Linking Operational Excellence, Business Transformation & Cultural Change into a Sustainable Business Model

Leonard R Hepp 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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Linking Operational Excellence, Business Transformation & Cultural Change into a Sustainable Business Model

The BTOES 2018 Insights Report, “The Global State of Operational Excellence, Critical Challenges and Future Trends”, is a rich survey of how Operational Excellence (OpEx) needs to evolve to a new level of strategic impact as an enterprise-wide business program. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.

 

Maturity Shift of Operational Excellence

From OpEx early days as Six Sigma and Lean – the methodologies, tools and techniques were leveraged as a continuous improvement mindset with Cost Savings as King although it has evolved over the years at mature organizations to include waste elimination, improved process flow & efficiencies, enhanced capacity, and a quality/compliance driver. The survey reinforces this maturity shift in several key areas:

 

• Change management and cultural transformation remains the biggest challenge
• Sustainable OpEx improvements are critical
• Leadership understanding, buy-in, and being advocates-mentors-coaches of change has to be “a given”
• Driving end to end business transformation with a seamless customer experience across the business needs to be “front and center”
• Talent management and employee empowerment are key
• New technology and marketplace trends will be defined by the right processes & systems for the new business landscape/transformation

 

By its very name, OpEx has held a traditional operations approach in most corporate visions and as a result been strongest in manufacturing operations/production sites or within department/functional operational lines of organizations. This traditional operational approach creates a “Separate From” business strategic linkage in many corporate visions [1]. 

 

 

"What's the problem or opportunity for improvement?"

The Survey shows the top four business organizations utilizing OpEx remain Day-to-Day Operations, Operations, Customer Service & Manufacturing.

 

 

 

 

I was particularly struck by many comments throughout the survey where OpEx was described and highlighted as a Tools Approach to problem solving. This couldn't be further from the truth. OpEx starts with a simple question - "What's the problem or opportunity for improvement?". Then the Right METHODOLOGY with Tool & Techniques AS APPROPRIATE can be leveraged for sustainable improvements.

 

In his book “State of Readiness – Operational Excellence as a precursor to being a high-performance organization” [2], Joseph Paris has a similar view of OpEx Maturity deployment with some great historical background as well as a challenge to look beyond the traditional Kaizen-Lean-Six Sigma process improvement of OpEx to enterprise-wide strategy of system performance with many examples and anecdotes.

 

 

 

Business Transformation

More recently, organizations have a new mantra – Business Transformation.The very nature of global competition and customer expectations is forcing a shift to Customer Excellence while at the same time minimizing costs and driving efficiencies through traditional OpEx approaches. What has been driving Business Transformation? The Boston Consulting Group has had several in-depth analyses with consistent findings [3].

 

 

Although a lot has been said about Disruptive Technologies/Companies driving Transformations, as can be seen in many cases it’s a more organizational, financial, operational and/or growth focus. And from a starting market position, it covers the range of bottom to top performing companies in their industries.

 

 

 

With such fundamental reasons for Business Transformation, you’d think most companies would be successful in deployment. So why do most Business Transformations fail?

A 2011 Global Survey identified [4]:

• Lack of well-defined milestones and business objectives
• Lack of commitment by senior management
• Employee resistance to the transformational change
• Poor communication as to mission, vision, and new directions

 

Clearly, the ability to meet business challenges demands that companies and leaders inspire and align their organizations, create a sense of urgency and speed while balancing innovation and continuous improvement and always keeping an eye on Quality from a customer view while meeting the company vision, milestones, and objectives.

 

Results Survey Report 2018/19: What are the 3 most critical Operational Excellence-focused challenges affecting your job role right now?

 

Seven years later, these same failure areas are evident in this Survey along with some new challenges:

1. Changing & Improving the Company Culture
2. Execution & Sustaining OpEx Projects
3. Need for End to End Business Transformation
4. Keeping up with New Technologies
5. Lack of/Need for Leadership Understanding & Buy-in
6. Maintaining key priorities consistently
7. Changing customer demands/business trends

 

 

So, how do we move our businesses to successful Process Improvement, Business Transformation deployment & sustainable change?

By linking OpEx, Business Transformation & Cultural Change in a “Next Level Evolution” model of Enterprise Excellence:

 

 

Key elements of this model:

1. Business Strategy and Alignment requires a clear vision and plan. Best in Class companies have adopted the Hoshin Kanri approach [5] to this part of the model, i.e. “Planning the Business”.
   
   
2. Leadership Engagement assures a business and customer focus on the outputs of mission critical systems and structures (called Key Process Indicators, KPIs). Many companies have adopted Lean Leadership principles from the Toyota Way of Leadership Development [6] in this part of the model, i.e. “Running the Business”.
   
   
3. Behaviors and Empowerment is fundamental for successful deployment of (1) and (2) by setting the right Values and Behaviors (called Key Behavior Indicators, KBIs) for EVERYONE in the company (leaders, managers, and employees). Empowering employees for success through Lean Leaders as coaches and mentors who drive continuous improvement, innovation, and fully support the company vision by their actions with goals and metrics (both KPIs and KBIs) tied to Strategy.[7]
   
   
4. Operational Excellence has traditionally delivered by a data and process mindset focused on improving process KPIs. A sustainable culture shift by a focus on Change Management and KBIs is that opportunity to make OpEx “Part Of” transformational change. Fully integrating and leveraging OpEx Lean Six Sigma and Change Management methodology, tools and techniques with Business Transformation elements 1-3 above completes the model, i.e. “Solving Business Problems and Advancing Business Opportunities”.

 

 

   

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