Let’s make OpEx simple again

Michael Stober 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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Let’s make OpEx simple again 

Operational Excellence is a heavily expensed program by companies, well-marketed by consultants and advocates, and has volumes written about it.

The big question though, is why are a large amount of companies still challenged to successfully implement such programs. Personally, I strongly believe the discussion is inverted, so, let’s “talk turkey” and get it on the table. The typical arguments for why Operational Excellence fails typically range from lack of leadership buy-in to insurmountable cultural change. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.

But what does that really mean? The very topic of Operational Excellence, in itself ambiguous, and terms like ‘leadership buy-in’ and ‘cultural change' merely pig-pile on the obscurity. To bring some clarity to, what Operational Excellence really means, I want to start with the expected outcomes that these programs intended to deliver. Click here to read the full Survey Report 2018/19. 

 

 

All companies expect simple and specific OpEx outcomes.

Terms such as ’new technology’, ‘digitization’, ‘AI’, ‘robotics process automation’, ‘machine learning’, etc., don’t mean much to the teams who will be responsible for driving the success or failure of the program. Although these capabilities are really cool buzz terms for C-suite executives, consultants, and highly paid internal talent, it all comes down to one thing--the expected results; which all comes back to an organization’s P&L, expense or revenue. This is the starting and ending point for any individual OpEx engagement or OpEx program.  This is its meaning, its power, its value.

 

 

To drive the point home, let’s push further to talk about a typical outcome most companies hesitate to discuss openly with its employees.

And, I pick this one since it is the most sensitive topic, but drives home my point. The term is expense reduction. Why has this phrase devolved to becoming so taboo? It’s because it translates into real people losing their jobs.   Rather than tiptoeing around the topic and disguising ‘expense reduction’ as change management, improved efficiency, freed up capacity, I urge leaders to put it on the table, plainly, on day one. That way, everyone involved is fully aware of their expected outcome and path forward. This won’t magically make the challenge in achieving the desired results disappear and provide a path of no resistance, but, it will provide transparency and clarity to those involved, which in turn increases the speed and quality of the engagement or program.

 

More so, as an initiative progresses and obstacles arise, a more open and honest dialogue can be had  as opposed to potentially perpetuating the confusion in an effort to disguise the program’s goal. Disguising the goal, as I have witnessed, creates distrust, passive-aggressive behavior, and skepticism.

Now that we have addressed “the what,”, what Operational Excellence truly is intended to deliver, let’s transition to the “how’s,” how you go about successful implementation.

 

The first "how" is responsibility.

It needs to be made crystal clear upfront, who is responsible for delivering “the what.” The responsibility of the OpEx project, program, or engagement team, is to identify a suite of options in order to achieve the desired outcome. The responsibility of the stakeholder or Executive Sponsor is to make the decision related to which options are most viable and how aggressively they want to be in meeting or exceeding the benefit goal. The key here is that in most engagements, people will try to blur the lines of responsibility in order to hedge the ownership for the success or failure. If this happens, do not move proceed with the engagement. Stop it in its tracks and reset until it becomes perfectly clear who is responsible for what.

 

 

The second "how" is behavior.

Again, behavior can be a very ambiguous term, and this one gets a bit more complicated because it involves humans. Allow me to explain. Companies talk a lot about culture, value systems, core beliefs, etc., which are great buzz words without much meaning unless properly defined. It will create disorder to nibble around the edges of what behavior means, when promoting how important it is under layers of intranet campaigns, training sessions, and guest speakers on the topic. These types of campaigns often do not get to the core of human behavior in a personal way. In our line of business, here is what behavior comes down to.

Humans have two primary value systems, one personal and one professional. For the professional value system, there exist multiple layers of competing values that align to the company, their division, their department, and then themselves. The values can be incongruent and at times, create confusion for the employee in terms of, to which they should pledge allegiance to, for the same is true for personal value systems. The result is a perpetually competing incongruency which influences an employee’s behavior at work, ultimately impacting the expected outcome of any OpEx engagement.

If we agree that workplace behavior can be simply defined as how employees think, believe, act and feel, then we can begin to reshape behavior by minimally acknowledging the existence of this incongruency. We can then begin focusing our energy and time on understanding and proactively addressing the employee’s misalignment of behavior to delivering the outcome. I would suggest you are on constant patrol for this misalignment and let the tools and methods drive the delivery versus expecting employees to suddenly change their behavior all at once.

 

 

In summary, let’s make OpEx simple again.

Let us not go astray by focusing on cool technology and methodologies.  Let’s focus simply on the desired outcome and how behavior does or doesn’t align with this expected outcome, allowing the cool technology and methodologies to be layered in the underbelly of your engagement or program. Most importantly, boldly address the common challenges upfront.  If this is a program to reap an expense savings, say so. If it seems that the delivery team may face discomfort in bringing forth ideas that result in such savings, address that, too. Embrace the discomfort. Address it early and often. Discomfort is okay, and we are backed by an assortment of time-tested tools and methods to get us to a desired outcome.