Innovation case study submitted by Afoes Consultants during 3rd Continual Improvement & Innovation Symposium organized by Dubai Quality Group's Continual Improvement Subgroup to celebrate World Quality Day 2011.
WQD2011 - INNOVATION - Afoes Consultants - An Innovative Approach
1. Innovation Storyboard
[A Major Engineering Firm in the Middle East]
[Strategy Development by Conjoining Top-down
Directives and Bottom-up Commitment: An
Innovative Approach]
[May 2010-June 2010]
[Strategy Masters]
2. About the Organization
• Case Study Organization (CSO) is a SBU of a $13B
global group. CSO has installed more than 28,000
automation systems in more than 7,500 sites
since 1974, representing a $17 billion installed
base—one of the largest in the automation
industry.
• CSO is headquartered in Abu Dhabi, UAE, is a
subsidiary of global group. The operation of CSO
covers various countries within the ME region.
Due to confidentiality the name of the organization not revealed
3. Opportunity for
Innovation
• In April 2010 a New Engineering Manager was
recruited for the CSO.
• In order to effectively run his function he
wanted to formulate a strategy for
Engineering Department for the next two
years in line with the CSO’s corporate and
business strategies.
• Our firm was selected for this project.
4. Opportunity for
Innovation
• In August, 2009 the Manager Project
Operations (MPO) of CSO formulated a
strategy (top-down approach) for the overall
Project Operations Department of which ED is
a part.
• hardly any participation from ED (bottom-up
involvement) .
• nobody in ED knew the existence of this
strategy document.
5. Preliminary Research
• A recent survey by
Harvard Business
Review (March, 2010)
corroborated this fact,
companies are more
top-down than
bottom-up in their
approach to strategy Who Gets to Shape Strategy?
formulation (Source: Harvard Business
Review, July-August 2010, p. 74)
6. Preliminary Research
• It was quite akin to
what HBR says, “A lot
of people say they
can’t [state their
strategy].
• situation is
particularly bad
among those who Can You State Your Strategy?
(Harvard Business Review, July-
aren’t involved in August 2010, p. 74),
strategy
development”
7. Opportunity for
Innovation
• To be effective, a strategy has to be constructed
and owned by those who will execute it, namely
the line people.
• With its current skilled and experienced human
capital base, ED can identify promising new
strategic approaches by encouraging emergent
strategizing (Kaplan 2008) and aligning it with the
top-down directives.
• This was the first time this innovative approach
for strategy making was applied in this CSO.
8. Stakeholder analysis and
team selection
High Power
Context Players
Setters Involved
Unaffected Actors
Low Interest High Interest
Crowd Subjects
Unaffected Involved
bystanders bystanders
Low Power
10. Team Selection
ED Others (Projects, PCO and Management)
• Engineering Manager • Regional General Manager (RGM)
(Process Owner) (Sponsor)
• Senior Technical • Manager Project Operations (MPO)
Managers x 2 (Champion)
• Technical Managers x 3 • Country Operations Manager (COM)
• Senior Project Manager
11. Process
• Primary data were collected over a period of
two weeks using three methods of data
collection:
– existing CSO strategy documents,
– interviews and (RGM and MPO of CSO )
– group discussions. (four workshops in which the
key stakeholders of ED participated )
12. Objectives of TMT
Interviews
• to get more information about the existing
strategy of CSO
• to understand perceptions of the strategic
issues facing ED with respect to its impact two
years into the future
• to know their aspirations about ED’s
performance.
• Each interview and workshop lasted for
around one hour and three hours respectively
14. Objectives of Workshop
Top-down
Perspective
What does CSO
Wants ED to do?
ED’s Strategy
Bottom-up
Perspective
What day-to-day
Experience suggests
ED should do?
15. Data Analysis
• cognitive mapping technique was followed to
collect and analyze data.
• cognitive maps are tools for the representation of
qualitative data.
• We utilized facilitator-operated causal mapping
software (‘Decisions Explorer’ – Banxia 2000) for
the workshops to capture the different issues and
perceptions raised by the participation.
• Four workshops were conducted in a period of
three weeks keeping in mind that the gap should
be no more than a psychological week
16. Risk Management
• Though individual interviews allow the elicitation
of deeper individualistic knowledge, it comes at
the cost of creative group dynamics.
• Data comparability can also be an issue for open-
ended semi-structured interviews which has to
be managed through proper indexing of collected
data and keeping notes of discussion points.
• To overcome this, we audio recorded the
conversations apart from maintaining notes
individually.
17. Risk Management
• Interviews were conducted with the RGM and
MPO only.
• For the first three workshops, the participants
were the managers from ED. The RGM and MPO
were not included in the workshop so that the
participants could bring out their issues more
openly without any pressure during the
discussions.
• However, in final workshop all of them (top and
line managers) came together to develop strategy
for ED.
18. Risk Management
for workshops
• the participants were briefed on the subject of the workshop in
advance
• ‘Round-robin’ was used to ensure all those participating are able to
contribute
• participants were encouraged to ‘piggy back’ off one another’s
views
• participants were explained the importance of thinking in terms of
‘yes and’ rather than ‘yes but’ to avoid shutting down others
options and discouraging members
• participants were discouraged from removing one another’s
contribution
• issues and goals from the top-management were used as ‘triggers’
to ensure strategic intent of ED fits within the organizational whole
(form of political feasibility)
21. Classification of high
priority issues
• ED lacks effective performance measurement
system
• ineffective use of knowledge repository
• training for engineers is inadequate
• motivation of staff in ED is dropping
• lack of uniform understanding of business
processes in CSO
• lack of multicultural staff in ED
• GES centers in China, Eastern Europe, South
America underutilized
24. Comparison of TMT Goals
and Emerged ED Goals
Project Operations Goals Emerged ED Goals
Improve one CSO scope by 20% • achieve sustainable business growth
• achieve continued business from existing customers
through add-ons
Become more cost competitive on projects and across • reduce blended cost of engineering services
all business functions
• reduce end to end lead time of project deliverables
Simplify the way we do things so customers find it • provide innovative solutions to customers
easier to do business with us
Leverage global capabilities and resources more • achieve uninterrupted availability of services from
effectively BO
Strengthen the business by continuing to improve • sustain 100% billability of ED staff in FO
working capital
Improve end-to-end quality in everything we do for • achieve improved quality of project deliverables
our customers (internal and external)
25. Comparison of TMT Goals
and Emerged ED Goals
Deliver flawless execution on all projects • deliver effective solution in an efficient manner
• achieve consistency in project implementation
Establish world-class supply chain • integrate existing and emerging technology seamlessly
Engage employees in understanding and helping drive • improve skill set of engineers
change that improves the business
• retain key talents within ED
• achieve employee satisfaction in ED
Recognize employees who demonstrate the focus • rewards and recognition for ED engineers for their
behaviors and reward outstanding business results successful contribution
• promote multi-perspective approach in dealing with
engineering issues
• achieve scale in knowledge reuse
• retrieve codified knowledge without having to contact
the person who originally developed it
29. Strategic Intent
• Effectively implement HOS and Functional Transformation through
Six sigma
• Develop and implement a strategic performance measurement
system
• Recruit and retain engineers from multi-cultural background
• Impart appropriate training for engineers to enhance their technical
and non-technical skills
• Roll out a comprehensive program in collaboration with HR to
improve staff motivation
• Develop and implement an electronic document system that
codifies, stores, disseminates, and allows reuse of knowledge
• Develop and implement a sustainable 'FO-in-BO' delivery model to
improve utilization of GES centers world-wide
31. Deciding What to Measure
• We identified measure that was important
along with structured set of measures
• Used existing strategic/business objectives
to help provide a focus
• Used stakeholder judgements to help
decide what’s important
• Used a Scorecard to help with the overall
framework
32. Structure for Performance
Measurement
Objectives • Focused on outcomes, results, deliverables
KPI • Focused on identifying the right indicators
Targets • Focused on end-state
Key activities • Focused on what you do
Enablers • Focused on what you need (Process, Resources)
33. Structure for Performance
Measurement
Objectives • Effective Implementation of HOS & Lean Six
Sigma Initiatives
KPI • Improvement in Process Effectiveness & Efficiency
• Reduction in Process Waste & Variations
Targets • Achieve a minimum of 4.5 sigma levels
Key activities • Appropriate project selection.
Enablers • Identify PIT, train them in lean six sigma
methodologies, appoint consultants.
34. The key differentiating
factors of the innovative
•
approach
firstly it focused on the day-to-day realities of management
especially the strategic issues and concerns that managers
believe they faced.
• In the bargain, the key stakeholders recognized and
appreciated that in most situations incremental change is
more realistic than wide-ranging and deep-seated change.
• Further, the key stakeholders discovered ED’s core
distinctive competences through their combined efforts
rather than just being plainly stated or assumed; and
• finally, it focused on conjoining top-down directives with
bottom-up commitment, and in the bargain a robust
business model evolved for the Engineering Department of
HPSME.
35. Key Learning
• The learning and adjustment of strategy during the process
produced a series of logical increments towards ED’s
strategies.
• The very process of consultation involving higher level
strategic issues created its own positive dynamics. For
instance, one of the line managers at the end of the second
workshop commented that ‘this exercise is first of its kind
wherein our views would go into formulating strategy for
ED’.
• The overall sense of ownership that the process created
was palpable. We are unsure how exactly the process we
have started would unfold and this is not worrisome.
36. Key Learning
• It is important for ED to continually test the emergent
strategies through improved quality of information and
feedback for future decision making. This will
complement its efforts in successful implementation of
strategies.
• The group processes that have been set up already at
ED through the consultative group processes during
the workshops are harbingers of institutionalization.
• These processes can be characterized as commitment,
ownership, procedural justice, procedural rationality,
open communication and collaborative learning.
37. Key Learning
• the strategy-making process suggested here would require
the participants to understand the importance of double-
loop learning.
• This may not always be a free of tension. However, the very
process of recognizing tension and surfacing conflicts
(where there is, for instance, procedural justice) would
generate creative solutions.
• The multiple realities that apply to diverse individuals in the
group indeed are in negotiation with each other in many
senses; psychological, emotional and social.
• This view is in conflict with traditional positivistic
approaches that managers have hitherto been adopting.
38. Limitations
• After each workshop we sat down to tidy up the maps. This
was indeed a very time consuming and challenging process.
• We realized that we were trying to over-analyze the data
which was consuming up our most important resources,
time and patience.
• The most important realization was that the data analysis is
a means to an end and not an end in itself.
• Availability if Power-Brokers due to their travel schedules.
However, this was well managed as the RGM got personally
involved.
39. Way Forward
• The CSO has institutionalized this methodology.
• Feedback from one of Project Manager
“Congratulations to AFOES for conducting a very
productive workshop on the Engineering department
emergent strategies. I thought it was very professionally
conducted and facilitated free flow of thoughts. Sri (that’s
me!) was outstanding in the way he facilitated this
workshop and Peter (Engineering Manager), as is well
known, showed 100% commitment. Every point was
deliberated appropriately without taking any on their face
value”. This was indeed gratifying to me personally.