Posted by: davidhayden | April 25, 2010

The planning myth. Why traditional business often fail


The engineers were ecstatic.  From a worn out machine and no drawings, they were able to make an exact copy of the machine.  The only problem was, it was an exact copy.   $250,000 and 4 months later, they had a brand new version of a worn out machine.

How perfect plans can lead to perfect failures

The story mentioned above is absolutely true.  An international manufacturing company I worked for had an old machine fail.  So old was the machine, there were no original drawings left from which to make a new machine.

The perfect plan was to disassemble the machine in a highly structured way, measuring and recording every single part.  Down to the smallest nut and bold the machine was pulled apart and dimensions recorded.

Seems like a perfect plan so far doesn’t it?

It was a perfect plan for recreating a worn out machine.  See, when they measured the parts, they were over confident. They failed to study and calculate the size of the part prior to wearing out.

Many a failed plan has it roots in ego and / or overconfidence

Students learn early in any business program that EGO is a source of many failed plans. It manifests as ESCALATION OF MANAGEMENT COMMITMENT!

Escalation of management commitment boils down to throwing more time, money and resources at an idea that is just not panning out.   The manager knows his idea is a sound one and it just needs more than he expected to come into fruition.

This is because too much of the manager’s ego is wrapped up in the plan.  S/he has forgotten the intended goal and feels compelled to prove the idea was a good one . . . no matter what it cost.

Escalation of management commitment really should be taught in conjunction with PDSA at the end of the program.

What is the PDSA Cycle?

Simply put, the PDSA is an acronym for Plan -Do -Study -Act.   Also known as the PDCA (Plan – Do -Check -Act) this cycle is a cycle for continuous improvement and is the key to A) preventing building worn out machines and B) continuously improving your product or service to stay ahead of your competition.

.                                                             PLAN
.                                                      /                    \
.                                                  ACT                 DO
.                                                     \                     /
.                                                           STUDY

The plan to strip down the machine was a well thought out plan.  That is a good place to start.

Had the engineers, expanded on their plan with an aggressive Potential Problem Analysis , they probably would have foreseen the problem of forgetting to redesign the worn out parts.

So a good plan is more than outlining all the necessary steps, it involves anticipating things that can and will go wrong along with appropriate triggers and responses to insure the plan to stay on track.

A plan is useless if it is not implemented.  So you must DO something to implement the plan.  No rocket science here, just work your plan.

Where our heroes failed, is they never STUDIED/CHECKED their work against their desired goal to create an “as designed” machine.

If they had checked their interim results against their desired results, they would have taken the ACTION needed to redesign worn out parts.

And so the cycle starts again.  A corrected plan is made, implemented by doing, checked in progress, and appropriate actions taken to improve the plan.

It is a thing of beauty and simplicity.

The PDSA Cycle is different typical planning

When people make plans, they typically are planning for the “perfect world” and the plans are often very linear.

  • Do Step A
  • Report what boss wants to hear
  • Do Step B
  • Report what boss wants to hear (we are on schedule, under budget, etc.)
  • Blame market, shipping department, anyone else for failures to meet plan
  • Write report explaining why results are not as expected

PDSA/ PDCA is entirely different in that A) it is recursive and continually cycles through evaluation and improvement process,  B) it anticipates information learned along the way will lead to a better plan and C) it is not about the ego of the person who dreamed up the plan.

PDSA/PDCA is about continually revising and improving the plan based on measurable results.

Whoa pardner, our company does not have the time, money or resources to do PDSA

Following through on PDSA does take a commitment of time, money and resources.

If your company is so close to the edge, that you do not have the resources to plan, do, study and act, do you have the resources to withstand another planning failure?   I’m just asking.  It might be time to rethink the processes that have brought your company to the brink of failure.

PDSA is a strategy for success

You’ve read it before.  The definition of insanity is doing what you have always done and expecting a different result.

PDSA, even when used haphazardly can be a recipe for success.  By evaluating results and adjusting your actions, you stand to do more of what is working and less of what is not.

An important key is to consistently build on success

How about PDSA as a model for PDSA?

Start small with a project that has great potential ramifications but to which PDSA could be easily applied.  This need not be a high visibility issue or project.

Plan your implementation of PDSA by picking the project, defining the Plan, Doing the planned steps, Studying the results, and Acting upon the feedback.  Within a little time you will have a successful PDSA project that has had a positive impact.

Then with success behind you take on another area of the company.  People will have heard of your success and, while they may not embrace your involvement in their sacred territory, they may give you less push back.

Again the key is to pick a project that has a high likelihood of success.  With 2, then 3 and more little successes under your belt, you will have some momentum to take on larger projects.

NOTE:  Just because you have had some success and expand into more areas, do not interrupt the existing PDSA cycle.  PDSA is about continuous improvement, not fix it once and forget it.

Engineers are pretty bright people and are not prone to making the same mistakes twice.  Once confronted with their brand new, but worn out machine, they corrected their mistakes.

Studying and acting quickly became part of their response plan and a brand new, working machine was the end result.

PDSA is so simple, even an engineer can do it.

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