Operational Excellence: Getting the most out of your Lean and Six Sigma programs

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Operational Excellence is more important now than ever. Your customers demand it! However, evidence shows that traditional approaches to achieving Operational Excellence are not delivering the expected results. In this presentation delivered at the APICS Houston Professional Development Meeting on May 15, 2015, Chris Seifert, Manager at Wilson Perumal & Company, explains why traditional approaches to Operational Excellence are failing, and provides strategies you can use to make Lean and Six Sigma relevant in today's complex world.

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Operational Excellence: Getting the most out of your Lean and Six Sigma programs

  1. 1. Opera&onal  Excellence   Ge#ng  the  most  out  of  your  Lean  Six  Sigma  programs  
  2. 2. Wilson  Perumal  &  Company,  Inc. Agenda/Objec&ves   •  Why  a  new  approach  is  necessary   •  How  to  diagnose  the  real  problem   •  Three  things  you  can  do  to  get  the  most  out  of   your  LSS  Programs  
  3. 3. Wilson  Perumal  &  Company,  Inc.1)  AlixPartners  Survey2)  2010  Accenture  Survey   A  new  approach  is  necessary   •  OperaKonal  excellence  is  more  important  than   ever  –  customers  demand  it!   –  Increased  compeKKon  driving  decreased   margins   –  ExpectaKons  of  customers,  shareholders,  and   society  are  higher  than  ever   –  News  of  poor  performance  travels  far  and  fast   •  TradiKonal  approaches  are  not  achieving   expected  results   –  Only  31%  of  companies  were  able  to  achieve   the  results  promised  by  LSS  pracKoners1   –  58%  of  execuKves  report  conKnuous   improvement  programs  produced  minimal   financial  impact2   Consider  the  case  of     1-­‐800-­‐Flowers   Leadership  engagement  is  oFen  blamed,  but  is  that   the  real  reason?  
  4. 4. Wilson  Perumal  &  Company,  Inc. The  world  has  changed!   Volume   Cost   Pre-­‐Industrial  Age   “Individual  producKvity”   Dominated  by   variable  costs   Volume   Industrial  Age   “Economies  of  Scale”   Dominated  by   fixed  costs   Complexity   Post-­‐Industrial  Age   “Complexity”   Dominated  by   complexity  costs      
  5. 5. Wilson  Perumal  &  Company,  Inc. 5   TECHNOLOGY  IS  MORE  COMPLEX     PRODUCTS  AND  SERVICES  MORE  COMPLEX   PROCESSES  MORE  COMPLEX   ORGANIZATIONS    MORE  COMPLEX   REGULATIONS  MORE  COMPLEX   MARKETS  MORE  COMPLEX   Complexity  is  stretching  the  capabili&es  of   most  companies   X X X X X
  6. 6. Wilson  Perumal  &  Company,  Inc. 6   Many  companies  are  passing  a  complexity  threshold   VALUE   (diminishing   returns)   COST  &  RISK   (exponenKal  growth)   Level  of  complexity   you  can  support   $   #Items #links 1 0 2 1 3 3 4 6 5 10 … 10 45 Complexity   Opera'onal  risk  grows  exponen'ally  with  complexity   Few  companies   are  s'll  here   Many  companies   are  here   An  increasing  number   of  companies  are  here  
  7. 7. Wilson  Perumal  &  Company,  Inc. 7   Tradi&onal  approaches  to  Opera&onal  Excellence  are   not  effec&ve  in  the  face  of  complexity   •  They  do  not  address  strategy,  which  is  oen  the   source  of  complexity   •  They  take  a  “Bo_om-­‐up”  approach  to  improving   results   •  They  can  actually  add  more  complexity   •  They  seek  to  improve  before  establishing  control   •  Complex  environments  require  a  different   approach  to  leadership  
  8. 8. Wilson  Perumal  &  Company,  Inc. Complexity  arises  from  the  interac&ons  between   products,  processes,  and  the  organiza&on   •  Complexity  is  a  cube   funcKon—as  it  increases  on   one  axis,  it  mulKplies  across   the  others   •  TradiKonal  approaches   address  individual  processes —not  interacKons  between   product,  process,  and   organizaKon      
  9. 9. Wilson  Perumal  &  Company,  Inc. 9     Example:  The  impact  of  product  por^olio  complexity   on  process  complexity    
  10. 10. Wilson  Perumal  &  Company,  Inc.     Tradi&onal  approaches  typically  employ  a  “Boaom-­‐ up”  approach,  which  doesn’t  address  complexity   Bo=om-­‐up  approach:  Improving  one  process  at  a  6me   Top-­‐down  approach:  Start  with  a  framework  
  11. 11. Wilson  Perumal  &  Company,  Inc. 11   The  typical  response  is  to  add  even  more  complexity,   which  compounds  the  problem   Complexity   increases   Poor   execuKon   Loss  of   process   control   Poor   business   results   More   people  &   processes   Vicious     Complexity  Cycle  
  12. 12. Wilson  Perumal  &  Company,  Inc.     Tradi&onal  approaches  aren’t  effec&ve  in  the  face  of   complexity   •  TradiKonal  approaches  a_empt  to   improve  processes    before   establishing  control:   –  Controls  for  individual  processes  are   created,  but  the  underlying  system   necessary  for  sustainment  is  not   –  Results  in  improving  processes   without  knowing  their  real   capability   •  Establishing  control  is  the  necessary   first  step:   –   Ensures  sustainment   –  Oen  produces  greater   performance  improvements  faster   and  with  fewer  resources  
  13. 13. Wilson  Perumal  &  Company,  Inc. Agenda/Objec&ves   •  Why  a  new  approach  is  necessary   •  How  to  diagnose  the  real  problem   •  Three  things  you  can  do  to  get  the  most  out  of   your  LSS  Programs  
  14. 14. Wilson  Perumal  &  Company,  Inc.     Defining  Opera&onal  Excellence  –  the  oFen   overlooked  first  step   Leadership  Alignment   Consistent  Messaging   Employees  Understand   Clear  Roles  and   ResponsibiliKes   Increased  Commitment   •  Leaders  must  be  united  and  share  a  common  vision   •  If  leaders  aren’t  aligned,  messages  won’t  be  clear  and   consistent   •  Unclear  and  inconsistent  messages  impede  employee’s   understanding     •  If  employees  don’t  understand  vision,  they  will  spend   Kme  trying  to  define  their  roles   •  In  the  face  of  ambiguity,  many  employees  take  a  “wait   and  see”  stance  
  15. 15. Wilson  Perumal  &  Company,  Inc.     15   Common  defini&ons  of  Opera&onal  Excellence  are   vague  and  lack  the  ability  to  be  measured   •  “Each  and  every  employee  can  see  the  flow  of  value  to  the  customer,  and  fix  that  flow  before  it   breaks  down.”SM    -­‐  InsKtute  for  OperaKonal  Excellence     •  Opera6onal  Excellence  is  a  philosophy  of  leadership,  teamwork  and  problem  solving  resul6ng  in   con6nuous  improvement  throughout  the  organiza6on  by  focusing  on  the  needs  of  the  customer,   empowering  employees,  and  op6mizing  exis6ng  ac6vi6es  in  the  process.  -­‐  Wikipedia       •  A  philosophy  of  the  workplace  where  problem-­‐solving,  teamwork,  and  leadership  results  in  the   ongoing  improvement  in  an  organiza6on.    The  process  involves  focusing  on  the  customers’  needs,   keeping  the  employees  posi6ve  and  empowered,  and  con6nually  improving  the  current  ac6vi6es   in  the  workplace.    -­‐  The  Business  DicKonary   •  “The  leveraging  of  the  disciplines  of  Lean,  Six-­‐Sigma  and  Leadership  as  key  to  any  Con6nuous   Improvement  ini6a6ve  –  towards  the  increase  in  performance  of  both  individuals  and  the   companies  for  whom  they  work  and  resul6ng  an  indelible  and  posi6ve  impact  on  stakeholder   value.”  –  LinkedIn  OperaKonal  Excellence  Group   These  definiKons  contain  components  of  the  systems  and  culture  necessary  to  achieve   OperaKonal  Excellence,  but  because  they  lack  the  ability  to  be  measured,  they  are  not   useful  for  understanding  how  to  achieve  OperaKonal  Excellence,  or  why  it  is  important.  
  16. 16. Wilson  Perumal  &  Company,  Inc. Opera&onal  Excellence  delivers  industry  leading   performance  across  7  Value  Drivers   Given  two  companies  with  similar  strategies,  the  one  that  executes  be_er  will   have  be_er  performance  across  all  7  Value  Drivers.       Sound Strategy Operational Excellence Leading Performance 7  Value  Drivers   1. Safety   2. Environment   3. Compliance   4. Quality   5. Produc&vity   6. Yield     7. Cost   Strategy   1. Product  por^olio   2. Markets  served   3. Distribu&on  channels   4. Price  point   5. Level  of  service   6. Partnerships   7. Opera&ng  model   Opera'onal   excellence  is  the   execu'on  of  the   business  strategy   more  consistently   and  reliably  than  the   compe66on.  
  17. 17. Wilson  Perumal  &  Company,  Inc. Agenda/Objec&ves   •  Why  a  new  approach  is  necessary   •  How  to  diagnose  the  real  problem   •  Three  things  you  can  do  to  get  the  most  out  of   your  LSS  Programs   1.  Address  non-­‐value  added  complexity  that   arises  from  your  strategy  
  18. 18. Wilson  Perumal  &  Company,  Inc. Technology   Strategic   intent   Value  chain   processes   Culture   Structure   and   authority   People         Sound  strategy  requires  aligning  decisions  to   allocate  resources  consistent  with  strategic  intent   Make  strategic  decisions   consistent  with  intent   1.  Value  discipline   –  Product  innovator   –  Customer  inKmate   –  Low  cost   2.  Markets  to  parKcipate  in   –  Local   –  Global   3.  Value  chain   –  VerKcally  integrated   –  Single  segment   Processes  and  Culture  must   support  the  strategy   Technology,  organizaKonal  structure,   and  people  capabiliKes  must  support   the  processes  and  culture   Strategic  Intent   Components  of  the  Opera&ng  Model   Aligning  the  OperaKng  Model  to  the  strategy  isn’t  enough.    We  must  also  implement   the  management  system  processes  necessary  to  execute  the  OperaKng  Model.  
  19. 19. Wilson  Perumal  &  Company,  Inc. Agenda/Objec&ves   •  Why  a  new  approach  is  necessary   •  How  to  diagnose  the  real  problem   •  Three  things  you  can  do  to  get  the  most  out  of   your  LSS  Programs   1.  Address  non-­‐value  added  complexity  that   arises  from  your  strategy   2.  Simplify  and  standardize  your  Management   System  
  20. 20. Wilson  Perumal  &  Company,  Inc.     Opera&onal  Excellence  is  a  func&on  of  the   management  system  &  culture   Effective management processes and procedures Culture of Operational Discipline Operational Excellence Understanding  this  rela&onship  helps  cut  through  complexity  to   quickly  iden&fy  the  real  problem  from  the  “top—down”     Sound Strategy Operational Excellence Leading Performance
  21. 21. Wilson  Perumal  &  Company,  Inc. 21   Understanding  the  different  types  of  processes  is  an   important  first  step   Acquire raw materials Convert  to   finished   good Store finished goods Distribute finished goods Collect payment Procedures Roles  and  ResponsibiliKes   Training Risk  IdenKficaKon A    Management  System   Process  or  Key  Control  is  a   process  whose  primary   purpose  is  to  ensure   effecKve  execuKon  of  a  value   chain  process   Applied  across   each  phase  of   the  End-­‐to-­‐End   Value  Chain   The  End-­‐to-­‐End  Value  Chain   represents  the  core  acKviKes   a  firm  performs  to  deliver   value  to  its  customers  
  22. 22. Wilson  Perumal  &  Company,  Inc. 22   The  founda&ons  of  an  Opera&onal  Excellence   Management  System   Key  Value   Drivers   OE  is  defined  by   measurable  business   performance  across   specific  value  drivers       Safety   Environment   Compliance   Quality   Produc&vity   Yield     Cost  
  23. 23. Wilson  Perumal  &  Company,  Inc.     The  4  Sources  of  Risk   Equipment  Processes  People  Inputs   Acted  on   by   To     produce   Finished   Goods/   Services   The  OperaKon   •  Any  failure  of  the  operaKon  to  produce  a  good  or  service  that  meets   the  customers  requirements  is  a  result  of  1  of  4  sources:   1.  A  person  failed  to  do  what  they  were  expected  to  do.   2.  A  process  failed  to  perform  as  expected   3.  A  piece  of  equipment  failed  to  perform  as  expected   4.  Un-­‐managed  change  
  24. 24. Wilson  Perumal  &  Company,  Inc. 24   The  founda&ons  of  an  Opera&onal  Excellence   Management  System   Key  Value   Drivers   Four   Sources  of   Risk   OE  is  defined  by   measurable  business   performance  across   specific  value  drivers   There  are  only  four   sources  of  risk  for  failure   to  perform  against  the   value  drivers       Safety   Environment   Compliance   Quality   Produc&vity   Yield     Cost   People   Processes   Equipment   Change  
  25. 25. Wilson  Perumal  &  Company,  Inc. Each  source  of  risk  can  be  analyzed  for  the  key  causes   of  failure       People   Unaware  of   expectaKon   Unable  to  perform  as   expected   Chooses  not  to  perform   as  expected   ExpectaKons  don’t  exist   ExpectaKons  not   communicated   ExpectaKons  not   enforced   Lack  of  knowledge   Lack  of  talent   Lack  of  virtue   Wrong  incenKve  
  26. 26. Wilson  Perumal  &  Company,  Inc.     26   Each  source  of  risk  can  be  analyzed  for  the  key  causes   of  failure   Equipment   Inadequate  Design   Unplanned  Failure   Improper  OperaKons   Inadequate   Maintenance  Strategy   Inadequate  execuKon  of   Maintenance  Strategy   Personnel  not  allocated   People   Process   Insufficient  tools/ materials   People  
  27. 27. Wilson  Perumal  &  Company,  Inc.     27   Each  source  of  risk  can  be  analyzed  for  the  key  causes   of  failure   Process   Process  is  not  capable   Process  not  in  control   OperaKng  limits  not   defined   People   Equipment   Change   MOC  process  not   capable   MOC  process  not   followed   People   Change  not  idenKfied  
  28. 28. Wilson  Perumal  &  Company,  Inc. The  founda&ons  of  an  Opera&onal  Excellence   Management  System   Key  Value   Drivers   Four   Sources  of   Risk   Common   Causes  of   Failure   OE  is  defined  by   measurable  business   performance  across   specific  value  drivers   There  are  only  four   sources  of  risk  for  failure   to  perform  against  the   value  drivers   The  four  sources  of  risk   tend  to  fail  for  the  same   reasons  regardless  of   the  type  of  operaKon       Examples   ExpectaKons  don’t   exist   Lack  of  knowledge   Wrong  incenKves   Equipment  not  capable   Personnel  not  allocated   Process  not  capable   MOC  inadequate   Safety   Environment   Compliance   Quality   Produc&vity   Yield     Cost   People   Processes   Equipment   Change  
  29. 29. Wilson  Perumal  &  Company,  Inc.     If  the  causes  of  failure  are  consistent  across  various   opera&ons,  the  necessary  set  of  Key  Controls  is  as  well   People   Unaware  of   expectaKon   Unable  to  perform  as   expected   Chooses  not  to  perform   as  expected   ExpectaKons  don’t  exist   ExpectaKons  not   communicated   ExpectaKons  not   enforced   Lack  of  knowledge   Lack  of  talent   Lack  of  virtue   Wrong  incenKve   Ops/maintenance  procedures/ policies/standard  work   Core  communicaKon  strategy   Audits/assessments,  org  structure,   performance  management   Training/cerKficaKon     SelecKon  process   Culture,  selecKon  process   CompensaKon  strategy,  performance   management   Key  Controls  
  30. 30. Wilson  Perumal  &  Company,  Inc.     30   If  the  causes  of  failure  are  consistent  across  various   opera&ons,  the  necessary  set  of  Key  Controls  is  as  well   Equipment   Inadequate  Design   Unplanned  Failure   Improper  OperaKons   Inadequate   Maintenance  Strategy   Inadequate  execuKon  of   Maintenance  Strategy   Personnel  not  allocated   People   Equipment   Insufficient  tools/ materials   People   CriKcality  Ranking,  FMEA,  RCM   Engineering  Disciplines   Gatekeeping,  Scheduling   Planning,  Parts  Ki#ng,  Parts   Strategy  
  31. 31. Wilson  Perumal  &  Company,  Inc.     31   If  the  causes  of  failure  are  consistent  across  various   opera&ons,  the  necessary  set  of  Key  Controls  is  as  well   Process   Process  is  not  capable   Process  is  not  in  control   OperaKng  limits  not   defined   People   Process   Change   MOC  process  not   capable   MOC  process  not   followed   People   Process  Engineering  (LEAN  Six  Sigma   Tools)   Process  FMEA,  Process  Control  Plan   Management  of  Change  Program  
  32. 32. Wilson  Perumal  &  Company,  Inc. 32   The  founda&ons  of  an  Opera&onal  Excellence   Management  System   Key  Value   Drivers   Four   Sources  of   Risk   Common   Causes  of   Failure   Specific  Key   Controls   OE  is  defined  by   measurable  business   performance  across   specific  value  drivers   There  are  only  four   sources  of  risk  for  failure   to  perform  against  the   value  drivers   The  four  sources  of  risk   tend  to  fail  for  the  same   reasons  regardless  of   the  type  of  operaKon   The  set  of  Key  Controls   necessary  to  prevent   failures  is  also  the    same       Examples   Vision/Procedures   Training/CerKficaKon   Performance  Mgmt   Engineering  Disciplines   Planning/Scheduling   Design  for  Six  Sigma   MOC  Process   Culture   OrganizaKon  Structure   Process  Control  Plan   FMEA   Examples   ExpectaKons  don’t   exist   Lack  of  knowledge   Wrong  incenKves   Equipment  not  capable   Personnel  not  allocated   Process  not  capable   MOC  inadequate   Safety   Environment   Compliance   Quality   Produc&vity   Yield     Cost   People   Processes   Equipment   Change  
  33. 33. Wilson  Perumal  &  Company,  Inc.     Management  System  processes  can  be  grouped  into   Elements  to  reduce  complexity   Risk   IdenKficaKon   Process   Hazard   Analysis   Failure  Modes   Effects   Analysis   Risk  Registers   The  value  of  the  7  Elements   •  Easier  for  people  to  remember   than  all  key  controls   •  More  efficient  to  organize  around   •  Creates  common  language    that   facilitates  learning:   –  Between  management  and   employees   –  Between  leaders   –  From  site  to  site   •  Encourages  systems  thinking   –  Ensures  proacKve  management  of  risk   in  development  of  new  systems   –  Used  in  root  cause  analysis,  problems   aren’t  seen  in  isolaKon    
  34. 34. Wilson  Perumal  &  Company,  Inc.     The  7  essen&al  Elements  of  an  Opera&onal  Excellence   Management  System   Leadership   Employee  accountability   Risk  idenKficaKon   Risk  miKgaKon   Knowledge  sharing   Management  of  change   ConKnuous  improvement   Leaders  arKculate  a  clear  vision  of  OperaKonal  Excellence   and  create  a  culture  of  OperaKonal  Discipline   Processes  are  in  place  to  ensure  employee’s    are  properly   incenKvized  and  know  what  they  are  accountable   Risks  are  idenKfied  ,  assessed  ,  and  prioriKzed  for  processes   and  equipment   Controls  are  put  in  place  to  miKgate  the  idenKfied  risks   CommunicaKon  and  training  systems  are  in  place  to  share   knowledge  about  the  risks  and  their  controls   Processes  are  in  place  to  management  changes  of  people,   processes,  and  equipment   All  processes  are  measured,  verified,  and  conKnuously   improved  
  35. 35. Wilson  Perumal  &  Company,  Inc. 35   The  founda&ons  of  an  Opera&onal  Excellence   Management  System   Key  Value   Drivers   Four   Sources  of   Risk   Common   Causes  of   Failure   Specific  Key   Controls   OEMS   Elements   OE  is  defined  by   measurable  business   performance  across   specific  value  drivers   There  are  only  four   sources  of  risk  for  failure   to  perform  against  the   value  drivers   The  four  sources  of  risk   tend  to  fail  for  the  same   reasons  regardless  of   the  type  of  operaKon   The  set  of  Key  Controls   necessary  to  prevent   failures  is  also  the    same   Key  controls  are   organized  into     Elements  to  facilitate   implementaKon  and   management         Examples   Vision/Procedures   Training/CerKficaKon   Performance  Mgmt   Engineering  Disciplines   Planning/Scheduling   Design  for  Six  Sigma   MOC  Process   Culture   OrganizaKon  Structure   Process  Control  Plan   FMEA   Examples   ExpectaKons  don’t   exist   Lack  of  knowledge   Wrong  incenKves   Equipment  not  capable   Personnel  not  allocated   Process  not  capable   MOC  inadequate   Leadership   Employee  Accountability   Risk  ID   Risk  Mi&ga&on   Knowledge  Sharing   Management  of  Change   Con&nuous  Improvement   Safety   Environment   Compliance   Quality   Produc&vity   Yield     Cost   People   Processes   Equipment   Change  
  36. 36. There  is  an  “order”  to  implementa&on   Leadership   Employee  accountability   Risk  iden&fica&on   Risk  control   Knowledge  sharing   Management  of  change   Con&nuous  improvement   Commi_ed  leadership  is  the  foundaKon   Employees  must  know  their  accountabiliKes   Once  leaders  and  employees  are  commi_ed  to   prevenKng  risks,  idenKfying  them  creates  value   Risks  must  be  idenKfied  and  assessed  before  they  can   be  controlled   Controls  must  be  in  place  before  employees  can  be   trained  on  them   Processes  must  be  clearly  defined  and  controlled   before  change  can  be  managed   Assessing  a  process  that  is  known  to  be  out  of  control   oen  creates  li_le  value  
  37. 37. Wilson  Perumal  &  Company,  Inc. Agenda/Objec&ves   •  Why  a  new  approach  is  necessary   •  How  to  diagnose  the  real  problem   •  Three  things  you  can  do  to  get  the  most  out  of   your  LSS  Programs   1.  Address  non-­‐value  added  complexity  that   arises  from  your  strategy   2.  Simplify  and  standardize  your  Management   System   3.  Leverage  culture  
  38. 38. Wilson  Perumal  &  Company,  Inc.     Opera&onal  Discipline  is  necessary  to  achieve   Opera&onal  Excellence   Effective processes and procedures Culture of Operational Discipline Operational Excellence A  robust  OEMS  alone  will  not  lead  to  Opera&onal  Excellence;   Opera&onal  Discipline  –  doing  the  right  thing,  the  right  way,   every  &me  –  is  also  needed   Sound Strategy Operational Excellence Leading Performance
  39. 39. Wilson  Perumal  &  Company,  Inc.     39   Complex  opera&ng  environments  require  a  different   approach  to  Leadership   •  In  complex  operaKons,  leaders  can’t  possibly  idenKfy  all  the  situaKons   that  an  employee  will  face.   •  A_empKng  to  create  a  laundry  list  of  rules  or  tasks  will  not  cover  every   possible  situaKon.   •  By  idenKfying  the  fundamental  behaviors  of  an  OperaKonal  Disciplined   organizaKon,  we  can  create  a  framework  that  helps  employees  determine   how  they  should  behave  in  a  given  situaKon.   U.S.  Nuclear  Navy—A  High  Reliability  OrganizaKon  (HRO)   ‒  Remarkably  low  number  of  mishaps   ‒  Highly  complex  and  inherently  hazardous  tasks   ‒  Consistently  over  a  sustained  period  of  Kme  
  40. 40. Wilson  Perumal  &  Company,  Inc. 40   At  an  operator  level,  safe  and  reliable  opera&on  rests   on  the  “Pillars  of  the  Program”…     •  Integrity   •  Level  of  Knowledge   •  Ques&oning  Artude   •  Formality   •  Forceful  Watch  Team  Backup   REACTOR  SAFETY  &   CONTINUITY  OF  POWER   LEVEL  OF  KNOWLEDGE   FORMALITY   QUESTIONING  ATTITUDE   FORCEFUL  BACKUP   INTEGRITY  
  41. 41. Wilson  Perumal  &  Company,  Inc.     The  “Pillars”  of  Opera&onal  Discipline   •  Integrity.    Be  reliable.    Do  what  you  say  you  are  going  to  do,  compleKng  every  task  the  right  way,   every  Kme,  even  if  no  one  is  watching.   •  Level  of  Knowledge.    Understand  not  just  what  you  do,  but  why  you  do  it.    ConKnually  seek   greater  knowledge  about  the  systems,  processes,  and  hazards  in  and  around  your  workplace.   •  Ques&oning  Artude.    Constantly  ask  yourself  what  could  go  wrong.    Check  for  out-­‐of-­‐the-­‐ ordinary  and  learn  to  anKcipate  potenKal  problems.    Don’t  assume  things  are  okay—verify.     •  Formality.  Treat  your  workplace  and  your  role  with  respect,  recognizing  the  seriousness  of  what   we  do  and  your  role  in  that  as  a  privileged  trust  and  part  of  something  bigger.Follow  authorized   procedures  and  expect  the  same  from  others.    Do  not  take  or  tolerate  shortcuts.    If  you  think  of   a  be_er  way,  follow  authorized  processes  to  review  and  improve  the  procedures.   •  Forceful  Watch  Team  Backup.    Backup  your  co-­‐workers  by  looking  out  for  what  they  may  have   missed,  and  expect  the  same  in  return.    Have  the  courage  to  care,  intervening  even  when  it   makes  you  uncomfortable.    If  you  see  an  issue,  own  it.    
  42. 42. Wilson  Perumal  &  Company,  Inc. 42   Leaders  need  to  understand  basic  concepts  related   to  culture  and  human  behavior   •  Leaders  play  an  essen&al  role  in   shaping  culture  and  changing   behaviors   •  A  recent  Booz  &  Company  study1   revealed  that  48%  of  execuKves   “think,  other  than  communica6ons   and  leadership  alignment,  they  do   not  have  the  capabili'es  to   effec'vely  deliver  change”   •  Understanding  what  culture  is,  and   why  people  behave  in  a  given  way,   will  help  leaders  be_er  understand   how  to  lead  the  change   •  Leaders   –  Cannot  force  people  to  change  beliefs   –  Cannot  force  people  to  change  behaviors   –  Can  change  the  consequences   Beliefs Behaviours Consequences influence  result  in   reinforce  or  undermine   Culture  is  the  shared   beliefs  of  the  group  
  43. 43. Wilson  Perumal  &  Company,  Inc.     43   4  Steps  for  crea&ng  a  culture  of  Opera&onal  Discipline   •  Need  for  the  Pillars   •  DefiniKon  of  the   Pillars   •  Approach  for   implementaKon   Align  Leadership  on   the  Pillars   Create  the   Case  for   Change   Internalize  the   Fundamentals   Embed  in   Management   System   Processes   •  Use  case  study  like   Deepwater  Horizon   to  make  case  for   change   •  Create  a  sense  of   discomfort   •  One-­‐on-­‐one   conversaKons   between  leaders  and   employees  using   right/wrong   framework  to   discuss  behaviors   •  Leader  interacKons   on  the  shop  floor   •  New  hire  selecKon   •  OrientaKon/training   •  Incident   invesKgaKon   •  Performance   Management   Crea&ng  a  culture  of  Opera&onal  Discipline  must  start  at  the  very   top  of  the  organiza&on!  
  44. 44. Wilson  Perumal  &  Company,  Inc. Summary   •  A  new  approach  is  required  due  to  complexity   •  First  Step:  Diagnose  the  problem  using  a  “Top-­‐down”  approach   –  Is  it  strategy,  management  system,  or  culture   •  Address  non-­‐value  added  complexity  that  arises  from  your  strategy   •  UKlize  the  7  Element  OEMS  to  break  the  vicious  complexity  cycle  and   regain  control   •  Remember  that  there  is  an  “order”  to  things   •  Define  and  create  a  culture  of  OperaKonal  Discipline   Reducing  complexity  and  regaining  control  of  your  opera&on   will  revitalize  your  Lean  and  Six  Sigma  Programs  
  45. 45. Wilson  Perumal  &  Company,  Inc. Email:  cseifert@wilsonperumal.com   cpseifer@gmail.com   On  the  Web:    www.wilsonperumal.com   Blog:  www.wilsonperumal.com/blog   Twi_er:  @cpseifer       @Wilson_Perumal   LinkedIn:  h_p://www.linkedin.com/in/christopherseifert   h_p://linkd.in/10BnH1i     Phone:       (972)  800-­‐3618   (972)  716-­‐3930   Contact  Informa&on  

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