BO/U1 Topic 4 Business as a System
A business system is designed to connect all of an organization’s intricate parts and interrelated steps to work together for the achievement of the business strategy.
Creating effective business systems often unifies the problem solving and decision making of the organization. Many common tools and methodologies are universally taught and expected to be utilized by all levels. Several key management structures, such as a full-time Performance Excellence office or systematic maturity assessments, are made a permanent part of the infrastructure. The business system also encompasses how we lead our people and connect them to the operational strategy.
There are several reasons to implement a business system.
Improving Top-Line Performance: Part of the business system is the development and implementation of strategy creation, business processes and strategic planning throughout your organization. Those foundational elements lead to a much more insightful way to investigate and grow top-line revenue. In short, a business system takes care of your future. It ensures you meet your customers’ expectations and improve your brand, which are key to growing a healthy business.
Meeting Customer’s Expectations: If you use a systematic approach, your organization will analyze, measure, compare and test all the possibilities of what your customers want and don’t want. You will have constant information on areas that need to be improved and, even more importantly, you will begin to understand the unmet needs of customers. A business system is key to improving the brand that the organization projects to your community, including customers, employees and suppliers.
Consistent Results: Whether we are considering safety, quality or getting the job done in a timely manner, a business system is designed to give you effective, efficient and repeatable results. In short, the business system gives you a “process to fix your processes.”
Employee Engagement: The goal of the system is to enable proper education and opportunities to all employees so they can complete their work more efficiently and effectively. We also seek to harness their ideas and creativity and, in the process, increase their personal engagement. Additionally, having the system in place allows you to quickly integrate new-hires, and makes it easy for them to see their role within the organization and bring forth new ideas.
Reduce Cost and Increase Profits: It has been proven time and again that the implementation of a sound business system helps reduce costs, but so will many things. A business system is intended to reduce costs without taking the shortcuts that often lead to an erosion of profitability due to the necessity to lower quality expectations or service levels.
The Power of a Business System
Value-Stream Based: Instead of assigning resources to projects based on financial priority, which means they can be spread all over, we assign resources to a specific site or value stream to work a series of projects. This creates focus, achieving significant transformation in that value stream and allowing the local leadership team to become comfortable using new tools to solve problems. With this approach, we build up islands of excellence much faster.
Such a value stream approach also allows for a more systematic project selection process.
Project Selection: Such a value stream approach also allows for a more systematic project selection process. We don’t want to be haphazardly selecting projects but rather working on initiatives designed to drive toward the achievement of the strategic goals and objectives of the business.
Move to Local: Nearly all improvement teams and kaizen events should be conducted at the local site. No more conference room kaizens! This gets more point-of-action team members involved and experiencing the process first-hand.
Pinpoint Focus: Improvement opportunities such as kaizen events should be scoped with a small enough focus to allow for actual process improvements to be made DURING the run week. Thirty-, 60- and 90-day plans are good for creating a long-term view, but we want to see immediate results both to the bottom line and in the lives of the employees doing the job.
Drum Beat of Success: Process improvements should take place in the same value stream on a consistent monthly basis until we have affected the required amount of improvement and have trained the local team. The “drum beat” of success is of vital importance both from a cultural standpoint and a sustainment point of view.
Replication: By installing a replication process, organizations can take an improvement implemented in one location and duplicate that to all of the other affected locations. This allows the whole organization to see results much faster.
Deployment Dashboard: A deployment dashboard summarizes all results to date and informs the leadership team of expected progress. This dashboard should be communicated on a regular basis. Results have to be measured and shared to sustain success.
Daily Management: Through a thorough Daily Management system in each value stream, we put in place—depending on needs—a tiered meeting structure, visual management boards and leadership standard work. Daily Management is the backbone of sustainability and is often where the most significant improvement opportunities are surfaced.