The Roadmap – Stage 6 Problem Identification – The Stakeholders

Welcome to the TLS Continuum Change Maestro’s Roadmap newsletter. A new edition will be released every Tuesday on LinkedIn. It is by nature an interactive newsletter. What do I mean? My initial intention was the development of a dialogue pertaining to the concept of a change roadmap. I was looking for interaction between those of us here as to what each phase so far meant to you. It appears as though you would prefer to be passive readers, so be it. However, let me reiterate that as we progress through the roadmap if you have something you want to contribute, feel free to comment on any issue that perks your thoughts.

?Identification of the Supply Chain Partners

?As we discussed earlier, as an organization it is our responsibility to make more money and to acquire and maintain customers. The subsequent question that arises is how do we achieve that ultimate goal? The two alternate responses has plagued our organizations for decades.

The first response is based on the work of the economist Milton Friedman who believed that your organization has no responsibility to the public as a whole since its only concern is to increase the corporate bottom line through increasng the corporate income. The needs of the public would be met by the shareholder’s actions. The basis of this belief is that the shareholders own equity in the organization.The Pearse Trust tells us that shareholder are the owners of the company and provide financial backing in return for potential dividends over the lifetime of the company In other words, A shareholder, is a person, company, or institution that owns at least one share of a company’s?stock , which is known as equity. Because shareholders are essentially owners in a company, they reap the benefits of a business’ success. They also suffer the losses when the business does not perform as well. The problem with Friedman’s view is that it does not take into account the contribution of the various components of the critical chain except in vague terms. It does not take into account that under the shareholder theory that management is an agent of those who own the organization.

The second view is that as expressed by R.Edward Freeman who put forth the concept of the stakeholder theory. Stakeholder Theory52 is a view of capitalism that stresses the interconnected relationships between a business and its customers, suppliers, employees, investors, communities, and others who have a stake in the organization. The theory argues that a firm should create value for all stakeholders, not just shareholders.

We believe that to fully implement the TLS Continuum we must operate from the latter perspective and focus on the stakeholders. The University of Virginia Darden School of Business, which implemented this alternate view, tells us that there exist five distinct types of shareholders in their principles and purpose statement53.

The first type are our customers. As we will see later in this chapter, the customer dictates the direction in which the TLS Continuum directs its actions, tasks, and efforts. It is the customer who tells the organization what is wrong with the processes. The second type are the human capital assets who are our subject matter experts who know and understand where the system constraints are found. This is because they see the process in its functional state. The third type are the suppliers. The suppliers govern the supply chain and thus the supply and demand of materials needed to ensure that the processes run smoothly. The fourth type are the communities in which we operate whether we are talking about the local community or the global workplace. The fifth type are the shareholders. By accepting the Stakeholder theory, we are not negating Milton Friedman’s view of organizational structure however we are saying they are not the primary focus. The shareholder’s contribution to the organization is in the form of the basic funds to operate.

The first step in the TLS Continuum journey thus becomes identifying who are the appropriate stakeholders in the process at hand. The TLS Continuum toolbox provides us with a tool called the SIPOC form in order to facilitate this task.

SIPOC Diagram

To better understand who, the stakeholders are it is imperative that we understand the roles each of the stakeholders play in the process improvement efforts. The easiest way to achieve this is through the usage of a tool called the SIPOC diagram. Remember in Chapter 2, we said the TLS Continuum is just that. It is a chain of a series of actions resulting in process improvement. In order to begin implementation of process improvement within your organization, we need to gain an eagle’s eye view of the processes and the performance gaps from the customer’s point of view. The SIPOC can fill that need.

The first step in the journey is to look at the organization from above and identify the players in the mix.? Using the form, as seen in Figure 10.1, the process begins with the construction of a SIPOC analysis of your operation. It provides an eagle’s eye view of the various components of the process.? The SIPOC is divided into five segments or columns which lay out the steps in the process chain. While we eventually will be concerned with the critical few, at this macro viewpoint we want to include all that are applicable to the process in each column.

The first column in the SIPOC tool (represented by the S in the form) represents the suppliers to the system. They represent those entities that contribute the materials that are used to produce our products and services. Initially you want to look at the potential suppliers from a macro view. If a potential supplier may contribute to the process, they should be included. When we are ready to begin the problem-solving stage, we can narrow down the suppliers to those with the most to contribute. It is the goal of the suppliers to deliver something of value to the various processes that they are involved in.

These things of value are represented in the second column shown by the letter I.

These materials are delivered to the organization in the form of an input of some kind. As an organization you seek out suppliers to provide you with something. Whether it is materials or software, you still seek out their inputs. These process Inputs come both from within and outside our organizations. The inputs are designed to furnish or provide (a person, establishment, place, etc.) what is lacking or requisite or to make up, compensate for or satisfy something missing from a process. These inputs ultimately feed into one or more of your organizational processes.

The third column, shown by the letter P, represent the processes which are the center of our process improvement efforts The system is designed so that the suppliers and their inputs feed the various processes by which your organization functions. It should be noted that the supplier and their inputs may feed multiple processes. You need to have a precise path of how the supplier’s inputs are utilized in making the product or delivering the service to meet the client needs. Your definition of the process involved must be clearly noted.

The fourth column show by the letter O, represents the outputs from the processes. We do not conduct a process without expecting the process to result in some sort of product or service. The processes deliver something of value to the end-user in the form of outputs.

The fifth of the tool, shown by the letter O refers to those outputs. Our processes need to produce something tangible. When we complete a process, the process creates the end product or service which we deliver to the customer.

The sixth and final column, shown by the letter C, represents the end-user or customer who delivers the product or service to their customer. In turn the customer enters its own SIPOC to deliver the product or service to their end-user. This is a clear manifestation of the continuum since the critical chain flows both forward and backwards and thus you could develop SIPOC forms for both ends of the processes.

Stakeholder Analysis

With the SIPOC completed, the organization is now in a position to establish where the stakeholders are in working towards the completion of the process improvement effort. The TLS Continuum does this through implementing a stakeholder analysis. A stakeholder analysis groups the stakeholders according to their levels of involvement. Typically, the analysis considers the involvement from the aspects of participation, interest, and influence. Once this step is done, the organization then determines how to best involve and communicate to each level throughout the process. As can be seen in Figure 10.1, the form demonstrates each stakeholder and where they fall in the spectrum. It is critical that we identify those stakeholders that are critical for success and what their current level of involvement in the process is.

The reasoning behind the stakeholder analysis can be delineated for several areas. First, the stakeholder analysis helps management to enlist the assistance of key organizational players. The project charter asks us to identify several levels of parties. We have the executive sponsor who is the key management individual who is pushing the project. We have the project sponsor who is charged with being the gatekeeper for the project through the various levels within the organization.

Stakeholder Analysis Form tools4dev

vIn the end, the project outcomes must be aligned with the organizational goals, values, and strategies. It is easier to obtain this alignment if the organization starts early to begin the process of getting everyone on the same page as we make the journey through the Continuum.

We are all human and as a result we may not see eye to eye all the time. One of the outcomes of the stakeholder analysis is the potential to uncover areas of conflict where certain individuals who are not totally onboard with the improvement efforts. It is these individuals who can add a constraint to the improvement effort.

Voice of the Customer

With the stakeholder analysis completed, it becomes necessary that we turn to the most critical stakeholder in the form of end-user or customer. Remember that we can’t take the TLS Continuum improvement journey without some creditable data. So where do we get those data points? The easiest way is to ask the customer what is on their minds. The difficulty here is that their immediate answers may not be the full story.

Our goal is two-fold. First, we want to understand what they think is the problem that is confronting them. They see the world as they see it. The supposed deficit in your product or service delivery is what they see an assumption as what is wrong with the process. This assumption is the starting point as to our experiment to determine the system constraint. Second, the results of utilizing the TLS Continuum will show the real determination as to the case of the system constraint.

To assist us in making this determination, the TLS Continuum toolbox contains a specific tool that is essential in arriving at that answer. The TLS Continuum toolbox contains a tool called the Quality Function Deployment (QFD) tool as show in Figure 5.3.? The QFD is a process within a bigger process and is designed to more effectively define that all important voice of the customer. The end goal is that with the customer telling us what is critical to them, your organization is better able to establish those products and services that meet those voices. It is the completion of the Voice of the Customer Matrix that completes that goal.?

To get a better understanding of how the Matrix works, turn back to Figure 5.3 and I will take you through the various components of the Matrix and their interactions with the rest of the form.

Running horizontally across the top of the Matrix is the delineation of the phases of the process in question. In this case the phases are laid out as Plan, develop, market, deliver and support/ Under each of these are three options that might be undertaken for each phase. For instances in the planning stage the options shown are internal consultant, customer surveys, and the cross-functional team.

Figure 10.3 Voice of the Customer Matrix

To get a better understanding of how the Matrix works, we will take you through the various components of the Matrix and their interactions with the rest of the form.

Running horizontally across the top of the Matrix is the delineation of the phases of the process in question. In this case the phases are laid out as Plan, develop, market, deliver and support/ Under each of these are three options that might be undertaken for each phase. For instances in the planning stage the options shown are internal consultant, customer surveys, and the cross-functional team. On the far left is a vertical column denoted by the three goals of the TLS Continuum. We want to strive to get your product or service to the end-user better (less defects), faster and cheaper (not in total cost but in the outlay of funds to produce the product or service).

By entering this data into an excel type spreadsheet you construct a grid between the components. The next step is to ask the customer what would characterize a “perfect product for them?” Your task then is to assign a number to each response on a scale of 1-4, with 4 being considered a strong want by the customer.?

Your final task is to then to identify the customer priorities in their response on a scale of 1-5 with 5 being the strongest want. When you enter the priority ranking into the column, the Matrix is preloaded with weighting formulas for each square. The last horizontal row is the calculation of the totals of each column, giving you the ability to identify those customer needs that are critical to the improvement effort., It is these critical few items that must be worked on immediately

Looking for the perfect model for improving your organizational processes? Pre-order your copy of the TLS Continuum Field Guide - How the Theory of Constraints, Lean and Six Sigma will transform your operations and Program flow to be released in February of 2024

About the author:?Daniel Bloom?knows HR and Change Management. He’s a speaker on transformational HR, a strategic HR consultant and trainer. Thank you for subscribing to this newsletter. The best strategy that I ever undertook was earning my SPHR and the Six Sigma Black Belt. You can take the same path with our Road to Organizational Excellence Seminar. For more information visit https://netorg5223078-my.sharepoint.com/:w:/g/personal/dan_dbaiconsulting_com/ETY_Nur5SptJmboTeh04ijUBb39pq5bXzhFAIOJmSOK6Dg?e=EVVhmg or email us at [email protected]

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