Why the Management System Is Important | Operational Excellence Quick Hits

Speaker 1: (00:02)
In this session of our house of operational excellence, we’re going to talk about the management system. So the management system are the necessary and sufficient elements that need to be in place to help support operational excellence.

Speaker 1: (00:16)
The management system doesn’t have to be the last thing that’s put in place. It’s one of the first things that put in place once we get customer focus and leadership, because it has to have the elements in place to be able to support the two pillars of the stable and capable delivery system and the continuous improvement culture.

Speaker 1: (00:36)
So the elements of the management system include first of all decision-making, so how does the organization make decisions? Of course we have the performance metrics in place. The decisions need to support those performance metrics, our KPIs. There’ll be secondary measurements in place that support the process. So we need to make sure that there’s alignment between the process supporting metrics and the KPIs in the organization.

Speaker 1: (01:08)
Then we need to make sure that we’re making decisions that support the overall goal, the vision and mission of the company and the strategy and tactics. If we have misalignment in the decision-making, then we’re not going to achieve operational excellence.

Speaker 1: (01:25)
The second element is profitable growth opportunities. So how do we identify which opportunities to go after and more importantly, which opportunities not to go after? Again, it’s just like focus. What are the things that are going to bring value to the company? What are the things that aren’t going to bring value? And decide what are the growth opportunities that we’re going to pursue.

Speaker 1: (01:49)
Next is change management. So how do we manage change within the organization? So of course achieving operational excellence takes a lot of change. Also takes a lot of change in the way people think and the change in mindset. So change management includes how do we change people’s mindset? How do we physically change things in the organization that support the overall operational excellence strategy?

Speaker 1: (02:16)
Then the last element, the most important element, is sustainability. So when you get a gain, how do you ensure that that gain is sustainable over the long-term? Too many organizations I’ve seen where they’ve made short-term gains and then six months later they’re right back to doing what they did.

Speaker 1: (02:37)
So in order to get that sustainability, there’s two things you got to do. You got to start doing something different, but more importantly, you got to stop doing what you were doing that was creating the bad performance or bad behavior. And again, once we get that gain, sustainability is so important to achieve operational excellence and maintain that over the long term.