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Archive for the ‘Business Process’ Category

What are the most important attributes of companies that are successful at creating a culture of continuous improvement?

20 Jun

I describe culture as the collection of spoken and unspoken conversations. A culture is determined by what you can say, think you cannot say, and how sincere you are when you say it.

In that context, a culture of continuous improvement is build around the following attributes:

  • Develop strong leadership capability. Leadership is the ability to create a future that would not ordinarily exist. Although leadership needs to exist throughout the organization, it are the leaders at the top who will drive creation of a new future by defining and enrolling people in the mission. The latter is a measurable goal within a defined time frame that you want to achieve. That will give you the baseline for continuous improvement. This all happens in language.

  • Align practices, process and metrics to achieve the mission. There always needs to be a balance between those three to have an organization that produces systemic results while keeping its flexibility.

    • Companies are not creating continuous improvement, it is the people! . It is the people’s practices, engagement in processes and measurable performance in metrics that will create continuous improvement. The alignment between the three is important, as I have seen companies become so bureaucratic where people seem to have lost common sense and continuous improvement is smothered. At the same time, when there are no sufficient processes, there is lack of continuous improvement as now everyone is trying to imitate the ‘best’ producer while making the same mistakes over and over.

  • Develop and nurture the team dynamics. There is only continuous improvement when people can work together with people. This is not a capability you necessarily hire, it is a capability you have to develop within your culture at your organization.

    • Nobody is perfect, but a team can be! This only happens when you have the right team dynamics as it determines how a team works together. I am sure you have been part or have seen a team of experts, where each individual is a brilliant individual performer in their respective field. Yet, once they come together as a team, it is very dysfunctional and therefore not very productive. This is caused by lack of the right team dynamics. In such a team, there is insufficient relationship and trust, and a lack of conversational capability to bring the team together. Often in these cases, people are more focused on advocating their own ideas, and are not listening and inquiring into the ideas of the other team members.

All these attributes come into existence through language and the conversations that you are able to have on an ongoing basis within your company.

When these are implemented, you have the foundation of creating a culture for continuous improvement, which will result in a high-performing organization.

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Posted in Business Process, Leadership, Teamwork

 

10 Principles to Optimize Your Business Results: Principle #9 – Processes and Capabilities

21 Feb

Processes govern every phenomenon in the physical world, from cell division to business divisions. And just as cells create organisms according to the plan written into their DNA, so do business processes proceed from a system design. The processes your business follows create the results the business produces. If you’re not happy with those results, you can always optimize those processes. You can also optimize your employees’ and teams’ capabilities that support those processes.

How do capabilities influence processes? There are two main types of capabilities we need to address. First let’s consider the capability known as domain expertise — the skills sets and talents needed to perform certain tasks. Hopefully you already have these resources on hand, but if not, you may have to look at how you make your hiring processes. The other type of capability poses more of a challenge, since you can’t just solve it through your HR department. Let’s call this other type collaborative capability — your team’s ability to work together efficiently and cooperatively. Nothing but time, experience and coaching can build this capability, because it’s based partly on the mutual trust that comes through shared experiences in a properly nurturing atmosphere. (Remember Principle #8?)

How do you know where you have effective — or ineffective — processes? In order to answer this question you have to be able to measure your processes.  An undocumented process cannot be measured, and an unmeasured process cannot be managed.

So, you have to document processes thoroughly. This documentation serves as your basis for ongoing monitoring and measurement of the process results and breakdowns, allowing you to make course corrections where needed. This ongoing procedural remodeling can have astonishing effects. I’ve seen one of my own clients add $1 million dollars to its profit as a direct result of measuring and adjusting its processes.

Do you have a million dollars’ worth of hidden productivity lurking somewhere within your existing processes? If so — go find it!

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Posted in Business Process, Process Management

 

Innovation and Execution Excellence – Practices of High-Performance Organizations/Teams

05 Sep

Innovation and execution excellence is a big subject. As an operating executive for over 30 years, I have studied and applied best practices to improve my own organizational performance and the performance of other organizations.  I think it is misleading to talk about organizations in terms of this organization executes or innovates better than that organization, because it obscures a fundamental fact.  Organizations do not innovate or execute, people innovate and execute.  So, when you say this organization innovates and executes well, what does this really mean.  It means the people in that organization have installed effective processes and have developed the capability to work effectively together.  What emerges is innovation and execution excellence. 

Ultimately, all results are achieved by people following a process or processes. This is a very simple, but powerful concept. When you think about it, it cannot be any other way.  Everything we do in life is done by a process driven by a capability. This can be represented by the Process Cycle Model below. I was first introduced to this model in 1991, in a somewhat different form, by Brian Yost of Yost and Associates.

 

Before I explore the Process Cycle Model and its relationship to innovation and execution excellence, I want to articulate a number of axioms that provide additional context for this discussion.  I’ve learned these axioms over the years.  I call them axioms because, like in geometry, an axiom is a truth that does not have to be proved, but is used to prove other truths.

Here are the axioms which I am using to support this discussion on the practices used by high-performance organizations/teams to produce innovation and execution excellence. 

  1. An organization is a system, of people and processes, perfectly designed to produce the results it is producing. The term organization can be applied at the enterprise, department and individual team level.
  2. If you want to change the results, you have to change the design.
  3. Results are produced by the individual and collective capabilities of the people driving a process or processes.
  4. Language is generative not just descriptive. Our conversations produce results through the language-action relationship.
  5. Everything that happens between people happens in the spoken and unspoken conversations people have or do not have with one another. In this context, we take a broad view of conversations.  To us, conversations are anything that provokes interpretation.  This includes anything we pick up with our senses as an active or passive participant in the conversation. This means conversations are never innocent.
  6. Since everything that happens between people in an organization happens in conversations, the system design is held in place by the spoken and unspoken conversations.  However, it is the unspoken conversations that have the most gravitational pull creating the status quo.
  7. To change the results you have to change the conversations.  This means having the courage to start new conversations, stop some conversations and change other conversations.

 

We have used the Process Cycle above for years as a lens and actionable framework to lead organizations to produce the results they actually want to produce, rather than continuing to produce the results they do not want.  High-Performance organizations/teams are able to see the relationship between their capabilities, processes and the results they are producing. Without this lens, it is difficult to make design changes.  You cannot intervene in a world you cannot see.

<More>

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Posted in Business Process, Change, Process Management

 

No Theory – No Learning

15 Aug

Dr. Deming, a thought leader, in quality improvement theory and practice once said, “No theory, no learning.”  What does this mean? Don’t we learn through experience?  Isn’t experience itself a teacher?  I say NO!  I do not believe experience teaches; rather only refection on experience teaches.

It is difficult to reflect on experience if you do not have a good working theory to be the mirror providing the reflection. As a system engineer turned CEO, I have studied organizational theory and behavior for over twenty five years. Over this period of time, I learned that every company is a system perfectly designed to produce the result it is producing. If you do not like the results, you have to change the design.  I also learned that the system design did not just happen. It evolved through a conversational process, and everyone in the organization contributed to the process and the current state of the design.  How can I say everyone contributed to the design? Isn’t it clear that the executives and managers are responsible for the organizational design?  Yes, they are part of the system, and may have a heavy hand on the controls, but everyone else is also part of the system, and they do have an influence on the design, usually stronger than they believe.

Look at it this way, organizational excellence is not based on one or two factors.  It is based on several interrelated factors starting with compelling vision and effective leadership.  When I say leadership, I do not just mean leader ship at the top.  I mean leadership throughout the organization.  With a compelling vision as the context for action, the next aspect of leadership is to create a powerful strategy as a means to bring the vision into reality and effective operational structures to execute the strategy.

The underpinning of strategic and operational effectiveness is ultimately the effectiveness of the teams throughout the organization. At the end of the day companies do not innovate or execute, people do.   

When all of this is done with excellence, the result is financial effectiveness and business growth.

Here is a framework to look at many of the key aspects of your organizational system. If major capabilities and/or processes are missing or are ineffective, then your results will suffer until you change the design.

Compelling Vision 

Effective Leadership
Strategic Effectiveness

  • Strategy Formulation
  • Strategic Objectives
  • Strategic Positioning
  • Competitive Strategy
  • Technology-Product/Service Strategy
  • Business Development
  • Offers/Target Customers/Marketing Strategy
 Operational Effectiveness

  • Systems
  • Structures
  • Processes
  • Practices/Methods
  • Measurement
  • Tools

 
Team Effectiveness

  • Cooperation/Collaboration/Coordination of Action
  • Capability Development
  • Engagement/Empowerment
  • Conversational Competencies
  • Trust/Full Self Expression
  • Adapting To The Business Environment
  • Managing Mood
  • Learning/Change Management

Financial Effectiveness

 

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Posted in Business Process, Interesting Perspectives, Leadership, Strategy, Teamwork

 

Igor Ansoff’s strategy development process!

01 Jun

I, Kobe, came to the US in 1995 to work and study with Dr. Igor Ansoff, often referred to as the Father of Strategic Management. Although he was a great contributor to management thinking, I do think that he mainly got that reference because he was the first to dedicate a book solely on the subject of corporate strategy. I am dating his initial contribution as this happened in 1965. This book is described as “the most elaborate model of strategic planning in the literature” by Henry Mintzberg, a consistent critic of Dr. Ansoff.

One of the most recognized models of Dr. Ansoff  is the Product-Market Growth Matrix, or Ansoff Matrix which he published in 1957. Although it does not sound like much in our MBA driven culture where every problem has its own matrix, at the time this was a revolutionary concept.

The matrix provided, and it still does to this day, a good basis for a strategic discussion. Its main weakness was rooted in the fact that it was one of the first strategic models in the market place. Its initial success drove the widespread adaptation of this model and it quickly became a ‘one-size-fit-all’ solution for any company that wanted to do strategic planning. That combined with the analytical and prescriptive nature of the tools, checklists and processes in his initial work as described in Corporate Strategy, made it too difficult to consistently implement.

Although the matrix has its use, and it is never a lost conversation, it clearly is not a solution to every strategic dilemma, even less so in an ever-increasing complex environment. Lucky for me, as I am quite a bit younger, it did not discourage Dr. Ansoff in his strategic thinking. I strongly believe that to this day one of his greatest contributions to business world is the Contingent Strategic Success Paradigm. It is the major recognition in that strategy is not a balance sheet, a point in time where you write a plan that you put on the shelf. The strategy development process sets up strategy development as an ongoing process. Since that time, there are other great thinkers that I admire that have developed similar strategy development processes. The main advantage of looking at strategy as a development process is that there is always room for continuous improvement, and there is the recognition that strategy has to be flexible if the company is to stay successful.

Dr. Ansoff took that process one step further by firmly linking the environment, with the strategy and the capability, where the premise is: “In order for a company to reach optimum profitability in the future, a company needs to align its strategy and capability with the future turbulence of the environment.” Ansoff’s strategy process has been empirically validated its process in a wide variety of industries and over 1,500 companies.

Other management gurus have picked up several of his ideas and made them more famous such as Michael Porter’s competitive advantage, Gary Hamel and C.K. Prahalad’s core capability and Tom Peters’ “sticking to your knitting”, to name but just a few.

I will expand more about Ansoff’s strategy development concepts in future blogs.



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Posted in Business Process, Change, Interesting Perspectives, Strategy

 

Breakaway Innovation

02 May

To qualify as a real breakthrough, the breakthrough must have an extraordinary and unprecedented result.  A real breakthrough does not have an historic precedent.  Since it does not have an historic precedent, it cannot be planned based on past methods or practices.  A strategic breakthrough looks like this:

When you look at breakthroughs this way, planning based on the past is always an extrapolation giving a past based, incremental future.  This is business as usual planning and it produces ordinary, business as usual results.  Executing what worked in the past will never produce unprecedented, extraordinary results.

So, when everything you know given your past experience says, “that can’t be done,” how do you create a breakthrough?  How do you let go of the past long enough to create the possibility of bringing a significant, unprecedented result into existence?  Our history is ripe with stories of individuals overcoming self limitations or the limitations imposed by others to achieve extraordinary results.  As Henry Ford said, “If you think you can do a thing or think you can’t do a thing, you’re right.”  Fortunately, breakthroughs are not magic; there are ten key principles underlying the process of creating real breakthroughs a team can learn.

The first principle is probably completely contrary to the way you learned to plan a project and make project commitments.  While you start with the project goals, you plan based on your past experience to layout the project timeline.  You plan from the past to create the future.  In other words, you create a past-based future.  If you don’t like the results you can  “tune” the plan, but that typically produces only incremental improvements.  Sound familiar?  So, if someone needs to create a new product that typically takes 18 months, a past based plan process with “tuning” might shave off 5% to 10% or one to two months.  The commitment based on this plan then is 16 to 17 months.  That would not be considered a breakthrough.  This process can be seen as plan first and then you make your commitment based on your established plan.

The first principle of creating a breakthrough is you have to commit to the breakthrough in advance of planning it. You have to commit to the breakthrough knowing you do not know how to achieve this breakthrough.  So, what about doing the project in 9 months? If you could do that, that would be considered a breakthrough.  Anyone would agree that would be an unprecedented result. Well, that’s great but how do you create the breakthrough?   This is the hardest part of the process.  The possibility has to come into existence by an act of declaration.  You have to commit first and then plan from the future back to create or invent a structure to fulfill the commitment.

Unlike the business as usual process of plan first and then commit, this is the breakthrough process of commit first and then plan. Risky, you say; you’re right.  Unrealistic you say; we don’t think so.  Many people and companies have been able to create a breakthrough-oriented culture.  IBM documented extraordinary results by educating their teams in the specific breakthrough technology inferred in this brief overview.

Okay, what is the difference between committing first and then planning, versus making a plan and then committing?  Everything!  By committing first you create a major breakdown.  What is a breakdown?  It is a gap between where you want to go and where you are.  While you want to bring forth the declared breakthrough, you do not know how to do it from where you are now.  You cannot look to your past to find the way.  You have to create and invent new possibilities, new approaches, new methods, and keep inventing until you resolve the breakdown.  You see, breakthroughs are created by deliberately creating the breakdown by committing to an unrealistic, but deemed possible, goal.  Breakdowns only occur in the context of a commitment.

In order to create a breakthrough, you deliberately create a breakdown by committing to a result you do not know how to achieve.  You create a “gap” between your commitment and your current situation.  The gap can be looked at as an “energetic gap” pulling the best creativity and innovation from the team to close the gap with new, previously unthought-of approaches.  In order to create this pull, you have to make the commitment first, create the breakdown and then plan from the commitment back.  The team has to stay in the conversation of possibility until they invent a structure for fulfillment they believe will produce the breakthrough.

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Posted in Business Process, Innovation, Leadership, Strategy, Videos

 

Everything we do in life happens in a process!

29 Apr

Every time you, the team or the organization is trying to achieve a desired outcome you need a set of capabilities. These are either the skills that are required or the team dynamics that need to be in place to make it happen. A high performing organization will always need both of them.

Next is to apply these capabilities to a process. This can be either an implicit or explicit process. An implicit process is where you rely on the tribal knowledge of a few without clear metrics as to how you come to the desired outcome. An explicit process is where you have clear documentation, clear roles and responsibilities and clear metrics. This will more often than not be cross-functional and might even cross different business units.

The capabilities and process will allow you to obtain a certain result. If the result is aligned with the desired outcome you can do more of the same. However, when there is a gap between the result and the desired outcome, it often falls in to one of these categories:

  • Need to hire the skills
  • You have all the right skills, but the people are not working well together.
  • Your process looks fine on paper, but in reality people are not sticking to it.
  • There are too many process steps that slow down the execution and create frequent breakdowns.



A high performing team will work with a defined process methodology and build the right team dynamics through the right conversational dynamics.

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Posted in Business Process, Teamwork

 
 
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