What we learnt the hard way on operational excellence journeys

After more than 75 years of careers living and breathing OPEX (Operational Excellence) transformation programmes in the Pharma - Biotech world, We have had a lot of time to think about what we would have done differently when we could start again.

There are many points we would never NEVER do again. Not exhaustive of course, but something we now preach to all our clients with OSICS.

Let’s break them down around 9 main themes.

1-?????Don’t assume the leaders at all levels understand what it takes and help them create the time to lead the cultural transformation before the results come.

2-?????Never create a site OPEX group, only support with temporary and rotating global experts.

3-?????Embed OPEX activities as one of the ways to reach operational performance goals.

4-?????There is no Supply chain & Operational Excellence without Quality Excellence and Safety Excellence – it is all ONE approach with its particularities.

5-?????Stop Accounting OPEX as a separate P&L – look at the big picture and the waterfall.

6-?????Invest widely in OPEX capabilities, especially in the talent pool and succession plans.

7-?????Make the GMs the OPEX leaders from the start. Be ruthless with lack of will.

8-?????Bring HR team much more actively in the transformation

9-?????The top leadership needs to lead it – there is no excuse.

Lets look at what we mean more in details:

1-?????Making and protecting time to lead the transformation is the most important step you can take early on.. You cannot ignore the facts that most top and midlle managers are back to back in meetings of various values and very little in places where the value is created. You have to help them to create that space otherwise the impulse wont be there. With a mix of agenda review, MILO and empowerment and delegation, you can make a huge difference in the agenda of a management team and create 30-40% time that can be reinvested in leading the change and driving those critical initial steps to embed new expectations and ways of working – OSICS has a unique and highly sought after methodology to do that and results have been impressive with a few groups.

2-?????The simple act of creating an OPEX role, signals that OPEX is what they need to deliver. OPEX is not an expertise like Safety or GMP expertise: it is just ways of working and specific & simple tools to help you engage with your people and deliver change of performance levels. Instead of creating and labelling an OPEX function, you should create an associate position reporting to each department heads of the site.

Why? Because your leaders do not have enough quality time to invest themselves in OPEX transformation, they tend to delegate it when there is an OPEX function.

If you create an associate next to him or her, there is no more excuse that they can’t actually lead as they can now delegate the day to day work (audits, budget, unions, managing up, etc..other time consuming tasks) and take charge.

Apart from a few sites, most leaders do not “own” the OPEX transformation and delegate making it all much harder than it needs to be.

The experts to help you get started must come from a central group and be focused on capability building and hands on development whilst the site LT takes charge from the start.

3-?????OPEX activities are not separate projects or things out of the hat – they are the ways for the site teams to deliver their annual objectives and beyond. Hence, the leaders should be primarily focused on them every day. Targets should be tough and challenging: world class companies reduce production costs by 3-5% year after year at stable turnover. OPEX does much more than just compensate for inflation, it also is a key lever for service and quality improvements.

Falling behind on transformation targets should be a big deal and top management should get worried on a weekly basis / problem solve with Site Leadership team. Failing to meet your targets should be one strike for a site GM – 2 strikes: you are out.

4-?????It is all ONE – stop making separate “excellence” initiatives because the Top team each want their “branded programme”... All these excellence streams must be ONE to stop confusing people – with the same tools, approach and ways of working, you can drive improvements to all dimensions of your performance?-It should be one common tool box, one approach with sometimes an additional tool drawer for Safety, Quality, risk management, Supply chain etc..

5-?????Accounting OPEX savings is the most stupid thing I have ever heard. It is an act of waste created by leaders who do not understand the big picture and need to micromanage. What you do with OPEX is the Site GM’s business to achieve his or her goals year in year out…if savings are not visible in the P&L than it is clear he or she has done a lousy job.

However, there is a caveat to the statement above: due to many issues in Quality and other areas of the business, companies keep on adding costs on one side of the business to fix issues whilst OPEX is enabling costs reductions – when you draw the waterfall, the result is that despite OPEX the costs savings are not visible sometimes because all these other costs that come in.

OPEX transformations in one company saved more than 150 mEuros in 4 years but new spendings elsewhere almost made it invisible: Raw material costs increases, quality remediation, etc..

6-?????The only investment you must do is to go BIG on OPEX capability building – wide and deep (from top to bottom) to equip fast and appropriately as many people with the new tools and ways of working. Only teaching a few people at the sites during their transformation is not enough… you do not reach scale fast and it takes 2 to 3 years to train everyone– it is all in one big bang on new ways of working or nothing. Then you must put OPEX skills in the core curriculum of each employee, including on boarding boarding (you have 1 month of TPS and lean training when you join Toyota- understand the point?).

Moreover, all your talents (the best at their roles and their levels) and new leaders coming from outside should go through the most expert training you can offer – they are your future leaders and must perpetuate the ways of working and the culture to sustain performance improvements.

Here a great idea is to build an OPEX academy, something OSICS has great expertise in.

7-?????Too many site GMs fail to play their role here – they actually pay lip service to the actual culture change which leads to new performance – they manage their career but do not really represent the role models we actually need. Lack of gemba walks, no problem solving, poor performance management, no leadership .. very poor..

You need to have the courage to test and let go the leaders with ‘fake’ will from the beginning and bring the right guy from the start even if he does not come from the Pharma industry.

In order to really change the game, you should aim for leaders with inspiring and hands on behaviors rather than the technical experts – pharma still struggles with this for the wrong reasons. But no one can replace the leadership of a great site GM - I would rather have a leader with deep transformation and OPEX skills than a pharmacist as he can find tons of them around him or her.

8-?????HR cannot be allowed to do their usual “HR stuff”– sitting on the fence is no good. HR must be hands on to set expectations and call the right shots early with people – when they recruit a Site LT with the wrong mindset and ends up killing the transformation ‘cause it was not his way, HR is really responsible too… HR needs to be OPEX trained deeply too and one of the top expert group in the site, especially all the change management and communication and talent build up is their job..too many are just watching and not doing enough hands on.

9-?????The top leadership fails to show and lead in the right way. I get worried when I never see any Top leaders lead a Kaizen or do a gemba walk (they did site visits but this is not a gemba walk) or even set up their visual performance management (even remotely).. this is not helping and when people look up they don’t see consistency. And they lose trust.