Steven Hodlin 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.

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Culture - the result of shared values

The primary result from the Global State of Operational Excellence report indicates that changing and improving culture is the top challenge, followed by leadership buy-in and understanding. These two issues are linked in practice. Culture is the result of shared values and how people think, believe, act, and feel. This belief system leads to the action taken and the results attained.

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

Experiences create the belief system

The way you change culture is through experiences. According to Schein (1992), experiences create the belief system, which leads to the action taken and the decisions made, which produce the result and outcomes. If you want a different result, the belief system must be changed, and that is influenced by the experiences. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.

Leadership needs to be role models in providing the experiences that will drive the beliefs of the organization. Without this influence and these experiences, the culture will be far different than what leadership intended. Any successful operational excellence endeavor requires the leadership buy-in and understanding of the operational excellence approaches in order to influence the culture in a meaningful way.

End-to-end Business Transformation

The report also highlighted the need for end-to-end Business Transformation. The importance of end-to-end is a reflection that all steps in the process are a part of a system, and in order to optimize the system, process re-engineering needs to view the value stream of the system in its entirety. The system needs to be viewed in order to prioritize the re-engineering according to the greatest constraints. Otherwise processes being transformed in the system may have little impact if the bottleneck is downstream, thus resulting in lack of systemic improvement.

Once improvements have been achieved, the gains can be sustained through the development of control plans that build in a metric system to monitor the key performances associated with the gains. Based upon the formula f(x) = y, by understanding the variables that drive the outcomes and controlling them, sustainment of the gains can be maintained and it is possible to move on to another challenge confidently.

The emotional side to change

As improvements are initiated, change management becomes critical. It is important to realize that there is an emotional side to change and that people need a bridge from the current state to the future state resulting from the change. This is often under-estimated or discounted.

A good change management model is that proposed by Kotter (1996). His eight stages of change are broken up into three major categories. Establishing a sense of urgency, creating the guiding coalition, and developing a vision and strategy serve to create a climate for change. Communicating the vision, empowering action, and creating quick wins results in engaging and enabling the organization. By building on the change and anchoring new approaches in the culture, the change is implemented and sustained.This cycle can be summarized as plan, engage, and implement and sustain the change. There are some key deliverables in each area.

For creating a climate for change, stakeholder analysis should be conducted. This helps to identify the stakeholders and enables understanding of how to get them bought in and engaged. Communication is a key to any change. The communications should be planned and targeted for the audience. The vision should be communicated, along with providing transparency to the pathways for achieving the vision. Celebrations and recognitions should be developed to keep everyone motivated and energized as small wins are achieved along the way. Training and support need to be considered to assist in the change initiative execution and sustainment.

Work on improvements that are critical to the strategic goal

In the report, maintaining key priorities consistently was highlighted as a challenge. This can be mitigated by ensuring all initiatives are linked to strategic objectives. Many times, organizations develop “scope creep” in their operational excellence objectives, and find employees working on improvements that are not critical to the strategic goal, thus diluting the operational excellence resources in the organization.

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

One way to address this is to develop a cascading metric system such as OKR’s (Objectives and Key Results). The objectives are linked to the high-level strategic vision. They are qualitative, inspirational, attainable, controllable, provide business value, and are doable in a quarter. The objectives are then supported by key results that are quantitative, aspirational, specific, owed by someone, vertically and horizontally aligned, and drive the right behaviors (Niven & Lamorte, 2016).