Improving Business Performance by addressing HOW things are Done:

A Discussion on Process & Value Streams

Understanding variation - the foundation for Business Success

There is a key concept in business and life that can have a powerful impact on your ability to  identify problems and address them effectively.   The concept is variation.   Variation is the difference between what you expect to see and what you actually observe (expected vs. observed).   W. Edwards Deming, who had a profound impact on business practices globally beginning in the 1950s and lasting until today,  had a primary focus on variation.  The key for solving difficult problems and improving processes,  he and others taught is understanding variation and eliminating the portions of which you can control  early in the improvement or problem-solving process.  These concepts are foundational for productivity and quality improvement programs that emanate from Six Sigma, Lean and even Agile 

Focusing on variation is critical because without rationalizing variation, you have a high probability of investing in things that compound rather than reduce problems.    Using Deming's terminology, there are 2 main causes of variation, assignable (more commonly called special) and common.  Assignable or special causes are those you can identify and remove.  The common causes of variation are those that you can't control- the random or totally external  variables that are encountered.

Although it often conflicts with the near "instant gratification" approach of some businesses, it is critical that you initially focus on understanding intimately the process you are trying to improve by focusing on identifying special causes of variation. Then, once identified, you can further identify the root causes and remove them.  Just as important, when you design the new process based on analyzing variation, you can then implement controls to monitor common caused variation to ensure that if it breaks its random pattern, that you identify the new special cause and address it.