Early data says “not really,” and that’s a problem.
My father, now retired, put food on the table for most of my childhood by running a small carpet cleaning and disaster restoration company. As a child when on summer break from school I would go with Dad every day to his office to “hang out” while he arranged the daily work schedule, assigned jobs to the crews, inventoried supplies, paid bills, and performed all of his other standard work in order for the business to function.
Then, usually around mid-morning, Dad would head out of the office for any number of reasons – picking up supplies, checking in on an important customer, bidding on a new job, etc. The good news was that he would take me with him on these appointments, which meant that (a) I wouldn’t have to try to entertain myself in the office all day and (b) I’d get to spend some time with my father, which is all a son wants at that age.
Obviously, I remember that time spent with Dad quite fondly, but the reason I mention it in this context has to do with the nature of his work and how it was applied, not to his customers, but to us at home. One would think that because my Dad operated a carpet cleaning company that our carpets at home would be spotless all the time. However, any family composed of two boys, a dog, and a cat is going to have its fair share of spills, stains and spots, and because time is money to a small business owner, Dad wasn’t going to defer customer work every time my brother or I made a mess. So while we kept a clean, well-maintained home (no thanks to me), there were times in which the carpets weren’t exactly pristine.
"Walking the Talk"
So how does this story apply to Operational Excellence (OpEx)? Well, like the proverbial carpet cleaner with stains in his carpets, OpEx Leaders need to be wary of espousing to the broader organization the importance of taking a disciplined and structured approach to managing the business without applying the same mindset and methods to their own function.
In fact, avoiding the perception that OpEx isn’t “walking the talk” is much more important than in the story above because, unlike my Dad's customers who never saw the inside of our home, the “customers” within your organization (i.e., individuals and team who are tasked to engage with OpEx) have tremendous visibility into how your team goes about its business. In other words, if OpEx doesn’t have its act together, then its credibility within the organization is diminished along with its ability to impact the business in a meaningful way.
With that in mind, we recently launched an assessment designed to help OpEx Leaders determine the extent to which they were strategically managing the broader OpEx team/function within their company.
The focus for the assessment is on the essential aspects of strategic OpEx management, not on which specific methods or tools are being applied. Sample questions in the assessment include:
- Have you developed or updated within the last 12 months a compelling vision for OpEx aligned with the overall corporate vision?
- Have you developed a core set of strategic objectives for OpEx that align with the OpEx vision and larger business strategy?
- Have you assessed the various methods (e.g., Lean, Six Sigma, etc.) that are typically applied to support OpEx and aligned on which ones are most appropriate for your organization?
- Has the organization defined a resourcing plan for the OpEx function?
- Have you conducted a stakeholder analysis to better assess which stakeholders will have a high potential impact on the future success of OpEx in the organization as well as those stakeholders who are likely to be resistant to the OpEx vision and strategy?
- Has your organization developed a workforce training program to support the application of OpEx?
The early data from this assessment provides insight into how well OpEx Leaders are managing the OpEx function. Here are several key takeaways:
OpEx Leaders are Doing About ½ of What it Takes to Strategically Manage Opex
The questions posed in the assessment are all binary (i.e., yes or no) in order to take much of the subjectivity out of the process. We looked at the total number of “yes” responses out of the total number of questions posed and discovered that an affirmative response was provided only about 52% of the time.
As a point of comparison, the Process Excellence Network conducted a survey recently on how organizations are approaching process improvement. One of the questions posed was “On a scale of 1-10, how well would you rate your OpEx program?” The average score across all respondents was 6.1.
So what OpEx Leaders and Practitioners seem to be saying is that their OpEx programs are only about 60% as effective as they could be (a failing grade when I was in school) and, at the same time, they are doing only about one-half of what they should be doing to strategically manage the function. You may disagree but we believe that one can infer a relationship between these two phenomena. In other words, the fact that the OpEx function isn’t being strategically managed in our view directly contributes to the modest rating of program effectiveness.
OpEx Leaders Love Their Methods
Perhaps not surprisingly, OpEx Leaders generally have a strong sense as to which CI method(s) (e.g., Lean, Six Sigma, TQM, TPM, Business Process Reengineering, etc.) they want to rely upon to drive the implementation of OpEx in the organization. The affirmative response rate to the questions in this element was 89%. Questions posed include:
- Have you assessed the various methods (e.g., Lean, Six Sigma, etc.) that are typically applied to support OpEx and aligned on which ones are most appropriate for your organization?
- Do the methods make sense given your industry as well as any external certifications that you may be pursuing?
- Have you analyzed the capabilities of your OpEx team compared to the selected methods and determined whether there are capability gaps that need to be addressed?
While selecting the right methods to support OpEx is clearly necessary to have success, it’s not sufficient in and of itself to ensure effectiveness. Ultimately, what every enterprise strives to achieve is a scenario whereby the method gets infused into the DNA of the organization and changes the way people at all levels think and behave. This ideal state is what folks are trying to convey when they talk about building a Lean Culture or Continuous Improvement Culture.
However, there are a variety of factors that affect the extent to which the method gets entrenched into the culture that have nothing to do with the specifics concepts, practices, and tools espoused therein.
This truth is reinforced by the pedestrian OpEx program effectiveness rating referenced above. In other words, there’s significantly more that goes into strategically managing the implementation of OpEx in the organization than selecting and deploying a particular method or set of methods.
OpEx Leaders Struggle to Align Leadership
Again, this finding might fall in the “not surprising” category, but the data is illustrative nonetheless. Our assessment posed the following questions on leadership alignment:
- Have you identified all key leadership stakeholders who need to be aligned to the OpEx vision and strategy for the organization?
- Have you conducted a stakeholder analysis to better assess which stakeholders will have a high potential impact on the future success of OpEx in the organization as well as those stakeholders who are likely to be resistant to the OpEx vision and strategy?
- Have you analyzed the probable root causes of potential or known resistance to the OpEx vision and strategy?
- Have you defined the key leadership behaviors that will need to be exhibited in support of OpEx in the organization?
- Do all key leadership stakeholders support the OpEx vision and strategy?
- Do all key leadership stakeholders support the implementation of the key leadership behaviors and have committed to participating in coordination with OpEx in embedding those behaviors into the culture of the organization?
Clearly the questions are designed to test the extent to which OpEx Leaders are being systematic in how they create leadership alignment. There are at least two OpEx “tools” that should be applied to meet the standard set for this element – stakeholder analysis and root cause analysis. This is the textbook definition of “practicing what you preach.”
OpEx Leaders and Practitioners are regularly espousing the importance of sound change management (of which the stakeholder analysis is fundamental) and structured problem solving (of which root cause analysis is fundamental). So are we applying these tools to our own situations or instead throwing up our hands and bemoaning the fact that leadership just doesn’t “get it?”
Back to the results of the assessment…the affirmative response rate to the questions posed in the Align Leadership element was 26%. Returning to the Process Excellence Network study referenced earlier, one of the more interesting results from that survey was that the number 1 stated challenge was securing and maintaining executive buy-in. Again, it’s probably not a stretch to infer a relationship here. We’re not doing the things that are likely to drive leadership alignment, which is a big part of the reason why we don’t have it.
What It Means
Aggregate data is illustrative but doesn’t speak to every organization’s personal circumstance, which is why it’s important for OpEx Leaders to take stock of the manner in which they are strategically managing the work of the OpEx function. The time spent looking in the proverbial mirror will likely surface opportunities to better support the business and drive sustainable impact by taking a more disciplined and structured approach.