Kasper Uhd Jepsen 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.
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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.
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What have been the greatest developments?
What are the key drivers pushing change in Operational Excellence?
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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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Three execution design rules to succeed
According to the recent report “Global State of Operational Excellence, page 18”, top three challenges in execution are;
Change and improve Culture
Need for end-to-end (E2E) focus
It is a paradox, since all these challenges should be core components of your execution design. As you know, it is always about the execution - of course with a clear vision and understanding of your customer journey as a starting point. Life has also shown us, that you should have an agile mindset, where you aim for a minimum viable product (MVP) within 3-6 months. Click here to read the full Survey Report 2018/19.
What does “challenge based execution design mean”? It means that you lay out your execution to build upon the challenges instead of trying to solve or mitigate them afterwards. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.
Challenge 1: Change and improve Culture
Culture can only be changed by changing values and behaviour. To foster an improvement culture, people need a positive experience of improving, e.g. a process or IT system. In order to do that they need to experience it themselves. You cannot feel change through a nice article on the intranet or a success story, which lead us to the first rule…
Rule #1: Ensure that those who need to change are part of formulating and executing the change
Of course, you also need to deal with your executive sponsors to support the change of the culture. They are becoming increasingly short term minded so you need to construct your change so pilot go-live is within 3-6 month. That will reduce risk and validate direction.
Challenge 2: Sustain execution
In my opinion, that is the hardest part, since many companies think it is great to rotate leadership every 12-18 months.
It is probably the greatest challenge of execution. We know from agile that if you set a new team you often start all over. The loss of knowledge is a growing challenge as research tells us that tacit knowledge is becoming increasingly important to win. There are two ways to mitigate this issue.
Firstly, as part of executing you should evaluate leadership’s willingness to change in the beginning and replace them if needed.
Secondly, you should commit core change team for at least 24 months. Finally, you should have a fast go-live as mentioned above, despite the fact that major changes take time.
Rule#2: Replace leadership if needed at the beginning and commit your core team for at least 24 months
Challenge 3: Need for end-to-end (E2E) focus
Most companies are organized (HR reports wise) in functional silos and not according to customer journeys or value chains. That makes sense from an efficiency view, but not from an effectiveness perspective. The biggest part of improvement potential lies in the E2E process and/or customer journey.
This E2E challenge should be mitigated in two ways. First, through the right overall E2E governance. There are multiple models here. In my current company of Danske Bank, we have implemented a process governance for key value chains. In this setup, the customer responsible, delivery responsible and IT responsible, align strategy and targets for harvesting E2E potential. This governance is replicated down to employee level so it covers E2E continuous improvements as well. The framework provides a strong counterbalance to the financial targets, which are given in the functional silos.
If you do not have the luxury of such a governance, the next best thing is to commit leaders in the value chain yourselves. Most leaders understand the importance of collaboration across functional silos.
The second way to mitigate the E2E challenge is to deploy leaders and employees from the whole value chain to the core change team. You should do it even though their productivity within project work skills might be lower than professional operational excellence consultants. You will get the investment back tenfold when you have to implement and sustain change. This leads to the third rule…
Rule#3: Build E2E governance. Deploy leaders and employees from the full value chain to your core change team.
Thank you for listening and please be aware that the rules above are only based on 17 years of experience within operational excellence and strategy execution. Despite many rules, there can never be a one-size fit all when you execute. If your followers understand this, you will have a very powerful tribe.
Good luck in your execution, and please reach out, if you want to share thoughts or learning.
About the Author
Kasper Uhd Jepsen
Kasper has 17 years’ experience in leading business optimization and transformation. He is an experienced people developer with the ability to recruit, develop and grow talent.
He has deep experience within customer value and requirements identification, agile, performance management, process optimization, organisational design and behaviour transformation. Check out his LinkedIn page.
BTOES is the industry’s biggest and best, senior-level, cross-industry gathering of Business Transformation & Operational Excellence industry leaders and senior executives.
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The summits hosts a number of private forums for C-Level & Global corporate-level leaders as well as business unit heads.
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