Want to produce results fast, minimize risk of failure, perfect a concept and create demand for more? Pick a pilot, improve results and replicate.
Increasingly, organizations are adopting surgical approaches to improving performance, focusing on targeted segments (a branch office, manufacturing plant, laboratory, sales territory, or distribution center), making significant shifts quickly, creating stories around the successes and replicating the improvements across the organization.
Selection Makes Success
A successful pilot starts with careful selection. I base my recommendations for pilots on five criteria. Once decided, it’s then all about execution.
We led a pilot to increase export sales at FedEx Express. In four months, revenues went up 23 per cent and produced a 1,447 per cent return on the investment. Five more locations volunteered to be next. They produced $6 million in increased revenues and a 1,660 percent ROI.
An ITT Corporation pilot in Lubbock, Texas created a lean/six sigma showcase model. It dramatically improved sales, productivity, on-time-delivery and quality. Four other locations stepped up and produced similar results.
Five Key Criteria
The proposed pilot:
- Is operating below expectations. It’s easier to improve a poor performer than a high performer. But I’d be disinclined to pick a real dog for fear someone would say: “That was no big deal. Anyone could have done that.” (Aside: Of course, if anyone could have done it, one might wonder why they hadn’t done it before.)
- Represents value and leverage to the company. For example, if damage in the supply chain is a big corporate issue, then addressing damage in a large distribution center might represent a high priority as it did with a large logistics company.
- Is relatively self-contained. Performance measures can be isolated. People can control the results. Causal relationships between actions taken and results gained are clear.
- Has strong leadership or leaders who want to become stronger. Pilots sometimes include a heavy dose of leadership development. However, you don’t want to begin with a weak leader.
- Represents an area that other areas can identify with. (“If they can do it, we can do it.”) This is a critical criterion. If a success at ABC operation isn’t perceived as being doable elsewhere, there will be no “pull” for it. That is, people won’t clamor to be the next pilot.
I’ve personally conducted at least 50 pilot projects. One involved improving quality and the speed of claims processing in four branches of a large property casualty company. The CEO celebrated the successes in the first four locations, then invited more branch managers to join in the next round. Every branch manager wanted in the game because when the initial branches improved, the managers made more money.
Ramping up Process
The performance improvement process ramps up once the targeted segment is decided for a pilot project. I have been successful with the following process.
- Orient the leadership, project team and employees
- Set performance targets
- Gather and analyze data
- Create and implement a plan that relies heavily on employee involvement
- Align systems and processes to focus energy and make the improvements stick after the pilot is over.
Throughout the process, test and learn quickly. Rapid iteration, experimentation and continuous learning are critical to creating a successful process that can expand across an organization.
KEY TAKEAWAY: Use pilot projects to improve results and get agile quickly.