The Roadmap to Organizational Excellence - Part 2 of 7

Lean Nation:

(Part 2 of 7) As we discussed in our last blog, I was going to blog a seven part series on how to create a world class organization. Here are the steps to creating a culture of continuous improvement:

1. Find a Sensei - You need a coach to make the journey.
2. Select your Organizational Wide outcome measures - these are known as the True North measures.
3. Prioritize and Map your Value Streams - select the areas with the most leverage.
4. Deliver Improvement - Use A-3 thinking and lean principles to make the changes identified in your value stream mapping sessions.
5. Sustain your improvements using visual management and leadership standard work.
results are only realized if the gains are held.
6. Support your improvements with ongoing training and leadership development.
7. Spread your improvements to other parts of your organization.

Continuing in this series,  this week I will expand on step 2: Select your Organizational Wide Outcome Measures.  After you have secured a Sensei,  your next step will be to become crystal clear on your organizational outcome measures.   Lean process improvement is about generating results.  Virtually any results are possible, however,  it is up the the leadership of the organization to define which results are desired.  The results should have several attributes, however.

• The results should be aligned with the key dimensions of operational excellence.  These include a quality measure,  a delivery or a lead-time measure,  a cost or productivity measure, and  often-times a growth measure.  Since nothing happens without people the final dimension is some sort of staff morale, or staff engagement measure.  The collection of the these measures ( Morale, Quality, Delivery, Cost and,  Growth), known as MQDCG for short are also called True North Measures.
• The results should reflect an improvement of greater than 10%.  Double digit improvement is expected using lean approaches and each measure should be a stretch target.  You will need to eliminate waste to improve all five measures simultaneously.
• The results should be directly aligned to your strategic plan.  Do not select lean measures that are odds with either your strategic plan, your board scorecard, your budget.  Lean measures will go the bottom of the deck every time if you force leaders of the organization to choose.
• Have at least three of the five measures in the suite.  It is too easy to game a single measure.  we want to make sure that waste elimination is the focus.  You can often get to one measure at the expense of another..
• Ensure the measures reflect organizational wide improvement.  Do not select department measures for organizational wide improvement targets.
• Choose measures that are simple ratios when possible.  Measures with a simple numerator/denominator relationship are the easiest for everyone to understand.  When you eliminate waste, you can have the improvement teams focus on the numerator or denominator of the ratio for each activity.  This makes target setting very simple.

No that you have selected your organizational wide outcome measures,  You are ready to move to step 3 in the improvement process. I will pick up here next week.

Lean Blessings,

Ron

Ron Bercaw
www.breakthroughhorizons.com