I am way behind in my blog reading. When reading some of my backlog, I found this great post by Brad Power over at Harvard Business Review.
Why was it great? Brad talked about how meeting the customer expectations and operational excellence are not opposites. Business should be doing BOTH and the ones that do have great success.
What is more important to company success, a strong external focus on customer experiences or an internal focus on effective and efficient operations?
Of course, it’s a false dichotomy — you need both. I described in an earlier post how Tesco worked for years to improve its supply chain capabilities, then leveraged this value by using deeper customer knowledge to enrich customer experiences.
Brad uses two great examples. One is L.L. Bean that provides goods to consumers. The other is ThedaCare which provides medical services to people. He shows how meeting customer expectations and having operational excellence can work in either industry.
Many hospitals began pursuing the “triple aim”: better patient experiences, consistent quality, and lower costs. Hospitals such as Virginia Mason and ThedaCare adopted process improvement systems from manufacturing (“Lean” and the “Toyota Production System”) to deliver increased consistency, reliability, and quality. While skeptics are right when they say, “Patients are not cars,” the reality is that medical care is, in fact, delivered through extraordinarily complex organizations, with thousands of interacting processes, much like a factory.
Most in the lean community are aware of the great work ThedaCare and Virginia Mason have been doing. It is great to see it highlighted on the HBR Blog.
Something that the lean community has stressed for a very long time is focus on delivering value for the customer first and then determine how to deliver that value as efficiently as possible and with no waste.
There is so much written about lean that is wrong or misunderstood. It is great to see a post discussing how companies can use lean properly to help them compete and win.
James approached me earlier this year about his blog. I am glad he did because I hadn’t seen it before. James does a very nice job of making his points clearly and with some humor and great analogies.
The blog is split into three categories: Operations Analysis, Process Improvement and Employee Engagement.
If you haven’t read Squawk Point, I encourage you to give it a try.
This is part of my reflections from the OpsInsight Forum in Boston.
Robert Miller presented about the principles and dimensions The Shingo Prize for Operational Excellence uses to assess companies for the award. Robert explained the important factors for any company that wants to achieve operational excellence.
Companies need to:
- Define Excellence
- Define Continuous Improvement
- Understand Transformation
- Tell the Truth
The first two are about setting expectations so people know what is expected of them. The third is about understanding what your people will be going through. The last is the most important. An organization needs to be honest with itself and where it stands. They can’t sugar coat their situation and they can’t hide it from their employees.
Companies need to bake operational excellence into their culture. In order to do this, it starts with principles that help define systems that help to build tools to support. I have recreated the graphic that Robert showed that helps explain why companies fail in building operational excellence into the culture.
Have you seen this to be true? With lean transformations, I have seen this quite a bit. Companies start by implementing tools and then later figure out the tools aren’t working because they don’t have the systems in place to support the tools. Then even later the company realizes they don’t have the same underlying principles that a company implementing lean successfully does. By this time it may be too late. The lean implementation may have been thrown out the window.
If the lean implementation does last long enough to realize the principles are needed to lay the foundation then the company has wasted a lot of valuable time. It is good they got there. The company could have had larger or better sustaining gains if they built the same direction as they thought about it.
When a company can think and build from left to right, the greater chance of success of embedding operational excellence into their culture.