Cultural Transformation & Leadership Buy-In and Understanding

Ganapathy Subrahmaniam 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 read 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.

 

 

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Cultural Transformation & Leadership Buy-In and Understanding

Cultural Transformation for Operational Excellence

There is a saying that all Operational Excellence professionals ought to embrace should their desire be to achieve a Cultural Transformation such that everyone in their field of influence voluntarily begins to want to learn & employ Operational Excellence tools & methods:

 

They don’t care how much you know until they know how much you care

 

 

The following examples are from my workplace:

 

A Lean consultant, my direct manager (performing both the Operations Manager & Operational Excellence Manager roles), the site’s financial controller & I (Operational Excellence Analyst) arrived at a conclusion after having developed a Value Stream Map of the manufacturing facility’s flagship production line: There was a 7% increase in profitability available if we were to speed up the production line by 1 unit per minute. This was a ‘free-speed’ opportunity because this speed increase was only going to match the slowest running piece of equipment on that production line. The calculations were checked again and verified as being correct with an annualized value exceeding $ 200,000 via overtime reduction; all else being equal. Not an opportunity to be set aside for later consideration. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.

 

 

When this analysis’ recommendation was presented to the production line supervisors (including the financial gain involved), the following objections were raised (even before the supporting analysis was presented):

 

1) This has been tried before and it failed miserably because an equipment breakdown occurred. If the same equipment failure occurs again, it will be the production line’s supervisors & employees who will be held responsible for the downtime; not you.

2) This speed increase would reduce the product quality significantly. Only we will be blamed for this; not you.

 

Both are perfectly valid objections. I should mention that at the time, I had a Six Sigma Black Belt certification from the American Society for Quality, a high level of proficiency in Minitab 16 & I was also an accomplished user of the fundamental Lean tools & methods (e.g. Shop Floor Management, Single Minute Exchange of Die, Total Productive Maintenance, Value Stream Mapping, 5S, Root Cause Analysis etc.). So was my direct manager but none of that mattered to the production line’s supervisors when this proposal was made.

 

 

We struck the following deal after an hour’s debate:

This recommendation will be tested for 4 hours (half a shift) and after that time, the before versus after improvement would be measured using the following Key Performance Indices (as compared to known control):

 

1) % yield

2) % downtime

3) Critical to Quality product characteristics (e.g. tensile strength & product colour) measured using calibrated devices that had statistically calculated control limits & customer-driven specification limits

 

If the test fails for any reason, sole responsibility will be borne by me & my direct manager. In any event, full credit will be given to every employee in this production line for undertaking the test’s execution in a timely & efficient manner in the interest of the site’s profitability. This was even made a formal agreement in each employee’s annual goals.

 

The Director of Operations for the site was fully on-board with both the analysis’ recommendation and the Lean methodologies used to arrive at it. Without data-driven support (not diktats) from top management, Operational Excellence initiatives are destined to fail.

 

 

The Test

The test began as scheduled. 4 hours passed and everything went swimmingly. That production line still runs 7% faster than it used to 10 years after the test was first conducted.

Less than 2 years after that test’s success, 5 new pieces of equipment with a total cost of more than $ 1,000,000 (Return On Investment 1.5 years) were purchased & successfully installed in that production line to further improve its efficiency & product quality.

 

We later learnt from a former Maintenance employee that the equipment failure that occurred during a previous attempt of the speed increase test was a completely unrelated event and would have occurred anyway.

 

As the site’s only Operational Excellence analyst, I have no direct reports at all. However, since the employees in that production line saw that my direct manager & I were ready to face the music should any failure occur during a scientifically valid test, trust was built.

 

To employees who are usually both hesitant & curious about Operational Excellence; honesty, a boots on the ground approach & independently verifiable data matter. Armchair consulting in fancy clothing without any accountability is shunned.

 

 

It's all about Trust

That trust grew by leaps & bounds from that point on. In the next 2 years, all production line managers provided me & my direct manager every resource that we required to successfully set up a site-wide fully electronic Statistical Process Control monitoring system that within 1 year of its implementation reduced customer complaints by 45% on each of the site’s top 3 issues in the field.

 

 

Through all this, my direct manager & I have enjoyed the good fortune of watching the company culture transform from ‘Operational Excellence stuff is this thing we have to get done sometime this month on top of everything else’ to ‘Let’s call our Operational Excellence professionals to teach us how to perform this task using Lean & Six Sigma methods’.

 

 

My direct manager & I recently held the following ‘elevator conversation’ with the Regional Vice President of Operations:

 

“With a small investment of $ 50,000 to purchase a new ultrasonic machine & to repair the existing one, we can save $ 150,000 in customer complaints related claims & overtime labour hours in a bottleneck department by improving product quality, increasing equipment reliability & reducing the non-value added hours lost by employees having to transport for 3 miles each day the one unreliable equipment we currently own. We have the data analysis summarized & ready for you to review if you can please spare a few minutes?”

 

Summary reviewed. Permission granted. Mission accomplished. All in a span of 2 weeks.

 

 

Leadership Buy-In & Understanding is achieved in this manner:

 

Being trustworthy & having independently verifiable data ready before starting the business case conversation.