Why Optimized business performance is within your reach

‘There are no secrets to success. It is the result of preparation, hard work and learning from failures.’?(Colin Powell)

I believed the 'work harder myth' myself until the masters of business optimization, William Edwards Deming and Taiichi Ohno, taught me how to apply Lean Six Sigma and Kaizen, with spectacular and immediate results for the businesses I served.

This wisdom helped me significantly improve operational performance and eliminate million USD of recurring costs in one of the worlds best manufacturing companies.

I learnt about Value Stream thinking and system design and techniques to see and uncover waste (Muda in Japanese), identify cost saving opportunities, create a business case, then target and eliminate these non-value adding inefficiencies working with cross-functional expert teams, continuously optimizing the underlying supply chains, processes and value streams.

When such initiatives are rooted in a culture of continuous improvement, business optimization efforts can yield spectacular revenue growth, cost reduction and margin improvements.?

With the volatility we face these days, sustaining such business optimization requires us to digitize what Deming and Ohno taught us.

We must find ways to visualize both the material, information and financial flows we want to improve in our optimization equation and uncover the waste more systematically.

Most importantly we must put our people in charge of the improvements, support them with the right mathematics to think about optimization, and scenario capabilities to allow every expert in the company to ask the right questions and find the best alternative solutions to their problems.

Here is how.

1.????Introduce shared scorecards across departments AND companies

'Power today, comes from sharing information, not from withholding it'. (Keith Ferrazi)

It can be a though bargain to align KPIs between functions or with suppliers and customers.

Establishing common goals and formalizing the outcome in dashboards, takes time and discussing, but my experience is the rewards will be spectacular and worth all the painful negotiations.?

Such discussions create a spirit of true partnership around shared improvement objectives for all the involved departments and companies, more optimized business decisions and improved collaboration within and across companies towards common goals all parties can adhere to.

After decades of success in warfare environments, Digital Command and Control Centers slowly emerge in the world of business, providing that level of transparency to all involved with business results within the company, but also across the ecosystem of customers, suppliers and service providers.

2.????Prioritize all scorecard KPIs and align around trade-offs

'When you have too many priorities, you effectively have no top priorities.' (Stephen Covey)

KPI like revenue, cost or margin impact each other. The same is true for more operationally oriented KPI. Operational KPI impact each other and also impact the business KPI.

That’s why an overarching priority framework clarifying priorities and trade-offs between KPIs is mandatory to optimize a business.

Without a clear priority framework, each time we address an operational inefficiency within a particular silo, or company, we are at risk of overruling other customers or business priorities and overlooking the impact of that decision on the overall revenue, cost and margin ambitions of the company.

Through clear priorities and trade-offs, when confronted with conflicting priorities, we want?to avoid the achievements in one specific function and KPI area negatively impact other functions and KPI!

Algorithms and analytics tuned and extended by the right experts can make sure the optimization priorities for your business are always in line with the latest business realities, past, future and present.

Well-tuned algorithms and analytics reprioritize business choices on the fly, both during planning and after disruptions, so your business stays on course, whatever surprises it faces.

3.???? Support scenario-based decision-making and make it accessible to a maximum of employees

‘Success today requires the agility and drive to constantly rethink, re-invigorate,?react and re-invent.’ (Bill Gates)

Shifting consumer choices, market volatility, changing business strategies and sudden disruptions in your supply chain all make it very critical to continuously review the definition of what will be optimal for your business in the future.

In a shifting business environment, it’s the?agile?and resilient organizations, preparing themselves ahead of events for the new and ever changing optimum that have the best chance to survive—and even thrive.

In order to continuously re-optimize your business, whilst responding to changes, everybody in your company must become part of the network of excellence, and be in a position to investigate with others how short, mid-term and long-term decisions will impact the customer and their business KPI optimization objectives. That way the entire organization is equipped for continuous improvements and becomes more agile to respond to change.

Agile organizations are prepared for continuous re-optimization of the business. They have institutionalized scenario-based collaboration and they see change as an opportunity, not as a problem.

A command and control center, advanced analytics and algorithms and extended scenario capabilities involving the entire corporation, its suppliers, customers and service providers is what it takes for your company to start optimizing its decision-making and become more agile taking better and faster decisions.

All 3 required elements are within reach. So when will you get started?

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