One Component Organizations Need to Support Operational Excellence | Operational Excellence Quick Hits

Speaker 1: (00:04)
In the House of Operational Excellence, the foundation pieces are customer focus and leadership, which includes vision and mission, value analysis and value proposition, strategy and tactics and performance metrics. In addition to those foundation pieces, there’s root cause analysis and problem solving. The biggest issue I see in companies is that they’re not good at root cause analysis and problem solving. So I put this as a foundation piece for operational excellence. Companies need to be good at problem solving. What I see mostly is companies put bandaid solutions in place. They don’t get to the root cause and three months later, the problem arises again and they’re fighting the same problems over and over and over again.

Speaker 1: (01:01)
In our operational excellence there’s a philosophy of organizational leadership that stresses problem solving. So this is one of the key elements to operational excellence. Regardless of the type of problem we need to be good problem solvers, which means being excellent in cause and effect thinking. What is an effect? It’s the outcome. There’s a result of a consequence or action. So if we take some action and we get some undesirable effect, then we want to understand what was the action that we took to create that undesirable effect. What is the cause? It’s something that brings about that effect, the result. What is the root cause? It’s the initiating cause of either a condition or a causal chain that leads to an outcome or an effect of interest. So to get to the root cause we need to focus on doing the cause and effect analysis and get to the root cause.

Speaker 1: (02:05)
Yes, it takes a lot of effort and a lot of time to do that work, but once you get a permanent solution in place, then it’s going to eliminate a bunch of chaos in the organization. We can eliminate that chaos then we can focus on doing more problem solving, so it becomes a snowball effect where we start out small. It takes some effort to start developing that cause and effect relationship or cause and effect logic. And once we start to get permanent solutions in place or permanent countermeasures, we can start to build on that and more and more problems will go away.

Speaker 1: (02:48)
How do we know if we got to the root cause of the problem? So one of my rules of thumb is, if the action that you’re taking is putting another non-value added activity in place, you didn’t get to the root cause. So if we understand what is value added and non-value added, we can analyze our countermeasure that we’re putting in place as a result of our root cause analysis and understand, is that a value added activity or is it a non-value added activity? If it’s a non-value added, we didn’t get to the root cause, so you need to go back to your analysis and understand where you have some flaw in your thinking and correct it. What we don’t want to do is add more steps to the process, we want to eliminate steps, reduce the number of steps, integrate steps to streamline and improve the flow.