1. Sustainable High
Performance and Profitability
Wilson Stefano, Jr. — Oliver Wight Americas
Informative Guides On Industry Best Practices
Inspiring
Business
Excellence
The Journey That Never Ends
2. In the rapidly-moving global environment, business
organizations in every sector are continually being
challenged. They are being confronted by an increase
in global competition, the pressure to maintain growing
and profitable businesses, and to meet more stringent
and changing customer demands.
These conditions and more are driving organizations
to seek solutions to manage this constant change in a
dynamic environment and to achieve Sustainable High
Performance and Profi tability, which is characterized
by operating the business effectively while effi ciently
improving its capabilities and enabling it to continuously
maintain a distinct competitive advantage and compile
the best performance in the industry.
One solution to achieve Sustainable High Performance
and Profi tability in this environment is for industry
leaders to look at their organizations in a holistic
manner as an integrated and structured entity. The
purpose of this white paper is to introduce and
describe the steps necessary to start on the journey to
Sustainable High Performance and Profi tability and how
to do it in a holistic manner.
The ability to
manage continuous
change quickly and
effectively in a
“Stabilized Dynamic
Condition” is a key
driver for business
success.
“
”
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY2
3. FACING THE CHALLENGES
The ability to manage continuous change quickly and effectively in a “Stabilized
Dynamic Condition” is a key driver for business success. For the purpose
of this paper, Stabilized Dynamic Condition is defi ned as the capability to
understand the various business scenarios and marketplace requirements
while anticipating and initiating the necessary changes to meet these new
conditions through a structured and integrated management process.
Many organizations say they are in a continuous improvement journey, yet they
do not achieve acceptable performance improvements due to a variety of poor
execution or other factors, such as:
• Lack of business control due to disconnected management practices,
which leads to informality and fi re-fi ghting activities that ultimately impact
short-, medium-, and long-term decisions.
• Failure to align strategic business goals and objectives throughout the
entire organization and monitoring adherence to them.
• Ignoring or failing to investigate and correct customer complaints such as
quality, service, and delivery.
• Lax enforcement of initiatives to reduce
cost, working capital and inventories.
• Lack of recruiting top talent, and
motivating and retaining valued
personnel.
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY 3
4. Many organizations cannot articulate
these or any other ongoing challenges
they may have, hence, they cannot defi ne
a clear journey with the appropriate
sequence for improvement to assure
sustainability. The result, then, is a series
of isolated initiatives, often overlapping
and competing for the same resources
that reach suboptimal results (see Figure
1). Achieving a Stabilized Dynamic
Condition is an ongoing challenge and a
prerequisite for organizations to maintain
Sustainable High Performance and
Profi tability.
Figure 1 The Challenge of Sustainable High Performance Journey
Figure 2 The Oliver Wight Integrated Business Model
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY4
5. BEGINNING THE JOURNEY
Many organizations attempt to solve their problems
in a non-holistic manner. By so doing, it means
that each function is focusing on its own individual
performance (and often to the detriment of the entire
business). Instead, each function should align its
actions and initiatives to the strategic map developed
by the organization. The journey to Sustainable High
Performance and Profi tability, and completed in the
right sequence, is the key to success. The specifi c
steps include:
INITIAL EDUCATION
The fi rst step is to learn and understand the concepts
and best practices for creating an organization with
integrated and structured management processes,
as detailed in the Integrated Business Model (see
Figure 2). Also integral to the education process is
studying and understanding the various maturity maps
developed by the Oliver Wight organization over 40
years of advising and witnessing industry best practice
processes. These include the maturity maps relating
to each integrated process, such as the Business
Maturity Map (Figure 3), and the Integrated Business
Planning (S&OP - Sales and Operations Planning)
Maturity Map (Figure 4).
Part of the initial education step is to have an initial
understanding of where your organization stands in
relation to these maturity maps. Following a model
helps to develop a holistic view and an initial vision on
how to manage the business as a whole.
Figure 3 The Oliver Wight Business Maturity Map - Integrated Business Planning
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY 5
6. DIAGNOSTIC
In the second step, a broad-based diagnostic of the
organization is conducted. The initial diagnostic makes
use of the maturity maps studied in Step 1 and is
supplemented by The Oliver Wight Class A Checklist
for Business Excellence, Sixth Edition.
At this juncture, the checklist will be used only to
support the broad-based diagnostic and will not
detail or attempt to score the initial output. The detail
and scoring output will be done after the milestone
to be developed is identifi ed, defi ned, and assessed.
At that point, the output will be a formal and macro-
level diagnostic reinforcing the discussion from the
initial education and after the gaps, issues, and
opportunities are identifi ed.
The primary reason for the diagnostic is to develop a
strong sense about where the organization is currently
and to create an initial vision about where to start
the journey to Sustainable High Performance and
Profi tability.
Figure 4 The Maturity Journey - Integrated Business Planning (Advanced S&OP)
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY6
7. EXCITE, COMMIT, AND DIRECT
The third step of the process involves the executive
team reviewing the documents, assessments,
opportunities, and priorities that have been developed
in the previous steps. After reviewing these and the
plan to execute the identifi ed milestone, the team
makes a “go,” “no-go” decision.
A ”go” decision commits the organization to the
Sustainable High Performance and Profi tability journey
(see Figure 5).
This represents the fi rst part of the Oliver Wight
Proven Path process (see Figure 6). In this phase, the
Leadership has knowledge of what needs to be done,
the resources required, and the effort required to
bringing the milestone(s) to completion.
Figure 5 The Path to Sustainable High Performance
Figure 6 The Oliver Wight Proven Path - Leadership Phase
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY 7
8. IMPLEMENTATION
The fourth and fi nal step in the process is of a series
of individual steps through the “Development” and
“Ownership” phases (see Figure 7).
Typically, several improvement projects move through
the Proven Path process at any one time. Each is
evaluated at the “Milestone Assessment” stage where
its progress and achievement is reviewed. A decision
is then made whether or not it should proceed to
the next step in the process. Obviously, and for any
number of reasons, some of the improvement projects
are not approved for further activity; other projects’
Figure 7 The Oliver Wight Proven Path
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY8
9. Figure 8 The Path to Sustainable High Performance - A series of improvement programs (milestone definitions)
milestones have been achieved or realized (see Figure
8). The objective of any organization is for the journey
to Sustainable High Performance and Profi tability
and the Proven Path process being undertaken at all
times. It should not be stagnant because, as stated
previously, this journey “Never Ends”. Therefore,
additional milestones must be evaluated, considered,
and moved into the journey toward Sustainable High
Performance and Profi tability to ensure the “Sustain
and Mature” part of the process.
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY 9
10. CONCLUSION
Business organizations will need to work hard to develop improvement programs related to the development
of Integrated Business Management. Referencing the Oliver Wight Business Maturity Map, the majority of
the organizations we have observed are in Phase 1 (Coordination) or “Eliminating unplanned events, or doing
routine things routinely.” A minority have advanced to Phase 2 (Business Process Control), “Eliminating failure in
business processes.”
Business organizations which have begun their journey to Sustainable High Performance and Profi tability have
experienced a number of signifi cant achievements. Depending on the maturity of their processes, people, and
technology solutions, the range of the individual benefi ts they report are:
• Increased Sales Plan Accuracy - 18 to 25%
• Increased Sales Revenue - 10 to 25%
• Increased On-Time Delivery - 10 to 50%
• Inventory Reduction - 18 to 46%
• Safety Stock Reduction - 11 to 45%
• Increased Productivity - 30 to 45%
An enormous opportunity exists for organizations that begin their Journey to Business Excellence and make
use of the structured methodology with best practices as described in this paper to attain Sustainable High
Performance and Profi tability.
SUSTAINABLE HIGH PERFORMANCE AND PROFITABILITY10
