Perhaps one of the least-fair demands put on executives today is the expectation that they should be talented fortune tellers. They should be able to anticipate customer wants and needs. They should be able to predict business conditions a year or more out into the future, even with the unstable economies found on every continent.
I probably don’t have to tell you how important predictability can be for a manager. There is so much uncertainty in our world that having the ability to know with any level of confidence that something is… or isn’t… going to happen on-time and in-budget, is a gift. And the more lead time a manager has in making this determination, the more options they will have in terms of reacting appropriately.
Whilst no one has yet invented the perfect fortune teller’s globe for business leaders, there is one area where predicting the future is becoming a reality: business execution. One of the most exciting aspects of new performance improvement software tools like i-nexus’s business execution system is the ability for managers to be able to see farther out into the future with a greater degree of certainty than they’ve ever had before. With real-time updates on project progress, the software can reliably predict whether that project will be on track not just a week or month from now, but 3, 6, 9, or even 12 months out.
This greater predictability gives managers much more time to make adjustments in resources, timing, and budgets so they can still get the business results required of them to meet annual or strategic goals.
If you’ve been following this blog, you know that we conducted a survey last fall about the most common causes of failure of Lean Six Sigma programs. The results were presented at a webinar in December delivered by Grant Crow, our COO, and Jon Fitzgerald, Solutions Consultant.
Almost 700 people responded via LinkedIn, and 63% of them voted for “Lack of Management Buy-In” as the biggest source of failure. (For comparison, the next-highest response was 13% of the votes cast for “lack of effective coaching.”)
I’m not really surprised that lack of management buy-in came in so far ahead because it’s a common complaint I hear from Lean and Six Sigma practitioners across the globe. But we have to be careful not to interpret that response as blaming management for a lack of commitment to something they see as valuable. What is more likely the case is that the Lean Six Sigma leaders are choosing the wrong projects (and therefore the efforts don’t deserve management buy-in) or they haven’t been able to show that the efforts are, in fact, contributing to business priorities. If you can clearly demonstrate to a manager or executive that Lean Six Sigma success directly contributes to their business success, then lack of buy-in won’t be an issue.
With budgets tighter than ever and a host of newer challenges competing for management attention, it’s up to the Lean Six Sigma practitioners and supporters to make sure that they are selecting high priority projects, and then marshal the evidence that their efforts deserve management attention and support.
Neither of these tasks is easy, but they are more readily accomplished now than they were even a few years ago. New software tools (such as Hoshin planning software and business execution systems) can help you map out projects in ways that clearly establish linkages from the business priorities to project goals, at every level of the organization. Having that linkage is the first step in securing management buy in. The best software tools in this class also help you better communicate with management throughout the organization: you can roll up results and summarize them for senior executives, or dissect them into minute detail for supervisors and frontline managers.
In today’s competitive economic climate, organizations stand or fall by how well they deliver against the promises they make to stakeholders. There are two likely causes of the failure to deliver on promises made: either the strategy itself was fundamentally flawed, or the process through which strategy gets disseminated and executed was ineffective. In the majority of cases, it is this execution process that lies at the heart of the problem with the root causes of this being one of the following:
Lack of alignment between top level corporate strategy and the initiatives which take place at a tactical level
Management reviews are predominantly focused around lagging measures which measure outcomes, and not leading measures which predict what the outcomes will be
Organizations are unable to accurately predict the impact that the successful completion of actions will have on the Key Performance Indicators, and ultimately, strategy.
The process of Hoshin Planning or goal deployment, using the powerful X-Matrix, is being implemented by a number of organizations to help address these root causes, however close to 90% of companies are using spreadsheets to manage this and subsequently fail to achieve their goals.
Join me in this one hour webinar and I will discuss the steps organizations can take to address the barriers to effective Hoshin Planning. Click here to register.
Take part in our LinkedIn poll today and the results will be discussed during the webinar.
It’s a well known fact that the vast majority of organizations struggle with their execution, and it consistently tops the list of the number one challenges that CEOs face.
From my own experience, poor strategy execution can usually be attributed to three core problems:
Lack of alignment
More often than not, strategic goals are missed because what senior management thinks is happening in the organization and what actually happens are generally two very different things. But why is this? For many, this occurs because of a lack of linkage between the main methodologies that are used to drive the initiatives. Operational Excellence methodologies, such as Lean and Six Sigma, are excellent at driving action at a localised level, but offer no approach to link back to strategy. Conversely strategy design methodologies, such as Balanced Scorecard, facilitate the design of well-rounded strategies but are unable to offer guidance on how to translate the strategy down the organizational chart.
Review basis
In many large organizations, the management reviews are predominantly focused around lagging measures which measure outcomes, and not leading measures which predict what the outcomes will be. As a result, the information is usually obsolete by the time the reviews actually take place, meaning that the reports in which actions are taken against are inaccurate.
Forecasting problems
Because it is difficult to accurately predict the impact that the successful completion of actions will have on KPI’s (and ultimately on strategy), there is no reliable method of ascertaining if all of the actions will lead to the goals being achieved. More importantly, the lack of reliable forecast information then drives a “reactive” rather than “proactive” reaction, meaning the organizations responds to catastrophes rather than anticipating and overcoming problems.
In order to overcome these issues, organizations need to transform the end-to-end strategy execution processes. There are essentially six steps that can be taken that will ensure successful execution:
Translate strategy into actionable priorities – this can be done by utilizing strategy maps to visualize goals and cause-effect relationships, and by using Hoshin Planning and Policy Deployment to translate goals into actions.
Define KPIs that will be used to track success and establish the targets over time for these indicators.
Ensure everyone is aligned and motivated to deliver the strategy by linking their reward and recognition to the KPIs that will measure the achievement of the goals.
Leverage web-based technologies that join up strategic planning, initiative execution and performance management activities, organizations will be able to see and keep on top of who is doing what, what has been achieved and what impact it has made.
Change management culture. By this, I mean promote the ‘chief fire prevention officer’ not the ‘chief fire fighter’.
Use robust technology platforms to move from tracking performance historically to forecasting future performance based on the projected impact of your improvement actions.
As 2011 comes to an end, I’m already looking forward to what 2012 will have in store for i-nexus, and we’re beginning the year by attending and exhibiting at the Process Excellence Network (PEX) week in Orlando. I’m really excited about the event, which is taking place 16th – 20th January 2012 at Buena Vista Palace, Lake Buena Vista, Florida.
It’s always enjoyable attending these kind of summits, as it gives me the chance to discuss the finer points of Business Execution and to hear first hand the difficulties that are faced on a day-to-day basis by organizational leaders. This year I’m hosting a workshop on the first day (16th January) of the conference that will address many of the issues faced by organizations when it comes to strategy execution, and give attendees that chance to discuss the difficulties that they face when it comes to goal deployment.
During the workshop, I’ll focus on Hoshin Planning and the ways in which organizations can realize the true benefits of using this methodology. I’ll outline why the vast majority of organizations that implement Hoshin Planning fail to make it work, and detail that ways in which organizations can ensure that they are one of the few that see the step change in results that better execution can deliver.
i-nexus are able to offer delegates a discount off your booking, so to find out more about PEX Week and to secure your place, please click here. Quote reference i-nexus/PEXWEEK
Most Lean Six Sigma initiatives fail. It’s a common problem in many organizations that seems to be increasingly difficult to overcome, and projects seem to always fall down at the same point – the maturity stage. There are many theories behind the reasons for the failure, but it seems that there is one common root cause, and it’s one I’ve spoken about before. Most initiatives fail because of the poor management of the initiatives.
Our next webinar, taking place on Wednesday, 7th December, will tackle this topic. Hosted by i-nexus Chief Operating Officer Grant Crow, the webinar will address the benefits of using Software as a Service (SaaS) to overcome the most popular reasons for Lean Six Sigma programs failing. Covering issues such as lack of benefit quantification, lack of management buy-in, and a lack of effective coaching, the webinar will address and discuss each issue in detail.
Grant will also talk through the results of the i-nexus poll on LinkedIn, which asks what you rate as the number one reason that you think Lean Six Sigma programs fail, and offer guidance to companies who are experiencing problems in scaling up their Lean Six Sigma Initiative. Why note take part before the webinar?
I’ve spoken before about the difficulties that Operational Excellence leaders face, and I’ve put forward my own ideas as to why Lean Six Sigma projects fail. For me, the number one reason that the majority of Operational Excellence projects fail is because of a lack of executive buy-in.
Talking from my own experience, the fundamental problem with Lean Six Sigma initiatives is down to the fact that often, there is a disconnect between the priorities of a CEO and the outcome of the organization. Or, put simply, the fight between the urgent and the important. In almost all cases, the urgent will win over the important.
As all Lean Six Sigma practitioners know, Lean Six Sigma has the potential to literally transform the performance of any organization, but as with any critical organizational change, Lean Six Sigma requires leaders to stay engaged in the effort, which doesn’t happen when it’s not at the top of the to-do list. With this as the number one reason, in my eyes, for the failure of many Lean Six Sigma projects, I thought it would be interesting to hear your thoughts on the subject.
I also recently released a podcast on how you can make Lean Six Sigma your CEO’s no. 1 priority – Click here to listen to this podcast and others in the series.
I’m really proud of how far i-nexus have come in the last 10 years, which is why it was a great honour to be listed in The Telegraph’s Top 1,000 order of mid-sized companies in the UK.
The list was compiled by government innovation agency NESTA and business information specialist Dun & Bradstreet and it identified 1,000 private and Alternative Investment Market-listed companies. The list also took polls of more than a dozen membership organizations, such as the Chartered Insurance Institute, the Institute of Physics and the Royal Academy of Engineering.
It was great to see i-nexus sitting alongside companies such as Lovefilm, Skyscanner and Photobox in the ‘Britain’s Brightest Businesses’ list.
However, the biggest compliment for me was the fact that the list also took nominations from readers and conducted research of companies that had received peer acclaim.
It was a great achievement to have been listed. To read the full article, click here.
The last few months have been tough for everyone, with warnings of a double-dip recession and more cuts being announced.
Slow growth and a weakening outlook has forced an increasing number of companies to reassess their expectations, and with UK profit warnings rising sharply year-on-year in the second quarter of 2011, there is a greater need than ever before to drive consistent and relentless execution of strategies. i-nexus Business Execution software can help organizations in the financial services sector to achieve this.
On Friday 18th November, I’ll be hosting a seminar in London on this very topic. I’ll be talking through ways in which Business Execution can accelerate Lean transformation in the financial services sector, which in turn will help to improve the probability of business objectives being achieved. Business Execution as a discipline is already being used by global companies to manage their policy deployment processes and align them with Lean initiatives, and now is a perfect time for the financial service sector to see how it can benefit from this approach.
The seminar will be taking place at Intellect House, London from 10am until 1:30pm, with lunch included. The delegate rate is £150 and the seminar provides a great opportunity to meet with other like-minded individuals in the industry to network and swap best practice techniques.
For more information and to register, please click here.
