P’s in focus, Process, Product, and Performance, completes the picture of your operations.  Operational Awareness is about knowing how the internal organization is performing to meet ever-changing conditions in the market place, or how responsive we are to customer needs.  Process focus, or how we create our products, provides a picture of process predictability and stability.  Are there charts and metrics?  Yes and the team has the right skills uses this information to improve flow.  The only other options are intuition and customer feedback.  Unless you have a strong relationship with your customers you may only find out about poor customer satisfaction when the orders stop coming in.  Or worse you find your company's name on the web with a not very flattering writeup.

The measures will be based on inputs from suppliers, like quality, cost, and delivery, and our internal process results that also include quality, cost, and delivery along with safety and any other factors that may reflect your process.  These measures help to highlight the internal process “need helps” or abnormalities and when to intervene. Product focus draws our attention to the ability of the product, whether material or information, to meet customer demands and expectations.  These measures are based on the voice of the customer and will involve talking to them.  These customers may sit next to us or are on the same floor or product line, but these conversations help to clarify or define what they really want.

Performance measures describe on our ability to manage change.  This could be when to change, when to stop changing, or answer can we change before the opportunity disappears.  Our belief in our ability to make the right change can help carry us through times of stress when we know performance is not where it should be.  And having the right people in the right places can make that important impact to roadblocks, whether they are systems, processes or people.

Which of the P’s are most important?

At first glance it is easy to rationalize that all the P's are important.  While this is true you will need to think about it from your customer's perspective.  If they are happy with the price, but would like more (or less) features, then product may be most important.  If your business requires people to "connect the systems", then having well trained and highly motivated team members is most important.  If having a high quality product reaching your customers hands each and every time is part of your strategy, then process may be your main focus.

But if your market conditions are always changing, you should consider measuring all four P’s and keep them in a continuous improvement cycle.  There are many tools and methods to drive this philosophy; balanced scorecard, house of quality, learning to see value stream mapping, and lean function deployment just to name a few.

How to measure and improve the 4P’s?

You may be thinking, “Well that’s an interesting question and if I knew the answer then I would not need to hire consultants.”  This is not an answer that will be found like some lost scrolls in the desert when we accidentally happen upon them, but a journey with our customers, suppliers, and other stakeholders of our businesses.  Direct and real-time measurement is always best, and having the methods in place to respond immediately when abnormalities begin showing up.

These may be statistical control charts, survey results, andons, or other visual controls.  The key to keeping measures relevant is having the courage to review them and respond to abnormalities with your teams.  This is not a disciplinary action, but an honest look at team performance to customer or business needs and what are the root causes of problems.  

The 4P's are not a "quick fix", but a journey that helps us become a learning organization that is able to adapt to the ever-changing market conditions.

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