Operational Transformation Framework

Editor's Notes

• #2: HALEY Thank you for joining us today. Welcome to Future State’s webinar about Operational Transformation!
• #3: HALEY [Introduce housekeeping items.]
• #4: HALEY Let’s get started with some introductions from our two speakers today: Shannon Adkins and Sylvia Stephenson [SHANNON and SYLVIA introduce themselves]
• #5: SHANNON Today, we will focus on five topics: The case for change Framework for operational transformation Maturity model for operational transformation Case studies that led us to our hypothesis Exercise to assess maturity
• #6: SHANNON 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
• #7: SHANNON Let’s move on now to the Case for Change. Why does operational transformation matter to an organization?
• #8: SHANNON I’d like to share with you how we got to this hypothesis. We began with a basic change management and communications approach and observed and learned alongside our client partners. We found there are a variety of trends and drivers forcing a need for operational transformation. 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.
• #9: SHANNON 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!
• #10: SHANNON This led to our core hypothesis. We learned what it really takes to create a lasting shift. 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.
• #11: SHANNON Now, we’d like to share the components of our operational transformation framework – how the elements fit together, and what the key inquiries are for each domain.
• #12: SHANNON Here’s the framework. It starts with the inputs – get clarity and alignment on vision and values, leadership behaviors and culture, operational challenges and portfolio priorities and opportunities. 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. 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 tools and support, managing expectations, and escalating risks with engaged, visible sponsorship. Portfolio Management organizes how we will align, prioritize and manage risk? How do we ensure the right actions are taken at the right time, and manage priorities, expectations and risks? Organizational Effectiveness recognizes change is possible in an environment with vague vision, lack of leadership behaviors that drive positive influence, unknown objectives, unclear values, or a conflicted, unaligned culture. It requires leadership who enable and empower people.
• #13: SHANNON turns it over to SYLVIA Now, let’s take a look at the maturity model for operational transformation. Just what does it take to develop this capability for your organization?
• #14: SYLVIA As you can see here, 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: SYLVIA hands it back to SHANNON Thank you Sylvia. Now we’d like to share some of our own and an external case study, which demonstrate why it is critical to look at this from an interdisciplinary, integrated perspective.
• #16: SHANNON Let’s take a look at the kinds of process, adoption and innovation challenges we experienced with our collaboration with Roche and Genentech. By way of context, we believe that trying and experimenting is how you learn. Failure can be a path to learning, if you are actively listening to the reasons why. 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.
• #17: SHANNON 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
• #18: 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/
• #19: 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: SYLVIA Now, let’s do an exercise to assess your group or project’s level of operational transformation maturity. You will want to grab a pen and think about whether you want to assess a current project you are part of, or your group / department or a program you may be responsible for – any of those will be fine.
• #21: SYLVIA 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. Let’s take a quick poll. Which of these domains is the lowest maturity level for your group or organization? [do the poll, acknowledge which one is lowest on average for everyone, talk about it] 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?
• #22: SYLVIA Thanks for being with us today. We are really interested in your input. We will send out the full Operational Transformation Maturity Matrix to you after the webinar today so you can do a more detailed self-assessment.
• #23: SYLVIA and SHANNON Thanks again for your time and attention today – does anyone have any more questions? We would love to hear from you about what you think helps make operational transformation stick, answer any questions about the case studies, and hear what your experience has been. Here is our contact information if you would like to get in touch.