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How to Digitally Enable Performance

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The promise of better performance via digitization and real-time access to information is best achieved if we begin with a process-centric view. With that, ask the question: What minimal information does each process require to make the best possible decisions? By so doing, we sort the wheat from the chaff and relay only the information required to speed decisions, enable agility and lift results.

Parse your data thoughtfully to make better decisions faster and get the most out of any process.

We’re impatient. In delivering products and services everybody wants to improve results. Yet, progress rarely matches expectations. To create an advantage, few things hold greater promise than digitization. We’re well equipped with computers, smart phones, tablets and touch screens… and lots of data. The cloud allows us to distribute huge quantities of information with ease. In spite of all this technology, we bog down when it comes to parsing critical bits of information needed to make the people-process interface work best.

What Does Digitally Enabled Change Mean to Performance?

Merging the concepts of “digitally enabled change” and “performance” can mean different things to different people. We’re seldom on the same page. The connection between digitization and performance is two-fold: First, it should enable better and faster decisions; and second, it should help compare results in order to propel best demonstrated practices. Such entitlements are pure gold for a large enterprise. Let’s take a closer look.

  1. Faster Decisions: If we collect, parse and distribute the right information to the appropriate stakeholders in an environment that’s equipped to use the information, better decisions up and down the value chain are possible. Then, lead times shrink. The ability to reduce lead time is an enterprise’s best indicator of competitiveness.
  2. Comparative Evaluation: Data allows us to compare results between procedures, processes and equipment across time and space. This allows us to identify performance trends and to evaluate and spread best practices. My friend and colleague Hans-Georg Scheibe with ROI* describes this quite well:

“In our projects, “digitally enabled change and performance“ often means to provide the right information to different stakeholders. E.g. to gather data from comparable machines all over the world, and to compare a dedicated machine with the others. There is always a best and a worst and when you ask why, you get a chance to improve. Or to gather best practices from different teams and to provide this knowledge in a manner that somebody else can use to solve problems directly, or faster or better. This requires connectivity to gather the data – to have a kind of intelligence to make information out of the data and then to turn information into knowledge.”

A Process-Centric Approach

Instead of starting with all the data available – both signal and noise – and pushing it into the process, we start by looking at the process itself and ask what minimum information (data) is required for people closest to the work to make the best decisions.

Why is worker inclusion so important? In practice, we’ve found that only the people doing the work can reliably tell you what information is essential to getting the job done right. Thus, engaging in front-end information conditioning is vital to actually reducing lead times, revealing improvement opportunities and paving the way for a better future-state work process.

The Decision Map

As its name implies, a Decision Map emphasizes the idea that faster and better decisions are the precursor of optimal processes. We start with a fairly traditional view so we can see the process flat on the wall – it could be a swim lane map, box and wire, value stream map, etc. Then we identify places where information is required to make decisions and take action. We pose simple enough queries that often prove to be thorny lines of inquiry such as:

Who makes the decision and is this right? There can be no room for ambiguity.
What information is really necessary? Less is more. Extraneous information is inventory and inventory has a carrying cost.
Is the decision point in the right place in the value stream or could it be moved or consolidated? When more than one point makes a decision, it’s an opportunity for no decision.
What’s the best way to collect and convey the information? Critical point here. Some information is best collected and conveyed electronically. Some is better suited for human involvement. This must be sorted out deliberately.

The maps show us different functions and accountabilities. You will find that some of the same data and information will be allocated to more than one location for different purposes. The point here is that these distributions of information are not a push of all information to be sorted out by the users, but rather they are done with a logical intent to provide only the information necessary to make the best decision at any given node.

Conclusions

For faster and better point-of-use decisions, information must be relevant to the user. Because of this we highlight data that is layered according to function and accountability. While daunting in an environment that identifies with “everybody can and perhaps should know everything”, a disciplined “need to know” approach makes whatever information is conveyed seem more valuable to the user because it is concise and actionable – it sorts out the wheat and the chaff is left behind. In the end, Digitization can enable change and performance in remarkable ways. But, the concept works best when we don’t just throw all kinds of data at people and process and hope for the best. Up front evaluation of the process with the people doing the work is the right way to start. It makes change stickier and reduces rework and frustration. Most of all, it gets to optimal performance much, much faster.

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Want to know more about how Kaufman Global helps clients manage change and improve performance? Contact us.

*ROI Management Consulting, AG is a German-headquartered, network partner of ours that specializes in operational performance.

Transform and Sustain: Three Rules for Better Results

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Nothing is Transformed if it Cannot be Sustained

transformation journey to sustainClients never say: “We want to transform and do better, but we don’t care if we sustain the improvements.” Clients always profess a sincere desire to sustain results. This intent is so pervasive that during the past 20 years we’ve seen the rise of Operational Excellence as a legitimate function across wide swaths of business and industry. Yet most organizations fail to realize this apparently lofty goal. Low levels of lasting success are usually explained at a tactical level, but the reasons that leaders and their organizations get it wrong goes much deeper.

To get a handle on what is happening and why, we explore some of the traditional norms, individual behaviors and corporate incentives that must be rethought to enable transformation success. As a first step, let’s define a few simple rules that are the foundation of any successful initiative:

Rule 1 – The Environment IS Dynamic

It’s obvious to say, but our environment is dynamic. Everything changes all the time. “Sustain” conveys a sense of holding something – a process or procedures for example – in place. It’s time to re-evaluate this concept and acknowledge that in a dynamic environment, sustain doesn’t mean we pin something to the ground. Rather, it means we stay in lock-step with a moving target, consistently and credibly adjusting and improving.

Rule 2 – Understanding Value

Value is best understood where it is created. People know the most about optimization of the things they work on. Even more important, people care more about the things they work on than the things they don’t. Failure to grasp this rule is why top-down control of improvement systems doesn’t work well and never lasts.

Rule 3 – The Leader’s Role

For any of this to work – meaning, ongoing improvement and sustainment   ̶  the organization must be engaged and stay engaged. In simple terms:

More Engagement Equals Better Results

A primary (perhaps the primary) function of leadership is to compel engagement.  Easier said than done, we can state flatly that engagement is an activity that can be measured and when it’s missing, overtly addressed. Experience tells us that if engagement is not compelled, it will not happen enough to deliver lasting improvement.

When everyone works on solutions with cadence, structure and discipline, peers are required to spend time together improving their deliverables along the value stream. Team dynamics increase accountability and generate performance momentum. This is the catalyst for sustainment.

Internalizing and applying these rules to any improvement system increases the odds of success. Fail to apply them and results will be sub-optimized at best. Going to the next level requires understanding the underlying organizational behaviors that come into play in the struggle to transform and sustain. Here they are:

Engagement is Not Understood or Valued

The building blocks of lasting transformation revolve around getting and keeping everyone engaged (Rule #3). Unfortunately, organizational dynamics and behaviors that deliver this are seldom experienced or even witnessed. And, “What good looks like…” is rarely part of one’s education or training curriculum.  Understanding the structure of engagement so that it can be baked into the DNA of the system is essential to going beyond the “what” of transformation and getting to the “how” of it.

How to Sustain is Not Defined

In some respects it is difficult to separate transformation and sustainment. They are two sides of the same coin. But if we see engagement as the glue that holds these concepts together, it deserves a definition that is simple enough to act upon. Therefore:

The organization is engaged when you, your peers, your superiors and subordinates spend at least one hour each week actively improving the business.

This is what good looks like. When you overtly define engagement at an individual level, the behaviors and actions of it can be observed, measured and mirrored.  Too often, leaders want everyone to really “get it” before they do it. Transformation happens in the reverse.

For Many, Putting Energy Into Sustaining Activities Doesn’t Pay

Transformation initiatives most often occur inside a business emergency. During these times, communication spikes, teams are formed, actions are chartered and things get done. It feels great! When it’s over, the quorum disengages, momentum wanes and everyone reverts to business as usual. The final step is recognition and reward conveyed for fixing the crisis. Big changes, big projects, and big results – these are the things that get noticed and rewarded. Everyone working on small, incremental changes and improvements for the better? … Yawn.

When the requirements for sustainment are poorly defined, not well understood and appear difficult to measure, they are avoided. Success requires broad participation, openness to new ideas and a convergence of standard, simple mechanisms aimed at improving the business. Overtly make the connection between transformation and sustainment, then weave it into the compensation, reward and recognition system. Make it safe and make it pay.

Proactive Problem Solving Might Seem Simple and Boring… and People Are Easily Distracted

The concepts and execution requirements described here are so simple that they are easily dismissed. The ideas of broad inclusion and a flatter organization often require a significant re-evaluation of organizational norms and are naturally avoided. Any distraction; the latest crisis, a new technology or any approach or method that might require less coaching and change management is a welcomed relief. Without some overt activities that demonstrate our adherence to engagement, most will shift away – usually with the tacit approval of their bosses who never got it in the first place.

It Disrupts the Status Quo

When engagement and sustainable transformation starts to occur, decisions are pushed down in order to optimize absolute value. This is a shift that challenges well-established networks that are built around personal relationships and existing dynamics. It’s disruptive. This above all others is the biggest reason for failure.

The truth is this shift frees energy that is traditionally spent on re-work, redundancy and errors. Not everyone will see it this way but when the new system of engagement is well defined and well structured, resistance is easily surfaced. Shifts in organizational and personal behavior are required. Recognize the fact that something that threatens entrenched relationships and systems succeeds only with a crystal-clear mandate, a well-defined plan and adequate coaching.

With all these obstacles, it’s no wonder the majority of organizations and leaders lament an inability to sustain their transformation and continuously improve. Start by viewing the system holistically with a keen eye on organizational dynamics, individual behaviors, simple definitions and an approach that is firmly linked to activity-based performance measures. This will help avoid rework that is exponentially more difficult the second, third, and fourth time through.

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For  information about how to engage workgroups and push decision making down, read about Kaufman Global’s Lean Daily Management System.

Improve Operations Fast: 5 Transformation Tools

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When it comes to driving business improvements, the term “transformation” is overused. Transformation indicates a fundamental shift from one state to another.

Question: How often do organizations make such bold and radical choices and stay the course?

Answer: Rarely.

Years ago, I worked for an automotive tier 1 supplier that was facing all kinds of operational problems. Many of their challenges stemmed from an increasing number of additional products that required new machines and equipment, posing the question, “Where do we place them now?” Other challenges included long, complex delivery routes with WIP in every process step, conveyor belts creeping all over the place and inventory build-up. The list was endless. In the midst of it all, the manager had been trying to create efficiency to the best of his abilities but was failing ― slowly but surely.

Drastic change was needed. As a result, the plant shut down for a week, during which all machines were removed, and within that week everything was re-installed but in a complete new configuration based on one overarching principle: Flow!

Such drastic change is surely not always needed ― nor does it happen in many cases ― because most organizations do not have the collective courage to make such a decision.  So, often a choice is made for gradual, incremental changes, but incremental to what? In order to build a house you do start with the foundation don’t you?

TransformationA solid transformation does not happen incrementally. Instead, it happens dramatically and visibly. Incremental enhancements to operations are Continuous Improvement (CI) efforts, which are crucial to be truly competitive but happen at a slower pace. In situations where bit-by-bit simply isn’t cutting it, organizations should consider real transformation. Only then will dramatic results be achieved through bold change and decisive action.

If you’re considering a transformation effort, where significant results need to be generated fast, be sure to apply these five fundamentals to increase your odds of success:

1. Understand the Objective(s)

Identify one or two significant targets. Make sure that the objectives are quantifiable ― measurable up and down the value stream. Usually this involves a few fundamental measures that have a solid connection to bottom line results. Cost is often used because this mega-process measure wraps up just about everything, but especially materials and labor. But it could be other things like asset utilization or quality. The point is that these are big-picture, corporate target objectives that flow down inside the transformation initiative, generating the business case for change.

2. Make a Plan

The plan has to be simple enough to understand, but detailed enough to answer the basic questions that everyone will have: Who, What, When, Where, How, and How Much? This seems like basic information, but once you start to think about this in the context of a complex system (i.e., the operation), you realize that it really does take some thoughtful consideration. The better you do upfront on these important questions, the less time you will spend re-directing later on. Yet, there will be unknowns, so don’t over-analyze. Make enough of a plan to answer the questions and get started.

3. Apply Resources

Resources to drive transformation fall into two areas:

  • The resources necessary to push the organization off center and force the initial change. This takes significant energy and can’t be overlooked. Everyone already has a full-time job. Don’t expect the line organization to have the extra time necessary to effect a dramatic change. The bottom line is that some form of external support is most often required. It can be staff from other locations or external resources who make the initial push, but realize that they won’t be the ones to sustain or ultimately own the change.
  • The line organization who must ultimately own the initiative. The skills needed to push the organization in a new direction are not necessarily the skills required to sustain the change. But, once the initial rapid change is accomplished, it will take a lot of energy to hold into place. Don’t worry, this isn’t extra energy; it’s actually less energy than the old, waste-ridden practices prior to the transformation. Even so, the organization will attempt to do both the old and new ways. For this reason, you will need to apply internal resources to keep the new good practices in place, and to add even better ones as time goes on.

4. Over-Communicate

Make sure that everyone is clear about the objectives and plan to accomplish the objectives. A well-defined communications plan is an essential ingredient of success. Keep everyone informed about progress, challenges, accomplishments and, most of all, results — even the small ones. Near-term wins along the way will keep people energized and provide powerful ammunition for those who resist the change in favor of the tried and true ways of the status quo.

5. Measure the Results

Results give efficacy to the entire initiative. Many people have put themselves on the line, risen to the challenge and accepted the risk that comes with bold action. Do not abandon the proof that the effort — everyone’s effort — was worth the trouble. The key to sustainability is to make sure to have a system in place that can measure the results on the front line day-by-day and at the operating level month-by-month.

Want to learn more? For a solid example of an organization that dramatically transformed its manufacturing operations, click here to download our white paper, “Transforming Operations into a Strategic Competitive Weapon.”