You’ve probably completed some form of Lean Assessment such as the AME Lean Sensei app as part of your Lean journey, but that only covers about 30% of your Value Chain. How “excellent” are you on the other 70%? And how can you leverage some of your lean tools and tactics to achieve world class performance by creating and capturing more value?
As I’ve been researching Enterprise Excellence for the Vancouver Consortium, I’ve yet to find a truly comprehensive tool that focuses on organization-wide world-class performance. Sadly, you won’t find a definitive roadmap in this blog post either. Rather, you’ll find a checklist with a series of conversation starters, based on collecting thoughts from industry experts and my own experience creating high-performing and highly profitable companies.
My thanks to Jim Whitman for suggesting that I look more deeply at the Shingo model. It has many aspects to admire, but there’s also one very big element missing from its 4 Dimensions:
Can you spot it?
All of these Dimensions are entirely inwardly focused on the organization. Yet, lean says the customer is essential, and the customer focus is missing. When working with executives who are highly focused on operational excellence, I often need to have the “inputs-outputs-outcomes” conversation to help them see the forest for the trees. The first 3 Dimensions – Cultural Enablers, CI, and Alignment – are all inputs, foundations if you will. I’m not saying they’re not essential but until our mindset shifts to outputs and outcomes, true enterprise excellence will remain elusive.
Inputs, Outputs and Outcomes – Beyond the Shop Floor
When I use the term outputs, I’m not talking about conventional production outputs. Think of it this way. Have you ever seen a strategic plan with action items like “develop a marketing plan…” or “implement ERP”? Once we can put a checkmark on those activities, they become outputs – something has been “done.” But neither of those outputs delivers one iota of value to a customer or to your organization until they result in outcomes, i.e. increasing cash flow by reducing waste, or increasing customer retention by improving the customer experience.
If you’ve ever experienced a marketing plan that drove more sales but they were all “bad” business, you know what I mean. If you’ve ever experienced a bad ERP implementation that cost lots of time and money but delivered very little value, you know what I mean. Outputs and outcomes are different.
A more relevant set of dimensions for enterprise excellence (or what I call the 4 Pillars) based on outcomes may be:
Enterprise Excellence Means Expanding Your Thinking to the Remaining 70% of the Value Chain
Enterprise Excellence has to start with what I call the Demand Chain – i.e. an intense focus on understanding customer pull and creating customer value at every stage of the Value Chain, in every area of the organization, to eliminate inter-company waste (them) and intra-company waste (us.) Without customer focus, we’ve missed the most important part of Enterprise Excellence: Market Relevance. That’s where the really big value is in a business.
The 4 Pillars are the tip of the iceberg when it comes to achieving Enterprise Excellence across the entire Value Chain. So, here’s a first pass at a more comprehensive list of Enterprise Excellence factors. Many of these could incorporate the 4 Dimensions and the Shingo Guiding Principles. Some of them incorporate elements of Ailsa Carson’s article on what makes a world class company (my thanks to Ailsa for sharing.)
It’s said that the most valuable part of any puzzle is the picture on the front of the box of what it’s supposed to look like. The Checklist below provides you with a picture of what Enterprise Excellence looks like plus just a few of the puzzle pieces. We all have small pieces of the puzzle to contribute and there may not be a “right” answer, only progress towards a useful assessment tool.
The 12 Tenets of Enterprise Excellence (Including the 4 Pillars)
- Leadership,including a clear future state and a maximum of 3 crucial priorities, not a To Do list
- Great Communication to Drive Alignment,such that every employee can state where they fit, why they matter in achieving the strategic priorities and how they add value.
- Market Relevance, the first of the 4 Pillars above
- Strong Cash Flow, the second of the 4 Pillars above
- Deep Talent Pool, to fill new opportunities due to growth and succession planning
- Employee Engagement, the third of the 4 Pillars above
- A Culture of Enterprise Continuous Improvement, because CI needs to go far beyond the shop floor
- An Agile Organizational Structure vs. conventional (and arthritic) command and control
- A Progress Staircase to Measure the Journey, my thanks to Ron Harper of Cogent for sharing the Lean Maturing model they use from SA Partners UK. It includes the following “stairs”: reactive – formal – deployed – autonomous – way of life.
- Excellence in Execution, the fourth of the 4 Pillars above
- Innovation, creativity and intrapreneurship, which feeds market relevance and employee engagement
- Crystallize gains, tangible results including strong and steady profit & growth
Let’s share learn and grow by co-creating a more robust list of indicators, which I’ll capture in Part III of this series. Please hop on the AME Open Forum, and share what YOU would include as indicators in the existing Enterprise Excellence thread.
Last month, Part I focused on the 4 Challenges to Enterprise Excellence that hold organizations back. Enterprise Excellence is the theme of this year‘s San Diego conference so if you’re intrigued by this thinking, that’s the place you want to be.