LEAN STRAIGHT TALK #5
Most organizations claim to have a formal business system approach to strategic improvement. However, most have reached a serious maturity, decline, or even extinction stage with their various improvement initiatives. Step back and take a critical look at why your improvement plans are years behind schedule or failing to produce a real value contribution to the business. The majority of business systems in organizations are superficial knock-offs and mimicking of efforts from other organizations. Most don’t acknowledge or (want to take the time to) understand that this approach is “not your way, it’s their way.” What works well for one organization is very different from what works in another organization based on their specific leadership and infrastructure, strategic and operating challenges, business requirements, and cultural development needs. The widely practiced, lite mantras and boilerplate recipes from other organizations’ business systems are a disaster strategy in an ever changing competitive digital economy.
A holistic, higher order, enterprise-wide, technology enabled, and culturally connected approach to strategic improvement is desperately needed by most organizations. Most organizations can achieve new and significant benefits through a well architected and deliberate approach to strategic and breakthrough improvement. This has nothing to do with the improvement methodologies and tools themselves. A high performance business system approach to strategic improvement helps to define and integrate the systematic architecture of leadership, aligned infrastructure, digital technology integration, and behavioral/cultural development to achieve this higher order improvement and sustainable success. Business systems should be an all-encompassing set of integrated processes and best practices that guide how organizations improve, and improve how they improve.
“But We’re Already Doing Our Business System”
This is an unpopular message, but many organizations who claim to have their own “XYZ Business System” in place (in name only) are merely mimicking or just going through the motions of business systems lifted from other organizations – With very questionable business value. Unfortunately, too many organizations believe that they have their business system and are clinging to it with a strategy of insanity (i.e., Doing more of the same things and expecting different results). After many years in this business, I will never understand why executives and their organizations wait so long to change something that isn’t working anyway, and will never work without the right positive corrective interventions.
“After many years in this business, I will never understand why executives and their organizations wait so long to change something that isn’t working anyway, and will never work without the right positive corrective interventions.”
Let’s talk about the very core of a true business system – Leadership, unwavering commitment, and for real culture change. Everyone talks a good game about leadership, culture change, or sustaining the gains, but people and organizations always seem to gravitate back to the tools and techniques. Why? Because it is “the accepted unquestioned religion.” It’s what people know and are comfortable with, like going back to the well. What happens in religions and continuous improvement (CI)?
- People stand their ground, strictly follow their beliefs, and shut out change. People are mandated to follow a rigorous recipe of methodologies and approaches.
- On the surface these initiatives have the look and feel of success. Organizations practice engagement and empowerment, teaming, using the tools and jargon, and other visual signs of progress. A closer diagnostic usually reveals that there is more going through the motions than well aligned and executed improvement efforts and tangible results.
- Organizations simply rename their improvement initiatives a business system without continuously evolving and integrating the critical best practices that make a business system a true, high performance business system. Their business system exists in name only, a mirage.
- Over time, organizations assign multiple leaders to their XYZ Business System who end up being caretakers for the same beliefs and practices that are not working so well, or have stopped working due to changing business conditions.
- When work and thinking become overly standardized, people lose creativity and their ability to think beyond the box. CI practitioners accomplish the exact opposite of what they are trying to do. People are going through the expected motions and talking the lingo, but there is no tangible continued operating results coming out of their efforts. When people don’t feel success, they disengage – And management commitment also fades away quickly.
- Leadership doesn’t help CI sustainability and internalization much with token commitments, management edicts, conflicting priorities, short term performance, and random behaviors all over the map. Culture is a continuously moving and churning outcome based on the combined behaviors, choices, and actions of leadership . . . and all people in organizations.
Many consultants, trainers, and practitioners are no longer adding value because they are preaching the same old generic stories in the same Field of Dreams mode (i.e., If you follow the recipe and go through the motions enough, the results will come). The methodologies, tools, and practices of CI have become so over-standardized to the detriment of what creative, continuous improvement is supposed to yield in organizations. When every organization is using the same check-the-box approaches and working on the same basic things, where’s the competitive advantage? Again, the answer is simple but not popular – There is no advantage, only more value detractors and hidden wastes!
Successful organizations are responding to the speed of change required to remain competitive with a more holistic, higher order daily business systems approach to strategic and operational improvement. How are they responding? They have a greater focus on the integration of leadership, strategy alignment, sustainable infrastructure, digital technology integration, talent management, and cultural development . . . And much less focus on just the methodologies and tools themselves.
How to Design “Your Own” XYZ Business System
Regardless of the specific structure and naming conventions, all best performing strategic improvement organizations have their own strategy, content, and best practices for their XYZ Business System in place. They didn’t copy it from another organization. They developed it organically based on their own strategic and operating challenges, business requirements, and cultural development needs. A few years ago, we developed a reference model guide to help our clients architect, design, implement, and sustain their own high impact XYZ Business System as shown below. For additional information visit Global KATA: Success Through The Lean Business System Reference Model.
Our reference model is a proven guide for designing (“in your own way”) the systematic architecture of leadership, infrastructure, digital technology integration, and behavioral/cultural development to achieve higher order improvement and sustainable success. The reference model was initially named “Lean” but it is a practical guide for any major transformation initiative because it integrates all of the formal critical success factors, totally integrated processes, and best practices working harmoniously and continuously to achieve breakthroughs in operating performance.
At a high level, best performing organizations are proactively practicing and leading the charge in the following areas:
- Adaptive leadership, a highly focused but flexible operating strategy, and enterprise-wide governance to lead and reinforce improvement as a way of life;
- Tight real time alignment of strategic and tactical improvement opportunities to current and evolving business requirements;
- A living deployment plan where improvement initiatives are well defined, prioritized, teed up, and regulated based on resources and quick implementation;
- A purpose-driven communication and awareness effort to communicate, reinforce, and continuously evolve their success-enabling culture;
- A strong, laser focused talent, teaming, engagement, and human capital development initiative to provide a higher personal and professional work environment;
- Flawless and efficient execution and sustainability of top priority needs for rapid results;
- Visible, real time metrics (digital performance dashboards) that are well aligned to business objectives and cultural development needs, with broad ownership for results;
- Selection and integration of the right emerging and enabling technologies (a holistic IT approach, not piecemeal apps) that allow for quick response and adjustment to market, customer, and other internal operating changes;
- Continuous targeted people and cultural nurturing and development as the foundation of their success; and
- The business system model is a deliberate, highly integrated and aligned set of processes and best practices that replace firefighting, going through the canned motions of improvement, and wandering off point.
These essential, critical characteristics and best practices are either inconsistent or totally missing in the business systems of many organizations. Many organizations underestimate and oversimplify the critical elements and synchronous best practices of a true, high performing XYZ Business System. Remember this is a reference model. The particular graphical representation is not important. The specific element architecture and best practices content is what makes this systematic and culturally infused business system model work to achieve breakthrough and sustainable competitive advantage.
“The good news in all of this is that turning mediocre performance into superior performance is a leadership choice and very achievable in a relatively short time frame.”
Cultural transformation has taken on a more center stage position in our reference model. Within each of the architecture elements of the reference model are frameworks of integrated concepts, principles, guides, processes, an expanded body of improvement knowledge, and best practices. The intent of the reference model is to guide, communicate, educate, and create a shared understanding of a holistic, higher order, enterprise-wide business system approach to strategic improvement.
How To Measure Business System Performance
Our reference model includes assessment and evaluation criteria and incorporates over 600 best practice evaluation points and 50 graphical analytics. This analytics capability is very useful in pointing out gaps, root causes of underperformance, and missed opportunities with an organization’s strategic improvement initiatives. For example, have a look at the example metric chart below:
This particular chart is a graphical example of one of the largest detractors of success and sustainability: Misalignment of business strategy and improvement strategy. The example shows that the organization’s current focus of improvement is in manufacturing while the largest strategic opportunities and needs are within other work/value streams of the organization. What happens to commitment and interest levels when everyone is working on the wrong things? The answer is obvious.
Organizations can never achieve renewed success with their strategic improvement initiatives through the continuation of daily knee-jerk reactions and the same traditional approaches copied from other organizations. Strategic improvement is an innovative, exploratory, never-ending journey – Not a series of discrete fad check-the-box programs with a perceived end point. Learn from the best practices of other organizations, but recognize that your success is a custom architecture and remix based on your ever evolving customer expectations, your operating strategy, your critical value stream requirements, your business system model, and your timeline. Recognize that this is not a criticism: The world has and continues to change beyond the capabilities of existing beliefs, practices, and approaches.
“Learn from the best practices of other organizations, but recognize that your success is a custom architecture and remix based on your ever evolving customer expectations, your operating strategy, your critical value stream requirements, your business system model, and your timeline.”
A higher order of strategic improvement is desperately needed in many organizations – One that quickly identifies and capitalizes on new opportunities, executes effectively and efficiently with all the necessary competencies, and continues to produce sustainable success. The good news in all of this is that turning mediocre performance into superior performance is a leadership choice and very achievable in a relatively short time frame. A reference model approach to breakthrough improvement incorporates all of the lessons learned (and continue to learn – it is an evolving reference model) and best practices about how to design and integrate all of the necessary critical success factors. It’s not the recipe – But it engages people about how to better adapt the most critical success factors of strategic improvement into their own organizations based their own ongoing business requirements and cultural development needs.
Make no mistake about it – Digital technology is rapidly becoming a major differentiator in strategic improvement. It’s not a replacement for the tough work of improvement by any means and it’s not the next golden egg. However, refusal to embrace and connect digital technology and strategic improvement correctly and effectively will leave organizations in a serious competitive disadvantaged state. It’s about people engagement to adapt the right technology applications that take improvement to the next levels of excellence. People are the still the heart and soul of strategic and operating transformation and the organization’s greatest asset.
Liking our blog or posting a comment, and then returning to business as usual will not improve your business system performance. Call us to discuss your current situation and challenges. We can help you immediately with your lean or broader business transformation process. We do this for a living.
The Center for Excellence in Operations, Inc. (CEO) is engaged with many different clients every day, within a variety of industries, operating environments, and with different Lean/CI and cultural renewal challenges. We can get your Lean/CI initiatives back on track and operating at a much higher order, daily business system model level. Contact one of the authors below. We will be happy to discuss your current situation and needs.
Terence T. Burton is President and Founder of The Center for Excellence in Operations, Inc. (CEO), a management consulting firm specializing in strategic and operational transformation. Terry has four decades of extensive operations and supply chain experience as a hands-on practitioner and executive in private industry, and has led consulting engagements in a wide spectrum of industries, having consulted with over 350 clients in 23 countries on their strategic and operations improvement initiatives. Terry can be reached directly at firstname.lastname@example.org
Edward A. Fagundes is the West Coast Practice Director for The Center for Excellence in Operations, Inc. (CEO), with emphasis on serving clients in the West Coast, United States region. Ed’s career spans various leadership roles in general management and as a global business system executive. He has proven expertise and extensive experience with improving business processes, developing lean transformation strategies and plans, leading the implementation of business improvement journeys to address business issues, and implementing enterprise-wide continuous improvement applications. Ed can be reached directly at email@example.com.