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Metric Synchronization Versus Standardization The Real Value Behind IEE Smarter Solutions Profile

Written by: Jon Hansen

Article Overview: “Like a politician stumping for votes, proclamations by senior executives (and many industry pundits) that people and not technology are what is important rarely translates from the realm of oratory pontification into meaningful real-world application. This is due in large part to the fact that outside of the framework of political correctness, communication as Bill McAneny offered in his book Frankenstein’s Manager – Leadership’s Missing Links is actually a desire and not a skill, a skill that is in short supply according to his findings. In fact, second only to the ubiquitous lack of people skills complaint, ineffective communication said McAneny is the most common charge leveled at an organization’s leadership.”

Metric Synchronization Versus Standardization The Real Value Behind IEE Smarter Solutions Profile

“Like a politician stumping for votes, proclamations by senior executives (and many industry pundits) that people and not technology are what is important rarely translates from the realm of oratory pontification into meaningful real-world application.

This is due in large part to the fact that outside of the framework of political correctness, communication as Bill McAneny offered in his book Frankenstein’s Manager – Leadership’s Missing Links is actually a desire and not a skill, a skill that is in short supply according to his findings. In fact, second only to the ubiquitous lack of people skills complaint, ineffective communication said McAneny is the most common charge leveled at an organization’s leadership.”

The above excerpt from my 2007 white paper “Talent Attraction and Retention in a Global Economy” was originally referring to countless industry studies such as the 2007 ISM, CAPS and AT Kearney paper "Succeeding in a Dynamic World: Supply Management in the Decade Ahead” and in particular the seemingly contradictory relationship between the principles of effective communication and practical collaboration.

What is interesting is that the same paradoxical elements that have undermined the majority of supply chain initiaves are also the factors that have influenced the ineffective implementation of countless business management strategies like Six Sigma.

In fact, in a comment I received the other day regarding my August 1st post (Beyond Lean Six Sigma, the hidden IP value in contracts and bridging the procedural-operational gap in the acquisition of services), one reader emphasized the importance of communication originating at the senior level. Specifically, he opined that “For all this to work in concert, and for the technical elements of Six Sigma to be effective, you have to set the proper management orientation.” The reference to “management orientation” certainly suggests that McAneny’s findings are in deed universal.

Based on the significant impact that effective communication has on a successful strategy, be it Six Sigma or any of the other numerous “best practice” disciplines, it is a safe conclusion that all are rendered largely ineffective where the channels of collaboration between key stakeholders have been siloed by self interest.

And it is this precise point that formed the basis for my research into Forrest Breyfogle’s Integrated Enterprise Excellence (IEE) program.

Beyond Six Sigma?

In my post from April 24th titled A Dichotomy of Perspectives: A Discussion on Forrest Breyfogle’s New Book on Integrated Enterprise Excellence (see link under the Web Resources section), I had voiced my usual concerns relative to a strategy’s “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.”

In particular, the statement that “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.”
While the precept behind this statement is not in and of itself inherently flawed, it is the misintepretation of its effectivenesss in the vacuous hierarchy of ineffective executive leadership and in particular communication (refer back to McAneny’s book), that the greatest damage to organizational synchronization is done.

This of course formed the basis for my previously highlighted concerns (some might even say cynicism). Because, it does not matter how sound the foundational principles of a program such as IEE may be in theory, it is at the level of practical execution that poor communication leads to the eventual derailment of any initiative.

According to Breyfogle, these communication challenges may be a symptom of the “hidden agendas that can undermine the system; e.g., this lowering the water level will expose the hidden rocks that I have been hiding behind for years,” mindset on the part of stakeholders who are made insecure by the prospect of a self-examination process. Similar to the “I didn’t know I was sick until I saw a doctor” complex.

And the recognition of this basic truth is what appears to differentiate Forrest Breyfogle’s (and Smarter Solution’s) IEE methodology from the rest of the pack.

Communicative Contrasts

Before I delve deeper into IEE’s epiphany (although it would appear to be a safe assumption that this was neither a new or sudden insight on Breyfogle’s part) pertaining to the importance of effective communication starting at the senior executive level, I think it is important to provide real-world examples outside of the framework of a particular program.

One of this Blog’s most popular series of articles was the Yes Virginia posts, which sought to understand the success of the Commonwealth’s eVA initiative as compared to the Government of Canada’s (GoC) Way Forward program. (Note: see the corresponding link to the entire series below, paying particular attention to the October 23rd, 2007 Summit Simulpost.)

Even though both programs started at approximately the same time (fall 2001), the stark contrast in success is palpable. While the Canadian program has and continues to languish under revolving leadership, eVA has achieved and in certain instances likely surpassed its original targets.

While there are many reasons for eVA’s success, at its foundations is senior management’s acknowledgement that “government is not just a single business but is actually comprised of many different lines of business.” By seeing that “government goes beyond a mere org chart,” the Commonwealth program’s leadership was better positioned to understand the “special needs, special rules and special challenges associated with the procurement practice of each entity.”

What is ironic is that both Virginia and the GoC started with the same principles of a “one enterprise” methodology through which all departments would be called upon to adhere to a shared services platform. The difference is that shortly after launching eVA, Virginia recognized that a non-collaborative single standard was tantamount to a “monolithic undertaking” in which “centralized control (or the illusion thereof)” was the driving force, was untenable.

Senior management’s ability to recognize the flaws associated with the shared services ideology was simply the first step. The crucial step was directly linked to their courage and determination to change course and build a program based on both internal as well as external stakeholder input.

Now as I had indicated in the original post, I do not want to mislead you into thinking that the Commonwealth did not experience a degree of pushback from stakeholders. Certain elements of the program did illicit some degree of criticism. The key differentiator between the GOC and Virginia was the willingness on the part of senior management to listen and understand stakeholder concerns and take the appropriate course of action to remove barriers.

And it is within this type of “open” environment that IEE can shine as an ingenious collaborative engagement mechanism.

Why IEE?

Once again, I would like to emphasize the fact that I am not a voice piece for Smarter Solutions. Its viability as an effective methodology for your organization will be up to you to determine. In this regard, I will direct you to the Sponsor Presentations section of the PI Blog to invistigate the Smarter Solutions value proposition in greater detail, and at your own convenience.

That said the purpose of this post is to provide you with a point of contextual reference. And as I tell my seminar audiences, my sole purpose is to stimulate you to think outside of the framework of that with which you are most familiar and most comfortable. In essence, help you to see through a new or different lens of greater understanding.

This of course leads to the question, why IEE?

Over the past weeks I have had the opportunity to talk with Forrrest Breyfogle as well as Fred Bothwell from Smarter Solutions.

As I am sure you can imagine, besides sharing the same enthusiasm for our respective professions, there was a willingness on Forrest’s and Fred’s part to openly discuss the principles of the IEE program, and in particular its key differentiators (or unique attributes).

To begin, and as a point of reference, Fred provided a case study on Oracle Packaging, one of IEE’s early adopters. (Note: I am likely not the only one to think that the “other Oracle” might derive some benefit from a collaborative teamming with Smarter Solutions.)

Oracle Packaging converts aluminum ingots into sheets of foil used to produce the lids for yogart containers. According the the case study, IEE analysis showed how changing the width of the foil used could reduce work in process (WIP) or in-process inventory by 30%. This is a significant reduction in that WIP poses several challenges including the level of capital investment and the potential risk of goods expiration. (For all of you who have read my articles centered on Bridging the Communication Gap between Finance and Purchasing, WIP represents a good opportunity to open a dialogue with your CFO.)

Other program benefits included; improvements to production scheduling leading to a working capital reduction of $232K (without having to change the manufacturing process), a lead time reduction that is half that of the industry standard, a 5% reduction in raw material orders for internal production, and the potential to reduce scrap by 50%.

While Smarter Solutions can undoubtedly provide a variety of similar case references, the real question is why does it work? Even more importantly, what was the collaborative mindset of senior management within client organizations such as Oracle Packaging? And finally, to what degree did it contribute to the successful outcome?

Even though I will leave the specific answers to these as well as any other questions you may have for the one-on-one session between yourself and Smarter Solutions, I cannot help but think back to my interview with Bob Sievert from the Commonwealth of Virginia.

In particular the conclusion that while Ariba was one of the technological cornerstones of the eVA platform, the program’s ultimate success had very little to do with the technology that was selected. It was once again the willingness and ability on the part of senior management to proactively engage key stakeholders both within and external to the Commonwealth’s supply practice.

To me, the ability to facilitate a productive dialogue between stakeholders as a means of leveraging IEE principles is Smarter Solutions true value proposition. It represents an important starting point for any program. If they (being Smarter Solutions) are as adept at this area of practice as they appear to be, they have gone a long way towards justifying their “Beyond Lean Six Sigma” moniker. And it is on this basis that I would encourage you to check them out for your own edification.


Web Resources:
A Dichotomy of Perspectives: A Discussion on Forrest Breyfogle’s New Book on Integrated Enterprise Excellence: contact the author for details

The Procurement Insights Blog reaches 300,000 syndicated subscribers each month worldwide, and is currently available in English, Chinese, Portugues and Russian with new language versions being added in the near future.

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Article Tags: august 1st, dynamic world, global economy, importance of communication, industry pundits, ineffective communication, lean six sigma, management orientation, missing links, oratory, political correctness, pontification, principles of effective communication, proclamations, proper management, senior executives, six sigma, talent attraction, technical elements, world application



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