How Human Factors Limit Achieving Operational Excellence

Results from transformation initiatives show that simply repeating the same old initiatives will not get organizations the change they seek. When companies’ initiatives are similar to initiatives the organization had used before, only 31 percent report a successful transformation. The opportunity cost of failure is very high, not to mention the costs and loss of goodwill with employees and other stakeholders.

Today, a tectonic transformation is driving successful organizations into the next era. The Internet of Things (IoT), digitalization and other enabling solutions can change the competitive landscape. Yet over 50 percent of respondents to a recent survey indicated that human behaviour is the root cause of transformational failure; i.e. steep learning curves, too much data and a disengaged workforce.

The promise of Operational Excellence (OE) with its sustained and measurable high-performance business model cannot be attained without addressing these and other human issues. While major change can be frustrating, management has several tools available to ease this transformation.

These include, new approaches to Change Management as well as helping employees take Ownership of new opportunities. Finally, Cross Cultural training enlightens individuals about the wide diversity both inside the global enterprises as well as within its ecosystem.

A great article by Scott S, an expert in the field of Operational Excellence and consultant with Consult 2050.

Change Management

Volumes have been written on this subject. However, organizational transformation initiatives continue to fail at an alarming rate. One often observed error is relevance. Individuals will ask, “How is this relevant to me?”

In an effort to appeal to several market segments, change management training, books and processes are often general in nature. Consultants and trainers using this model run the risk of being extraneous. To engage the workforce, individuals need to see a value proposition for them. In other words, speak their language about relevant concerns.

The change management process and supporting materials must reflect the company and its industry structure. For example, in 2014 we published, “Implementing a Culture of Safety: A Roadmap to Performance-Based Compliance.” It was specifically written to appeal to those involved with offshore oil and gas operations.

Readers could relate the characters developed in a story line about change throughout the book. Moreover, industry terminology and nomenclature were used as well.

Assure Change Management processes are relevant to your audience!

Ownership

Continuing with the ME theme, value is in the eye of the beholder. Individuals, departments and even business units must be convinced that new initiatives will make their lives better.

Big Data Analytics is important to securing competitive advantage in a data driven world. According to the referenced survey, “65% of respondents are either currently deploying or planning to deploy predictive analytics.”

One problem with these types of generalities is that individuals cannot relate to them. In aggregate, the organization may realize this high value; however, department by department they usually do not add up.

Experience has demonstrated that a large number such as 65 percent is a function of many smaller numbers. For example, a department of 20 people may see a 10 percent change and division of 200 may see two percent enhancement.

An Economic Value Proposition Matrix must be developed that includes input and assessment for ALL impacted by the initiative. Also, since most incentive plans are based on some sort of financial performance metrics it makes sense to develop this matrix from an economic perspective.

For example, identify as many areas where predicative analytics can add value and seek input as to what that value might be for knowledgeable individuals. The model will accomplish two major tasks.

First a detailed listing of possible value will be developed and documented. This will help justify the investment and the risk associated by department.

Perhaps more importantly, by working closely with employees and others, ‘buy-in’ will mostly likely be more widespread. Everyone wants to feel like their input is sought and perceived as valuable.

Assure individuals own the initiative!

Cross Culture

A major initiative such as implementing Operational Excellence involves the full organizational ecosystem, i.e. supply chain, customers, local governments, etc. Most if not all constituents will be affected in some manner.

Not surprisingly, each entity has its own culture. For sustained OE there will be substantial interactions between various cultures.

Learning curves can flatten using cross cultural interactive serious game training tools. Stressful situations can be ‘gamed’ allowing individuals to learn how others respond to the same stress they are under.

This learning experience is for the most part, risk free.  It is all done online and as the saying goes, “no harm no foul.” Just hit Reset to play the game again.

Assure that cultural interactions are mostly positive!

Call to Action

The consulting firm McKinsey indicates that successful organizational transformation is a systemic process to change behaviours. Shifting mind-sets requires a concerted, formal and sustained approach. Planning and execution are just as important as any indicative or new market development.

The three objections addressed herein, steep learning curves, too much data and a disengaged workforce are easier to address than it might appear. The tools described herein are readily available and inexpensive.

However, a broad OE initiative requires a lot of hard work. As with other major initiatives, short cuts may diminish the value.

Roll up your sleeves and get to work!

About the Author

Scott S has over 30 years technical and executive management experience primarily in the energy sector. He is the author of six books and has written extensively about the field of operations. Scott is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling Operational Excellence and regulatory compliance management. He has studied cultural interactions for more than 30 years—his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of societal relationships.

1 thought on “How Human Factors Limit Achieving Operational Excellence”

  1. Very true.
    Resistance to change is more visible in Organizations which are ‘old’ and track record has been comparatively better.
    While introducing operational improvement initiatives, extensive discussions at shop floor level is normally seen wanting and therefor ownership lacks resulting in improper implementation. Ownership of idea is very important.
    One basic approach could be ‘questioning basic assumptions developed over time and re validating these critically’.

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