Speed of change vs. operational excellence

Speed of change vs. operational excellence

Rutger Heijmerikx9 februari 2016
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In the last couple of years, I have experienced a lot of projects that were started in an attempt to reduce costs and change business processes. In order to get the business case approved positive factors are overestimated while negative impacts or risks are not carefully investigated. Quite often projects were extended or scope was changed without checking the additional investment against the business case. Even if the project team delivered the results within time and cost, projects still fail to make the ultimate goal due to a lack of process governance.

In Lewin’s change model this is expressed in the “Refreezing” stage, but projects are run in parallel and new projects are introduced more rapidly so this phase receives less and less attention as the company wants to move on. In many cases, the project team is dismissed after delivery and subsequent support period.

Who will make sure the project change is embedded in the process execution? So project wise implementations, the business cases should not only be monitored in both cost and time but just as important the return on investment. The project can only be a success if the goal is achieved which is never cost / time-based delivery of the project. As example, a department invested in an EDI interface for customer order entry, but the order processing teams still perform 100% checks on the incoming orders through the interface, which caused the (efficiency) goal from the business case to never be met.

On the other side, there are the classic methods like Kaizen, Lean, and 6-Sigma for making changes, but the main difference is that these changes are done in small steps. Most noticeable difference is that these methods are triggered and executed by the business themselves. As the change emerged at their side and is managed by themselves, the chances of a successful implementation are higher than in IT driven projects. Less investment results in positive impact on the return on investment and there is a limited risk when delivery of the project is delayed.

When business improvement is required I trust on putting the responsibility at the departmental level and less on central corporate level. In other words less top-down push model and more kind of pull mechanism. Of course with alignment with a central team (f.e. supply chain management, template control team) to ensure the changes are still within the margins of the global process descriptions and new technologies or standards should be chosen companywide to avoid sub-optimization. So in my opinion, in a lot of cases, it is decided to go for the first choice and not always with the right reasoning. The increased number of simultaneously executed projects leads to a battle between projects to get resource allocation from a limited number of knowledgeable (key) users. These users are more and more consumed with project tasks and hardly have time to do their day-to-day work.

Especially in the last couple of years (even nowadays) the majority of the projects are strongly internal cost efficiency focused while the business users should focus on serving the customer needs. I would rather like to see these users invest their time in the company’s differentiating factors, the unique selling points, as these determine the company’s future.

At McCoy we have defined a way of working that ensures a continuous feedback loop between business case and project results. This allows balancing between speed and operational excellence as it introduces additional measurement of the realization of the business case goals, next to traditional boundaries in time and money.

Has this topic triggered your attention, are you feeling the need for balance combined with realization and monitoring of your business case? Please feel free to  reach out to us ; McCoy combines technical expertise with the capabilities to create, realize and deliver your business case.

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