In the last 2 related articles, I’ve shared some of the challenges that members of the BC Enterprise Excellence Consortium have faced when trying to identify exactly what Enterprise Excellence is and how to achieve it. In Part I we looked at 4 Challenges to Enterprise Excellence and Part II included a checklist for The 12 Tenets of Enterprise Excellence. Now it’s time to ask yourself the tough questions – how do YOU rank on Enterprise Excellence, and what will you do next?
The checklist below is not yet intended to be a robust and comprehensive assessment tool but serves as a catalyst to deepen your enterprise excellence conversations internally. When you’re ready to continue the conversation with others at various stages of the Enterprise Excellence continuum, come and join us at this year’s AME Conference in San Diego! You’re bound to get some great takeaways that will deliver bottom-line impact. I’ll be conducting a workshop on Monday afternoon, and I hope to meet you there!
1. Leadership: Many lean tools, including the AME Lean Sensei Model and the Shingo Model emphasize anchoring mission, vision values to correct principles. Rate yourself on these criteria denoting excellence in leadership:
- Is your current CEO/President an ardent advocate and supporter of Lean?
- Do you have conventional (often generic “to be the best/biggest”) Mission and Vision statements or a Purpose statement that uses the “From X to Y by When” structure to clearly identify the current state and an ideal future state, with a timeline to provide focus.
- Do you have a maximum of 3 critical success priorities rather than the conventional long To Do list seen in most strategic plans.
- Leaders have to have their finger personally on the pulse of where their customers are going. Do you “go to the Gemba” with your 15 most crucial customers at least 2x per year to really see what’s going on in their world?
- Do you have a corporate documented Lean Management System (LMS) that the Board has adopted and understands to extend the Lean Enterprise Excellence strategy and culture past the current CEO/President?
2. Great Communication to Drive Alignment I once read that all the memos, emails, town halls and so on that managers send their staff in a vain attempt to clearly communicate strategy account for less than 1% of the “noise” that bombards employees daily. I structure many of my programs like a football game, where there’s a clear scoreboard and ongoing celebrations of every “completion” and “touchdown”. Make it a game that employees want to win, and they’ll make it happen.
- Do you deploy visual management throughout the organization, or just in the areas where you have focused on lean?
- What evidence indicates that every employee can explain your company’s 3 strategic priorities in terms of where they fit, why they matter, and how they add value.
- Review your last week’s communications about change and progress to employees. Where do you rank on the 5 Levels of Communication?
3. Market Relevance The world of manufacturing and global trade has never been changing more quickly. Today’s customer or distribution partner could be tomorrow’s competitor or vice versa and each deserves the same continuous improvement focus that you’ve applied elsewhere in your business. As lean practitioners, you’ve rigorously scrutinized your supply chain and vendors. But have you done the same with your demand chain?
- Every customer interaction is a kaizen opportunity. How effectively do you use these opportunities to strip waste from your demand chain and create a frictionless experience?
- How effectively do you evaluate your customer/distribution partners’ value to you (from the perspective of profit and penetration)?
- How effectively do you understand how you bring value to them that is unique and different from your competition TODAY?
- What mechanisms do you have in place to understand their needs in the future and how you will evolve to continue to deliver value to them?
- In lean we often talk about people-centric leadership. How would you rate your customer-centric leadership based on the above questions?
4. Strong Cash flow results from only accepting business you can price and deliver at a profit, but its all too common to chase revenue at the expense of ‘good’ business.
- What KPI’s (beyond Revenue) are in place in your Sales and Service departments to measure and price for value from perspective of customer
- How well do you ensure that savings from lean or from the progress made in enterprise excellence are actually crystallized as tangible financial gains that can be used to fund growth?
5. Deep Talent Pool I hear of too many companies hiring supervisory, managerial, and leadership talent in haste as their business grows and evolves, only to end up with sub-optimal performance, a poor culture fit, and/or eventual costly termination. Enterprise excellence means taking the time to develop succession plans for every single position, with a focus on internal promotion.
- Have you developed a deep enough talent pool so that external hiring for new opportunities and succession is rare, or are you consistently dealing with disappointing external hires for key roles?
6. Employee Engagement If you have been practicing People-Centric Leadership as endorsed by AME, then employee engagement should not be an issue in any area of your organization… but is it?
- If you rate engagement using Gallup or other tools, what do the results indicate?
- Anecdotally, how significant a problem is presenteeism in your firm?
- How does your company rate on employee turnover compared to your industry?
7. Culture of Enterprise Continuous Improvement and & team-based problem solving – Culture is a powerful driver of getting this right the first time or getting things consistently wrong. The best cultures celebrate big & small improvements and everyday right-the-first-time behaviors that drive value
- Does your company culture support managers having all the answers, or are those who are closest to the problem or opportunity empowered to find their own solutions?
- How far does your continuous improvement culture and framework extend throughout the company? Is it in traditionally lean-focused areas only, or throughout every department?
- Does your culture celebrate getting it right, or only catch and correct situations of getting it wrong?
8. An Agile Organizational Structure – increasingly, every company needs to be agile, increase speed to market, and increase their adaptability to change. That can seem like a tall order unless you have systems and structures in place to support it.
- Think about each of your departments. How many of them are locked into “we’ve always done it this way” thinking, or hampered by legacy systems, policies, and procedures?
- How would you rate your level of cross-training – i.e. if an employee is off work for any reason, can someone seamlessly step in and fill that role competently until their return?
- How aware are all those with management roles regarding the trends that are impacting your industry, and how it will impact reskilling?
- How comprehensive is your reskilling program, if you have one in place?
- Do you have an agile Business Model process that continually evaluates where you are and where you should be going in the future
9. A Progress Staircase to Measure the Journey and Your Progress Ron Harper kindly shared Cogent’s approach to measuring progress which includes categories ranging from reactive – formal – deployed – autonomous – way of life. You may have a similar scale in areas that have practiced lean for some time.
- How robust is your current model for measuring progress?
- Is it deployed in every department, and reviewed on a regular basis
- How much progress does it show for key areas or initiatives within your business?
10. Excellence in Execution delivers exceptional results across the entire value chain, however too often I see leaders and their teams completely overwhelmed by an exhaustive list of To Do items on their strategic plan. Enterprise Excellence means having a tight focus and achieving the goals you set out to in the timeframes allowed, as you juggle the inevitable changes and challenges that will arise throughout your fiscal year.
- Take a look at your most recent strategic plan. You’re more than ½ way through the year. How may planned items read “in progress”? How many are stalled? How many have been replaced by something new? And how many are on track or achieved as planned? What do these results tell you about excellence in execution?
- Review your departmental plans for every department. Answer the same questions as above.
11. Innovation, Creativity and Intrapreneurship There’s a difference between innovation and invention. The first is driven by fulfilling customer needs they didn’t even know they had, and sells like hotcakes. The latter is often something cool developed by R&D that ends up contributing to the 80% of new product launches that fail each year. As manufacturers are projected to get over 50% of their revenues from services within the next 5 years, its entirely likely that your next value-add innovation will not be a product!
- How often do you find yourself saying “we should have thought of that” in response to a new announcement from a competitor?
- When was the last time your wowed your marketplace with a significant innovation?
- How well does your existing “new product development” process accommodate innovations in services or the user experience?
- How much of your revenue is coming from products that are more than 2 years old?
12. Crystallize Gains Many lean practitioners I’ve spoken with say that they know lean is doing good things for their business, but that its been very difficult to crystallize the gains made in terms of showing strong and steady improvements in profit & growth. As we extend the benefits of lean into the “softer” areas of the entire value chain, it becomes even more difficult to crystallize gains than in the production area, where measures of efficiency and effectiveness are easily seen. I work with organizations all the time in innovative ways to crystallize gains, but for now, let me simply leave this as a couple of open question:
- How well have you crystallized gains from lean initiatives in the past?
- How will you crystallize gains from Enterprise Excellence going forward?
Summary and Next Steps
Each and every one of these could have multiple facets, and likely more items could be added to the list. Take these questions to your leadership and management meetings throughout the organization. I welcome your feedback! Enterprise Excellence is an ongoing conversation, and we’ll be having it in San Diego this year. Join us!