Transformational Success is a Question of Operational Excellence
Upland Software and the PowerSteering team recently welcomed Joseph Paris, Chairman of the Xonitek Group of companies, author of “State of Readiness”, and founder of the Operational Excellence Society and the Readiness Institute, to discuss “Getting alignment across your organization – the building blocks of transformation”. With many organizations envisaging a transformation today, and failure rates as high as 70% according to McKinsey, we wanted to know what recommendations an expert such as Joseph has for success. Randy Clark, Director Upland PowerSteering, and Upland’s Six Sigma practice joined Joseph in the discussion.
The premise of Joseph’s point of view is that the competitive advantage of the 20th Century company was found in process excellence. Building on the establishment of processes in the previous century, the companies that stood out were able to speed up throughput and improve the quality of their processes to near perfect. In the 21st Century, Joseph argues, the duration of a company’s competitive advantage is limited. Sooner or later, other companies will embrace your excellent thinking and doing. While you may forever be honored as a process innovator, you may also find your market share eaten into by those other companies that have taken on board your innovations. Like Toyota, the original lean manufacturer, whose position in the automotive market was number three in 2017, behind Volkswagen and Nissan.
Competitive advantage in the 21st Century
Time, therefore, is the enemy of the 21st-century company. Those who are able to see beyond the horizon, more easily recognize opportunities and threats, and respond faster, will have the competitive advantage. This may not sound like revolutionary thinking, but Joseph breaks this last point down further. Responding more quickly to both opportunities and threats requires devising and deploying an appropriate response. Deploying that response means setting the pace, and maintaining control of the execution phase and narrative. To do so, the company must both know the capacity and capabilities of its leadership, resources, processes, technology, and value-chain, and be able to rely on them. And this means it must have a superior level of operational excellence, ensuring it can press the prosecution of the company’s vision and strategies. In short, high-performance companies are organizations that maintain a state of readiness.
They’re like an aircraft carrier. The fighter pilots perform at the highest level of proficiency because 5000 people on that vessel also do their job to the highest level of proficiency. From the galley cooks who ensure the crew is fueled, to the maintenance teams for the nuclear reactor, the ship is a well-oiled machine. It works as a single operational entity, prepared to engage for the purpose for which it was intended.
CEOs want the sausage not the list of ingredients
In general, it’s the CEO that defines, nominally, what that purpose is; who provides the corporate vision. Like JFK announcing the USA would, by the end of the decade, send a person to the moon and bring them safely back, the top person in the company sets the strategic goals and deadlines. Everyone else figures out how.
Collaboration and sharing across functions, in companies, then, is essential to achieving the vision, but also in attaining the level of alignment and accelerating decision-making that ensures competitive advantage. The organization has to be bound together. The one medium that can do that is technology – if it’s properly implemented. It can give people the information they need to do their jobs, in real time, providing both the means to share and the means to access. It can give a sense of how the organization is performing. But if it is not aligned with the corporate vision, the strategic expectations, the commitments leadership has made to the board, it will not be sustainable.
Joseph expands on how to get buy-in and support from top management. He recommends stepping away from inputs – the types of resources you need, the processes you want to implement, expressed in your jargon. Those are the ingredients that go into the sausage, and CEOs, like everyone else, do not want to know how their frankfurter is made. He advocates focusing on outputs – the sausage itself. How can you accelerate achieving the company vision? What initiatives will lead to that? In short, what is your value proposition? And this needs to be expressed in the CEO’s language. Joseph also recommends level-setting your program once a quarter to ensure continued alignment with what is important to the company.
Organizations need a company-wide scoreboard
To sustain change, the different functions of the organization, and each individual in a given team, must have confidence in the other component parts of the company to achieve that change. Confidence is born from knowledge of capabilities, not just the confidence we have in others, but the confidence we project. When we know what we can do, and can express that clearly, others are more likely to trust us. And confidence across the board is the key to accelerated decision-making. The more confident we are in our abilities to look at data, see information, and make decisions based on it, and the more we trust our colleagues to help us follow through, the quicker we can respond as an organization.
Technology tools that help companies communicate their strategy, providing a single repository for objectives and goals, ensure everyone is aligned as changes occur. Tools that show what the organization is doing, what programs and initiatives are in place, and how they’re doing, get everyone moving in the same direction, with the same understanding, and foster trust. But they have to be available to everyone in the organization, not just as an executive dashboard. It’s like the scoreboard at a sporting event: Fans can see how much time is left, and their team’s score compared to the competition. In other words, what the team is trying to achieve and how they’re doing. And it helps everyone get behind them, and root for success.
Get more of Joseph and Randy’s insight. Listen to the entire webinar here.