Future State Operational Transformation Framework

Editor's Notes

• #4: Language is important when moving large numbers of people in the same direction. Let’s go over a few terms we’ll use throughout our presentation. Operational Transformation – change of business operations that creates a significant, long-lasting change of behavior over time vs. only a short-term impact Process Excellence – achieving high performance with existing modes of operation, most likely by reducing waste and eliminating non-value added work, with a standardized approach and well-communicated process maps Adoption – applying a structured approach to manage the people side of change, with infrastructure, communication, engagement, tools and change management to drive full adoption of behaviors, process, technology or innovations Innovation – creating something original, novel or new, that serves an unmet need in business, markets or society (products, processes, etc.) Portfolio Management – process and activity of planning, organizing and driving procedures, protocols and reporting to achieve project objectives, including resources, timeline, budget, risk management, prioritization and resourcing at the portfolio level across multiple projects Organizational Effectiveness – how effective an organization is in achieving its goals, including talent management, HR strategy, leadership development, organization design, measurements and scorecards, all integrating with business process, technology and adoption of new ways of working
• #5: Why does operational transformation matter to an organization?
• #6: Internal drivers typically include things like new leadership, cost pressure, growth or M&A. External drivers can include industry competition or shifts and regulation pressure. New technology can be both an internal and external driver of change.
• #7: When we looked at the big picture, what we saw is often a disconnection among initiatives and more and more change fatigue from duplicative initiatives. Internal drivers can lead to process improvements, Lean, Six Sigma type projects External drivers can lead to innovation efforts, design thinking approaches and novel ideation Initiatives crossed paths and intersected, with increasing complexity But who is thinking about the people and what they need? Employee opinion surveys provide an indication of employee satisfaction Organizational Change Managers (OCMs) manage the people side of change Project Managers (PMs) ensure change management gets priority and that risks are managed well HR, organizational effectiveness, leadership development also help support people navigating change We observed that people typically want is: Clarity, vision and benefits – why bother? Information, tools and support – how to do it? Action taken in response to their feedback – did you hear me? Impact, consistency and sanity – don’t waste my time!
• #8: To create a shift that is fully operationalized, it takes an interdisciplinary approach, with process excellence, change adoption, innovation, portfolio management and organizational effectiveness integrated together in a holistic way, keeping people at the center of focus. For instance, fully preparing leadership to effectively lead helps ensure employee engagement in the change. An integrated, interdisciplinary approach helps create a structured, on-time, on-budget engagement, which is imperative to opitmize the transformation.
• #10: Here’s the framework. It starts with the inputs – get clarity and alignment on vision and values – why are we doing this…how does everything tie to this vision? Next define intended outcomes – such as happier employees, aligned leadership and teams, appreciated SMEs, technology that serves people instead of vice versa, and achievement of growth, efficiencies or optimization. People are of course at the center because we really only have the power to change ourselves, and change grows from there, expanding out through established networks of influence. Now next is a balance with three components – process, innovation and adoption. This is a key part of the framework as with the example of the life sciences company…you need to balance the amount of innovation with the process excellence and adoption to produce the optimal mix and the least amount of wasted effort. Process Excellence answers: how can we be more efficient with our process? What can we do better? Who is doing what now and in what sequence? Who owns accountability at which stages? Innovation looks at how we generate novel approaches to solve future demands? What are we solving for and where do we need to go next? What novel ways can deliver a better experience? Adoption examines why should I change? Who, what, when, where and how? Creating clarity, sharing the vision and information, building competency, providing training tools and support, managing expectations, and escalating risks with engaged, visible sponsorship. Portfolio Management organizes how we will align, prioritize and manage risk while keeping everyone still focused on the vision, on the why? How do we ensure the right actions are taken at the right time, and manage priorities, expectations and risks? Organizational Effectiveness focuses on the structure and mechanisms for achieving the vision.. Learning is here, providing the ability for a culture of learning with a systemic focus So you need an integrated, interdisciplinary approach, with clear and continual connection back to the why, the vision. Another example…an insurance company has been in business for a long time. Had a point-of-sale relationship with their customers, reliant on location. They realized in order to keep pace with shifting industry, market demands and competition (external drivers), they needed to become more connected with their customers…not just based on a location. Customers should be able to walk into any location, connect online, in order to be supported. So as we learned before, external drivers generally lead to innovate approaches…focus on innovation. And the outcomes they envisioned was larger market share, better stock price, account growth, happier employees, etc… So as they started the effort, they realized the agents were critical to success. Those agents had personal relationships with customers…So they realized they had to bring those people along in order to achieve adoption and success. And they realized that the innovation would require innovate processes, new ways of working. Great, so we have a vision, we have intended outcomes, we have a need for innovation, we have focus on process and we seem to have a focus on the people…the agents…in order to drive adoption. So initiatives sprung up, deliverables were built and what happened? Well, it’s what happens in a lot of instances…they slowly started to lose sight of the why, the vision, even the connection to the people, the agents. Like so often in the execution, the focus shifted to on-time, on budget, get er done…and decisions began to be made not to the outcome of truly transforming the relationship with the customers…the why, the vision. Instead, cutting costs, saving time, rolling it out became more important. So while the implementation may have been launched on time, maybe even on budget, the reason and the focus for doing it was lost along the way, impacting what was created and the also the people. This is one example…and in this example…what could have helped…more portfolio management focused on the why, the vision to truly create an integrated approach. And you see how learning is a part of all of this. In that example…training was rolled out….but was it truly effective if the energy rested on time and cost and not value and vision?
• #13: There are four levels along the maturity scale for developing an organization’s capability, competency and capacity for operational transformation: Level 1 Entry-level experimentation and applications with low consistency Level 2 Expanded application of a basic approach with regular, routine consistency Level 3 Establishment of standards to guide a unified approach for repeated success Level 4 Demonstrated competency and sharing of knowledge to grow organizational capacity And there are five domains to integrate among: Process Excellence Adoption Innovation Portfolio Management Organizational Effectiveness
• #15: Adoption: Change Management and Communications for an Integration (2010) IT-driven Not based in business process Awareness and engagement high, yet had adoption gaps Process: PDG Profound Current State Study Management Process Mapping (2012) Business process and adoption focus Possible investment in non-value added processes Not integrated to innovation efforts Innovation: PD Innovation (2014) Focused on ideation without being deeply embedded in business process Shallow understanding of stakeholders, can lead to lack of adoption and ROI Experiencing a true partnership with our Roche and Genentech colleagues allowed us opportunities for direct sharing of what worked, what needed improvement and what could have immediate lessons learned applications, after each project completed. This type of thoughtful examination and transparent dialogue helped us form our hypothesis and create a novel approach to operational transformation.
• #16: Process: Current State Clinical Study Management Process Mapping (2012) Business process and adoption focus Possible investment in non-value added processes Not integrated to innovation efforts
• #17: SHANNON Continuous Improvement for Beverage Competitive Advantage (Coca-Cola Co.) Goal: Move beyond continuous improvement approach to true operational transformation to develop a larger competitive advantage Approach: Leverage, grow and build innovation capability, with existing strengths in process and adoption, to drive operational transformation Results: The company's largest and most impactful innovation to date, yielding double digit (%) sales growth and fundamentally changing the way products are developed, produced, warehoused, transported, serviced and sold In summary, you can see our effort reflected higher maturity in process and adoption, and we focused on increasing capability and applications in the innovation sphere. Source for more information: http://www.sustainableplant.com/2012/07/process-water-recovery-system-wins-innovation-award-for-coca-cola/
• #18: SHANNON turns it back to SYLVIA Integrated Approach for an Independent Physician Association (IPA) IPA needed an intergrated approach to Regulatory transformation requirements (affordable care act - ACA) Goal: Substantially reduce cost of care while improving quality of care delivery Approach: Accountable Care organizations (ACOs) exponentially complex environment involving multiple organizations outside that aligned on shared risk agreements developed amongst IPA, health plan and hospital partners. The development of common agenda and measurements defined. Interdisciplinary teams of innovation, project management and process formed to realize operational transformation. Outcome: ACOs that achieved savings in excess of 15.5M in first year of operations through cross-organizational coordination of care (data sharing, process alignment, innovative ideation and rapid implementation of tests of change) In summary, you can see our effort had relative balance among process excellence, change adoption and innovation elements, which is what led to our success.
• #20: Look at each domain here and reading from left to right, get a feeling for what it takes to be at each level of maturity. Which of these domains is the lowest maturity level for your group or organization? Do you notice anything else? Are you in relative balance at a certain stage of maturity across the board? Do you have wildly different levels of maturity in each domain? What do you see that surprises you?