Barriers to Operational Excellence Success

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A lack of urgency will result in disappointment or complete failure.

Barriers to Operational Excellence Success Urgency for change is mandatory

By Ron Crabtree, CPIM, CIRM

Implementing operational excellence requires urgency for change and nothing you do, say or think will get around this one critical tenet in change management. A lack of urgency will result in disappointment or complete failure. On the other hand, dramatic bottom-line benefits from success are well documented by innovators like Jim Womack and a host of others. On the surface, buying into the urgency for change and Operational Excellence implementation seems like a no brainer when comparing the costs and the benefits.

So, why isn’t everyone jumping on board? Perhaps there’s a little more to this whole change management thing than just listing the benefits and expecting everyone to go forth and prosper.

Michael Hammer, the business process re-engineering guru, is credited with the statement, “The soft stuff is the hard stuff.” He could not be more dead-on when it comes to the implementation of effective Operational Excellence (OpEx) principles across an organization or value stream. OpEx is 80 to 90 percent people and 10 to 20 percent tools and techniques. Achieving success is not intuitive, and there are many forces that work against successful implementation.

As you can see from the following figure, the forces at work in implementing Operational Excellence are powerful on both sides:

The forces “for” tackling the implementation of OpEx principles and approaches are easy to understand. I can’t think of a single executive or manager who would argue against things like preserving jobs, increasing speed to market or stakeholder value, or achieving dominance in their market. Having an urgent desire to move your organization forward and into a better market position is not the problem. Overcoming the barriers to success, however, is.

Let’s examine the common barriers to successful Operational Excellence implementation and discuss some of the considerations and potential actions we can take to overcome them.

Barrier #1Natural human resistance. It’s well accepted that people simply don’t like change. The bigger the change, the harder it is for them to deal with and the more they resist. Human nature can tolerate a “bad” situation far easier than a new one, even if the new circumstances promise to be better.

One of the most significant recurring flaws I see in companies trying to implement Operational Excellence is the belief that telling people how good things are going to be once these changes are made ensures they will run headlong and happily into implementing change. Far from it. Few people (perhaps 10 percent) will initially “get it” to the extent that they will change their behaviors voluntarily and quickly. The rest of us need a little persuasion.

Anthony Robbins said, “People are motivated by pleasure or pain. Getting one and avoiding the other is basically what drives our behavior.” Following this logic, we have to make doing things the old way too painful to continue. The pain associated with change has to be (far) less than the pain of doing things the old way. Think about lifetime alcoholics who have repeatedly failed to quit. Often it takes a shocking life event—like losing a loved one to a drunk driver or being incarcerated—to enable an alcoholic to quit. We need to recognize that the majority of people will need a sizeable shock to help them move beyond the pain.

Consider the following action steps.

  • Implement physical transformations quickly. Creating a new physical process helps rewire old habits and create new, desired behaviors. You can implement cells or form work teams around the process targeted for change. This also usually means implementing new metrics. Giving responsibility to each team member to support the team and its goals makes it very difficult to do things the old way.
  • Change your appraisal system. If you measure and expect behaviors that align with your new vision of the future, people will naturally respond. It is imperative, however, that management clearly communicate these changes in rewards and expectations, and that employees can communicate back their understanding.
  • Lead by example and insist on doing it the new way. This is an absolute must for executives and leaders all the way down the food chain. Once the team has decided how things will be done, not doing them cannot be an option. If leaders do not have the stomach for positive confrontation and continual reinforcement, you’re looking at a failure before you’re even out of the gate. People naturally watch what the formal and informal leaders do, not what was said. If you give people conflicting messages between what you say and what you do, they will take this as an opportunity to revert back to old habits.
  • Rethink your incentive program. If you don’t have one, you should create one. If monetary rewards occur only when the entire team is successful, this provides enormous incentive for people to “get it” and see that the only way for them to take part in that success is through effective value stream execution. Individual successes rarely impact a company’s bottom line. Continuing to reward for isolated successes (overproduction, signing on a big client, etc.) is a huge mistake.
  • Don’t allow non-participation to go unnoticed. Again, leaders need the stomach to follow through. The people in your organization, from the top down, need to be held accountable for both individual and team acceptance and implementation of the new systems and processes. Peer pressure is an amazing force. If an employee’s inaction or reluctance is allowed to stand, the greater team (and the company) suffers tenfold. One reluctant individual left unchecked will infect the rest of the team. If you or your managers allow it to continue, you are telling everyone that, in effect, you condone and support that individual’s behavior. To the contrary, in successful OpEx organizations, there can’t be any place to hide. This is the power of the visual standardized workplace. Properly done, it enables everyone to know what is working and what is not.

Barrier #2Leadership turnover. Leadership turnover can be seen as an opportunity to derail your program/project implementation. If the sponsor or leader moves on before changes are embedded, you can bet the next one in line will have a different agenda. Secretly, most middle managers pray for a new boss and a new agenda before they have to actually change anything. It is up to you to ensure that any leadership changeovers that occur during implementation are done in a way that ensures continuity in your OpEx process.

A top-down mandate to achieve period-over-period zero-based improvements is critical. Appraisals and job descriptions must contain specific actionable requirements to provide excellent leadership. An ongoing 5S audit program is a great way to stay on top of things, regardless of leadership changes. 5S workplace organization is one of the first things you must do in a world-class Operational Excellence implementation.

Barrier #3Traditional accounting/metrics. What gets measured gets done. When people can see hard proof of the results of their efforts, they comply with the mandate. That’s the good news. The bad news is that traditional accounting is obsolete.

Despite the amazing changes we’ve seen in areas such as manufacturing over just the past ten years, accounting is still being done fundamentally the same way as it was 150 years ago. While the discussion surrounding traditional standard cost accounting and its inadequacies and impediments to success is too lengthy for this discussion, I suggest picking up a copy of a good book on this subject by Gary Cokins, Activity-Based Cost Management: An Executive’s Guide. The point for us here is to acknowledge that we need to rethink some of our metrics and measurement systems to provide an accurate picture of the modern business strategies and systems we employ in our pursuit of Operational Excellence.

Barrier #4Lack of urgency for change. Finally, we get down to the crux of the problem. Change is often implemented piecemeal, hesitantly, or half-heartedly. Leadership often communicates the idea of change, but without the sense of urgency to get it done and get it done now.

Two things seem to cause enough urgency for change to happen quickly: threats and visionary, dynamic leaders. Threats from the outside in the form of competition and pressure from customers—on pain of losing your business—go a long way toward getting everyone’s attention and drive them to make change happen quickly. Without an immediate clear and present danger, the next best source for change is the visionary and dynamic leaders with the horsepower and support to drive change throughout the entire company. In the absence of a clear need to change, getting people to take seriously the changes required by a world-class implementation is dicey at best.

 

Additional Reading

Staffing for Operational Excellence

Overcoming Barriers to Organizational Transformation

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