Organisational Health Check - Excellence Rhythms for 2012

In order to maintain our own health we perform rhythmic tasks for both our mind and body. I believe that the health of any organization can also be maintained and continuously improved by performing certain tasks in a rhythmic manner. The following link takes you to such a standard tasks calendar for 2012.

Excellence Rhythms for 2012

Wish you all the very best in your quest to leave behind a legacy.

Coansulting and Coaching

I was really surprised to realise that the intended benefits from a good ERP system have mainly been obtained in the financial modules like accounting, finance, costing, etc. especially in the traditional automotive manufacturing industries through various versions of the ERP over the last two decades starting with the conventional MRP and transitioning to ERP through the MRP II.

As I wondered why, it struck to me that this was mainly due to an “Expert” suggesting and advising the usage of best practices and business processes from the perspective of the “Expert”. In almost all the cases the “User” who was as intelligent as the “Expert” and found ways of working with the ERP by using brilliant innovative and at time disruptive approaches to serve the customer.

Seeing this from a scientific perspective it is obvious that the “Expert” and the “User” both equally intelligent had and continue to have different brains with each looking at the world in a unique perspective and evolving solutions that were the best from their perspective.

They why can’t we make all “Users” into “Experts”?

Yes! In my belief it is possible once we understand the purpose of consulting and coaching.

Consulting is the process where an “Expert” (Consultant) tells and shows the “User” what to do and how to do from the perspective of the “Expert”. Consulting mainly delivers tangible results.

Coaching is the process where the “Expert” (Coach) makes the “User” identify what to do and how to do from the perspective of the “User”. Coaching mainly transforms people by improving thinking.

I realized that for introducing ERP and many other ITES mostly consulting method is adapted resulting in the entire supply chain delivering numbers through brilliant innovative and at time disruptive approaches.

Maybe an “Expert” who is both a coach and a consultant would be an ideal situation to generate both the results and thinking processes to create passion to excel in every individual of the organization by choosing IT as a support in to their exceptional individual skills. Would it then not result in ever “User” becoming an “Expert?

Of course, this is my unique thinking and my perspective. I really welcome you to reflect and get back to me on your further insights.

Executive Coaching

The main emphasis in Executive Coaching is to catalyse the self discovery of the approaches and strategies that take an individual to a goal through empathetic listening and asking the right questions. Getting coached from a person with the domain knowledge or experience on the one hand ensures that the relevant questions are asked, so that the self-discovery becomes exciting. However there exists a risk of adapting some of the coach’s approaches/strategies during the self discovery. This risk becomes more a chance, if the coach of the domain has had diversity in his/her experience/career.

Process Duration: 4 – 6 Executive Coaching sessions of 1h each (can also be a telephone or VOIP conference) spread over 4 – 8 weeks. It is recommended to give a gap of 1 year between two Executive Coaching assignments, since the internalizing of the new learning and experiencing the effect takes time. Once a good rapport has been established, Executive Coaching can also be done through eMail.

Der Schwerpunkt beim „Executive Coaching“ liegt im einfühlsamen Zuhören und dem gezielten stellen von Fragen durch den Coach. Durch diese katalytische Wirkung des Coaches wird beim Klienten ein Selbstentdeckungsprozess für neue Ansätze und Strategien entfacht. Mit diesen neuen Gedanken soll der Weg zur Zielerreichung aus sich selbst entstehen. Diese Selbstentdeckung ist ein hochinteressanter Prozess.

Von Vorteil ist es wenn der Coach aus dem gleichen Aufgabenbereich kommt. Durch sein Know-How und seine praktische Erfahrung gelingt es Ihm die richtigen Fragen in der richtigen Fachsprache zu stellen und den Klienten schneller und viel effizienter voran zu bringen. Durch die gemachten Erfahrungen und Strategien des Coaches kann die Gefahr bestehen, dass der Klient diese Erfolgsrezepte übernimmt und nicht seine eigenen entwickelt. Im Umkehrschluß ergibt sich aber auch ein hohes Chancenpotential, diese erprobten Erfolgsrezepte schnell für sich nutzbar zu machen und weiter zu entwickeln.

Einheit bestehend aus 4 – 6 „EC“ Sitzungen zu je 1 Stunde innerhalb von 4-6 Wochen (Persönlich, via Telefon oder VOIP)

Es wird empfohlen zwischen 2 EC Einheiten eine Pause von ca. 1 Jahr zu lassen. Diese Pause wird benötigt um die ersten Ergebnisse umzusetzen und aus deren Effekten entsprechende Rückschlüsse und Erfahrungen zu gewinnen. Wenn in der Folge eine gute Beziehung zwischen Klient und Coach aufgebaut wurde können EC-Einheiten auch über eMail abgewickelt werden.

A ênfase principal em “Executive Coaching” é para catalizar a própria descoberta das enfoques e estratégias que levam um indivíduo a uma meta através de escutar com empatia e colocar as perguntas corretas. Quando O “Executive Coach” é uma pessoa com o conhecimento e experiência do setor as perguntas pertinentes são feitas, de forma que o própria descoberta fica bem interessante. Porém lá existe um risco de adaptar algumas das enfoques e estratégias do “Executive Coach” durante a descoberta própria. Este risco se torna uma chance, se o “Executive Coach” do setor teve diversidade na sua experiência/carreira.

Duração do processe: 4 á 6 sessões de “Executive Coaching” de 1h cada (também pode ser por telefone ou conferência de VOIP) sobre 4 á 8 semanas. É recomendado para dar um intervalo de 1 ano entre dois cessões de “Executive Coaching”, porque para práticar a sabedoria nova e ver o efeito levam tempo. Quando um acordo é estabelecido, "Executive Coaching" também pode ser feito por e-mail.

Manufacturing Industry - Improvement Approaches

Strategy Development

The core competency assessment (CCA) can be done taking the products and processes as the basis. Factors that are considered for the assessment are their importance to business, the USP’s as perceived by the market, effort needed by others to copy, degree of sustainability, possibilities for substitution and already known innovation potential both from the value addition as well as from the cost reduction perspective. The core competencies then serve as a very valuable input to the SWOT analysis that follows the CCA.

Purpose: Develop a robust basis for strategy.

Process Duration: SME – 1 to 2 weeks; LE – 4 to 6 weeks

Product Portfolio Management

It is necessary to have a mix of products/services that are very innovative in nature and products that compete due to a cost advantage. For the business to grow profitably, it is essential to maintain a rolling development plan of product portfolio. The future products and the further development needed can be planned systematically using the idea workshops. Idea workshops can be held typically once a year and the product needs and positioning examined from the perspective of market, cost, innovation and core competencies.

Purpose: Create a robust product portfolio to support sustainable growth.

Process Duration: SME – 1 to 2 weeks; LE – 4 to 6 weeks

Time-To-Market Process

The key success factor for timely launch of products is to identify risks that normally are underplayed in organizations due to collective (team) wisdom. Once clear gates are established with the “Must” factors and “Want” factors to be fulfilled to proceed to the next stage, the TTM not only becomes more efficient, but also ensures that the right resources are deployed upfront to ensure a smooth start-up and a good life cycle. Structured risk assessments followed by meaningful MIS will ensure the necessary management focus.

Purpose: Smooth and successful launch of new products and/or product variants.

Process Duration: SME 1 – 3 days; LE 1 – 2 weeks only to assess the improvement potentials. The actual implementation can run into months/years.

Capacity and Investment Planning

The most important aspect in manufacturing is to establish the correct installed capacity based on clear premises (Cycle Time, Line Balancing, Utilization, Working Hours, Defectives, Type-Mix, Set-ups, etc.). Once this is done, only then can the performance be measured to check if the installed capacity is being fully unitized. The investment planning then is done based on the sales forecast and the actual performance of the installed capacities. Therefore the sales forecasting accuracy also is very important to invest on a timely manner. Based on the past experience of the accuracies of the sales forecast, strategies can be developed for the investment planning to compensate the risk of having idling investments.

Purpose: Improve ROI with timely investments after ensure full utilization of already installed capacities.

Process Duration: SME 1 – 3 days; LE 1 – 2 weeks only to assess the improvement potentials. The actual implementation can run into weeks/months.

Supply Chain Development

A mix of outsourcing and in-house manufacturing based on the Core Competency Assessment is necessary to get the best benefit. Apart from this, the overall optimization of the logistics chain and centralization of only such components/products using core competencies will support the overall supply chain performance.

Purpose: Design/Optimize the supply chain based on core competencies and both within the organization and outside in the market.

Process Duration: SME 1 – 3 days; LE 1 – 2 weeks only to assess the improvement potentials. The actual implementation can run into weeks/months.

Target Deployment and Timely Standardized Reporting

As the organizations get bigger, the purpose often gets lost at the working level and compartmentalized attitude builds in resulting in slackness in the overall system. However, a thorough alignment of targets followed by a unique (single) deployment (top-down) and reporting (bottom-up) path across hierarchy will set the base for the entire organization to work towards a common purpose. Timely reporting after a thorough review at each hierarchy level in a cross functional team ensures that the accountability is established across the hierarchy.

Purpose: Better synchronization of all functions in an organization.

Process Duration: LE 6 – 8 months preferably starting 2 months prior to the annual target deployment time line. SME sector may not need this service due to the organization size and structure.

Business Process Management

Especially as the organizations get bigger and various functions are formed, the interdepartmental functioning becomes quite turbulent. Using swim lane diagrams the business processes can be mapped either top down or bottom up in cross functional teams. Followed by the process mapping, the process can be designed to eliminate waste and to add more value to mostly the customers. However the efficiency of these processes can only be improved with a top down cross functional approach with clearly defined KPIs for the monitoring purpose as well as KPIs for the control purpose, preferably at the shop floor level with appropriate visialization.

Purpose: Continuously optimize the business processes and establish role clarity of every function and every employee leading to motivation through a clear identity.

Process Duration: LE 2 – 6 months depending on the organization size.

Continuous Learning through structured SDCA/ PDCA

In the manufacturing industry as in other industries attrition and availability of the qualified and trained manpower is an issue. One way of addressing this concern is to put in systems in place that ensure organizational learning. The classic SDCA/PDCA (Standardize or Plan/Do/Check/Act) is a great tool to accomplish this goal.

In manufacturing discussion/review/check routines with appropriate visualization/documentation of results are extremely important to run the business in a sustainable and effective manner. For example starting from hourly routines of quality checks, shift wise routines of the attendance check, status check, etc, daily routines of shop floor QCD deviation management, weekly routines of meeting room review of Corrective and Preventive Actions (COPA), monthly routines of business performance check and quarterly routines of system audits can be so modified that the “Act” of the SDCA/PDCA becomes more effective, since this is truly the learning phase that is extremely important for sustained continuous improvement. Emphasising on the “Act” phase not only will the know-how and knowledge be available across the organization in a documented form but also the employees become more motivated with a continuous learning.

Purpose: Know-how enhancement, employee motivation and reliability of data/reports.

Process Duration: LE 2 – 6 months depending on the organization size.

Productivity Improvement

Productivity is the most essential KPI especially for the manufacturing wherein a relatively large number of people are employed and wherein the learning effect is almost continuous till the end of the product life cycle. Even after ramp-up the learning effect is significant resulting from quality improvements, machine downtime reduction, Kaizen activities, suggestion schemes, layout changes, make/buy decisions, etc. Therefore a payment/incentive model that supports continuous improvement in productivity is a must for sustained success. The choice of the correct measurement indicators (for example % increase in the ratio of “SVOP: Sales Value of Production” to the total input hours of all the employees could be one such indicator) is the key success factor. Linking this indicator to the payment incentive systems in a way that other inefficiencies (like inflexibility, limiting of output or abstaining to boost productivity, etc.) don’t creep in is the true challenge.

Apart from the manpower productivity, it is also essential to ensure increase in the overall business productivity (for example % increase in the ratio of SVOP to the total of operating expenses, difference between SVOP and material cost). Defining the key cost drivers to improve productivity and including them in the annual target deployment is necessary.

Purpose: Maintain the health and agility of an organization

Process Duration: LE 2 – 6 months depending on the organization size.

Profitable 15% CAGR

Growth is essential to maintain any business. With the GDP growing at 8.6% CAGR in India, a CAGR of about 15% for the top line of an Indian enterprise can be a stretched but realistic goal. It is very obvious that any growth must be profitable.

Profitable growth can be achieved either with value addition or cost optimization. A combination of both would be the ideal strategy. In this blog I try to explain how these two strategies can be adopted and with what methods one can achieve profitable growth.

The first step would be to prepare the portfolio of products and services and classify them as Unique, Scarce and Plenty (USP) based on i) availability in the market, ii) effort and time required to copy and !!!) known innovation potential.

Value addition becomes the main strategy for the unique products and services. The products and services classified as plenty must adopt mainly a cost optimization strategy. The ones identified as scarce need to use a combination of value addition as well as cost optimization.

Though it may seem very motivating to do business only with the unique products and services, it must be noted that over time these naturally move to the plenty category. Maintaining products in the plenty category is essential for the organization health as this keeps the organization fat under control and therefore mandatory.

Proactively defining the technology and competence roadmaps (Organizational Health Check Blog) followed by realization of these is the basic approach for profitable growth through value addition.

Establishing a thorough integrated MIS with structured and cascaded reviews (Sustainable Performance Blog) with a strong SDCA/PDCA (Learning Cycle Blog) apart from selective offloading, smart vendor management and excellent resource utilization becomes the basic approaches for profitable growth through cost optimization.

Of course both the strategies go hand in hand and have to be put in practice with a proper business plan, budgets and resources. A strong coaching culture (Perpetual Learning Blog) will ensure that these strategies become a culture and implicit in an organization.

One can do self check of the need to get an outside support for the development of a strategy for profitable 15% CAGR once a self-assessment of the organizational health check is done as we normally use a thermometer to check the fever before going to a doctor.

Learning Cycle

I have used the following questions regarding the PDCA and SDCA that are the backbone of any organization on the one had to achieve sustainability and planned improvements and on the other to review where we are and what we did as a part of the organizational learning.

Plan/Standardize Phase:

Standards/Targets: Aligned and Deployed?

Clear Practices/Actions?

Planning Basis?

Responsible, due dates (acceptability)?

Plan “B”?

Common understanding of both targets and approaches?

Do Phase:

Standards/Targets and approach understood by all - common understanding?

Anything else has changed?

Progressing towards target?

Adhering to the standards

Conscious of the deviations?

Actual situation? Current forecast - where are we going to land?

Check Phase:

Checked the progress and completion?

Deviations/Gap?

Visualized, easy to perveive?

Plausibility check?

Visited Gemba?

Understood cause and effect?

Act Phase:

Were intent/Expectations understood uniformly?

Learning: Strengths/Weaknesses?

Improvements needed? Who? When?

Further practices/actions needed?

Standards/Targets OK?

Escalation to the next level?

Standard: Desired present state of process (Value Stream Map, Procedure, RASIC*,..) or result (Drawing, Workplace-Photo, Setting Plan,..)

Target: Desired future state of process (Value Stream Design, Procedure, RASIC*,...) or result (Customer Complaints, Delivery Volumes, Modified-Layout,..)

Actions: Comprises immediate containment (ICA), corrective (to address root cause) and preventive (to control) actions

*RASIC : Role Definition Chart for the various tasks needed in an organization

Responsible “Doer”: Individual(s) (Many) who perform an activity or take part in a decision—responsible for action/implementation.  Preferably only one for accountability

Accountable “Buck Stops Here”: Individual (One!!) who has ultimate decision making and approval authority. Typically the owner of the budget.

Support “Passive, if asked for”: Individual(s) (Many) who need to work and have input into a decision or action before it occurs, provided asked for.

Informed “FYI”: Individual(s) (Many) who must be informed that a decision or action has taken place. 

Collaborate “Active, team member”: Individual(s) (Many) who need to work and have input into a decision or action before it occurs, proactively.

Perpetual Learning

We all know the saying "Sharing knowledge will increase knowledge". Not only do we know the saying, but have also certainly experienced it. The reason is quite simple. When we need to share our knowledge, on the one hand we naturally get motivated to learn thoroughly to really be able to add value and on the other get motivated to discover and learn as we get questioned by the ones with whom we are sharing our knowledge.

In my personal experience as a leader, apart from setting the direction to develop a sense of security to the teams and organisations I have lead, asking the right questions to my "followers" for catalysing their self-discovery has been the second most important success factor to create the passion that resulted in exceptional performance. Of course the other standard leadership skills and qualities like entrepreneurship, empathy, initiative, assertiveness, assessing, giving/receiving feedback, networking, having the big picture, process focus, cooperation, communication, cross functional thinking, good domain knowledge, etc.

The purpose of coaching is exactly to catalyse the self-discovery. All great leaders in our society seem to have this skill well ingrained. Not only have they created a noble vision and have got many people go behind them to realize this vision but also have created great leaders. Needless to say a noble purpose, their character and the other standard qualities I have listed above would have always been there.

Many of us I am sure would have learnt this catalysing skill the hard way as we matured in our leadership capabilities, in some cases spanning over a decade or so. I am sure coaching our teenage kids and/or brothers/sisters would have been one of the biggest leadership learning opportunity. Our coaching skills would have also come from our elders and others who would have coached us. Our main learning method was through experience in life or in simulations during a training. Imagine being comfortable with this skill of catalysing self-discovery as we take on our first leadership role in the mid twenties. Wouldn't it be a great competitive advantage?

The average age in India is expected to be 29 years by 2020. Presently more than half of our population is less than 25 years of age and more than 65% less than 35 years of age. Taking from our own experience, we can really catapult the learning process if we can provide a platform for people to help others catalyse their self-discovery and at the same time helping oneself by experiencing this extremely important leadership skill. This pool of catalysers what one can call as Peer-Coaches or Reciprocal-Coaches will be my first step towards creating more than 100 exceptional leaders by 2020. Once this pool is created then a series of other value added learning services like consultancy, Socratic training as well as best-in-class business solutions like competency management, process management, benchmarking, etc. can follow.

Of course this model of learning must be financially viable and yield an excellent ROI. Going by the numbers in India alone, the best-in-class leadership solutions can in my opinion be available at really affordable prices. The main challenge would be to get a critical mass of at least 1,000 willing, like minded, young potential exceptional leaders.

Sustainable Performance

In organizations it is quite easy to produce exceptional results once or occasionally against all possible odds. I use the word easy due to the relative effort needed to produce exceptional results consistently on a sustainable basis. I want to share my learning to produce consistently sustainable results organizations.

1. Identify intermediate check points, when and how frequently to check
2. Establish what to check or "KPI: Key Performance Indicator" and how to calculate or arrive at this KPI
3. Define who calculates the KPI, who analyses the actual situation, forecasts the final result, compares with the target and defines the immediate containment, corrective and preventive actions.
4. Ensure that the KPI is released only after step 3 is completed.
5. Define who verifies that step is is being performed and at what frequency is this verified (once every three cycles would be preferred)
6. Assess the adherence (Steps 1 to 5) to the defined steps and modify system to ensure adherence.

Go ahead and get consistency through sustainable results in your business using the above steps. I must caution that it may take a several cycles till consistency is achieved. Apart from this consistency doesn't mean that the targets are met. Here you need to use these steps for the basic stability (SDCA) and deploy task forces to work with gaps and develop measures to reach the target (PDCA).

Organisational Health Check

We normally think of money and head count as the necessary resources to do a business. I am of the opinion that much more resources are needed either to perform a simple task or run a big business. I call these resources as CAPABILITIES (PLEFIMS: People, Leadership, Expertise, Finance, Infrastructure, Management, Speed). Here I am listing these CAPABILITIES to build a base for the concept of organizational health check, that is very simple. Once we assess the AVAILABILITY on a scale of 1 to 5 (Adequate, Satisfactory, Good, Very Good and Excellent) of these CAPABILITIES we can very fast define the most important focus areas for improvement in the organizational health.

CAPABILITIES

1. People:
People are the most important for any job we do. Under people not only the employees but also customers, vendors and business partners are considered. The main question is how good is the networking and how right are the people we know. In school we used to say that the wave length matched between the thick pals. Though in business this is not always possible, it is imperative that we consider the character when we count our people.
2.Leadership:
We can only achieve outstanding consistent performance if and only if true passion can be ignited in the people that we spoke of under 1. True passion comes only if the purpose is noble and this is what leadership is all about. Creating a vision, mission, values, business ethics, strategy and approach with a learning environment and open culture to a secure future with a noble cause.
3. Expertise:
In today's world just having a noble cause with passionate people can only be used for monetary benefits, provided know-how of the product/service in question as well of the direct processes needed to produce is available. Product/service core competencies, the related IP rights, perceivable USP's are all accessible and known either through available documentation or through the people considered under 1.
4. Finance:
Needless to say money is always needed to perform a task or run a business. Market capitalization, asset base, profitability, cash reserves, outstanding receipts as well as payments need to be thoroughly analyzed. When checking an internal performance the consistency in adhering to defined budgets and the ability to make correct expense forecasts can be used as a capability for assessing the organizational health.
5. Infrastructure:
Buildings, machinery, equipment, hardware, software, etc, would all fall into the infrastructure category. It is mandatory not just to check the availability, but also check the usability and the condition of the infrastructure. It is very common in business to exploit (over use without proper maintenance) the infrastructure at the cost of getting fast results. This common phenomenon not only erodes the infrastructure but also demoralizes the people using this infrastructure.
6. Management:
One time success can be got easily without management, since management in my perception is the art of consistently doing the job in a most optimum and efficient manner. Therefore policies, guidelines, systems, processes and procedures come under management. It is imperative that cascaded (across hierarchy levels) targets are deployed from the business plan, a meaningful MIS along with cascaded reviews/feedback for all key performance indicators/results as well as absolute clarity of roles/responsibilities exist. Both the target deployment (top-down) and reporting (bottom-up) through hierarchy must be having the same unique path.
7. Speed:
Last but not the least important is time as a resource. In order to have the speed in whatever we do, it is essential that a SDCA/PDCA (Standardize/Plan, Do, Check and Act) mindset is evident and constantly a formal learning system exists to reflect and learn from both good and bad experiences. Speed also comes with a clear delegation accompanied by total clarity on who is accountable in organizations for various tasks. The biggest deterrent to speed is the micro-management culture and lack of confidence and trust across hierarchy as well as peers.

AVAILABILITY

A. Adequate:
A capability can be assessed as adequate in case of anxiety concerning a capability.
B. Satisfactory:
Provided the routine is being done normally then a capability falls into this category.
C. Good:
Being proud of a capability can be a good reason to assess in this category.
D. Very Good:
You are not only proud, but also feel comfortable to talk about relevant capability openly.
E. Excellent:
You would have received recognition for the relevant capability from outsiders.

It is quite obvious that these capabilities will lead to key results specific to the organization that meets all the stakeholder needs as well as perception and performance indicators concerning each of the stakeholders. I am listing all the stakeholders once again. Shareholders, Customers, Employees, Business Partners and Society are the 5 main stakeholders for any organization.

The CAPABILITIES are also the basis for preparing a SWOT. However, before preparing a SWOT it is essential that the goals or what we want to achieve (our dream) must be the starting point. As far as strengths and weaknesses are concerned the AVAILABILITY assessment will automatically show the areas to further check. For the opportunities and threats the questions must be "Which of the PLEFIMS is available with others that can benefit me?" and "Which of my PLEFIMS may get siphoned out by others?".