5 must DO to decide and prepare for an Operational Excellence assessment - Manager's perspective

Context: as a manager, you want to improve your organisation and you wonder whether you should start by an assessment of the current state

In a lot of ways, the job of a manager is not unlike the captain of a ship. It is your responsibility to make sure that all systems are functioning and that all employees are coming together to form something far more powerful than any one of them could be on their own. Then and only then will you be confident that you will accomplish your long-term objectives in the most effective and appropriate ways possible.

Oftentimes, managers will encounter operational issues that need to be addressed. This requires a careful analysis to achieve the understanding necessary to know what step to take to solve those challenges and, more importantly, how best to take them.

Usually, this leads managers to determine that an Operational Excellence Assessment is necessary. That, unfortunately, is where things get a bit complicated.

At its core, an Operational Excellence Assessment is exactly what it sounds like: it's an opportunity to obtain a totally in-depth, completely unbiased assessment of your organization's current capabilities. At the end of this process, you'll know more than ever about what is working at an organizational level and, more importantly, what isn't. You'll therefore be able to support and empower everything that works and you will finally be able to address the root cause of the things that don't.

But this isn't just difficult to achieve without the right Operational Excellence Assessment having been selected in the first place. In most cases, it's largely impossible.

The purpose of this white paper is to help managers like yourself fully qualify both your Operational Excellence Assessment decision and the potential project that follows it. Over the course of these pages, you will learn things like:

How to identify what type of analysis and support you need, along with how to get internal validation. This will depend heavily on several different factors and whether or not there is a need for an improvement action plan after the diagnosis.
If there is a need for such a plan, you will learn how to best prepare yourself, your teams and all key stakeholders before starting the diagnosis. This will in turn put you in the best position to tackle the consultant selection process as well.

All of this is critical because when the complexity of the issues you are trying to solve cannot be addressed with a standard managerial approach, you are suddenly dealing with a significantly different situation that falls outside the normal process of running a business. Depending on the context, you could be looking at a straightforward "Change Management" approach or a far more complex "Transformational" approach. Both require a specific and thoughtful framework with dedicated people, unique change management capabilities, complicated stakeholder management, budget approval, human resources and personal representative involvement, and more.

It is in your own best interest to anticipate these areas before any assessment is performed so that you can properly prepare. If you don't, there are far too many risks:

Selecting the wrong type of assessment model will lead to the selection of the wrong type of support.
At that point, you will be unable to execute the project that all key stakeholders were actually anticipating.
This leads to a general heightened organizational sense of frustration.
Ultimately, the project is a failure.

If some type of implementation is necessary and you have not prepared, not only are your chances of success lower - you have wasted significant amounts of time and money as well. This is one of those aspects of operational improvement where it is difficult, if not impossible, to get a second chance. From that perspective, "getting it done" is far less important than "getting it done properly."

On the other hand, adequate preparation can not only help your project achieve success - it can bring genuine change to your company in a way that is highly rewarding for all involved. Very often this generates a tangible boost to the manager who initiated this project, too.

More often than not, one of your key partners throughout this process will be either an external or internal consultant. They will support the initial diagnostic and possibly even the implementation project, if one is deemed necessary. But not only do you need to exercise care during the consultant selection process to make sure you're finding the right one, but this partner also needs to embrace the appropriate type of analysis approach to begin with. This, too, will depend on very specific criteria.

The larger goal of this white paper is to guide you through this process by way of a series of straightforward, manageable steps. Taken together, they will help you take the right actions and make the right decisions when considering the initiation of an initial diagnostic in your operational area. All told, there are five core steps that you must complete to make the right Operational Excellence Assessment decision for your business, all of which are worth a closer look.

Before we begin: important considerations

This white paper is designed for any organization large enough to be facing significant "organizational issues," which generally involves companies of at least 25 employees. It is focused on operational practices - meaning business processes, performance management, people competencies and similar areas.

Likewise, it is mainly designed for situations where your business may already be placing some priority on bringing in an external consultant. However, this process can also be applied to internal consultants as well, particularly in the areas of continuous improvement and operational excellence. This is true so long as the issues you are trying to solve are not part of their existing daily tasks within the organization.

This document will provide examples of specific situations, but as always your actions must be dictated largely by the context of your company and the people who work there. From that point of view, this white paper is meant to provide guidelines - not absolute truth.

It is also essential to understand what this document is NOT designed to do. It is not aimed at helping you address problems with human resources management, or information technology. It isn't about technical services and it is certainly not about strategy. The aim is to dissect the operational, managerial practices that are in place to help your organization deliver its services. This larger idea can encompass procedures and methodologies, organizational structure, governance, and even people management.

Finally, understand that this document is largely focused on what to do before the Operational Excellence Assessment takes place. It will also cover things that can be done during the analysis, including answering or clarifying the questions and criteria as defined here. When it is recommended to "take your risks," you need to acknowledge that some of those risks may be reduced entirely by the actions you take during the analysis.

Step 1: "What is the likelihood that an implementation project will be necessary after the assessment?"

At first glance, it may seem strange that the first step in this process is about a project that is still hypothetical and is not about the assessment itself. That's okay, because beginning with a "bigger picture" question helps you create a structure that you will use to make the best decisions possible moving forward.

Think about it like this: you would never get into the car for a cross-country road trip unless you had some idea of where you were going. How would you know which direction to head in, how much money to take with you, or how many supplies to buy? By getting a firm understanding of where you're headed, you put yourself in the best position to make it there in the most effective way possible. Additionally, you help confirm immediately whether or not this is a journey you actually want to take in the first place.

Everything about this process is not only inherently complicated, but it is also unique to your organization - meaning that there is not really a "one size fits all" approach to what you're doing. The overall internal validation process, the complexity of the analysis (and the project that will result from it), and even the choice of the right support partner and/or consultant are all very different. Therefore, these factors must be adequately anticipated before starting the analysis to avoid issues that could derail progress later on.

If you are unsure as to whether or not an implementation project will be necessary after the analysis, there are a few key factors to consider that can help you decide.

The first has to do with whether or not the issues you are trying to solve go beyond any simple function or department within your business.

Determine if you are dealing with a framework that touches multiple accountabilities and roles.
If that is true, understand that one person or even one team cannot solve these issues on their own.
They impact other people who may need to change their way of working. This, too, must be anticipated in advance.

You will also need to examine whether the issues you need to solve are or are not exclusively about a single IT system.

IT may only be symptomatic of a larger problem.
Likewise, those issues may not be technical (meaning that they don't deal with equipment, certain components, machines, tools, software or servers) and may have little to do with the competencies of specific employees to begin with.

You must be cautious, however, as there is a risk when people assume too far in advance that the cause of a problem falls squarely at the feet of IT. This happens because technology is what people see and use on a daily basis. The problem, however, may be "behind"the IT - existing by way of your business processes or the parameters that are configured within the system. In that case, addressing IT would do little to solve the underlying complication. You want to treat the disease, not just the symptom.

If the issues you are experiencing involve some level of managerial or organizational complexity in one or even several areas, this too will need to be discussed.

Examples of this would include but are not limited to factors like unclear roles and responsibilities and processes that lack definition.
A lack of key performance indicators could also contribute to a failure to understand the root causes of difficulties.
All of this can lead to a lack of efficient decision-making or action monitoring, which is largely what your project will address.

Finally, think about whether the problem you now face isn't a "new" one.

If it isn't, and you've tried to solve it before with a standard "operational" approach unsuccessfully, this will impact whether an implementation project is necessary after the analysis.
Trying to solve the problem in the same way is only going to generate the same result.
For the true, positive change you seek, you're going to need to go deeper.

If these factors do not apply...

If most or even all of those factors don't describe your situation, there is not a high likelihood that an implementation project will be needed. However, you may need either external or internal consultant support for the analysis itself. The implementation of the solution designed to solve your issues will either be a managerial responsibility in an "Operational Mode," or it may require specific competencies like IT and technical knowledge, training, etc.

Luckily, the support selection process and the internal validation will be much easier since you are focusing on a naturally smaller scope. Your issues are far more specific and, because of that, they will be less expensive to address and you will impact fewer people in terms of productivity along the way.

If you still need more clarity…

If you are unsure of whether or not those factors apply to your situation, there are two steps you can take. The first involves discussing the circumstances with different stakeholders to try to get more specific data about the issues. Alternatively, you can also invest in a short "scoping" with an external consultant to try to collect as much actionable insight as possible. It may also be possible to use self-diagnostic tools, with Wevalgo's "Best Practice" models being just one example.

Step 2: "Is this worth it for the scope of work? Are people willing to change?"

If there is a strong likelihood that an implementation project will be necessary after the analysis, the next step involves finding the answer to a two part question:

Is that project worth it in terms of the scope of your work, and
Are people willing to change in the first place?

To speak to the former, consider the existence of a "Burning Platform" for change - one where some type of action is practically a foregone conclusion given the circumstances. This would include situations where business performance in general is poor, or client satisfaction is in need of a dramatic improvement. A similar issue would be one where the social climate around the office is difficult to say the least.

As a manager, all of these issues are critical to the scope of your work and therefore, you should continue on with the remainder of the process.

This is a situation where these issues are only going to grow and compound on themselves over time.
If performance is poor, it is going to get worse.
If client satisfaction is down, it likely has more room to fall before it hits rock bottom.
If social climate and employee engagement are poor, it's only a matter of time before it starts to negatively impact productivity.
All of these things are going to get worse before they get better - the "Burning Platform" is the realization that you cannot afford to let that happen.

However, something else must also be true to continue on beyond this part of the process. If the "scope" also extends to one of your subordinates (as it would if you were a general CEO and the issue directly affected one of your affiliates), you must also make sure that affected parties also share this "Burning Platform" and want to improve to begin with. Unless you have a complete buy-in for what you're about to do, success is going to be difficult.

This scope, along with associated revenues, costs and/or cash improvement possibilities, often allows for you to make a good Business Case that will help illustrate return on investment.
In many situations, managers incorrectly think that there is no real need to create a Business Case because "the 'Burning Platform' is already high enough as it is."
However, this is still a necessary step to take as it will later become a key factor in deciding the shape that the project will take. If you've waited until that point to address this issue, it's already too late.

The Business Case will become an invaluable tool when it comes to estimating an initial budget. For larger projects, the cost can easily reach up to 1/3rd of the estimated Business Case - that can be literally millions of Euros/Dollars depending on the size of your organization. As a general rule of thumb, your Business Case must be worth at least three times the implementation project costs in order to generate the necessary return on investment.

If these factors do not apply...

If most or even all of these criteria do not apply to your situation, it is usually better not to move forward at all. If you choose to proceed with the assessment anyway, there is a high risk that you will perform an analysis that does not actually lead to a project. You may encounter a refusal by hierarchy, or the resistance to change is just too high to overcome. That will create an almost immediate feeling of frustration and, of course, wasted efforts.

For the best results, try to look for ways to either enlarge the scope or focus on those areas with the highest that Business Case can also be tackled internally.

If you still need more clarity...

If you find it difficult to answer these questions, don't worry - the status of your "Burning Platform" will be relatively easy to check. If it is not obvious, that typically means it doesn't exist. If it is obvious, at least you know where you stand.

If these matters affect one of your subordinates, it is always recommended to get them involved as early on in the definition of the diagnostic as possible. This is an efficient way to get them to buy into the process completely. Otherwise, they may resist in a way that ends up ruining all of your other efforts. In a lot of ways, this is just an extension of how you should be behaving as a quality leader in the first place. Never ask someone to do something that you yourself would be unwilling to do.

Unless you have tripled checked whether or not a Business Case is needed to confirm that it isn't, you should estimate a very high level one anyway. If you have to, get help internally. You can also ask your consultants to give you a rough estimate during your initial discussions or, at the latest, during the proposal process.

Step 3: "Is the assessment part of the business priorities of your hierarchy and is it on the right scope?"

Assuming that the answers to the previous two questions were "Yes," you must then ask yourself if a particular Operational Excellence Assessment is A) aligned with the higher hierarchy of your business, and B) if it is on the right scope as well.

For the best results, the assessment must be aligned with the hierarchy of your business - meaning that it is dialled into the overall priorities of at least one Decision Maker, Authorizer or the company itself.
It can be linked to a higher "corporate" project, for example. This will also help make sure that there is also no other internal project competing with this issue.

Within the context of the financial investment that will be required, as well as the dedicated internal resources that will be needed, there must be a clear business rationale in order to move forward. This goes above and beyond the Business Case. It is surprisingly common to see managers who assume that their hierarchy would naturally be aligned because the Business Case seems so obvious to them. The problem is that they're too close to it - they are unable to see the reasons why it, in fact, is not.

To speak to the scope side of this conversation, it is necessary to make sure that the people impacted by the change are within the scope of the identified Decision Maker and Authorizer. If there are people impacted by the change who are beyond that scope, there is a high risk of refusal - not to mention the likelihood of more severe reactions.

If these factors do not apply...

If those factors don't apply to your situation, proceeding with the analysis is not recommended - if only to avoid refusal later on. Instead, try to see how to present the Business Case differently. Maybe a change of scope is in order, or the conditions will change if given enough time.

If you still need more clarity…

If you are unable to answer these questions, do not assume anything. Check in a very transparent and clear way and do not move forward until you are absolutely confident in doing so.

Step 4: "Do we know if we need external Support? If so, what will it cost?"

By now, you have confirmed and re-confirmed that you'll be needing an implementation project after the analysis is complete. Now, you must make the determination as to whether or not you need to bring in external support. When doing so, you will have to answer a few critical sub-questions, including:

What type of external support do we need, and what will they be doing?
Do we have a cost estimate and, if not, how do we get one?

There are two distinct situations you may find yourself in depending on the specific needs of your business. The first is one where this level of support is only needed for the diagnostic itself. The second involves support for both the analysis and the project. This white paper assumes that any support will be provided by a consultant, either in an internal or external capacity. Note that the selection criteria remain identical for both.

This is an essential part of the larger process so that your consultant can best define the type of analysis you'll be working with. That in and of itself is important to guarantee team buy-in for the findings and the implementation project.

If you do not have an internal consulting team, obviously you will have to look for outside assistance.
If you yourself do not have experience with this type of situation, enlist the help of people you know who do and seek quality advice from all sources.
In any event, you should pre-select two to three external consultants.
Be ready to have several conversations with them so that both you and they better understand what is needed for the analysis and the project.
Any partner you select should be able to help you properly estimate the cost. No official bid should be "necessary" at any point.

If your support is being handled internally, it will likely be handled by your Operational Excellence or Continuous Improvement teams.

In that case, go through the same process and have the same types of conversations.
Though depending on your company rules, along with the size and scope of what is to come, it is still recommended to discuss with external consultants as well.

In all cases, you must be able to clearly articulate what type of support you need. Your consultants will need to know whether you need implementation capacity or capability support, whether you're looking for assistance with change management requirements, and similar issues. Likewise, you should not proceed before you have an estimation of the total cost.

Sometimes managers mistakenly believe that if they pretend they need some level of support even if they know they don't, it will incentivize the consultant to either do a better job or reduce their fees to participate. That may happen, but usually the consultant will provide a different analysis than what is necessary because they're working from incorrect information. This can lead to them spending too much time on superfluous areas like change management activities or influencing techniques, while spending less time on a detailed analysis. At the end, even with a discount the process will still be too expensive, all in service of something that was never appropriate to begin with.

It is recommended that you avoid playing this "game" and instead practice extreme transparency at all costs.

Moving Forward

By addressing these criteria, you will now have a better idea of whether or not support is needed, and if that support will be external or internal in nature. If external assistance is required, you will likely have selected a viable partner. Now, you can move on to the fifth and final step in the process.

Step 5: "Can we afford the assessment, and is the decision process clear?"

At this part of the process, you should have all the information you need to answer what is arguably the most important question of all: can you afford the Operational Excellence Assessment in question, and is the decision process clear within the larger context of your business?

For the answer here to be "yes," you must have a budget that is available or one that is likely to be approved for the analysis and project. Simply put, how can you expect to know if you can afford something if you're not 100% certain of its true cost?

This includes the costs associated with any internal or external support you are working with.
If no budget is approved, the criteria and process to validate the start of the project must be clear.
You should know who is involved, what role everyone is supposed to play, and what spend approval limit you are working with.
In general, the order of magnitude must be understood. You are well aware who the key Decision Maker is (if it isn't you) along with the Authorizer(s), and all parties agree with the process and the steps that will be taken moving forward.

Often, this is an area where neither you nor the consultants want to give an estimation for a variety of reasons.

From your point of a view as a manager, sometimes it is out of a fear of not getting the best price.
From the perspective of the consultants, sometimes they fear losing out on the business or looking unprepared.

This is yet another area where it is hugely beneficial to have open, honest and transparent conversations whenever possible. Not only does it help both parties better understand what the other one really means, but it again helps you gain a necessary understanding of the costs you will be dealing with in the future.

With regards to the clarity of the decision process, you need a deep understanding of the role that purchasing will play in the proceedings. This, along with acknowledgement of the potential impact on the processes and the consultant selection criteria, will help tremendously. Never assume that the decision process will follow the standard "expense/approval" process, as the order of magnitude (not to mention the complexity) of the project will likely be different than you are used to dealing with. All told, this must be as clear as humanly possible. You never know what surprises are waiting in store for you if it isn't.

If you have chosen a consultant who is working under the assumption that there will be an implementation plan enacted based on his or her support, that is going to influence their decisions in the short-term. If you already know that there is very little chance of that happening, you likely aren't going to get the level of analysis that best suits your needs. It is truly best to avoid this problem altogether and that requires clarity.

Do not forget that the decision process will take place just after (or sometimes, even before) the full end of the analysis. The size of the gap hear and the ultimate risks you will contend with have a directly proportional relationship. In an ideal situation, there is a preliminary decision that can be made before the end of the analysis. This is one that will benefit from both the internal motivation and the presence of the consultants. Because of the availability of those consultants and the fact that they are the same ones who were present in the project and the analysis, this will help create a much-needed sense of continuity at the beginning of that project that will be difficult to achieve through other means.

If these factors do not apply...

If you have reached this point and have determined that you cannot afford the assessment or that the decision process lacks clarity, you should similarly not move forward. If the criteria and the processes aren't clear, which includes the order of magnitude, they should absolutely go through further internal discussions.

This likely involves additional meetings with all key stakeholders and may even result in changing the scope entirely. The major risk that will soon reveal itself is the fact that everyone has put in a lot of effort and enthusiasm into something with the expectation of moving forward, only to find that it is unlikely to be approved. With more specificity, you could have anticipated the reason earlier in the process and avoided this outcome entirely.

Likewise, if no budget has been approved and isn't likely to be in the future, what sense does it make to proceed with an analysis at all?

If you still need more clarity...

If you cannot answer these questions, you need to speak with whoever is necessary to find the answers as you should not proceed until you have them.

Where do we go from here?

Now that the criteria are clear, you have more actionable information to work with than ever. You've identified what type of analysis and support you need, and you've mitigated risk at every corner. You've followed a path of solid preparation and are in a position to bring about genuine change to your company that will certainly create a better situation for everyone involved. You understand where you are, you have clarity on where you want to be and, most importantly, you now know what you need to do in order to connect those two points in the most efficient way possible.

As a manager, you have maximum visibility into what was once a murky process. You can now proceed with the selection of your consultant support partner.

This is not necessarily going to be easy. Again, choosing to enlist the wrong consultant could open the door for just as many problems as the wrong Operational Excellence Assessment decision, if not more. The good news, however, is that all the cards are squarely in your hand.

As you move forward, it is always recommended that you be as transparent as possible with your consultants. This will help make sure you are getting the best proposals from the right partners, giving you the widest array of options to choose from. Then, once you narrow your choices further based on your own needs, you will be left with someone who can support your implementation when needed over the long-term.

There are a lot of activities that will have to be performed in an internal capacity before the analysis even begins. This is especially true if there are a lot of "Change Management" style aspects to your implementation plan. You'll need to reinforce your internal communication capabilities, you must define the steering committee, you will need to select relevant internal participants and more.

But rest assured, at this point, you have a rock solid information of insight from which to build from. Provided that you have followed these five necessary steps, performing the right Operational Excellence Assessment decision for your business is no longer a question of "if," but "when."

If you would like to find out more about what performing the right Operational Excellence Assessment looks like from a consultant's perspective, we recommend that you read our companion document The 6 Steps a consultant MUST DO to propose the Right Operational Excellence assessment. Note that this is the exact same process, albeit viewed through a different point of view. A quality consultant can and should go through all the same questions and steps above, as it will help them to actually propose the right course of action to take. It is again the best chance they have at making the right Operational Excellence Assessment decision by your side. Even if the consultant is looking at internal considerations closely, this is important – for the consultant, this is more about proposing the right Operational Assessment rather than performing it.

If you have any additional questions that you would like to discuss with someone in a little more detail, please don't delay - contact us today and be sure to register on our website so that you can always stay up-to-date on this and other essential related topics.