Canice Pinto has written an article on his interpretation of the Global State of Operational Excellence Survey Report - Critical Challenges & Future Trends - 2018/2019.  Click here to download the full Survey Report 2018/19.  

The Most Comprehensive Study of Critical Challenges and Future Trends within Operational Excellence

With nearly 1000 respondents, 37 insightful questions, detailed analysis & insights from 40 industry thought leaders, and the BTOES Insights executive team, this 130 page report is recognised as the most comprehensive study of critical challenges and future trends within Operational Excellence, and is considered a key resource for the industry. Areas covered include:

• The Critical Operational Excellence Challenges faced by executives.

• The Current Scope of Operational Excellence.

• How is Operational Excellence success measured?

• Key Findings & Roadblocks.

• What are executives focusing on over the next 12-18 months?

• What have been the greatest developments?

• What are the key drivers pushing change in Operational Excellence?

• Industry Perspectives.

• Small, Medium & Large Corporation Perspectives.

• Detail Analysis & Insights from BTOES Insights Executive Team.

• Detailed Analysis & Insights from 40 Industry Thought Leaders.

• Analysis of key themes, including Cultural Transformation, Customer Delight, Sustaining an Operational Excellence program, Need for end-to-end Business Transformation, Keeping up with new technologies/impact of digitalization and Leadership Buy-in & Understanding.

Complete form to access Report now

Black belts, step aside

Company culture resides in the trenches.

When it comes to company culture, not all companies are created equal. Company culture is different things to different people, even from the same company. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.

Which begs the question – what is company culture?

Is it that nebulous score a company receives on a Forbes survey? Or that fuzzy feeling that a fifteen-year company veteran evokes when asked why he/she stayed that long? Is it because the employee worked at a pet-friendly place? Or, was there a crèche at work? Or are employees’ ideas used to create action-plans?

Companies I have long admired for their spirit of innovation, focus on continuous improvement and employee engagement are BMW, IKEA and LEGO – these companies consistently check all the boxes and feature regularly on ‘best work culture’ lists.

Challenges to changing company culture

When polled by BTOES (Business Transformation and Operational Excellence World Summit), practitioners had this to say:

1)55% listed company culture as a critical challenge

2)49% listed sustaining continuous improvement culture as focus area over the next 12-18 months

Click here to read the full Survey Report 2018/19.   

Is the Operational excellence structure optimal?

“Mission defines strategy, and strategy defines structure.” - Peter Drucker

Most organizations hire either management consultants or seasoned quality leaders (from companies where continuous improvement is institutionalized) to set up the operational excellence function. The typical set up is:

                                                     Current organization structure

a) A quality leader who is the change management expert and the enforcer,

b) A master black belt who’s technically sound and has loads of expertise in implementing projects,

C) And a couple of black belts, some of them certified and others who have potential.

While this approach works great initially and the operational excellence journey gathers momentum, the effort plateaus in a year to 18 months. The black belts typically handle 3-4 projects at a time and each of these takes a minimum of 4-6 months. Realistically, we are looking at 6 to 8 projects in a year per Black Belt. With a team of 2 Black Belts, you do the math – only about 12 to 16 projects a year.

Is top-down approach sustainable?

Generally, this would mean some lines of business would have no exposure, or limited exposure (projects on some metrics, not all top metrics where there is a need). Expectations are bound to rise – the operational excellence team is always playing catch-up. Added to this potent mix is always a deal-breaker, or fire-drill every month. Prioritization is the name of the game.

Apart from this, natural attrition amongst the operational team, given the small base of the team and the fact that they are sought-after resources, means the team is perpetually in a state of flux, relatively speaking.

A few subject matter experts lead projects right from collecting and analyzing, drilling down to the root cause, and running implementation plans – is this top-down approach sustainable?

Building continuous improvement capabilities

This is what one respondent had to say on the BTOES survey :

“Drive CI down to the floor, everybody solving problems everyday, not putting all improvements in the hands of a few engineers.”

Offering process improvement training on concepts and building a large base is probably the way to go. On an average, in my experience, of 100 employees trained:

1) 40 go on to take up projects

2)10-12 complete projects

By investing 8 hours/day, one can actually train 100 front-line folks in a week.

By investing 2% of annual capacity, one can get as many projects completed as regular Black Belts in four months alongside their regular work.  There is also the option of video-recording the training and uploading it on the company training portal, to enable employees to learn at their schedule, even outside regular hours.

I am not comparing projects by impact here – only absolute numbers of projects. Given the skill-set, Black Belts would run more mission-critical projects. The projects run by the front-line could be drilling down on the root cause for a recurring defect, putting in place a standard-operating procedure for a sub-process, building an FAQ list for new joinees on a difficult program, and so on.

However, once there is a steady pipeline of projects run by the frontline, this over-time forms a pool which the operational excellence team can draw from. While a Black Belt’s skills are domain-agnostic, having domain knowledge does not hurt. Having someone rise through the ranks, adding process improvement skills to domain knowledge would help the person field questions on practicalities of solution and execution.

By developing a cadence around training – one week of a Black Belt’s resource on training every 6 months, one is able to make the model scalable and release the Black Belt’s capacity for the bigger projects that the C-suite wants and create a second-level that can move on to do bigger things once they complete the smaller projects assigned to them.

Of course, there is additional capacity required to mentor those projects – if out of 100 trainees, 40 take up projects, 1 hour of coaching per week, would mean 1 FTE of BB resource dedicated to training and coaching projects.

                                           Optimal organization structure

Generating ideas from the front-line

Here’s what some respondents from the BTOES survey had to say:

“When employees execute improvements and bring ideas for improvement forward.”

“Change of culture such that leadership and all employees embrace their role in continuous improvement, daily.”

“Getting buy-in from ground-level staff; seeing sustained change in an organization.”

Click here to read the full Survey Report 2018/19.   

When I was on the shop-floor, in my first job, more than two decades ago, the quality champion would stop by urging us to share our improvement ideas for the month. The mandate was one idea per employee per month. While management may be loath to enforce such a policy, I think the idea behind this was commendable. I am yet to see an organization that has as big a pipeline of ideas as that organization twenty years ago! Why is this so? Part of the reason is how communication is driven.

How are ideas shortlisted? What are the criteria for selecting ideas? How is credit for ideas shared?

Front-line ideas are a great mode of risk-mitigation be it in prioritization of projects, or what to push further down the automation roadmap.

If only 10%-20% of ideas are selected to be run as projects, we need the front-line to be prolific in providing input in terms of ideas.

I think employee engagement drives sharing of ideas. The fewer ideas , employees share, the weaker the employee engagement. Having lived in data-land all my life you can cut me some anecdotal slack ☺

Measures of success

Company culture maturity scaleDescriptionNudgeIf the number of projects run by front-line is > 4x and <= 5x the number of projects run by Black beltsPushIf the number of projects run by front-line is > 2x and <= 4x the number of projects run by Black beltsShoveIf the number of projects run by front-line is <= 2x the number of projects run by Black belts

1) If the number of projects run by front-line is > 4x and <= 5x the number of projects run by Black belts, the organization needs a nudge.

2)If the number of projects run by front-line is > 2x  and <= 4x the number of projects run by Black belts, the organization needs a push.

3) If the number of projects run by front-line is <= 2 x the number of projects run by Black Belts, the organization needs a shove.

4) If the number of projects run by front-line is > 5x , company culture score from a buy-in, employee engagement , would be off the charts.

As borne out by the survey, company culture is paramount – it drives employee behavior and therefore performance. By encouraging front-line to provide ideas, and investing in training, continuous improvement capability is created, changing company culture, one project at a time.