Post 2 – Operational Excellence Model

This diagram was published some time ago on this channel. It’s easy to understand it because is very simple, but in the real life requires hard experience and a very clear and detailed implementation plan, orchestrating the whole Value Chain, to evidence a real change.

Having a holistic view of the model, not only as a collection of boards, meetings, methods, and tools, helps us to define the modules, responsibilities, and all the change management plan for strengthening competencies with an understood purpose that allows to develop the continuous improvement mindset in every co-worker, not only for evidencing the progress in a Gantt Chart. The trap in a mindset development plan is to validate only the project progress instead of measuring and evidencing the embracement of the new ways of working.

Let me highlight some (7) warnings before start talking in a positive way:

?1.?????? We can spend many hours training people, but they are not going to utilize methods and tools in a sustainable way if they don’t have a clear purpose. We need a Communication Plan, a Competencies Matrix, and a Development Plan to identify talents / change agents, motivate them, having recognition and results quickly, not only delivering certificates or showing the KPI “training hours” or “certificated people”.

2.?????? People can run methods and tools, but they will not see a new way of working if the top management asks for immediate solutions (jumping from the problem description to the “solution”). Top management must push people to understand the problem before and then eliminate the root-cause.

3.?????? People can run methods and tools everywhere; we can certificate a lot of people, even having projects that improve a KPI in a 0,005%, if we don’t have defined and communicated the business priorities. This is not about the amount of certified people, it’s about the results and their impact in the co-worker’s quality of life, the shopper/customer/consumer delight, and the P&L.

4.?????? We can improve a KPI in a specific area, but this improvement could impact negatively in other area. We must have the End-to-End or Value Chain approach for avoiding isolated results.

5.?????? Sometimes KPI’s reach their targets because of a top-down order, not for the methods utilization. For example: Working Capital, or monthly sales figures at the end of the period.

6.?????? If the purpose is not clear for people or top management asks for results at all costs, people can be confused and stating: “either I do my work, or I do projects for achieving the Operational Excellence plan”.

7.?????? We can communicate what we expect from people, but without an effective change management plan and top managers convinced, people will see a dichotomy between what we preach and what managers practice.

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Therefore, our starting point is to have clear answers for these two questions:

What is an Operational Excellence Model?

Why do we want to implement an Operational Excellence Model in our organization?

?When top managers understand the answer to the first question; answering the second question, they know the problems that they want to solve; and they understand the scope and are convinced about the Operational Excellence Model; just there we can go forward, understanding the four quadrants of this model:

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High performance teams: I must form teams that know how to manage their time, are collaborative, learn to solve and not blame, trust each other, are clear about the organizational purpose, etc. The initial situation in our companies shows 60% of the time spent writing emails and making presentations where we explain the situations that occurred time ago from our selfish perspective, showing how to blame to others. To that we add the emails where we clear our responsibility for events that are going to occur, but “I am doing what I was told, but I am warning about …” so as not to appear as responsible in the autopsy presentations.

Strategy: We must have the company's strategy defined, aligned, and communicated at all levels. The initial situation in our companies shows that senior management knows the strategic objectives, they direct their teams, but there is no clarity on how the different levels contribute to its fulfillment, or it is not clear at the level of the collaborators how their efforts are synchronized. to do things right at the first time. Many companies have their mission, vision and strategic objectives published, but without an understood clear purpose, or a detailed explanation where all employees know how they contribute to that strategy, it can be just part of the landscape in the hallways or the intranet.

Performance Management: We must be clear about the connection between KPIs and PPIs to be able to evaluate our operational results. Here, we see the synergy with the Strategy quadrant, because if what we monitor periodically (by hour, shift, day, week, month) is not connected to the strategy, we will be working on issues that will not have visibility, or that will not impact the results that the company seeks. The initial situation in our companies is that the connection between what happens daily and what is sought in the mid and long term is lost. People put out fires daily, but the numerical results appear due to a top-down instruction to meet the sales figure at the end of the month, or to appear well in the Working Capital photo at the end of the quarter.

Process Excellence: This part must have total synergy with the other three quadrants and a very special component that is focused on the shopper/customer/consumer. Here we define the methods and tools that we are going to use for each component and above all, to develop the skills of our collaborators. The initial situation in our companies is that the operational areas can map the processes, or the sales and marketing areas have their customer persona and know the needs of their clients, or the factory produces what its capacity delivers, but not what is needed, and the inventory is growing, or logistics delivers and there is always an excuse to explain the extra costs. Be careful: sometimes people understand that Operational Excellence implementation plan is just about this part … this is a huge mistake.

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Therefore, when we talk about Operational Excellence, we must be clear about the purpose and accompany the process with people who have experience in each of the quadrants. We cannot create a replica of a Disney Park if the people who are going to create it have not previously been to one and it is even better if our chosen experts have already created a Disney Park in the past.

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I hope I have shown that Operational Excellence is not just having green indicators, or having low costs, or having a wide range of training, or complying with a certification, or keeping my bigger customers happy. Operational excellence is a comprehensive concept that moves the company to another level of efficiency, where the people are so prepared and convinced that they become agents of change to generate sustainable results in a sustainable environment.

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I recommend that you go to the Association for Manufacturing Excellence website https://www.ame.org/excellence-awards if you want a guideline that comprehensively measures your operational excellence. There, you can download the criteria for having a guideline with the high standards of operational excellence.

Remember: Listen to understand, not to respond.