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

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

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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 Aban-doned35%

Still in 'Pilot' Mode23%

Transi-tioned to Broader Deploy-ment31%

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

ProcessExcellence

(PEX)Program

Not InterestedManagers

Cannot See the Direct Linkage

Between Projects and

Their Personal Objectives

Not ConvincedManagers Do

Not Believe PEX Will Deliver the

Result They Need in the

Time They Have

Not MotivatedManagers 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 ForManagers 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

URGE

NT

URGENTNOT

IMPORTANT

URGENTAND

IMPORTANT

NOTURGENT

NOTIMPORTANT

IMPORTANTNOT

URGENT

LOW HIGH

LOW

HIGH

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 BreakthroughsSuccessfully 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…

ProductionSystem

Breadth and Depth of “System”

Busin

ess I

mpa

ct o

f “Sy

stem

”

Run and Improve the Business• Lean/Daily Management• CI Culture• Respect for People• Long Term Philosophy

Typified by Toyota

BusinessSystem

+ 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

PDC

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

ReviewActions

DoActions

Predominantly Lagging KPIsInconsistent Inputs

Based on Gut Feel Poorly Scoped Actions

Ready, Fire, AimLittle Formalisation

Last Minute ScrambleFocus on % Complete

TraditionalManagementReview Cycle

Identify Actions

Review Performance

ReviewActions

DoActions

NewManagementReview 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 Whetherthe 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

ProcessDriver

ProcessDriver

ProcessDriver

Y=f(x)

• P&L and BS Impact• Efficiency• Productivity• Cost/Output

• Speed/Cycle Time• Waste• Yield/Defects• Timeliness

Jan

MarMay Ju

lSep Nov

0

20

40

60

80

• Monthly Averages• Periodic Commentary

0102030405060708090

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

BusinessOutcomes

OperationalOutcomes

ProcessOutcomes

BA C D E

Speed

Roll Through Yield

SLA Adherenc

eComplain

tsVolume

produced Rework Backlogs

Cycle Time

Process Yield

Productivity

Profitability

Customer Satisfaction/

Retention

Leading IndicatorsRaw/Event Data

Process Frequency

Lagging IndicatorsAggregate Data

Periodic Reporting

Process


THE MAAR CHART LINKS IMPROVEMENT TO OPERATIONAL KPIS… SIMPLE TO LEARN AND UNDERSTAND…

Dry Lot Release Date

Indi

vidu

al V

alue

28-Oct-

03

20-Oct-

03

11-Oct-

03

01-Oct-

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 2Control Chart of Total Yield

Phased Introduction of newinsert 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

ActionReview

Fault Resolution Cycle Time Analysis of Root Causes

Action Planning/ProgressValidation of Improvement

A B C D

RC

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


Indi

vidu

al V

alue

28-Oct-

03

20-Oct-

03

11-Oct-

03

01-Oct-

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



Cause

Action Owner

Due

Status


PTD Jan


ABC Feb

Measure Analyse

ActionReview

On-time Delivery Analysis of Root Causes


A B C D

RC


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…


Indi

vidu

al V

alue

28-Oct-

03

20-Oct-

03

11-Oct-

03

01-Oct-

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



Cause

Action Owner

Due

Status


PTD Jan


ABC Feb

Measure Analyse

ActionReview

On-time Delivery Analysis of Root Causes


A B C D

RC


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…


Indi

vidu

al V

alue

28-Oct-0

3

20-Oct-0

3

11-Oct-0

3

01-Oct-0

3

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



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

ActionReview

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 DefinedGoals

.ppt deck

The Ivory Tower Exercise

FundingConstraints

Give me your numbers...

I need to includesome contingency...

Way too much!Cut by 25%!

If I don’t include it I’ll

lose it...

The Budget Dance

It’s close enough forMilitary work...

Divisional President

Functional Heads

Departmental Heads

Middle Managers

Employees

ProjectProjectProject

The Ad Hoc Cascade


THE STRATEGY EXECUTION MATURITY MODEL…

Level 1Traditional

Largely financially driven using traditional

(and often fragmented)

approaches to defining strategy, budgeting, target

setting, executing and following-up

actions.

Level 2Disciplined

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 3Aligned

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 4Integrated

Closure of the “Loop” &

Increasing Reflection


WHERE ARE THE MAJORITY OF GLOBAL 5000 ORGANISATIONS?

Level 1Traditional

Level 2Disciplined

Basic Execution Disciplines & Performance Management Framework

Level 3Aligned

Increased Focus on Alignment &

Making Hard Choices

Level 4Integrated

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

PrepareAssess existing execution capability and establish Breakthrough Goals

AlignFocus management attention on what matters

CascadeEnsure plan is comprehensive and executable

ExecuteRelentlessly drive execution and take action where needed to stay on track

Key Output –Execution Capability Assessment

Clarity of Business GoalsAlignment of Personal Goals

Accountability for Delivery

Alignment of Action PlansRobustness of Project Management

Effectiveness of Portfolio Review

Accuracy of Impact Forecasting

Effectiveness of Execution Review

024


ALIGN – FOCUS MANAGEMENT ATTENTION ON WHAT MATTERS MOST…





• 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…





• 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…





• 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

http://mystrategicplan.com/resources/wp-content/uploads/2009/03/dilbert2008026112009.gif


I-NEXUS SOFTWARE BRINGS IT ALL TOGETHER

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EXECUTIONSOFTWARE

Strategic PlanningStrategy DeploymentPerformance Review

Portfolio PrioritisationProgram GovernanceProject Execution

Daily ManagementOperational ReviewBenefit Tracking

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