volume.

A Dichotomy of Perspectives: A Discussion on Forrest Breyfogle’s New Book on Integrated Enterprise Excellence

Recently, I had the opportunity to exchange ideas on the veracity of the various models that organizations rely upon as the framework for building a successful enterprise.

What prompted this open and productive exchange of ideas was a question that was recently posed regarding the merits of Forrest Breyfogle’s latest book on Integrated Enterprise Excellence (or for those of you that have a penchant for acronyms, IEE).

In the following paragraphs I will share a few of the more meaningful discussion streams starting with the original question.

Original Question:

I recently read one of Forrest Breyfogle’s new books in his 4 book-volume series on the Integrated Enterprise Excellence (IEE) System; i.e., “The Integrated Enterprise Excellence System: An Enhanced, Unified Approach to Balanced Scorecards, Strategic Planning, and Business Improvement.” The subtitle to this book describes what is covered in varying details in the other three volumes. My sense is that Breyfogle has pushed his (and our) thinking to the next level and addressed issues that many of us struggle with regarding Continuous Improvement efforts. His “Integrated Enterprise” thinking makes sense to me, what are your thoughts or feedback?

Bill
Operations, Supply Chain & Continuous Improvement Executive

My Response:

The fruit of the poisonous tree!

A telling statement regarding IEE is as follows:

“IEE is a system of checks and balances that will stay in place regardless of management continuity, changes in competitive conditions, or the economic climate.”

This is textbook equation-based modeling whether in the form of Six Sigma or SCOR or for that matter any model which attempts to establish an absolute standard in which success is based on the organization adapting to the model versus the model adapting to the organization.

It doesn’t work as the standards by which these checks and balances are based, specifically their sustainable veracity, begins to degenerate from the very moment they are first established as the static attributes of a sound process.

Refer to my recent article I wrote titled Similarity Heuristics, Iterative Methodologies and the Emergence of the Modern Supply Chain.

This should serve as a solid starting point for drilling down into the specifics of why the IEE theory is inherently flawed.

I have also provided two additional links of corresponding articles that I am sure you will find interesting given the nature of your question.

Links:

Why Six Sigma Initiatives Fail (A PI Q and A)
Is Ford’s auto-xchange the “Real Deal


Response from Andy P. (Independent Professional Training and Coaching):

I tend to agree with Issa Boss’ remarks. I, to, have read Forrest Breyfogle’s books. And in the spirit of full disclosure, I provided pre-publication review.

Furthermore, I think Hansen makes some interesting points. I am confident we would all agree that no model is sufficiently robust to accommodate all situations. I think it is appropriate in this respect to remember the (paraphrased) remarks from Box, “. . . all models are wrong; some are useful.” (Note: George Box is considered to be one of the most influential statistician’s of the 20th century. My theory of strand commonality is based on a variation of his time series analysis model which seeks to determine why and how data points come into being. The distinct difference is that Box attempted to forecast versus adapt to future events based on what he referred to as “known past events.” My article on Similarity Heuristics and Iterative Modeling introduces the existence of multiple stakeholder streams which are comprised of indigenous attributes which are to varying degrees dynamic versus being static in nature. Hence the continuing challenges associated with the veracity of single stream models.)

I believe Forrest presents his IEE model as a useful model for decision-makers and implementers to enable their organization to attain its goals – strategic as well as tactical goals. Indeed, in my opinion, his model has considerable flexibility. Maybe, some answering the questions got confused by the detail? Some answers, like Mr. Greene’s, criticize inappropriately without offering any positive alternative.

I find that Forrest’s IEE model does an excellent job of integrating past models (Deming, Juran, Crosby, Goldratt, etc.). I intend to use his teachings in mine. Finally, I recommend the “System” volume as an excellent overview for leaders and decision-makers in an organization.

My Response:

To begin, the passion demonstrated by everyone’s comments is terrific because it is the basis for honest dialogue.

As I tell my audiences at every conference in which I am speaking, to be considered successful I have to inspire you to think outside of the framework of that with which you are most familiar and most comfortable.

This means that you do not take what I have to say for granted or accept it as being gospel. Instead, and with the tools that are readily available (i.e. Google), you should challenge everything as no one individual has all the answers.

Even Jim Collins who wrote what I consider to be breakthrough books on business (Built to Last and Good to Great), has his detractors.

The fact is that any research and its resultant findings must be constantly challenged. If the outcomes are right, they will stand the sustainable light of scrutiny (note my reference to the word sustainable).

A good portion of my research has been funded by the Government of Canada’s Scientific Research and Experimental Development (SR&ED) Program. During the years of testing and retesting the veracity of a number of theories including strand commonality and the existence of commodity characteristics, a healthy balance between scepticism and enthusiasm has served me well.

Here are two additional articles that I am certain will also inspire debate. Let’s keep the embers of both passion and progress burning brightly!

Links:

Is there a Poor “Herbie” Anywhere in the Oracle SCM Area
How Does the Complexity Theory Apply to Business


Response from Frank F. (Business Futurist):

I appreciate the value offered by IEE, because I have used it successfully. But there has to be balance.

I constantly use the satellite view of organizational leadership and ongoing operational management. I am a futurist who envisions the macro future intuitively, but being an ex-banker I appreciate the need to zero-in on micro controls and metrics. You need a balance of both.

I thus also understand the diversity of opinion revealed by answers thus far. This dichotomy, which must be overcome if IEE is to succeed, is widespread, due to two innately-human reasons:

1. While few executives can prove their mission statement with concrete data, they intuitively “know” how those initiatives drive supporting operational improvements.

2. Other executives need metrics. Measuring results with micro-data, they meticulously orchestrate asset allocation so as to achieve optimal micro yields for greatest bottom line impact.

Which approach works best? I believe you need both.

You need IEE to identify flawed processes, as well as to re-invent rather than replicate old or outmoded processes. But you also need a “map” for the future in order to continually boost growth and profits.

CEOs that used a balanced approach need substantiated metrics that both measure and drive business dynamics. By seeing the future, they use IEE as a preventive tool to evaluate projects beforehand, thus avoiding those that have marginal benefit or may become negative, thus killing them early.

Indeed, the balance of “future vision + daily IEE” provides for innovation, re-invention, continuous improvement, and goal achievement.

This balanced approach is effective, regardless of changes in management succession, and it allows for faster and more nimble decisions in a digital economy – where it is essential to be digitally competitive.

IEE can also be used for process improvement and goal attainment in every corporate function, from R&D to sales, including HR and IT itself. It can make the entire organization hum. (Personal Observation: while many of the points that Frank has raised have merit, it is the “broad, enterprise-wide” application of any model or standard which has led to the majority of supply chain initiative failures such as Vendor Rationalization. Refer to my November 27, 2007 article titled The Continuing Dangers of Vendor Rationalization.

But this still is no simple panacea. Effective implementation needs careful forethought and planning.

To succeed, you need a clear view of the metrics. (This will annoy the data-phobic right-brain visionary, but will delight the left-brain manager who loves numbers – regardless of their value.) But you need both macro and micro. And there is the rub, and the dichotomy.

• You need the “big picture” satellite view. You need the Balance Sheet, P&L, and Cash Flow statements, not the bookkeeping ledgers.

• You need to be able to spotlight non-conforming processes or trouble spots, in order to identify their cause and swiftly implement a remedy.

A clear, balanced, macro-micro view ensures smooth operations. It not only identifies what is (or is not) working, it helps you to anticipate and overcome internal resistance to change. (Note: I have written many articles and papers as well as given lectures on what I refer to as the Change Management Myth. Any initiative or program upon which its success is based on a change management strategy almost always fails. Exceptions to these results are found in situations where the organization in question is going through a major restructuring exercise usually predicated by serious financial distress. Some would refer to these as turnaround undertakings. Given the voluminous nature of the reference material available, if you would like to obtain copies of said articles etc, please send me an e-mail with “Change” in the subject line.)

I have used this approach successfully in several turn-around operations, and understand the dichotomies that surface. But those who do not understand or appreciate its benefits need to get onboard – or out of the way.

Using this whole-brained view is the only way forward (those familiar with the Government of Canada’s initiative of the same name re “Way Forward” will find particular interest in this post), regardless of whether you are using IEE or any other tool.

My Response:

The dichotomy in responses to which Frank referred in his answer is one of the most critical elements in defining the success or failure of any model.

I wrote an article titled “Bridging the Communications Gap between Finance and Purchasing which was then followed by a supplemental piece which provided specific references to several points of disconnection between finance and purchasing. (Note: I refer to purchasing/supply chain as 85% of all ERP/eProcurement initiatives world-wide fail to deliver the expected results.)

The question is why? And a statistic which stands out as one of the key reasons can be found in the following excerpt from my article:

A May 4th, 2006 article titled How to Speak Like a CFO stressed that “Too often, finance executives in Corporate America simply don’t believe that purchasing departments are really bringing in the savings they claim. That may be because finance and purchasing don’t speak the same language.”

For example, the finance department isn’t interested in cost avoidance. They are interested in hard cost savings. This is perhaps one of the main reasons why a recent study revealed that of the 11.9% of average identified savings presented by the purchasing department, only 3.2% actually gets booked by the finance department – a difference of 73% from identification to realization.

A 73% difference! The problem with most models that are offered as the framework for “best practices” is that they attempt to standardize on a single stakeholder stream of attributes. This then creates stakeholder conflicts at the operational level that has historically been at the root of organizational vacillation between a focus on top line and bottom line results.

Therefore, and given the increasing importance and influence of supply chain practice, until the 85% rate of failure has been reversed can any model claim to be truly successful or effective from a collective outcome perspective?


(Note: If you would like to read all of the responses to the original question, send me an e-mail, and I will forward the coordinates to you.)

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