The Principles of Operational Effectiveness

Most companies when looking to improve their operations typically seek to implement a tool – 5S, Standard Work, Pull Systems, Total Productive Maintenance, etc.  Tools are not the place to start if you want to sustainably improve your operations.  When I tell companies, we need to start with three things – mindset, people and principles, the typical reaction is well – a big yawn.  But I am here to tell you that world-class companies who have achieved world-class effectiveness in their operations would never dream of starting with anything other than mindset, people and principles.

Let’s also be clear that operational effectiveness is not strategy.  It is the means by which we achieve our strategy and achieve profitable operations over the long-term.  Business leaders often get this confused and fail to get alignment between their strategy and their operations.

Companies that are pursuing operational effectiveness are typically implementing some version of Lean Operations.  Lean Operations and Thinking revolve around your mindset – how do you react to and view people, challenges, and opportunities.  Your mindset needs to be one of growth, continuous improvement and a focus on the results of the entire team.  Your view of people needs to be one of respect and humility.  Before you even begin to implement any of the typical Lean tools you must get your mindset and people orientation aligned.

Let’s look at principles next.  I’ve spent many years reading, researching, and experimenting with different Lean models.  The work of the Shingo Institute has been, in my estimation, the most holistic, comprehensive and successful model in the Lean world.  The principles, developed with the thinking of some of the best minds in business, rest upon 3 dimensions:

1) Cultural Enablers

  • Principle 1 – Respect Every Individual – Respect must be deeply felt by every person in the organization and every person who does business with the organization. This is how we win minds and
  • Principle 2 – Lead with Humility – A leader’s willingness to seek input, listen deeply and continuously learn will create an environment where team members feel respected and energized.

2) Continuous Improvement

  • Principle 3 – Seek Perfection – We understand that perfection is not likely to be achieved – it is aspirational. What it does is create a mindset of continuous learning and improvement throughout the organization.
  • Principle 4 – Embrace Scientific Thinking – Experiment, observe and learn. This is the cycle that systematically moves the organization to a deeper understanding of reality.
  • Principle 5 – Focus on Process – It is nearly impossible for good people to achieve great results with poor process. A focus on process helps us to drive to the root cause of issues causing us grief.
  • Principle 6 – Assure Quality at the Source – Do it right the first time. When a defect is detected it must be fixed the moment it is detected. Nobody has time to do things twice.
  • Principle 7 – Improve Flow and Pull – The focus here is on responding to a customer’s real demand with a continuous and uninterrupted process flow. Anything that disrupts the uninterrupted flow of value is waste.

3) Enterprise Alignment

  • Principle 8 – Think Systemically – We must understand the relationships and interconnectedness of systems. When we are aware of the relationship and interconnectedness of our systems, we can make better decisions.
  • Principle 9 – Create Constancy of Purpose – This involves a deep understanding by everyone in the organization of why the organization exists. This creates alignment, creativity and the ability to take risks with greater confidence.
  • Principle 10 – Create Value for the Customer – What does the customer want and what are they willing to pay for? Unless we deliver on both we cannot generate sustainable growth.

If companies want to take their operations to the next level it is critical that they assess operations from the perspective of these principles.  Each of these principles will have supporting systems and tools that will drive the behaviors we wish to see in the team members.  Underlying the behaviors are the mindsets that will either drive or undermine your operation.

Dr. Stephen Covey told us, “There are three constants in life … change, choice and principles.”  When we lead with principles, we win the long game.  I’ll close with a quote from the Shingo Institute, “An organization moves closer to excellence as it achieves its desired results as an outcome of behaviors, driven by systems that can sustain not only the results but the culture that created them.”

If you want to assess your operations using this model, please contact us. Let’s take some time to discuss this in more detail.  This model is a beautiful way to elevate your operations, your people and yourself!

Joe Bennett – Coach | Assured Strategy

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