The 7 tell-tale signs that your operational excellence program is still in the digital Stone Age and how to get out of it

Originally published in the May 2021 issue of 'The Lean Mag'

• 30.05.2021

Introduction

A few years prior to leaving the corporate world to become a co-founder of an operational excellence consulting company and bringing to market a first-of-its-kind continuous improvement software-as-a-service offering, a voice inside me began to awake. At the time I didn't realise what it was but its effect on how I approached problem solving leadership and my perception of operational excellence changed drastically because of it.

My induction into the world as an advocate of disruptive continuous improvement technology occurred in 2015 as the result of an abrupt career change sparked by a major disagreement with a senior manager in the company where I had dedicated 16 years supporting its global business transformation strategy.

In short, I learnt the hard way that promoting continuous improvement innovation to a team of middle managers in business operations with little appetite for such change, and with equally minimal support from senior management, is a recipe for disaster.

Taking this experience into consideration together with all that has happened since then while bringing my own software solution to life in the market, it is quite clear to me why anyone charged with bringing new technology into a company will always fight a steep uphill battle.

A globalised Lean workforce

Before I ever wrote one line of code, I worked in business transformation initiatives that depended on process re engineering to restructure their company's ever-changing operating model.

It was in 2009 when I got my first introduction to Lean methodologies.

Under the guidance of a consulting company tasked with assisting our company in bringing greater efficiency to our new multi-location accounting centre of excellence in Poland, I was part of the core team tasked with launching our first European Lean wave.

In our collaboration with the external consultants, fundamentals such as value stream mapping, waste reduction and standardised work were spoon-fed at rapid fire across the work site servicing the majority of our European clients.

This experience in corporate restructuring allowed me to see first-hand the true power of how leveraging economies of scale while integrating Lean methodologies can strengthen the value chain of a globally-focused service organisation.

Reflecting on the experience later, I realised that it was also the proof the company was looking for that cross-border process efficiency management can often be effectively carried out virtually by leveraging digital technology.

Virtual continuous improvement at 360°

There is no doubt that the Covid-19 pandemic has been the equaliser for proactive companies and business leaders who are looking for the open door to bring their digital transformation program to its next level. It is also the great opportunity operational managers have been waiting for to forge stronger ties with their IT team.

IT functional gaps and limitations that were tolerated yesterday are now under the spotlight as clients and employees are forced to work from multiple remote locations using offline, disconnected, high-risk tools. Tools such as 'home-grown' spreadsheets that are highly dependent on manual updates and shared from one user to the next pose great risk of data loss, data input errors and impede knowledge retention across the organisation.

Due to the travel restrictions caused by the Covid-19 pandemic, we recently completed our first ever continuous improvement launch program in a 100% remote setting together with one of our newest clients, an Ohio-based, 500-employee health services agency serving more than 8,000 patients per year. If I had been told less than 2 years ago that my team would have implemented such a program from Europe supporting a North American client without having to take even one flight or provide one on-site consultant, I would have had great difficulty believing it.

Starting from the sales cycle to our training workshops, all the way to the executive presentations to the steering committee, our team together with the client successfully executed an end-to-end introduction of Lean methodologies and continuous improvement to a group of eager business leaders. The program was managed completely via webinar and from our home offices.

In doing so, we taught a core team of continuous quality improvement managers to independently catalogue business processes together with their touchpoints and all their critical-to-quality process steps. From there, each process owner was trained in waste management principles and taught to capture and analyse waste reduction opportunities found in their business value chain. Finally, each waste reduction opportunity was presented to senior management to get the buy-in necessary to commence the action plan implementation phase.

Using our BPM - continuous improvement platform as the foundation of our test pilot, processes were digitally catalogued and made visible throughout the company. Waste reduction opportunities were captured together with their estimated costs and expected benefits and displayed across a visual waste dashboard. From there, each waste was reviewed and proposed for remedial action.

Using our PDCA change management kanban board, waste reduction projects were assigned to their appropriate process experts and supporting senior manager utilising our platform's enhanced automated RACI accountability matrix.

We can proudly say that although Power Point was used occasionally for training and for presentation purposes, Excel spreadsheets were non-existent throughout our entire program. The absence of Excel spreadsheets signified that all key data needed to support the team was made easily available online and in real-time in our software application. Over the course of the test pilot, feedback from all levels of management continuously highlighted the appreciation our client had for the enhanced level of transparency our program and supporting software solution brought.

Finally, from the user feedback loop, we were able to collect and launch a series of high value product enhancements to our BPM platform that brought immediate benefits to the client. One key customisation included the build of a reoccurring task management module allowing repetitive processes to be setup, scheduled, assigned and tracked completely automatically with reminder e-mails making sure deadlines are never missed.

Once again, all of this was launched from the comforts of our own homes.

OPEX's best is yet to come

Technology such as the smart phone loaded with apps such as Netflix and Spotify continue to prove to people of all ages that our days clicking on keypads and using other out-of-fashion hardware-heavy devices are quickly coming to an end. Keeping this in mind it's hard to ignore that digital transformation in business operations however is much less fluid, much less immediate and in many cases anything but 'digital'.

Having recently visited a manufacturing plant where shop floor issues are captured on a paper ticket with a pencil and placed physically into a plastic tray for delivery to the line managers, it is no exaggeration to state that business operations are still years behind the trends of individual consumers whose demand for digital automation continues to grow exponentially.

Prior to launching our continuous improvement software-as-a-service offering in 2016, my fellow co-founders and I made some big assumptions which over the course of time working with our clients have proven to be less-than-accurate forcing us to pivot, enhance, test, and retest our product as well as our go-to-market approach.

One of the most interesting discoveries was our false assumption that companies were already adequate in using technology to capture, communicate and retain the know-how of their staff. For most companies, knowledge retention is a real issue, one reason being the great disconnect between HR, L&D and business operations.

While operational excellence is based on standardisation and reduction of deviation, the art to giving your company a competitive advantage lies in harnessing the know-how of operational leaders to make quick, on-the-spot tactical decisions that support the company's long term, breakthrough strategy. A task that is very difficult, if not impossible to completely digitise.

Conclusion

Although digitisation includes the likes of visual dashboards and electronic KPI devices visible to all and in real time, let it be clear that we by no means are promoting the removal of manual white boards, or the reduction of huddle sessions and the good old fashion go to the Gemba events to see how things are first hand.

Business leaders know that operational excellence will never be fully automated. They know that operational excellence is about leadership and the agility in tactical decision making which often requires instinct.

That said however, they also know that the field of operational excellence and continuous improvement is lagging behind in the digital transformation revolution and far from its full potential.

For this we have put together the following short list of seven tell-tale signs that your company's operational excellence program is still in the digital stone age.

For each item listed lies our experiences lived and observations made time and time again in the field. Such episodes have inspired us over the years to rigorously push our agenda in closing the IT functional gaps that continue to limit companies from maximising their digital potential thus making them less competitive.

In layman's terms, we want you to be aware that if core operational information about processes and the people responsible to carry out those processes is still not available on-demand and in a way that does not disturb your process experts when obtaining it, then it is time to revisit the way you do things.

7 SIGNS THAT YOUR OPEX PROGRAM IS STILL IN THE DIGITAL STONE AGE

• 1. Your C-Suite thinks that the sole purpose of investing in a CI platform is to reduce responsibility and even worse, cut costs: Beware of any decision maker seeking a CI solution for immediate reduction in workload and cost savings. The purpose of investing in CI is to bring growth and maturity to your company. Embarking on such a journey means that you will take on new responsibilities and of course, expect growing pains!
• 2. Your portfolio of business processes is not centralised: Obtaining a complete list of processes together with those accountable for them for any business function should not take anyone more than 5 minutes and not require that the process owners are disturbed when doing so. Also, a listing of documents supporting each process (e.g., checklists, procedures, job aids) should be readily available highlighting where to locate each document, the last time it was reviewed and in what condition it is in. Does your OPEX program ensure this?
• 3. There is no real-time dashboard showing your portfolio of PDCA projects: If you are implementing CI then you have a large growing portfolio of exercises that need to be visible and readily available to all. Your dashboard should be in real time and display projects according to which phase of the plan-do-check-act (PDCA) cycle they fall in.
• 4. You do not have a visual dashboard dedicated to waste reduction ideas: Dr W. Edwards Deming often emphasised how the worst way to bring down staff morale is to not listen to their ideas. Your staff should have the platform they need to be efficient in identifying, capturing, and communicating waste reduction hypotheses in their day-to-day work. There should be a digital dashboard available to management giving real-time visibility to such opportunities and who initiated them. This is the virtual version of 'going to see' in the Gemba.
• 5. There is disconnect between HR, L&D and Business Operations: Can your HR team effectively list all the roles required in business operations and group into each role their respective business processes? Does your L&D team know what core skill sets are required to deliver process excellence? If not, it is because your operating model doesn't support such required reporting.
• 6. There is disconnect between IT and Business Operations: Is there an adequate, real-time reporting mechanism giving management visibility at the process level to all the required IT applications that support your business processes? Is there a complete listing of the bugs and product enhancement opportunities with their associated costs and benefits readily available, reviewed and updated by operations personnel? This is fundamental to make IT investment decisions. Keeping a list like this updated in an offline spreadsheet will prove to be very costly in man hours, limited in quality and continuously slow down your operations team.
• 7. Your KPI management strategy is confusing everyone: If your KPIs are being managed in a spreadsheet, then you are paying dearly for the excessive amount of friction required to keep those spreadsheets updated and disseminated in the right moments. By using such an offline system, you are compromising the level of quality when engaging decision makers to review under performance and take corrective action.