You Say Process Excellence, She Says Operational Excellence, I Say…

You say Process Excellence, she says Operational Excellence, I say Performance Excellence.

Are we all talking about the same thing?

It’s a question that’s been swirling around the back of my mind for a while. I’ve now attempted to answer it in a presentation which I’ve uploaded to Slideshare here.

What triggered me to finally put some effort into addressing it was the passionate response last week (by Paul Harmon of BP Trends) to those who want to change the meaning of the term ‘business architecture’.  In the world of business process management, there’s a struggle between those who argue the benefits of a discipline based on a common language and the revisionists who argue that in a fast-changing world we can’t be hostage to ‘disciplines’ and ‘bodies of knowledge’  which are no longer relevant.  [Personally, I tend towards the revisionists. In order to pass my exam and become an OMG Certified Business Process Management Professional last week, I had to answer questions on books and documents published mostly a decade ago.  At a time of rapid change, there’s a real downside to formalisation.]

Anyway, by contrast and on the same day, a Linkedin discussion How Does Your Organization Define Process Excellence? popped into my inbox. To my surprise, the 20k+ members of the PEX Network Lean and Six Sigma Continuous Improvement group seemed to lack any real consensus (almost two years after the question was first asked).

As you’ll see from the slides, I’ve compiled a selection of 33 definitions of Process, Operational And Performance Excellence. This is just a sample of the available definitions, and excludes (because life’s too short) closely related terms such as ‘Business Excellence’ and ‘Business Process Excellence’.

My own conclusions are that:

  • there is no widely-shared standard definition for each term
  • the myriad definitions for each term hugely overlap
  • process excellence and operational excellence are effectively the same thing
  • arguably performance excellence is more clearly defined, by the Malcolm Baldrige Award criteria, and slightly more extensive.

Anyway, I hope you find it useful – and I’d be very interested to get your feedback (below or direct).

Next up, I’m planning to look next at the various process maturity models, to explore a related question: what are the differences in the evaluation frameworks?  If you’d like to join me in that, I’d be pleased to hear from you.

Related Posts

26 Sep 2013   Process Excellence: Is The Party Over?

19 Sep 2013   What Process Excellence Looks Like In 2020 

Soulful Operational Excellence

iStock_000023558527LargeIf Operational Excellence (OpEx) and Lean Sigma are too often associated with a sense of heartless oppression, what would be soulful OpEx be? Is there a recipe for a wholegrain honest-to-goodness OpEx that everyone can believe in?

I think so – and there’s a step that we could take to nudge it to become the new normal.

There’s a wide spectrum of definitions of Operational Excellence. Some are crude, defined simply in terms of resource efficiency and its impact on the bottom line. Others seem ethereal.  But many start by acknowledging that people aren’t simply just another resource, and that the means matter just as much as the ends. Continue reading

When Operational Excellence Is Bad Karma

iStock_000018852459SmallA slightly uncomfortable weekend with two family members whose work leaves them on the receiving end of ‘operational excellence’.  I drove home rehearsing again the morality of what I do.

Both have blue-collar jobs in household name organizations (with, I happen to know, substantial Lean and Six Sigma programmes).

One – I have to hide identities here, for obvious reasons – works in transport and logistics.  Over the last three years, his job has been relentlessly analysed and ‘optimised’.  He’s fit – a keen Sunday cyclist – but now he arrives home exhausted.  Every minute of his day is programmed, every capability fully stretched all the time. And there’s continual pressure to do unpaid overtime to get the work done.

That relative at least still has a full-time job. The other, who works in retail, was effectively forced to sign a ‘flexible’ contract, under which working hours are pretty much variable by the employer at will. So he might learn this afternoon that he has been given a four hour lunchtime shift tomorrow, only to be sent home at 12:30 if things are unexpectedly quiet.

I’m sure that the Lean Sigma teams driving these changes are proud of what they’ve achieved. This is operational excellence diligently honed to drive out every scintilla of waste.  There’s absolutely nothing left to squeeze.

I’m not claiming that Lean Sigma in the wrong hands is a tool for oppression (Discuss). But it seems to me that we need consensus on a richer definition of operational excellence, a less clinical framework in which success looks beyond simply the elimination of waste.

Both employers in this case – and these are middle-of-the-road organizations, far from unique – should be worrying about how to reconcile their cost-cutting achievements with their proud boasts about Corporate Social Responsibility.

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10 Feb 2013   Social Business: Finding Meaning At Work

Why Governance Teams Are Not The Answer

HfS PwC - The Future of Global Business Services - June 2012It seems to me that there’s a fundamental flaw in the conclusions that HfS and PwC draw from their survey The Future of Global Business Services published this week. And that their recommendations would lead organizations down the wrong path.

The report focusses again on governance (which featured heavily in their joint report last year).

This year’s survey shows, they claim, that

“centralized governance organizations create the best outcomes…every organization should organize a governance team and, despite internal resistance from IT and business leaders who do not want to lose control, organizations should seriously consider centralized teams.”

All that I have seen in working with clients over the last ten years suggests that a centralized governance team is a dead end.  If by ‘governance’ we mean clear roles, responsibilities and accountability for driving every aspect of performance improvement, then governance has to be embedded in day-to-day operations.

A small core group supervising governance policies and their overall implementation across the enterprise makes sense. But the meat and drink of governance is the relationships and behaviours of process stakeholders. It’s about regulating actions in the real operational world of end-to-end processes. That’s where it lives and breathes.

Quality management offers a parallel.  Most often it was seen as a silo, separate from operational realities.  It was a box-ticking activity, a cost of doing business. No-one went into Quality Management to further their career. Then organizations like Toyota demonstrated the value of a completely different approach. They embraced quality and tried to embed quality thinking into everything they did.  They realized that quality only comes alive when it connects with everyday operations and gets people doing real work involved.

In Toyota’s case, Quality begat TPS and Lean of course – but that’s another story. The point is that nowadays a centralized Quality Management team is as rare as hen’s teeth. Quality should be everyone’s passion.

The HfS/PwC survey results themselves, and the HfS/PwC conclusions, illustrate that centralized governance teams can’t deliver:

“Governance teams frequently accomplish their primary objectives, but struggle to create similar outcomes in areas outside of their key focus areas.”

In other words, a centralized governance team may be able to railroad through cost savings, but it can’t also deliver innovation or agility or improved customer service. Centralized governance teams are naturally project-focussed and single issue. They can’t deliver sustained operational excellence and continuous improvement because that comes from ongoing collaboration between all the process stakeholders and users.

What every GBS organization needs is a collaborative framework that enables ‘Toyota thinking’:

  • a rich, ongoing and effective collaboration between all of the stakeholders of each end-to-end process (including of course its customers)
  • an engagement with process executors and customer users that will ensure their continual feedback and so drive continuous improvement.

Governance is the framework for this collaboration, the rules of the road that underpin rapid and sound decision-making.

Governance is absolutely a critical success factor, and especially in GBS environments which are often complex and fast-moving, with many actors involved. But its value comes when governance is embedded into the everyday, not ‘managed’ from some corporate ivory tower.

© Text Michael Gammage 2013

 

Chalk One Up For Sustainability

Delighted call yesterday from a client whose CEO had made a stand for sustainability.

The CEO had invited in a well-known consultancy for a year to drive a Lean program on a payment-for-results basis.

The Lean consulting team arrived two weeks ago and explained its methodology. They didn’t care that this organization had implemented Nimbus as a process platform at the heart of the business. They insisted that brown paper and Post-It notes would be used for all their work. Amazingly, they were so attached to this that they refused even to use the client’s paper. It had to be their brown paper.

When it was escalated to the CEO, he didn’t equivocate. He insisted that this organization’s process platform must be the alpha and the omega for the Lean program. It was, he explained to the Lean consultants, an integrated business management platform, but not in any abstract sense: it was supporting people doing real work 24/7. So it was the perfect framework to identify, design and deliver sustainable improvement projects.

What tickled my friend and led to his jubilant call was the CEO’s remark at the end of the meeting, as the consultants left the room, that if he saw brown paper being used in future, he would ‘personally escort them from the premises’.

The price of sustainable excellence is eternal vigilance. [as Jefferson might have put it… ]

Lean Pharma: Tackling Compliance Obesity

Not to put too fine a point on it, Quality and Compliance are often completely out of control in PharmaLand. No-one doubts the need for uncompromising quality and compliance. But the way that this is delivered in Pharma today is not just over-engineered and over-expensive, it’s become a source of risk in its own right.

Things can get to a point in obesity where surgery is the only way out. Everything I see suggests that we’ve reached the point where only a radical new approach can slice through and remove the multiple, overlapping layers of complexity to expose and manage the true compliance essentials underneath.

In a recent workshop with a Pharma organization, we were attempting to condense several dozen SOPs into a standard global process. The SOPs were often vague, long-winded, contradictory and only tenuously linked to the Quality and Compliance manual. So while the formal SOPs are consulted, in practice, they are usually ’supplemented’ by informally ’asking an SME’.

That’s of course when the SOPs are readily available. Recently a global process owner offered to print out for me the two ‘foundation’ SOPs for his process. It took him 15 minutes to find one of the SOPs – and that was in the dedicated Sharepoint site for this particular process.

These organizations are not unusual: as far as I can see, this is close to the Pharma norm. The people involved are bright, conscientious and endeavour to act with integrity at all times. But they are overwhelmed with unclear and sometimes conflicting information. In CMMI terms, these are organizations operating near to the lowest point on the process maturity curve: Quality and Compliance is often being delivered through a culture of heroes.

Most Pharma organizations are pursuing programs to simplify, to standardise and to eliminate non-value-add (NVA) activities. But often quality and compliance functions are barely touched.

It’s a nettle that has to be grasped. Outsourcing and re-shaped business models can only go so far to deliver the required levels of performance improvement. Quality and compliance isn’t going away. In fact, the reverse. The compliance burden is set to grow rapidly as Pharma expands into emerging markets and branded generics, and develops global operations in an increasingly multipolar regulatory world. With the costs of regulatory non-compliance spiralling, it’s not difficult to imagine that Quality and Compliance may soon be the largest single NVA in many organizations.

The liposuction equivalent for Compliance obesity is, of course, the adoption of a process management platform. In a client workshop I supported last week, that team succeeded in condensing numerous SOPs into a single standard global definition of Validation. We spent two days creating the two top levels of the process model. The power of process visualization, the rigour of a process hierarchy, and the constant pressure to describe things simply, in the language of the user, led to real agreement on a standard global process.

There’s plenty of detail to be added. And the activities in this process, and its regional and site variants, will need to be cross-referenced to the library of quality and compliance requirements. But eventually, and after completing the review and authorisation cycle, it will be published – and delivered to process users as easy-to-follow role-based storyboards.

It’s an approach that’s absolutely rigorous. It’s also multi-dimensional. It’s designed to manage complexity. It supports rich what-if analytics. But, critically, it’s also focussed on simplicity, on user adoption and enabling real work. Which is why it’s the key to Lean Quality and Compliance – and continuous improvement.