Taking your pex program to the next level pex webinar july 2016

HOW DO YOU TAKE YOUR PEX
PROGRAM TO THE NEXT LEVEL?
Public

PART I – THE LEADERSHIP
PARADOX
2 Copyright © i-nexus. All rights reserved

• #1 Lack of Management Buy-in
• #2 Lack of Tangible Results from Pilot
• #3 Lack of Quality Resources (Belts)
• #4 Lack of Benefit Quantification
• #5 Lack of Effective Coaching
TOP 5 OBSTACLES TO SUCCESSFUL PEX DEPLOYMENT

REALITY IS DIFFERENT…
No Pilot -
Straight to
Deployment
11%
Pilot
Abandoned
35%
Still in 'Pilot'
Mode
23%
Transitioned to
Broader
Deployment
31%
Survey of 120 PEX
“Deployments” – Position 2 Years From Launch
Pilot Defined As:
• <30 Projects
• Limited Scope (1-2 Divisions)
• Run by First/Second Wave
...More than 50% of PEX Pilots Are Not Successful!!

NEED TO UNDERSTAND WHAT REALLY MOTIVATES LEADERS…

THREE DRIVERS OF MANAGEMENT BUY-IN…
Cause Problem Pain
Root Cause Cause Problem Symptom Pain Consequence
Lack of
Management
Buy-in to the
Process
Excellence
(PEX)
Program
Not Interested
Managers Cannot
See the Direct
Linkage Between
Projects and Their
Personal
Objectives
Not Convinced
Managers Do Not
Believe PEX Will
Deliver the Result
They Need in the
Time They Have
Not Motivated
Managers Choose
to Prioritise
Business as Usual
Delivery Over
Driving
Improvement
Projects
Project Selection
is Not
Systematically
Driven by
Performance-
Expectation Gaps
in the Outcomes
Managers Are
Responsible For
Managers Have
Not Personally
Experienced
‘Proof’ of the
Power of Formal
PEX Tools on a
Problem They See
As Similar
The
Consequences For
Not Delivering
Against Business
As Usual Targets
Are Greater Than
The
Consequences on
Not Delivering
Improvement
Projects
Managers Don’t
Address Project
Road-blocks
Managers Don’t
Make Time For
Project Reviews
Managers Don’t
Provide Enough (or
the Right) Resources
to Projects
Managers See the
PEX Initiative as
the Deployment
Leaders Program
Managers
Behaviour Does
Not Reinforce PEX
Principles
Managers Short-
circuit Formal PEX
Approach With
Unsustainable
Actions
Managers Don’t
Ultimately Take
Actions Needs to
Liberate Tangible
Benefits
Projects Take
Longer to Do Than
They Should
Less Projects Are
Successful Than
They Should Be
Tangible Project
Benefits Are Lower
Than They Should Be
Deployment Leaders
Spend Time and
Energy
Compensating for
Unsupportive
Management
Behaviour
Deployment Leaders
Spend Time and
Energy Pushing PEX
Up the Management
Agenda
Tangible Program
Results are
Substantially Lower
Than They Could
Be
Rate of Program
Expansion is
Eroded As
Deployment
Leader’s Time and
Energy is Sapped
Keeping PEX on
Agenda
PEX Program Stalls
and Ultimately Fails

PUSH DRIVEN OPEX PROGRAMS ARE HARD TO SUSTAIN….
Initiative Fatigue
Quarterly Pressure
For Results (Urgent
vs. Important)
Misalignment With
Immediate Operational
Priorities
Lack of WIIFM
Inconsistent Executive
Behaviour
Will/Belief of
Deployment
Leader/Sponsoring
Executives
Power of LSS
Methodologies to
Deliver Tangible
Results
Well Publicised
Results of
Successful
Organisations

AVOIDING THE URGENT NOT IMPORTANT TRAP IS DIFFICULT
IMPORTANT
URGENT
URGENT
NOT
IMPORTANT
URGENT
AND
IMPORTANT
NOT
URGENT
NOT
IMPORTANT
IMPORTANT
NOT
URGENT
LOW HIGH
LOWHIGH
5%
10%70%
15%

LEADERS FACE CONFLICTING FORCES…
The Whirlwind Goals
or The Day Job New Activities
URGENT IMPORTANT

ONE KEY IS MAKING HARD CHOICES…
# of Breakthrough Objectives
(In Parallel With the Whirlwind) 2-3 4-10 10-20
# of Resulting Programs 32-48 64-160 176-320
# of Breakthroughs
Successfully Achieved 2-3 1-2 0

BEWILDERING RANGE OF ADVICE AND TOOLS….

PART II – THE POWER OF AN
INTEGRATED BUSINESS
“EXECUTION” SYSTEM

WHAT DO THESE ORGANISATIONS HAVE IN COMMON….?

AND THESE….?
John S Stroup
Lawrence Kingsley

THE EVOLUTION OF THE PRODUCTION SYSTEM…
Production
System
Breadth and Depth of “System”
BusinessImpactof“System”
Run and Improve the Business
• Lean/Daily Management
• CI Culture
• Respect for People
• Long Term Philosophy
Typified by Toyota
Business
System
+ Transform the Business
+ Hoshin Kanri/Strategy A3s
+ Systematic Approach to Innovation
+ Systematic Approach to Growth
+ Systematic Approach to Leadership
Typified by Danaher

PART III – USING HOSHIN TO
ALIGN PEX TO SUPPORT
“TRANSFORM THE BUSINESS”

THE RISE OF HOSHIN PLANNING….
Hoshin Planning is a systematic and disciplined process to align, communicate
and execute strategy by focusing on those few breakthrough objectives that
give you competitive advantage.

THE HOSHIN PLANING PROCESS….
1. Establish Vision
2.
Develop 3-5 Year Breakthrough
Objectives
3.
4.
5. Implement Annual Objectives
6. Monthly Review
7. Annual Review
P
D
C
A
Reflection
Hoshin Process
in Concept
Develop Annual
Objectives
Deploy Annual
Objectives
Catch-ball
Planning

THE A3-X (X-MATRIX) – ONE PAGE STRATEGIC PLAN

ROTATE TO CASCADE TO THE POINT OF ACTION…

BOWLING CHART AND COUNTERMEASURES KEEP FOCUS

HOSHIN ENSURES LEADERS ARE MOTIVATED TO DRIVE STRATEGIC PEX
ACTIVITY
Hoshin helps leaders
understand the logic
that connects
improvement actions
to business outcomes
Hoshin helps create
the consensus that the
selected actions are
likely to deliver the
outcomes that leaders
seek
Hoshin makes it easier
to reward leaders for
the achievement of
strategic goals

PART IV – USING MAAR TO ALIGN
PEX TO SUPPORT
“RUN AND IMPROVE THE BUSINESS”

THE IMPORTANCE OF DAILY MANAGEMENT TO HOLD THE GAINS…

TRANSITION FROM “TRANSFORM THE BUSINESS” TO “RUN AND IMPROVE
THE BUSINESS”

THE KEY IS CHANGING THE WAY MANAGERS REVIEW
PERFORMANCE…
Identify
Actions
Review
Performance
Review
Actions
Do
Actions
Predominantly Lagging KPIs
Inconsistent Inputs
Based on Gut Feel
Poorly Scoped Actions
Ready, Fire, Aim
Little Formalisation
Last Minute Scramble
Focus on % Complete
Traditional
Management
Review Cycle
Identify
Actions
Review
Performance
Review
Actions
Do
Actions
New
Management
Review Cycle
Simple, Consistent and Visual
Approach to Review of
Operational Performance
Systematic Identification
of Actions Based on
Primary Failure Modes
Chose and Consistently
Apply the Right
Best Practice Methodologies
Focus on Whether
the Actions have
Moved the Dials

WE HAVE TO SHIFT ATTENTION FROM MANY LAGGING TO VITAL
FEW LEADING INDICATORS…
From Lagging Measures of Outcome...
To Leading Indicators of Process Capability...
Outcomes
Process
Driver
Process
Driver
Process
Driver
Y=f(x)
• P&L and BS Impact
• Efficiency
• Productivity
• Cost/Output
• Speed/Cycle Time
• Waste
• Yield/Defects
• Timeliness
0
20
40
60
80
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
• Monthly Averages
• Periodic Commentary
0
10
20
30
40
50
60
70
80
90
100
UCL
LCL
• Control Charts - Variation
• Individual/Sample Data
• Trend/Special Cause

NEED A FACILITATED (CAUSE_EFFECT ANALSIS) WORSHOP TO
IDENTIFY VITAL FEW VALUE DRIVERS…
© i-solutions Global
Ltd. 2008
Slide Number 28
Business
Outcomes
Operational
Outcomes
Process
Outcomes
BA C D E
Speed
Roll Through Yield
SLA
Adherence
Complaints
Volume
produced
Rework Backlogs
Cycle
Time
Process
Yield
Productivity
Profitabilit
y
Customer
Satisfaction/
Retention
Leading Indicators
Raw/Event Data
Process Frequency
Lagging Indicators
Aggregate Data
Periodic Reporting
Process

THE MAAR CHART LINKS IMPROVEMENT TO OPERATIONAL KPIS…
SIMPLE TO LEARN AND UNDERSTAND…
Dry Lot Release Date
IndividualValue
28-O
ct-03
20-O
ct-03
11-O
ct-03
01-O
ct-03
21-Sep-03
11-Sep-03
02-Sep-03
24-Aug-03
15-Aug-03
07-Aug-03
01-Aug-03
100
90
80
70
60
50
40
30
_
X=61.35
UCL=92.19
LCL=30.51
1 2
Control Chart of Total Yield
Phased Introduction of new
insert design and new algorithm/
illusmination levels and
camera orientation.
Cause Action Owner Due Status
A Reduce
instances of A
PTD Jan
B Remove
instances of B
ABC Feb
Measure Analyse
Action
Review
Fault Resolution Cycle Time Analysis of Root Causes
Action Planning/ProgressValidation of Improvement
A B C D
R
C
J F M A M J J A S O N
A 10 21 16 18 0 0 0 0 0
B 18 23 24 16 2 9 0 2 6

EXTERNAL FACILITATION IS USEFUL TO DEVELOP FAILURE MODE
ANALYSIS
IndividualValue
28-O
ct-03
20-O
ct-03
11-O
ct-03
01-O
ct-03
21-Sep-03
11-Sep-03
02-Sep-03
24-Aug-03
15-Aug-03
07-Aug-03
01-Aug-03
100
90
80
70
60
50
40
30
_
X=61.35
UCL=92.19
LCL=30.51
1 2
camera orientation.
A Reduce
instances of A
PTD Jan
B Remove
instances of B
ABC Feb
Measure Analyse
Action
Review
On-time Delivery Analysis of Root Causes
A B C D
R
C
A 10 21 16 18 0 0 0 0 0
B 18 23 24 16 2 9 0 2 6

MAAR SHIFTS OWNERSHIP FOR IMPROVEMENT TO THE
LINE…
IndividualValue
28-O
ct-03
20-O
ct-03
11-O
ct-03
01-O
ct-03
21-Sep-03
11-Sep-03
02-Sep-03
24-Aug-03
15-Aug-03
07-Aug-03
01-Aug-03
100
90
80
70
60
50
40
30
_
X=61.35
UCL=92.19
LCL=30.51
1 2
camera orientation.
A Reduce
instances of A
PTD Jan
B Remove
instances of B
ABC Feb
Measure Analyse
Action
Review
On-time Delivery Analysis of Root Causes
A B C D
R
C
A 10 21 16 18 0 0 0 0 0
B 18 23 24 16 2 9 0 2 6
• Focus on Moving the Dial
Not Just % Complete on
Action
• Focus on Elimination of Root
Cause Not Just Alleviation of
Symptom

MAAR PROCESS CAN BE FULLY DEPLOYED IN 6 MONTHS…
IndividualValue
28-O
ct-03
20-O
ct-03
11-O
ct-03
01-O
ct-03
21-Sep-03
11-Sep-03
02-Sep-03
24-Aug-03
15-Aug-03
07-Aug-03
01-Aug-03
100
90
80
70
60
50
40
30
_
X=61.35
UCL=92.19
LCL=30.51
1 2
camera orientation.
Mode Action Lead Due Status
A DMAIC Project to
Reduce A
PTD Sep
B Just Do It Action to
Impact B
ABC Jun
Measure Analyse
Action
Review
Transaction Fulfilment Cycle Time Analysis of Failure Modes
A B C D
Mode J F M A M J
A 10 21 16 18 12 15
B 18 23 24 16 12 2
Month 1
• Clarify Ownership
• Clarify Operational
Definitions/Targets
• Establish Y Measure Data
Collection Process
• Train MAAR Owners
Month 2/3
• Identify and Codify
Potential Failure Modes
• Extend Data Collection
System
• Analyse Failure Modes &
Identify Process Drivers
Month 4/5
• Scope and Prioritise
Actions/Estimate Impact
• Coach MAAR/Action
Owners
• Execute Actions
Month 6
• Review Effectiveness of
Actions
• Assess if Sufficient Actions
Underway to Close Gaps
• Review Data Collection/
Operational Definition

PART IV – BUILDING YOUR
BUSINESS SYSTEM

THE TRADITIONAL APPROACH TO STRATEGY EXECUTION….
•Grow Sales of New
Product
•Customer Focus
•Invest in China
•Improve employee
satisfaction
The Off-site Strategy Day(s)
Unclear
Accountabilities
Poorly Defined
Goals
.ppt deck
The Ivory Tower Exercise
Funding
Constraints
Give me
your numbers...
I need to include
some contingency...
Way too much!
Cut by 25%!
If I don’t
include it I’ll
lose it...
The Budget Dance
It’s close enough for
Military work...

  
  
 
 
Divisional President
Functional Heads
Departmental Heads
Middle Managers
Employees
Project
Project
Project
The Ad Hoc Cascade

THE STRATEGY EXECUTION MATURITY MODEL…
Level 1
Traditional
Largely financially
driven using
traditional (and
often fragmented)
approaches to
defining strategy,
budgeting, target
setting, executing
and following-up
actions.
Level 2
Disciplined
A more structured
approach to strategic
planning and
follow-up built on a
foundation of strong
project execution and
improvement
disciplines
Basic Execution
Disciplines &
Performance
Management
Framework
Level 3
Aligned
Increasing focus on
top-down/bottom-up
alignment typically via
a more systematic and
collaborative goal
cascade process
and/or by establishing
a cross-functional
enterprise program
office
Increased Focus on
Alignment &
Making Hard
Choices
Creation of a
“feedback loop” that
enables earlier course
correction and
continual “testing” of
strategic assumptions
plus internalisation of
“execution” culture
Level 4
Integrated
Closure of the
“Loop” &
Increasing
Reflection

WHERE ARE THE MAJORITY OF GLOBAL 5000 ORGANISATIONS?
Level 1
Traditional
Level 2
Disciplined
Basic Execution
Disciplines &
Performance
Management
Framework
Level 3
Aligned
Increased Focus on
Alignment &
Making Hard
Choices
Level 4
Integrated
Closure of the
“Loop” &
Increasing
Reflection
15 154 31 5
http://www.surveymonkey.com/s/Execution_Maturity_Assessment
7.3% 75% 15.1% 2.4%

THE “GO TO” RESOURCE FOR STRATEX BEST PRACTICE…
www.i-nexus.com/stratex-hub

PREPARE – CREATE THE CASE TO ACT AND CLARIFY WHAT
MATTERS…
• Capture existing vision/mission/goals
• Build inventory of existing strategic/operational
indicators
• Build inventory of existing strategic/operational
initiatives
• Complete an ‘Execution Maturity Assessment’
• Run ‘Execution Readiness’ (SBU level) workshop:
• Develop shared understanding of current execution
system strengths/weaknesses
• Articulate 2-4 Breakthrough Goals
Prepare
Assess existing
execution capability
and establish
Breakthrough Goals
Align
Focus
management
attention on what
matters
Cascade
Ensure plan is
comprehensive
and executable
Execute
Relentlessly drive
execution and
take action where
needed to stay on
track
Key Output –
Execution Capability Assessment
0
1
2
3
4
5
Clarity of
Business Goals
Alignment of
Personal Goals
Accountability
for Delivery
Alignment of
Action Plans
Robustness of
Project
Management
Effectiveness of
Portfolio
Review
Accuracy of
Impact
Forecasting
Effectiveness of
Execution
Review

ALIGN – FOCUS MANAGEMENT ATTENTION ON WHAT MATTERS
MOST…
Prepare
Assess existing
and establish
Breakthrough Goals
Align
Focus
management
attention on what
matters
Cascade
Ensure plan is
comprehensive
and executable
Execute
Relentlessly drive
execution and
take action where
needed to stay on
track
• Translate Breakthrough Objectives into Improvement
Priorities and clarify functional Ownership (SBU X-
Matrix)
• Align existing indicators (where possible) as Hoshin
Targets or Operational KPIs
• Identify additional indicators (if required) to ensure
all Improvement Priorities tracked
• Align existing “in-flight” initiatives (where possible)
to Improvement Priorities and estimate projected
impact
• Baseline KPIs and run SBU level alignment and target
setting workshop
Key Output –
Strategic Grid Alignment Assessment

CACADE – ENSURE PLAN IS DEPLOYED AND REALISTIC…
Prepare
Assess existing
and establish
Breakthrough Goals
Align
Focus
management
attention on what
matters
Cascade
Ensure plan is
comprehensive
and executable
Execute
Relentlessly drive
execution and
take action where
needed to stay on
track
• Cascade Improvement Priorities that are not
addressed by cross-functional initiatives (Develop
individual functional X-Matrices*)
• Align existing indicators (where possible) or scope
new indicators (where necessary)
• Align existing initiatives (where possible) and
estimate projected impact
• Baseline Hoshin Indicators and run functional
alignment and target setting workshops.
• Run catch-ball alignment workshop (SBU Level) to
validate/adjust targets/plan.
Key Output – Functional X
Matrices

EXECUTE – RELENTLESSLY DRIVE EXECUTION AND COURSE
CORRECT WHERE NEEDED…
Prepare
Assess existing
and establish
Breakthrough Goals
Align
Focus
management
attention on what
matters
Cascade
Ensure plan is
comprehensive
and executable
Execute
Relentlessly drive
execution and
take action where
needed to stay on
track
• Resource and implement Action Plans.
• Implement on-going data collection for Hoshin
indicators and Action Plan progress.
• Set-up and deploy a Monthly Reporting and
Execution Review Cycle.
• Update current and forecast Bowling Charts based
on Project Impact
• Run monthly ‘Execution Reviews’ at functional and
SBU Level focused on Operational Scorecard/MAAR
Charts
• Instigate countermeasures to maintain performance
Key Output –
Actual and Forecast Bowling Chart

FINAL QUESTIONS/THOUGHTS?
“It is not the strongest of
the species that survives,
nor the most intelligent, but
the one most responsive to
change.”
Charles Darwin
“There is great power in
knowing where you are
going and passion in
knowing how as an
individual you fit in!”
Anonymous

I-NEXUS SOFTWARE BRINGS IT ALL TOGETHER
i-nexus
STRATEGY
EXECUTION
SOFTWARE
Strategic Planning
Strategy Deployment
Performance Review
Portfolio Prioritisation
Program Governance
Project Execution
Daily Management
Operational Review
Benefit Tracking

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www.i-nexus.com
One Integrated Cloud Solution to Manage…

Achieve more. Faster. With less effort.
i-nexus suite, George House,
Herald Avenue, Coventry Business
Park,
Coventry, West Midlands, CV5 6UB,
UK
UK: +44 (0)845 607 0061
US: +1 617 701 7343
US (toll free): +1 855-615-1589
info@i-nexus.com
www.i-nexus.com

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