Operational Excellence is more important now than ever. Your customers demand it! However, evidence shows that traditional approaches to achieving Operational Excellence are not delivering the expected results. In this presentation delivered at the APICS Houston Professional Development Meeting on May 15, 2015, Chris Seifert, Manager at Wilson Perumal & Company, explains why traditional approaches to Operational Excellence are failing, and provides strategies you can use to make Lean and Six Sigma relevant in today's complex world.
2. Wilson
Perumal
&
Company,
Inc.
Agenda/Objec&ves
• Why
a
new
approach
is
necessary
• How
to
diagnose
the
real
problem
• Three
things
you
can
do
to
get
the
most
out
of
your
LSS
Programs
3. Wilson
Perumal
&
Company,
Inc.1)
AlixPartners
Survey2)
2010
Accenture
Survey
A
new
approach
is
necessary
• OperaKonal
excellence
is
more
important
than
ever
–
customers
demand
it!
– Increased
compeKKon
driving
decreased
margins
– ExpectaKons
of
customers,
shareholders,
and
society
are
higher
than
ever
– News
of
poor
performance
travels
far
and
fast
• TradiKonal
approaches
are
not
achieving
expected
results
– Only
31%
of
companies
were
able
to
achieve
the
results
promised
by
LSS
pracKoners1
– 58%
of
execuKves
report
conKnuous
improvement
programs
produced
minimal
financial
impact2
Consider
the
case
of
1-‐800-‐Flowers
Leadership
engagement
is
oFen
blamed,
but
is
that
the
real
reason?
4. Wilson
Perumal
&
Company,
Inc.
The
world
has
changed!
Volume
Cost
Pre-‐Industrial
Age
“Individual
producKvity”
Dominated
by
variable
costs
Volume
Industrial
Age
“Economies
of
Scale”
Dominated
by
fixed
costs
Complexity
Post-‐Industrial
Age
“Complexity”
Dominated
by
complexity
costs
5. Wilson
Perumal
&
Company,
Inc. 5
TECHNOLOGY
IS
MORE
COMPLEX
PRODUCTS
AND
SERVICES
MORE
COMPLEX
PROCESSES
MORE
COMPLEX
ORGANIZATIONS
MORE
COMPLEX
REGULATIONS
MORE
COMPLEX
MARKETS
MORE
COMPLEX
Complexity
is
stretching
the
capabili&es
of
most
companies
X
X
X
X
X
6. Wilson
Perumal
&
Company,
Inc. 6
Many
companies
are
passing
a
complexity
threshold
VALUE
(diminishing
returns)
COST
&
RISK
(exponenKal
growth)
Level
of
complexity
you
can
support
$
#Items #links
1 0
2 1
3 3
4 6
5 10
…
10 45
Complexity
Opera'onal
risk
grows
exponen'ally
with
complexity
Few
companies
are
s'll
here
Many
companies
are
here
An
increasing
number
of
companies
are
here
7. Wilson
Perumal
&
Company,
Inc. 7
Tradi&onal
approaches
to
Opera&onal
Excellence
are
not
effec&ve
in
the
face
of
complexity
• They
do
not
address
strategy,
which
is
oen
the
source
of
complexity
• They
take
a
“Bo_om-‐up”
approach
to
improving
results
• They
can
actually
add
more
complexity
• They
seek
to
improve
before
establishing
control
• Complex
environments
require
a
different
approach
to
leadership
8. Wilson
Perumal
&
Company,
Inc.
Complexity
arises
from
the
interac&ons
between
products,
processes,
and
the
organiza&on
• Complexity
is
a
cube
funcKon—as
it
increases
on
one
axis,
it
mulKplies
across
the
others
• TradiKonal
approaches
address
individual
processes
—not
interacKons
between
product,
process,
and
organizaKon
9. Wilson
Perumal
&
Company,
Inc. 9
Example:
The
impact
of
product
por^olio
complexity
on
process
complexity
10. Wilson
Perumal
&
Company,
Inc.
Tradi&onal
approaches
typically
employ
a
“Boaom-‐
up”
approach,
which
doesn’t
address
complexity
Bo=om-‐up
approach:
Improving
one
process
at
a
6me
Top-‐down
approach:
Start
with
a
framework
11. Wilson
Perumal
&
Company,
Inc. 11
The
typical
response
is
to
add
even
more
complexity,
which
compounds
the
problem
Complexity
increases
Poor
execuKon
Loss
of
process
control
Poor
business
results
More
people
&
processes
Vicious
Complexity
Cycle
12. Wilson
Perumal
&
Company,
Inc.
Tradi&onal
approaches
aren’t
effec&ve
in
the
face
of
complexity
• TradiKonal
approaches
a_empt
to
improve
processes
before
establishing
control:
– Controls
for
individual
processes
are
created,
but
the
underlying
system
necessary
for
sustainment
is
not
– Results
in
improving
processes
without
knowing
their
real
capability
• Establishing
control
is
the
necessary
first
step:
–
Ensures
sustainment
– Oen
produces
greater
performance
improvements
faster
and
with
fewer
resources
13. Wilson
Perumal
&
Company,
Inc.
Agenda/Objec&ves
• Why
a
new
approach
is
necessary
• How
to
diagnose
the
real
problem
• Three
things
you
can
do
to
get
the
most
out
of
your
LSS
Programs
14. Wilson
Perumal
&
Company,
Inc.
Defining
Opera&onal
Excellence
–
the
oFen
overlooked
first
step
Leadership
Alignment
Consistent
Messaging
Employees
Understand
Clear
Roles
and
ResponsibiliKes
Increased
Commitment
• Leaders
must
be
united
and
share
a
common
vision
• If
leaders
aren’t
aligned,
messages
won’t
be
clear
and
consistent
• Unclear
and
inconsistent
messages
impede
employee’s
understanding
• If
employees
don’t
understand
vision,
they
will
spend
Kme
trying
to
define
their
roles
• In
the
face
of
ambiguity,
many
employees
take
a
“wait
and
see”
stance
15. Wilson
Perumal
&
Company,
Inc.
15
Common
defini&ons
of
Opera&onal
Excellence
are
vague
and
lack
the
ability
to
be
measured
• “Each
and
every
employee
can
see
the
flow
of
value
to
the
customer,
and
fix
that
flow
before
it
breaks
down.”SM
-‐
InsKtute
for
OperaKonal
Excellence
• Opera6onal
Excellence
is
a
philosophy
of
leadership,
teamwork
and
problem
solving
resul6ng
in
con6nuous
improvement
throughout
the
organiza6on
by
focusing
on
the
needs
of
the
customer,
empowering
employees,
and
op6mizing
exis6ng
ac6vi6es
in
the
process.
-‐
Wikipedia
• A
philosophy
of
the
workplace
where
problem-‐solving,
teamwork,
and
leadership
results
in
the
ongoing
improvement
in
an
organiza6on.
The
process
involves
focusing
on
the
customers’
needs,
keeping
the
employees
posi6ve
and
empowered,
and
con6nually
improving
the
current
ac6vi6es
in
the
workplace.
-‐
The
Business
DicKonary
• “The
leveraging
of
the
disciplines
of
Lean,
Six-‐Sigma
and
Leadership
as
key
to
any
Con6nuous
Improvement
ini6a6ve
–
towards
the
increase
in
performance
of
both
individuals
and
the
companies
for
whom
they
work
and
resul6ng
an
indelible
and
posi6ve
impact
on
stakeholder
value.”
–
LinkedIn
OperaKonal
Excellence
Group
These
definiKons
contain
components
of
the
systems
and
culture
necessary
to
achieve
OperaKonal
Excellence,
but
because
they
lack
the
ability
to
be
measured,
they
are
not
useful
for
understanding
how
to
achieve
OperaKonal
Excellence,
or
why
it
is
important.
16. Wilson
Perumal
&
Company,
Inc.
Opera&onal
Excellence
delivers
industry
leading
performance
across
7
Value
Drivers
Given
two
companies
with
similar
strategies,
the
one
that
executes
be_er
will
have
be_er
performance
across
all
7
Value
Drivers.
Sound
Strategy
Operational
Excellence
Leading
Performance
7
Value
Drivers
1. Safety
2. Environment
3. Compliance
4. Quality
5. Produc&vity
6. Yield
7. Cost
Strategy
1. Product
por^olio
2. Markets
served
3. Distribu&on
channels
4. Price
point
5. Level
of
service
6. Partnerships
7. Opera&ng
model
Opera'onal
excellence
is
the
execu'on
of
the
business
strategy
more
consistently
and
reliably
than
the
compe66on.
17. Wilson
Perumal
&
Company,
Inc.
Agenda/Objec&ves
• Why
a
new
approach
is
necessary
• How
to
diagnose
the
real
problem
• Three
things
you
can
do
to
get
the
most
out
of
your
LSS
Programs
1. Address
non-‐value
added
complexity
that
arises
from
your
strategy
18. Wilson
Perumal
&
Company,
Inc.
Technology
Strategic
intent
Value
chain
processes
Culture
Structure
and
authority
People
Sound
strategy
requires
aligning
decisions
to
allocate
resources
consistent
with
strategic
intent
Make
strategic
decisions
consistent
with
intent
1. Value
discipline
– Product
innovator
– Customer
inKmate
– Low
cost
2. Markets
to
parKcipate
in
– Local
– Global
3. Value
chain
– VerKcally
integrated
– Single
segment
Processes
and
Culture
must
support
the
strategy
Technology,
organizaKonal
structure,
and
people
capabiliKes
must
support
the
processes
and
culture
Strategic
Intent
Components
of
the
Opera&ng
Model
Aligning
the
OperaKng
Model
to
the
strategy
isn’t
enough.
We
must
also
implement
the
management
system
processes
necessary
to
execute
the
OperaKng
Model.
19. Wilson
Perumal
&
Company,
Inc.
Agenda/Objec&ves
• Why
a
new
approach
is
necessary
• How
to
diagnose
the
real
problem
• Three
things
you
can
do
to
get
the
most
out
of
your
LSS
Programs
1. Address
non-‐value
added
complexity
that
arises
from
your
strategy
2. Simplify
and
standardize
your
Management
System
20. Wilson
Perumal
&
Company,
Inc.
Opera&onal
Excellence
is
a
func&on
of
the
management
system
&
culture
Effective
management
processes
and
procedures
Culture of
Operational
Discipline
Operational
Excellence
Understanding
this
rela&onship
helps
cut
through
complexity
to
quickly
iden&fy
the
real
problem
from
the
“top—down”
Sound
Strategy
Operational
Excellence
Leading
Performance
21. Wilson
Perumal
&
Company,
Inc. 21
Understanding
the
different
types
of
processes
is
an
important
first
step
Acquire
raw
materials
Convert
to
finished
good
Store
finished
goods
Distribute
finished
goods
Collect
payment
Procedures
Roles
and
ResponsibiliKes
Training
Risk
IdenKficaKon
A
Management
System
Process
or
Key
Control
is
a
process
whose
primary
purpose
is
to
ensure
effecKve
execuKon
of
a
value
chain
process
Applied
across
each
phase
of
the
End-‐to-‐End
Value
Chain
The
End-‐to-‐End
Value
Chain
represents
the
core
acKviKes
a
firm
performs
to
deliver
value
to
its
customers
22. Wilson
Perumal
&
Company,
Inc. 22
The
founda&ons
of
an
Opera&onal
Excellence
Management
System
Key
Value
Drivers
OE
is
defined
by
measurable
business
performance
across
specific
value
drivers
Safety
Environment
Compliance
Quality
Produc&vity
Yield
Cost
23. Wilson
Perumal
&
Company,
Inc.
The
4
Sources
of
Risk
Equipment
Processes
People
Inputs
Acted
on
by
To
produce
Finished
Goods/
Services
The
OperaKon
• Any
failure
of
the
operaKon
to
produce
a
good
or
service
that
meets
the
customers
requirements
is
a
result
of
1
of
4
sources:
1. A
person
failed
to
do
what
they
were
expected
to
do.
2. A
process
failed
to
perform
as
expected
3. A
piece
of
equipment
failed
to
perform
as
expected
4. Un-‐managed
change
24. Wilson
Perumal
&
Company,
Inc. 24
The
founda&ons
of
an
Opera&onal
Excellence
Management
System
Key
Value
Drivers
Four
Sources
of
Risk
OE
is
defined
by
measurable
business
performance
across
specific
value
drivers
There
are
only
four
sources
of
risk
for
failure
to
perform
against
the
value
drivers
Safety
Environment
Compliance
Quality
Produc&vity
Yield
Cost
People
Processes
Equipment
Change
25. Wilson
Perumal
&
Company,
Inc.
Each
source
of
risk
can
be
analyzed
for
the
key
causes
of
failure
People
Unaware
of
expectaKon
Unable
to
perform
as
expected
Chooses
not
to
perform
as
expected
ExpectaKons
don’t
exist
ExpectaKons
not
communicated
ExpectaKons
not
enforced
Lack
of
knowledge
Lack
of
talent
Lack
of
virtue
Wrong
incenKve
26. Wilson
Perumal
&
Company,
Inc.
26
Each
source
of
risk
can
be
analyzed
for
the
key
causes
of
failure
Equipment
Inadequate
Design
Unplanned
Failure
Improper
OperaKons
Inadequate
Maintenance
Strategy
Inadequate
execuKon
of
Maintenance
Strategy
Personnel
not
allocated
People
Process
Insufficient
tools/
materials
People
27. Wilson
Perumal
&
Company,
Inc.
27
Each
source
of
risk
can
be
analyzed
for
the
key
causes
of
failure
Process
Process
is
not
capable
Process
not
in
control
OperaKng
limits
not
defined
People
Equipment
Change
MOC
process
not
capable
MOC
process
not
followed
People
Change
not
idenKfied
28. Wilson
Perumal
&
Company,
Inc.
The
founda&ons
of
an
Opera&onal
Excellence
Management
System
Key
Value
Drivers
Four
Sources
of
Risk
Common
Causes
of
Failure
OE
is
defined
by
measurable
business
performance
across
specific
value
drivers
There
are
only
four
sources
of
risk
for
failure
to
perform
against
the
value
drivers
The
four
sources
of
risk
tend
to
fail
for
the
same
reasons
regardless
of
the
type
of
operaKon
Examples
ExpectaKons
don’t
exist
Lack
of
knowledge
Wrong
incenKves
Equipment
not
capable
Personnel
not
allocated
Process
not
capable
MOC
inadequate
Safety
Environment
Compliance
Quality
Produc&vity
Yield
Cost
People
Processes
Equipment
Change
29. Wilson
Perumal
&
Company,
Inc.
If
the
causes
of
failure
are
consistent
across
various
opera&ons,
the
necessary
set
of
Key
Controls
is
as
well
People
Unaware
of
expectaKon
Unable
to
perform
as
expected
Chooses
not
to
perform
as
expected
ExpectaKons
don’t
exist
ExpectaKons
not
communicated
ExpectaKons
not
enforced
Lack
of
knowledge
Lack
of
talent
Lack
of
virtue
Wrong
incenKve
Ops/maintenance
procedures/
policies/standard
work
Core
communicaKon
strategy
Audits/assessments,
org
structure,
performance
management
Training/cerKficaKon
SelecKon
process
Culture,
selecKon
process
CompensaKon
strategy,
performance
management
Key
Controls
30. Wilson
Perumal
&
Company,
Inc.
30
If
the
causes
of
failure
are
consistent
across
various
opera&ons,
the
necessary
set
of
Key
Controls
is
as
well
Equipment
Inadequate
Design
Unplanned
Failure
Improper
OperaKons
Inadequate
Maintenance
Strategy
Inadequate
execuKon
of
Maintenance
Strategy
Personnel
not
allocated
People
Equipment
Insufficient
tools/
materials
People
CriKcality
Ranking,
FMEA,
RCM
Engineering
Disciplines
Gatekeeping,
Scheduling
Planning,
Parts
Ki#ng,
Parts
Strategy
31. Wilson
Perumal
&
Company,
Inc.
31
If
the
causes
of
failure
are
consistent
across
various
opera&ons,
the
necessary
set
of
Key
Controls
is
as
well
Process
Process
is
not
capable
Process
is
not
in
control
OperaKng
limits
not
defined
People
Process
Change
MOC
process
not
capable
MOC
process
not
followed
People
Process
Engineering
(LEAN
Six
Sigma
Tools)
Process
FMEA,
Process
Control
Plan
Management
of
Change
Program
32. Wilson
Perumal
&
Company,
Inc. 32
The
founda&ons
of
an
Opera&onal
Excellence
Management
System
Key
Value
Drivers
Four
Sources
of
Risk
Common
Causes
of
Failure
Specific
Key
Controls
OE
is
defined
by
measurable
business
performance
across
specific
value
drivers
There
are
only
four
sources
of
risk
for
failure
to
perform
against
the
value
drivers
The
four
sources
of
risk
tend
to
fail
for
the
same
reasons
regardless
of
the
type
of
operaKon
The
set
of
Key
Controls
necessary
to
prevent
failures
is
also
the
same
Examples
Vision/Procedures
Training/CerKficaKon
Performance
Mgmt
Engineering
Disciplines
Planning/Scheduling
Design
for
Six
Sigma
MOC
Process
Culture
OrganizaKon
Structure
Process
Control
Plan
FMEA
Examples
ExpectaKons
don’t
exist
Lack
of
knowledge
Wrong
incenKves
Equipment
not
capable
Personnel
not
allocated
Process
not
capable
MOC
inadequate
Safety
Environment
Compliance
Quality
Produc&vity
Yield
Cost
People
Processes
Equipment
Change
33. Wilson
Perumal
&
Company,
Inc.
Management
System
processes
can
be
grouped
into
Elements
to
reduce
complexity
Risk
IdenKficaKon
Process
Hazard
Analysis
Failure
Modes
Effects
Analysis
Risk
Registers
The
value
of
the
7
Elements
• Easier
for
people
to
remember
than
all
key
controls
• More
efficient
to
organize
around
• Creates
common
language
that
facilitates
learning:
– Between
management
and
employees
– Between
leaders
– From
site
to
site
• Encourages
systems
thinking
– Ensures
proacKve
management
of
risk
in
development
of
new
systems
– Used
in
root
cause
analysis,
problems
aren’t
seen
in
isolaKon
34. Wilson
Perumal
&
Company,
Inc.
The
7
essen&al
Elements
of
an
Opera&onal
Excellence
Management
System
Leadership
Employee
accountability
Risk
idenKficaKon
Risk
miKgaKon
Knowledge
sharing
Management
of
change
ConKnuous
improvement
Leaders
arKculate
a
clear
vision
of
OperaKonal
Excellence
and
create
a
culture
of
OperaKonal
Discipline
Processes
are
in
place
to
ensure
employee’s
are
properly
incenKvized
and
know
what
they
are
accountable
Risks
are
idenKfied
,
assessed
,
and
prioriKzed
for
processes
and
equipment
Controls
are
put
in
place
to
miKgate
the
idenKfied
risks
CommunicaKon
and
training
systems
are
in
place
to
share
knowledge
about
the
risks
and
their
controls
Processes
are
in
place
to
management
changes
of
people,
processes,
and
equipment
All
processes
are
measured,
verified,
and
conKnuously
improved
35. Wilson
Perumal
&
Company,
Inc. 35
The
founda&ons
of
an
Opera&onal
Excellence
Management
System
Key
Value
Drivers
Four
Sources
of
Risk
Common
Causes
of
Failure
Specific
Key
Controls
OEMS
Elements
OE
is
defined
by
measurable
business
performance
across
specific
value
drivers
There
are
only
four
sources
of
risk
for
failure
to
perform
against
the
value
drivers
The
four
sources
of
risk
tend
to
fail
for
the
same
reasons
regardless
of
the
type
of
operaKon
The
set
of
Key
Controls
necessary
to
prevent
failures
is
also
the
same
Key
controls
are
organized
into
Elements
to
facilitate
implementaKon
and
management
Examples
Vision/Procedures
Training/CerKficaKon
Performance
Mgmt
Engineering
Disciplines
Planning/Scheduling
Design
for
Six
Sigma
MOC
Process
Culture
OrganizaKon
Structure
Process
Control
Plan
FMEA
Examples
ExpectaKons
don’t
exist
Lack
of
knowledge
Wrong
incenKves
Equipment
not
capable
Personnel
not
allocated
Process
not
capable
MOC
inadequate
Leadership
Employee
Accountability
Risk
ID
Risk
Mi&ga&on
Knowledge
Sharing
Management
of
Change
Con&nuous
Improvement
Safety
Environment
Compliance
Quality
Produc&vity
Yield
Cost
People
Processes
Equipment
Change
36. There
is
an
“order”
to
implementa&on
Leadership
Employee
accountability
Risk
iden&fica&on
Risk
control
Knowledge
sharing
Management
of
change
Con&nuous
improvement
Commi_ed
leadership
is
the
foundaKon
Employees
must
know
their
accountabiliKes
Once
leaders
and
employees
are
commi_ed
to
prevenKng
risks,
idenKfying
them
creates
value
Risks
must
be
idenKfied
and
assessed
before
they
can
be
controlled
Controls
must
be
in
place
before
employees
can
be
trained
on
them
Processes
must
be
clearly
defined
and
controlled
before
change
can
be
managed
Assessing
a
process
that
is
known
to
be
out
of
control
oen
creates
li_le
value
37. Wilson
Perumal
&
Company,
Inc.
Agenda/Objec&ves
• Why
a
new
approach
is
necessary
• How
to
diagnose
the
real
problem
• Three
things
you
can
do
to
get
the
most
out
of
your
LSS
Programs
1. Address
non-‐value
added
complexity
that
arises
from
your
strategy
2. Simplify
and
standardize
your
Management
System
3. Leverage
culture
38. Wilson
Perumal
&
Company,
Inc.
Opera&onal
Discipline
is
necessary
to
achieve
Opera&onal
Excellence
Effective
processes
and
procedures
Culture of
Operational
Discipline
Operational
Excellence
A
robust
OEMS
alone
will
not
lead
to
Opera&onal
Excellence;
Opera&onal
Discipline
–
doing
the
right
thing,
the
right
way,
every
&me
–
is
also
needed
Sound
Strategy
Operational
Excellence
Leading
Performance
39. Wilson
Perumal
&
Company,
Inc.
39
Complex
opera&ng
environments
require
a
different
approach
to
Leadership
• In
complex
operaKons,
leaders
can’t
possibly
idenKfy
all
the
situaKons
that
an
employee
will
face.
• A_empKng
to
create
a
laundry
list
of
rules
or
tasks
will
not
cover
every
possible
situaKon.
• By
idenKfying
the
fundamental
behaviors
of
an
OperaKonal
Disciplined
organizaKon,
we
can
create
a
framework
that
helps
employees
determine
how
they
should
behave
in
a
given
situaKon.
U.S.
Nuclear
Navy—A
High
Reliability
OrganizaKon
(HRO)
‒ Remarkably
low
number
of
mishaps
‒ Highly
complex
and
inherently
hazardous
tasks
‒ Consistently
over
a
sustained
period
of
Kme
40. Wilson
Perumal
&
Company,
Inc. 40
At
an
operator
level,
safe
and
reliable
opera&on
rests
on
the
“Pillars
of
the
Program”…
• Integrity
• Level
of
Knowledge
• Ques&oning
Artude
• Formality
• Forceful
Watch
Team
Backup
REACTOR
SAFETY
&
CONTINUITY
OF
POWER
LEVEL
OF
KNOWLEDGE
FORMALITY
QUESTIONING
ATTITUDE
FORCEFUL
BACKUP
INTEGRITY
41. Wilson
Perumal
&
Company,
Inc.
The
“Pillars”
of
Opera&onal
Discipline
• Integrity.
Be
reliable.
Do
what
you
say
you
are
going
to
do,
compleKng
every
task
the
right
way,
every
Kme,
even
if
no
one
is
watching.
• Level
of
Knowledge.
Understand
not
just
what
you
do,
but
why
you
do
it.
ConKnually
seek
greater
knowledge
about
the
systems,
processes,
and
hazards
in
and
around
your
workplace.
• Ques&oning
Artude.
Constantly
ask
yourself
what
could
go
wrong.
Check
for
out-‐of-‐the-‐
ordinary
and
learn
to
anKcipate
potenKal
problems.
Don’t
assume
things
are
okay—verify.
• Formality.
Treat
your
workplace
and
your
role
with
respect,
recognizing
the
seriousness
of
what
we
do
and
your
role
in
that
as
a
privileged
trust
and
part
of
something
bigger.Follow
authorized
procedures
and
expect
the
same
from
others.
Do
not
take
or
tolerate
shortcuts.
If
you
think
of
a
be_er
way,
follow
authorized
processes
to
review
and
improve
the
procedures.
• Forceful
Watch
Team
Backup.
Backup
your
co-‐workers
by
looking
out
for
what
they
may
have
missed,
and
expect
the
same
in
return.
Have
the
courage
to
care,
intervening
even
when
it
makes
you
uncomfortable.
If
you
see
an
issue,
own
it.
42. Wilson
Perumal
&
Company,
Inc. 42
Leaders
need
to
understand
basic
concepts
related
to
culture
and
human
behavior
• Leaders
play
an
essen&al
role
in
shaping
culture
and
changing
behaviors
• A
recent
Booz
&
Company
study1
revealed
that
48%
of
execuKves
“think,
other
than
communica6ons
and
leadership
alignment,
they
do
not
have
the
capabili'es
to
effec'vely
deliver
change”
• Understanding
what
culture
is,
and
why
people
behave
in
a
given
way,
will
help
leaders
be_er
understand
how
to
lead
the
change
• Leaders
– Cannot
force
people
to
change
beliefs
– Cannot
force
people
to
change
behaviors
– Can
change
the
consequences
Beliefs
Behaviours
Consequences
influence
result
in
reinforce
or
undermine
Culture
is
the
shared
beliefs
of
the
group
43. Wilson
Perumal
&
Company,
Inc.
43
4
Steps
for
crea&ng
a
culture
of
Opera&onal
Discipline
• Need
for
the
Pillars
• DefiniKon
of
the
Pillars
• Approach
for
implementaKon
Align
Leadership
on
the
Pillars
Create
the
Case
for
Change
Internalize
the
Fundamentals
Embed
in
Management
System
Processes
• Use
case
study
like
Deepwater
Horizon
to
make
case
for
change
• Create
a
sense
of
discomfort
• One-‐on-‐one
conversaKons
between
leaders
and
employees
using
right/wrong
framework
to
discuss
behaviors
• Leader
interacKons
on
the
shop
floor
• New
hire
selecKon
• OrientaKon/training
• Incident
invesKgaKon
• Performance
Management
Crea&ng
a
culture
of
Opera&onal
Discipline
must
start
at
the
very
top
of
the
organiza&on!
44. Wilson
Perumal
&
Company,
Inc.
Summary
• A
new
approach
is
required
due
to
complexity
• First
Step:
Diagnose
the
problem
using
a
“Top-‐down”
approach
– Is
it
strategy,
management
system,
or
culture
• Address
non-‐value
added
complexity
that
arises
from
your
strategy
• UKlize
the
7
Element
OEMS
to
break
the
vicious
complexity
cycle
and
regain
control
• Remember
that
there
is
an
“order”
to
things
• Define
and
create
a
culture
of
OperaKonal
Discipline
Reducing
complexity
and
regaining
control
of
your
opera&on
will
revitalize
your
Lean
and
Six
Sigma
Programs
45. Wilson
Perumal
&
Company,
Inc.
Email:
cseifert@wilsonperumal.com
cpseifer@gmail.com
On
the
Web:
www.wilsonperumal.com
Blog:
www.wilsonperumal.com/blog
Twi_er:
@cpseifer
@Wilson_Perumal
LinkedIn:
h_p://www.linkedin.com/in/christopherseifert
h_p://linkd.in/10BnH1i
Phone:
(972)
800-‐3618
(972)
716-‐3930
Contact
Informa&on