PGS is introducing a new service to our product line that meshes much of what we have learned over many years into one cohesive process, Operational Excellence or OE. OE is being rolled out at a beta test site over the next 6 months. We are excited about the prospects for our clients to achieve greater success in all facets of their organizations. The interview below with our project champion, Doug Johnson, explains OE and what the potential is for your organization.
What is Operational Excellence?
Doug: Operational Excellence or OE came out of our current clients’ desires to improve the way they work as organizations. Essentially, it is the PGS approach to having the organization truly realize its vision.
How is that different then from strategic planning?
Doug: Planning outlines all the things you want to get done, i.e., what you are going to do. OE is about how you do the things that you do, how to be more productive in the work that you are doing.
How does it differ from PGS’ process improvement tool, Process Advantage?
Doug: When Operational Excellence is rolled out, Process Advantage is part of the toolbox we use. It is the main tool that we use to help organizations improve their processes. Processes are the heart of an organization. So Process Advantage is an integral part. But OE also works to improve structure and individual performance.
What do you mean by structure?
Doug: Structure is the way an organization or department or even areas within a department is organized. In OE, we look at how an organization is structured to determine if it is optimal. For example, an engineering firm we have worked with is restructuring itself based on market sector instead of traditional engineering disciplines. They found that their customers are more interested in the combination of services the firm offers as they apply to the customer’s industry or market sector, rather than the specific disciplines within the engineering field. That has been a huge undertaking for them, but one with great potential for customer service and appreciation.
Sounds like the organization will undergo change in one fashion or another. How do you get an organization and its staff to embrace an attitude that change is necessary?
Doug: Through results. When an organization comes to us, they are interested in making a change in some part of the process or structure. They will embrace those changes to the degree that the changes actually work better for them. Organizations should not change for change’s sake. They should change to better serve their customers.
What steps do you go through to determine where to focus in OE?
Doug: Operational Excellence has 5 distinct phases: Discovery, Design, Implementation, Operationalize and Sustain.
You start with Discovery. What is the purpose of that phase?
Doug: The potential for success and the primary areas targeted for improvements or change are determined in Discovery Phase, during which we complete a comprehensive assessment of operations. The outcome of Discovery is a report outlining the potential return on investment for the client and a clear outline of proposed work to come.
What do you do in Design and Implementation?
Doug: In the Design Phase, we work with the client to develop a better approach to whatever areas we found were ripe for change and improvements – whether structural changes, process improvements, training, etc. Then during the Implementation Phase we help the client to actualize those changes to their systems and structure.
What do you do during Operationalize?
Doug: The Operationalize Phase is that period of time during which you get the bugs out of the new system or new structure, where you bump up against old ways and old attitudes. It is an important period of transition in which the old is phased out and the new becomes “the way we do business”, i.e., the period of fine tuning and evolving. During Implementation, the client is initiating the new systems and structures. During Operationalize, the new systems and structure truly become the norm.
So, then what is Sustain?
Doug: Sustain is a critical piece of OE. During this phase, the organization is set up for true continuous improvement. We assure that they have the requisite knowledge, skills and abilities to not only maintain the new standards they have set, but to continue to improve and develop them over time. The client knows how to collect data and analyze the results to set continuous improvement in motion. There is also an emphasis on creating a culture and attitude in the organization that change is not only ok, but is expected and needed for the organization to continue in excellence. Without that culture, an organization will stagnate.
What can our readers do in their own organizations?
Doug: OE is a large-scale tool set that assists organizations in managing change to create a more positive, productive organization enabled to reach its vision. Can someone do this on their own? Three keys are essential for anyone to understand in implementing this type of tool set. First, recognize that discovering what needs to change and how it needs to change is difficult from the inside because you are immersed in the existing system. You have blind spots. The best way to remove the blind spots is to create a data collection method to see what his really going on your organization. The data will tell you what is working and what is not. Second, manage the gradient. Once you know all that is not working, you need to design the right interventions to fix all that is not working. But you don’t necessarily want to go after biggest thing first, manage the gradient of change and start small. Too much too fast can swamp the boat! And third, don’t forget your customer. You have to manage the old while you create the new, i.e., you can’t stop your business or stop serving your customers while you are operationalizing your changes.
Any closing thoughts?
Doug: A couple. First, W. Edwards Deming taught that one of the main keys to success is knowing both when to act and when not to. That decision should be driven by data. Study what is going on in the organization, the financial data, market share, product quality, customer feedback, etc. And second, remember that people don’t just “change” overnight. You can change systems and structures in a short time, but people have to be allowed to transition at their own pace. You can’t force people to change or you get a rebellion. The theory of Managing Transitions by William Bridges is essential to understanding how to bring your staff through the process of change.
To learn more about Operational Excellence contact us. We would be happy to explain the process for your organization and assess the return on investment you could realize.