Courtesy of Nasdaq's Greg Lipper, below is a transcript of his speaking session on 'Driving Operational Excellence in a Global Footprint' to Build a Thriving Enterprise that took place at BTOES From Home.
Driving Operational Excellence in a Global Footprint
We’ve all witnessed operational excellence programs that start strong, only to fizzle in the face of an unexpected disruption that comes either from within the organization or from the external environment.
In this engaging presentation, Greg will provide a rigorous framework and set of guiding principles, tips and do’s and don’ts for establishing an operational excellence program that will stands the test of time, even in the face of organizational change, technology disruptions and unexpected macro events. There will be time for Q&A.
Hi everyone, my name is Greg Lipper, a little bumper music to get us started with some county crows I'm with Lipper solutions. we drive operational excellence in global service organizations our specialty is improving productivity and service quality in pretty complex environments so I'm here today to offer you a framework for how you can not just achieve operational excellence but sustain it and underline.
That word sustain over the long term amid change and disruption and other challenges so I'll start with a statistic uh McKinney a few years ago did a study and found that only about 30 percent of organizations were successful in their business transformation efforts and that's a pretty appallingly low number not what we would uh what we would hope for so um here's a quote to get us started on maybe why probably 90 of our life decisions are powered by the twin engines of inertia and laziness so let's talk about what we mean by that so mean reversion is is is a real thing in life and it certainly impacts businesses not just financial markets very difficult to sustain very high levels of operational excellence exceptional results over the long term.
We tend to revert to the means typical performance and of course related to that is inertia we tend to stick to our comfort zones especially over the long term the art of life is a constant readjustment to our surroundings if we didn't know that before we certainly know that today in 2020 and so the other factor in the challenge around trying to achieve sustained operational excellence is adapting successfully to change in disruption and 2020 has been a year like no other in terms of change and disruption.
So we're having to handle distraction uncertainty instability actual visceral fear fear for our health and for our safety which makes it all the more challenging so the central uh focal point of my framework both visually and conceptually is a balanced scorecard a dashboard where you're measuring uh your key performance indicators your kpis and of course the notion here is as a metrics-based person.
I want to know if we're going to if we're aiming to achieve sustained operational excellence how do we define that what is our measure of success how do we know when we got there and i like a balanced score card where we can look at quality metrics financial metrics customer experience and employee experience and of course these are these are iterative and interdependent and that gives us a holistic view of how we're doing.
So what are some of the common measures we might find within each of these four quadrants well in quality uh as a six sigma practitioner the first metric I would want to have is an accuracy metric that could be dp mo but it could also be something as simple as your error rate the next thing i'd want to have is a timeliness metric and of course the reason for that is what do customers want they want their services delivered in an accurate and timely fashion so these two are pretty obvious the next one perhaps less obvious which is reliability or consistency and this refers to the variation from my target so let's just say for example uh in my uh service environment.
I have an accuracy target of 99 and a timeliness target of 99 and I've defined those so that's great and let's say I'm hitting that 99 are we done well it's important to understand the one percent that's missed uh so right so if I'm only hitting 99 percent of the time I'm hitting my timeline this accuracy target how far off from target is my one percent and that has to do with with variation and uh so for example in a in a very simple example in a call center if uh my goal is to answer 99 of the calls within 60 seconds.
Let's say um is the one percent be acting in answered in two minutes or is it taking five minutes or ten minutes to answer those calls and there's going to be a fair amount of correlation in the uh that which falls outside of your target with your customer experience so speaking of customer experience and these are some other metrics you might want to measure downtime bcp call stats speaking of customer experience the two most common metrics are csat and nps i prefer nps net promoter score because customer loyalty is a an excellent leaning indicator for some logging indicators you may also want to measure in this quadrant such as uh client retention your renewal rate reference ability are your clients referenceable and looking at your client facing incidents on the financial front the number.
One most important metric in a service organization in my view is productivity and it is difficult to measure uh the reason it's so important today more than ever is even if you're not global you've got a dispersed geographically dispersed workforce when most or all of your employees are working remotely as many of or most of us are right now and if you are going to have a global footprint you have the regular challenges of monitoring the performance or productivity of your global teams.
Which is now made more challenging by the fact that you can't easily get on an airplane and go visit them due to those travel restrictions we have right now so having a robust reliable transparent way to measure labor productivity has never been more important at zipper solutions we've developed a uh pretty easy to use uh apple app for this called smart works there are other ways to measure productivity out.
There my strong recommendation is you come up with a method to do that not only will you gain tremendous insights into your into your shop i can give some examples of that in the q a but you're also going to find high correlation between your productivity your quality your customer experience and your and your employee experience um so other financial metrics you may want to measure our labor cost utilization and unit costs and then last but not least in the employee experience quadrant oh sorry and just to mention in financial metrics.
If you have a team that has some kind of revenue targets if they're on the hook for legion or upsell you're going to want to measure that as well and so an employee experience number one thing i want to measure is engagement again it's a great leading indicator to some other measures you may want to have in your employee experience quadrant such as turnover your new hire experience how quickly and successfully are you integrating your new hires in and bringing them up the ramp uh your leadership and development and training programs how successful are those and the last one is one that i think is super important and not always measured.
Which is let's look at our high potentials our high performers our rising stars they tend to be the life and blood of what differentiates us uh as a service provider so you're going to find high correlation between this the engagement and retention and and professional development of your high potentials and all of these other metrics and so I like to look at those uh my my highest performers and understand their engagement scores their retention scores and are we uh are we assigning the right proportion of our leadership and development efforts uh as a leader am i signing the right portion of my time in developing my high potentials.
Who are the future leaders of the organization so once we have the balance scorecard as a concept you see some examples here the question is what are your actual kpis going to be i've given you some examples but even even if you said yeah we want to measure accuracy there's probably uh many different ways you could measure accuracy different ways you could define accuracy in even a single service organization and then once you've defined accuracy you've got to then decide decide what's your target going to be and uh we could we could spend an hour talking about that which we won't do but suffice to say uh that it takes a fair amount of uh ingenuity and um and experience and skill to come up with the right set of metrics.
If you have a hundred kpis you're going to be two more or even several dozen you're going to be much busier measuring than you are improving and if your targets are uh too high you're going to have wasted effort and diminishing returns on trying to achieve targets that are either unrealistic or aren't moving the needle in terms of your business goals if your targets are too low you might feel great about yourself but you're going to find that again you're not meeting your business goals so the way to get there is not surprisingly by understanding your business that's the first thing you need to do um and we start with understanding our business by understanding.
Who our customer is and what they value look at our voice of customer customer value streams what's our mission and vision uh what is in our business plan and our budget and let's do a swot analysis and what's very important to note here is many of us work within larger organizations in shared service organizations uh global business service organizations horizontals and it's important to do this analysis inside the organization that you're trying to transform so if you're a shared service uh financial operation um inside the office of the uh inside that rolls up to the cfo um you may want to look at all of these uh from the perspective of the of the firm and that's fine but you also need to look at them inside your organization uh as a financial operation service provider.
Your customer is probably the cfo and you may have some other internal customers and you may want to have your own mission and vision that you've worked out in collaboration with your cfo to understand what you're trying to achieve you clearly need to understand your business objectives uh your budget and you need to do a swat inside your shared service organization what are your strengths what are your weaknesses.
What are opportunities and threats so when you've done all that you can then devise a set of kpis that align with where you're trying to get to and where your strengths and weaknesses fall so once you've done that how do you actually execute on achieving your aspirations in terms of operational excellence once you've defined it in your four quadrant dashboard that's where a set of management tools come in now we're not going to talk in detail about these the point of this slide is you need to find out and discover which management tools are most important to achieving your goals so if you know you have to do a lot of re-engineering because you have a lot of quality issues or you have a lot of cost overruns and you've got to do some re-engineering work and you may decide to bring in six sigma as the tool to achieve that in engineering.
That's great but then you've got to make sure that you have the skill sets and the capabilities to execute that in a quality way so you're going to need black belts you're going to need a master black belt oversee that program if uh if the tool you need is offshore migrations because you have to lower your labor costs and and you want to take advantage of follow the sun and 24 7 then you need some expertise around offshore migrations in your in your shop.
So once you've done all that and you are successfully on your way how do you sustain the operational excellence and the key there is governance and this is uh something that sounds simple to do everyone does it to some extent but the reality is having really really robust reliable well-structured governance with the right level of oversight and execution around it is much harder to do than than it sounds partly because uh it doesn't deliver immediate results you only see when governance goes off the rails.
If it's not set up well is you only see that when you have a setback when things start to unravel and secondly we don't always invest in it appropriately I always say it's uh it would be great to have a dedicated resource if you've got the scale for that or at least somebody who among their other responsibilities this is one of their main responsibilities which is to oversee the governance of your business transformation program and what do we mean by governance.
You need to define who's making decisions you might need a racy or raid charts you understand roles and responsibilities how are change orders processed what are your escalation paths who's issuing reports what's in the reports who's receiving the reports how often uh and how are we communicating you are going to have setbacks in every single business transformation effort there's no question you're also going to have new information.
You're going to receive that's going to require a rethinking of some of your initial assumptions and make adjustments and the governance model is there to ensure that you have a way to do that and you've established accountability right.
So who's ultimately accountable when something goes wrong or when something goes over budget so the rest of this uh talk I'm going to be speaking about competencies and so again we'll have our understanding of our business we will have our management tools we'll have our governance that's all necessary but not yet sufficient to have a high probability of sustained operational excellence uh we have to look at our leadership and cultural competencies and i would posit that even with brilliant strategic inputs and sophisticated management tools most of us will struggle to achieve sustained operational excellence without a set of leadership and cultural competencies.
Which are needed to overcome what i spoke about at the beginning mean reversion inertia and the struggles around adapting to change and disruption so let's get into that so the first competency i want to talk about on the leadership arm of this is valuing talent and what I would say here is there's something very specific i mean by this which is that if you're going to drive business transformation you're going to sustain it in the face of a lot of um forces that are going to result in light.
If nothing else happens you're going to have a the challenge of actually achieving your your lofty operational goals and then you're going to have the inertia the mean reversion uh the burnout that people have where you're gonna have this natural leakage and reverting back to prior results and so you'll get your costs will slowly creep back up your errors will slowly creep back up your employee attrition will slowly creep back up and so the way to offset that is to make sure you have the right people and the right roles to get the job done both on terms of your implementing your program and then sustaining it and again not only is that easier said than done but it never stops because they you can this can very very quickly unravel.
You can spend a lot of time getting the right people in the right place with the right skill sets and then uh all of a sudden someone leaves and you have you have a hole in your in your plan so i had a case of many years ago where we had an offshore team we had a site gm running it who was very good very experienced everything was going great the team was raging success uh and i left the office on Friday thinking what a great leader I am and then on Monday.
When I showed up he handed me his resignation totally unexpected and I had not sufficiently uh either invested the time in him to understand that he was unhappy nor had I invested the right time in in having a number two who could easily come in and take his place and we struggled he left in two weeks and we really struggled after that so valuing talent is something that leaders should be doing continuously that's leadership behavior number one number two is foster innovation now innovation tends to be a word that gets used and overused.
So again I mean some specific things here seek new methods and ideas uh don't hold on to sacred cows uh embrace calculated risk-taking if you're too risk-averse you're not going to move quickly you're not going to innovate look for ways to leverage technology so once some things uh sometimes things happen where we've already implemented a new technology.
We feel great about that maybe we were the sponsor of that technology we spent money with an roi building the case for it and we really don't want to touch the technology again because we feel like we made a great decision but technology is changing so rapidly that we have a fiduciary responsibility as global service leaders to constantly reevaluate the technology options that are out there there's never before we've been able to do so much for so little cost and it's always changing every 18 24 months the costs are going down or the capabilities are going up avoid complacency regularly raise the bar be agile flexible adaptable and move fast embrace the need for speed we tend to underestimate the cost of moving slowly of deferring decisions uh to me.
You're not innovating if you're not moving if you're not moving quickly uh the third is to plan and execute at the same time you want to move quickly you want to make sure you're executing well so we talked about high low management right so the one hand you want to be strategic thoughtful planful analytical in your planning but then you need to execute when we say low you need to roll up the sleeves and get into the details to make sure you're executing successfully you need to define appropriate ownership and accountability.
We talked about that in terms of governance set smart goals and targets ensure sufficient resources and funding prioritize ruthlessly and I say ruthlessly because there's never enough resources funding and time to do everything we want to do so you're going to have to prioritize very well you have to provide air cover for your people so they can get the job done and mitigate risks around corners I'm a big fan of having a risk heat map i often keep it just stuck to the wall in my in my office and I'm looking at probability impact high impact high probability.
I want to understand what I'm doing to mitigate those risks even low impact high probability often on those items there are low-cost ways to mitigate those risks and that's going to make my project go much more smoothly so now I'm going to talk about five leadership traits so those were behaviors value talent innovate plan and execute those are leadership actions you want to take these are now around traits and characteristics that i think are highly correlated with successful change efforts.
So change is really difficult we got to bring people on the bus and people don't want to get on the bus often so you've got to demonstrate some passion you've got to demonstrate some excitement some burning imperative why we're doing this why this is so meaningful uh why this is a good thing and that passion can be infectious can bring your team along the next one is integrity people are suspicious of change there's a natural reaction that human beings have of resistance to change partly because we have fear that the change is going to bring in something something that's going to harm us in some way and it's a very it's a very um primordial instinct in us.
So you can overcome that by demonstrating integrity transparency is the next one right, so I'm going to be really transparent with my team I'm going to I'm going to demonstrate that my values around integrity I'm going to be clear about why we're doing this and what the impacts are to them we're going to collect want to be very collaborative because I can't do this in a bubble I need help from my i.t partners from my finance partners from my HR partners from my procurement partners.
So I need to collaborate and likely from from customers and from suppliers and then finally honest feedback I need you know because change programs are so difficult because disruption disrupts we need to have honest conversations about how things are going how people are handling things uh how to course course correct and we need to provide a safe environment for that so i would say let's lead by example as leaders in our service organizations as we drive business transformation and let's pitch passion integrity transparency collaboration honest feedback let's pitch these five leadership traits every day.
So the last uh pillar in the in the competencies area is what I call the four c's uh culture that highly correlates with successful uh change programs around sustained operational excellence and the first one is customer centricity now almost everyone talks about being client focused so i want to talk about what i mean when I say customer centricity and we'll use some examples here.
So the first one is know who your customer is and what they value and that may sound obvious be surprised at how many organizations don't do this so don't do this in a in a very rigorous way especially if you if you're not if you're one or two steps removed from the external customer so um you will have a direct internal customer.
It could be the cfo it could be uh it could be the cio you'll eventually have an external customer who's relying on what you're doing in some way and you need to understand of your different customers uh who they are what they value what they expect from you uh and then you need to maintain a mindset that there shouldn't be a single dissatisfied client that any decision or change needs to be assessed by customer impact now I'm going to explain this in a couple of examples.
So it's clear what I'm not saying what I'm not saying is all your customers need to be satisfied all the time because that's not necessarily realistic so let's use a couple of examples in the hotel in the high-end hotel uh industry you've got a hotel chain like the Ritz Carlton that has trained their people from the from the entry level lowest rung of the ladder all the way to the CEO everyone's got the mindset of delighting customers and they have very very high nps scores not surprisingly and any of us.
Who've been to our writs have experienced this now let's look at the airline industry and on-time arrivals which would be a key uh metric that they would want to track in their in their in their dashboard well on-time arrivals even for the best airline you're probably lucky to get to 90 percent many are at 80 percent uh and some are even lower so it we're not suggesting therefore that um to be customer centric you have to be at 99 or something what we're saying is that the as an organization you can have the mindset and your your your team on the ground can have the mindset we're going to do everything that we can in our power.
That we're accountable for to help ensure our customers are as satisfied as as they can be so for having a delay how are we communicating the delay how quickly are we getting on to let them know how clearly are we communicating how transparently are we communicating them with sincerity with empathy uh if they're uh if we have a delay are we offering free beverage service uh as a low-cost way to um to demonstrate that we value their time and we understand that this is inconvenience is the pilot getting on to to talk about what the what the uh technical or mechanical issue was it caused a delay in detail to give us some level of comfort.
So there's lots you can do in an organization to have a mindset around customer centricity regardless of where your your targets are you can do things like training daily huddles practice learning from mistakes um is is actually an old-fashioned really great way to demonstrate your customer centric and I'm going to talk to you about storytelling and myth making another great way to to embed a culture of customer centricity many years ago earlier in my career.
I was in a financial services organization where the president of the company was on his way to visit uh our largest customer who was an auto manufacturer and at the airport he got picked up by the driver in a car with the logo with the make of their main competitor and he told the driver to stop around the corners and he walked the last two blocks to the customer because he didn't want to be seen driving driving up in their competitor's vehicle and this story made the rounds it was legendary in the hallways for years after it happened and it really helped drive for me as a young person in the implementation team just starting out it helped to contextualize when, what we meant inside our organization uh in terms of being customer-centric and it really embedded in me this attitude that it's everyone's job uh the second c of uh the four c's of culture is continuous improvement and again it's a buzzword but i mean some very specific things here you want to have a culture where where it's natural to be regularly promoting incremental improvement that year over year.
You want to you want to be improving and you want to be celebrating continuous improvement as a triple win it's not this oh geez we got flavor of the month we've got a new initiative let's get through as quickly as we can to get back to business as usual rather it's continuous improvement is a great thing because when it's done well not only do we reduce cost but we also improve quality and we improve employee engagement and every time.
I've done a continuous improvement project successfully I've gotten that triple win the next thing is desire to fix anything that gets in the way of a great customer experience again we go back to that mindset and lastly everyone should be ready to make improvements in response to new problems threats or market demands so that's the culture that we're talking about when we say continuous improvement the reason candor i have in here is one of the four c's again because business transformation is so difficult sustaining high levels of operational excellence is so is so challenging.
If you're you know go back to our airline example if you're at 85 on time arrivals and your your best competitor is at 90 you're trying to get to 90 you need to understand what are the gaps that are preventing you from getting there and that means real conversations with people around uh and and with people who are going to get defensive because someone's accountable for the system for the process for the team that's preventing you from getting there.
So you want to encourage open debate and discussion uh you want to insist on accountability because if someone's accountable then they own it even when it doesn't go well fix what's broken which means knowing why it broke in the first place and overcome the uncomfortable don't let it get personal it doesn't have to get personal because it's not about pointing fingers it's not about looking backwards.
It's about understanding root cause so we can take preventative action and then the last c in the four c's of culture is competitiveness you want to strive to be operational competitive by delivering on the most important customer value streams you want to earn the respect of your internal customers i would say even act as if an outside service provider could replace you so you want to sort of artificially create some competition even if it's not there and frankly.
It's always there in theory right if if you're an internal uh shared service organization inside a firm you know CEO could all could at some point outsource the entire shared service function if uh he or she doesn't feel that they're getting uh the value um and benefit from from your services so avoid complacency or you run the risk of becoming a bloated internally focused bureaucracy.
So here's the framework when we put all this together in the middle is our success measures quality and financial targets customer experience employee experience you may have some technology and risk factors in your dashboard you may be tracking key initiatives these are informed by and defined by an understanding of your business voice of customer mission and vision business plan and swat.
You're executing flawlessly hopefully with the right set of tools and making sure that you've selected the right tools to get the job done and you have the right capabilities and skill sets whether they're inside your organization or whether you're borrowing them from a consultant or third party provider you're sustaining them through a governance structure that's very rigorous and very disciplined around reporting escalation paths decision making transparency and then you're ensuring uh that your leadership behaviors your leadership traits and your culture uh lend themselves to being successful with the kind of sustained operational excellence.
That we've been talking about this whole time and again a good way to remember these uh competencies the three leadership behaviors I call them the VIP leadership behaviors value talent innovate plan and execute your five leadership trades are pitch passion integrity transparency collaboration honest feedback and your four cultural characteristics of the foresees customer centricity continuous improvement candor and competitiveness so we have some time for q a and you can learn more about me and our smart works productivity app at lipperssolutions.com.
Thank you very much you.
COO of Corporate Services,
Greg Lipper is Chief Operating Officer for Nasdaq’s Corporate Services business. In this role, Greg oversees global service delivery and client onboarding for thousands of clients for Clients' Investor Relations Teams and Boards of Directors, across North America, EMEA and Asia-Pacific regions. Greg is also responsible for business and sales optimization of large system implementation and integration projects, and Greg leads Nasdaq's Lean Six Sigma Initiatives. Prior to joining Nasdaq, Greg held a variety of senior roles in Global Operations, Client Management, IT Outsourcing and Process Excellence at Fidelity Investments and at Staples. He has also led major global transformation projects for these firms. Greg has launched operations in India, Philippines, Lithuania and Poland, has lived in multiple countries, and is six sigma certified. Greg earned his MBA in General Management at the University of Michigan Business School, and holds a bachelor’s degree in English Literature and Business Studies from Concordia University in Montreal, Canada. Greg lives in Boston, MA and is an avid skier and hiker.
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