Rick Hepp
By
June 23, 2017

Business Transformation & Operational Excellence: Achieving Enterprise Excellence

Watch Rick's full session, 'Achieving Enterprise Excellence by 2020', here, courtesy of the Business Transformation & Operational Excellence World Summit (BTOES18).

Screenshot 2017-06-23 18.09.31.pngHistorical Deployment and Engagement of OpEx

From OpEx early days as Six Sigma and Lean – the methodologies, tools and techniques were leveraged as a continuous improvement mindset with Cost Savings as King although it has evolved over the years at mature organizations to include waste elimination, improved process flow & efficiencies, enhanced capacity, and a quality/compliance driver.

Business Transformation

More recently, organizations have a new mantra – Business Transformation. The very nature of global competition and customer expectations is forcing a shift to Customer Excellence while at the same time minimizing costs and driving efficiencies through traditional OpEx approaches. What has been driving Business Transformation? The Boston Consulting Group has had several in-depth analyses with consistent findings 1:

 The very nature of global competition and customer expectations is forcing a shift to Customer Excellenceminimizing costs and driving efficiencies through traditional OpEx approaches

OpEx and Business Transformation – Engaging Cultural, Strategic, and Behavioral Challenges

The top four reasons that transformations fail 2:

  1. Lack of well-defined milestones and business objectives
  2. Lack of commitment by senior management
  3. Employee resistance to the transformational change
  4. Poor communication as to mission, vision, and new directions

Clearly, the ability to meet business challenges demands that companies and leaders inspire and align their organizations, create a sense of urgency and speed while balancing innovation and continuous improvement and always keeping an eye on Quality from a customer view while meeting the company vision milestones/objectives. This is evident in the dramatic shift in Top Investment Areas for 2016 by businesses 3:

Top Investment Areas for 2016An integrated view for OpEx Deployment WITH Business Transformation was presented as a “Next Level” evolution of Operational Excellence:

 “Next Level” evolution of Operational Excellence

Key elements of this “Next Level Evolution” model:

  1. Business Strategy and Alignment requires a clear vision and plan. Best in Class companies have adopted methodology like Hoshin Kanri 4.
  2. Leadership Engagement assures a business and customer focus on the outputs of mission critical systems and structures (called Key Process Indicators, KPIs). Many companies have adopted Lean Leadership principles from the Toyota Way of Leadership Development 5.
  3. Behaviors and Empowerment is fundamental for successful deployment of (1) and (2) by setting the right Values and Behaviors (called Key Behavior Indicators, KBIs) for EVERYONE in the company (leaders, managers, and employees). Empowering employees for success through Lean Leaders as coaches and mentors who drive continuous improvement, innovation, and fully support the company vision with goals and metrics (both KPIs and KBIs) tied to Strategy then assures success as highlighted in the Shingo Model 6.
  4. Operational Excellence has traditionally delivered by a data and process mindset focused on improving process KPIs. A sustainable culture shift by a focus on Change Management and KBIs is that opportunity to make OpEx “Part Of” Transformational Change.

Ideal Business Results are delivered by bringing together these combined Business Transformation and Operational Excellence elements into the deployment model called Enterprise Excellence.

Here's a final Case Study example of how KPIs and KBIs drive sustainable business results and how these can be used to change the culture in an organization are presented:

Screenshot 2017-06-23 18.18.26.png

 

Click here to watch Rick's full Videoed Presentation, 'Achieving Enterprise Excellence by 2020: Linking Key Behavior Indicators and Key Performance Indicators to Deliver Ideal Business Results'

 

References

  1. Boston Consulting Group, internal survey October 2015 of 80 respondents and 169 companies.
    “Transformation – Delivering and Sustaining Breakthrough Performance” edited by Lars Faeste and Jim Hemerling, @The Boston Consulting Group, Inc. 2016.

  2. Source: Economist Intelligence Unit, January 2011 global survey of 288 executives, more that 75% in organizations with annual income exceeding $1 Billion.

  3. PeX (Process Excellence) Network Special Report - Aligning Strategy with OpEx to drive Sustainable Enterprise-wide Transformation, 4th Biannual State of Industry Report, 2015-2016. In association with Appian, Bizagi, & IPM-Integrated Project Management companies.

  4. Hoshin Kanri Planning articles are quite numerous in the literature. A good introductory slide show presentation can be found at: https://www.slideshare.net/Lightconsulting/hoshin-planning-presentation-7336617

  5. Toyota Way Of Leadership - for a comprehensive overview, see the book: “The Toyota Way to Lean Leadership: Achieving and Sustaining Excellence Through Leadership Development by Jeffrey K. Liker and Gary L. Convis “.

  6. 30 Years of benchmark studies and evolution in the Shingo Model for Best-In-Class Performance has identified how to integrate the concepts of KPIs and KBIs to deliver business strategy and results. http://www.shingoprize.org/model 


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