Business execution survey report


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Business execution survey report

  1. 1. Survey ReportBusiness Execution SurveySeptember 2011
  2. 2. OverviewOverall, the vast majority of organizations are struggling with execution. A recent HBR study by Kaplan and Norton – theoriginators of the Balanced Scorecard, concludes that less than 10% of organizations consistently deliver on their financial goals.Typically organizations use a number of frameworks and methodologies to manage the execution and achievement of their goals.The emerging discipline of Business Execution has quickly become widely accepted as an effective and systematic approach toaligning and mobilizing many thousands of employees in pursuit of organizational goals.A survey was conducted by i-nexus and Process Excellence in July 2011 to understand the level of adoption of managementframeworks and methodologies, Operational Excellence priorities over the next two years and the tools used to facilitate thedifferent stages of the Business Execution process.The key findings from the survey are as follows:1. The majority of participants are familiar with the term Business Execution (72%). There is high awareness in America and the least awareness in North Asia2. The most popular methodology implemented within organizations is Lean Six Sigma. (63% of respondents worked for organizations that have implemented Lean Six Sigma). Overall there is a lower implementation of frameworks such as Hoshin Planning or some form of formal goal cascade process3. Spreadsheets are the most popular tool used to manage various stages of the Business Execution process4. The priority over the next two years for the majority of organizations, across all regions, is to align their Operational Excellence initiatives with their business goals.Survey methodologies and respondent profile.The survey was conducted online, during July 2011 with the Process Excellence Network. A total of 702 individuals responded tothe survey of which 17% were from large organizations, turning over in excess of $1bn. Job titles of the respondents included:• Global Quality Leader• Process Improvement Director• Operational Excellence Director• Director of Continuous Improvement• Program Manager• Lean Six Sigma Black Belt• Senior Financial Analyst• Change Manager.There was a good global representation of respondents to the survey.
  3. 3. Awareness and implementation of management frameworks and methodologiesThere is generally a high awareness of the term Business Execution, particularly in the western market (Europe, America and UK).Implementing a Business Execution discipline fundamentally requires senior executives to implement and integrate the six coreplanning and execution processes which form the basis of the closed-loop Business Execution cycle. The processes are as follows:• Define and communicate business objectives• Translate these objectives into actions at all levels• Act with speed and focus to implement these actions• Embed new capabilities into the organization• Manage the performance of ‘day to day’ operations• Measure the impact of the actions on achievement of business objectives.In the last 40 years there has been an introduction, refinement and adoption of three core management frameworks that provide asound basis for these core planning and execution processes.The first of these frameworks is Hoshin Planning – a Japanese inspired methodology for defining, cascading and reviewing goalswithin an organization. The second is Lean Six Sigma – a powerful approach to systematically driving improvement in operationalperformance which has become the de facto approach to changing how processes operate within an organization. Finally the thirdis the Balanced Scorecard. This approach has become the de facto way in which organizations articulate goals and identify andreport on the indicators that track achievement of these goals. Collectively, these three management frameworks provide us with abasic blueprint for how each core planning and execution processes can work together to form a Business Execution System.Figure 1 shows the number of respondents who work for organizations that have implemented various management frameworks.Figure 1:Lean Six SigmaLean Six Sigma is the most widely adopted methodology, globally. In fact it is the most popular framework implemented inorganizations for most countries, except for India where the Balanced Scorecards are slightly more popular.Hoshin PlanningMainland Europe seems to have the lowest adoption of Hoshin Planning or some form of formal goal cascade process.Understandably, Asia has the highest adoption with the USA not far behind.Balanced ScorecardThis is the second most popular framework adopted, particularly in Asia.Overall, Business Excellence frameworks such as EFQM and Baldrige have the lowest adoption in all regions, particularly in Europe.
  4. 4. Linking strategy to action and measuring the impactBy implementing a Business Execution system within an organization, a leader will be able to answer the following questions:• Are we on track to deliver our objectives?• If not, are we doing anything to rectify the situation?• Ultimately, in aggregate, will the actions we have initiated get us to our targets?Survey respondents where asked if they were trying to align their Operational Excellence initiative e.g Lean Six Sigma, with theirstrategic planning or performance management approach e.g Hoshin Planning and/or Balanced Scorecards – a critical componentin setting up a Business Execution system for successful strategy execution.Survey results show that the majority of organizations are attempting to link their actions and initiatives with either their goalcascade process or performance management approach. The results, shown in figure 2, are fairly consistent across all regions,however, fewer European companies’ surveyed stated that they have a formal goal cascade process in place. This goes some wayin explaining why fewer are trying to link their strategy to their initiatives.Figure 2. Question: Are you trying to align your Operational Excellence initiative e.g Lean Six Sigma, with yourstrategic planning or performance management approach e.g Hoshin Planning and/or Balanced Scorecards? (%)
  5. 5. Usage of technology platforms Tools used to manage BusinessAs business challenges involved in successful strategy execution have Execution Processesbecome clearer, leading software vendors have responded to thesechallenges by creating technology platforms to manage the variousstages of the process.Survey respondents were asked which technology platforms they wereusing at each stage.The charts to the right show that the majority of survey respondentsare using spreadsheets to manage each stage of the Business Executionprocess.UK companies have a higher than average usage of Microsoft applicationssuch as spreadsheets and Microsoft Projects to manage their initiativessuch as Lean Six Sigma.As the majority of organizations are trying to link their objectives toactions, it is surprising that tools such as spreadsheets are used tofacilitate such an important process.Operational Excellence PrioritiesOver the next two years the priority for the majority of the organizationsis fairly evenly spread across the following:• Improve consistency of strategy execution• Align existing Operational Excellence activity with business goals• Increase sustainability of Operational Excellence initiatives• Increase the engagement of top management for Operational Excellence• Demonstrate the value of Operational Excellence programs.When the dataset is broken down by region, (figure 3) we beginto understand the maturity of the markets in terms of OperationalExcellence. It is reasonable to assume that the Americas region is thefurthest ahead in terms of the implementation of Operational Excellence Figure 3:initiatives as only a small percentage stated their priority being to‘demonstrate the value of their Operational Excellence initiative’ or‘increasing top management’s engagement’.
  6. 6. Summary “Improving consistency of strategy execution and “aligning existing Operational Excellence activity with business goals” werehigh priority items across all regions, however, there is still a large percentage of organizations not implementing acceptedmethodologies of achieving this e.g Hoshin Planning and Balanced Scorecards. Equally, the widespread use of spreadsheetsfor managing every stage of the Business Execution process means that organizations are using tools that are not really fit forpurpose.Despite their initial allure, the limitations of spreadsheets mean their use for tracking actions comes at a substantial cost (not allof which is immediately obvious). Not least, is the sheer volume of non value added activity that managing with spreadsheetsgenerates. Managers and analysts across all disciplines can end up spending on average more than 10 hours a week chasing,manipulating and validating what are frequently inconsistent inputs to update their monthly reports. This is time that these keyindividuals could, and should, be spending on value creating activities that transform their organizations.Whilst important, this wasted time, is however just the tip of the iceberg. Look a little deeper and the true consequences of‘spreadsheet misery’ are revealed. From the confusion and delay created by ‘many versions of the truth’, to the erosion ofaccountability that occurs when senior managers only get an ‘out of date’ progress update once a month, managing withspreadsheets has many hidden dangers.As leading organizations begin to realize the benefits of using robust technology platforms to integrate their goal management,program management and performance management processes, we will no doubt see a rise in the implementation of robustBusiness Execution Systems.