23 May 2016

Harrington's Seven Basic Performance Improvement Principle

Performance Improvement H. James Harrington

“The basic principles don’t change consultants just call them by different names.”

Industry

Harrington's Seven Basic Performance

Posted by kgreen
on Wed, 03/25/2015 – 15:54

The older I get, the more I realize that the basic things that we believe in and live by do not change. The world keeps moving faster and faster. We need to run and work harder just to keep up. We get sidetracked by many new ways to use our time. Technology is moving so fast that before you can learn all the features on your cell phone, it is obsolete. We communicate faster, more extensively, and exchange a great deal more information. The country and people that we used to think of as being on the other side of the world are now your next-door neighbors. CNN reports the latest news on the wars and the fight against terrorism to the world before the generals that are commanding our troops know about. Facebook and the Internet allow every individual to broadcast their thoughts to a vast population with minimum censorship. China has come out of the dark ages and is now one of the leading economic powers in the world. Labor costs in China are getting so high that they are outsourcing their manufacturing jobs to other developing countries. Yes, even our family life has changed. Our living standards today for most families require both parents to work in order to maintain an acceptable standard of living. Microwave ovens and TV dinners have replaced the family getting together where they could share a leisurely dinner and discussing the day’s activities. The morality and aspirations of our teenagers are more influenced by television than they are by their parents or their teachers. Yes, there’s no doubt about it –this little blue marble floating in space that we call Earth has changed. But in reality have the basic beliefs and principles that we, as quality professionals, have lived with 30 or even 50 years ago changed?

I was cleaning out some old papers and technical reports when I ran across a three-year planning technical report I prepared when I was president of the Harrington, Hurd and Rieker in 1988. It listed the seven principles that must be considered in preparing any performance improvement plan. I was amazed at how little things have changed in the last 30 plus years. These 35-year-old principles contains most of the concepts embodied in the Lean Six Sigma methodology we are promoting today plus some additional ones that are essential for organizations to be successful.

There are seven basic principles that were contained in the 1988 report. They are:
  1. An organization must maintain long-term product/service superiority in its home market, for this is the area that is most critical to profitability and growth. Organizations around the world have found out that if competition is possible, it’s bound to occur. The only way to combat this competition is to anticipate it so you can stay ahead of it. It is difficult, if not futile, to play catch-up.
  2. Past experience has proven that foreign competition invade by establishing a small niche market, then expanding to capture a bigger and bigger share of the total market.
  3. The elimination of waste continues to be more effective in increasing profits than increasing sales. In some cases, the reduction of waste has increased profits more than doubling sales would have.
  4. The soft side of customer relationships has proven to be more important than meeting specifications. Customer service must be surprisingly good to keep customers. Most companies can meet requirements. The truly great companies get ahead by meeting and exceeding customer expectations; then, helping the customer set new, higher expectations for the total market.
  5. Product leadership is not based upon making products quicker and cheaper, but rather on making them better. A focus on “better” is the best way to produce less expensive products faster as well as sell them faster.
  6. The best advertising a customer can have consists of groups of satisfied customers. A satisfied customer tells 8 people. A dissatisfied customer tells 22 people.
  7. Technology can no longer be looked to as a wall that protects your customer base. Where product technology once provided a company with a competitive advantage, it now travels so fast from organization to organization and nation to nation that it has lost most of its advantage. The most important and powerful way to hold and increase your market share is through quality supremacy.

Since 1988 we have developed many new and supposedly revolutionary approaches and methodologies to bring about improvement in organizational performance. Some of them are:

  • Process redesign
  • Process reengineering
  • Six Sigma
  • Lean Six Sigma
  • Balanced scorecard
  • Value chain mapping

In 1988 ISO 9000 was just being rolled out. The new concept of Total Quality Management was taking hold. But with all these changes in the quality practitioners’ approach to bring about performance improvement and all the changes in our environment have there been any major changes in these basic seven principles that drive performance improvement? From my standpoint these basic seven principles are as good today as they were in the 1980s. It is seldom that hindsight does not provide a better view than you have today, but in this case these basics truths are still as good today as they were in the 1980s. Now as you read them you may want to add additional principles based upon today’s views, but that was also the case back in 1980. In selecting the seven I want to limit the principles to the ones that were most important and the ones that should have been driving our improvement efforts as we moved forward. It’s just too bad that in the past 30+ years we have not been able to develop improvement efforts that have transformed our public and private sectors in keeping with the principles defined in these seven basic concepts.

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