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Building High Performance Government Through Lean Six Sigma
A Leader's Guide to Creating Speed, Agility, and Efficiency
By Mark Price, Walt Mores, Hundley M. Elliotte
The McGraw-Hill Companies, Inc.Copyright © 2011Accenture
All rights reserved.
Building the Anatomy for High Performance
Because of its ability to withstand attack by improvised explosive devices (IEDs, including homemade bombs), the mine-resistant, ambush-protected vehicle (MRAP) has become a critical asset in protecting our warfighters across the globe. Demand for MRAP vehicles increased virtually overnight, from about 200 vehicles for the U.S. Marine Corps in late 2006 to more than 15,000 vehicles for the combined services by early 2007. In response to growing public concern about the adequacy of U.S. warfighters' field resources and protection, the U.S. Congress mandated delivery to Iraq of 1,500 MRAP vehicles by December 31, 2007.
Achieving this mandate required a rapid acceleration in production from 10 vehicles per month to 50 vehicles per day. The Navy and Marines were faced with a seemingly impossible challenge: increase output by a factor of 150, as quickly as possible. Building more facilities was out of the question because it would take too long. Simply throwing more and more bodies at the problem wouldn't generate the results needed (at one point the final assembly plant did reach maximum staffing and operated 24/7 but still fell far short of the 50-vehicle-per-day goal).
The leaders of the effort realized they needed a new approach that would generate greater productivity within the resource and time constraints they faced. There were three main components to the path they followed:
Adopting practices for achieving Operational Excellence. These included continuous process improvement (CPI) methods that eliminate waste and improved quality throughout a process (key to increasing productivity 150 times without requiring 150 times more resources). Most importantly, the leaders approached the challenge with an enterprise view of the production processes, meaning they looked at how to make all the pieces of the puzzle work together most effectively, end to end.
Driving a rapid response (agility). The leadership committed its own workforces and budgets appropriately. Recognizing the congressionally mandated timeline, the leaders brought in outside experts who guided decision making and drove innovation while internal resources were being brought up to speed.
Shifting the culture. This will create a learning environment in which workers were encouraged and supported in their efforts to obtain and apply new skills and tools for attaining Operational Excellence and agility.
Together, these three components—building Operational Excellence, developing agility, and creating a supportive culture and workforce—set the foundation for increasing output and quality while reducing the amount of resources and cost needed. These components give an organization the right anatomy for achieving high performance: the capability to continually improve productivity and to deliver more mission for the cost.
Targeted improvements in the MRAP assembly operation were launched in August 2007. Production had reached 10 vehicles per week by that time, thanks to a combination of increasing the number of workers (= higher budget) and some initial Operational Excellence improvements. Unfortunately, production was still far below the target.
Only by adding in the other two components of Performance anatomy—agility and culture—did MRAP production reach its 50-vehicle-per-day goal just four months later, in December 2007. (Published accounts cite 2008 production figures that occasionally rose even higher, to 70 vehicles per day.)
This book looks at the three components of a Performance anatomy from a leadership perspective, examining key leverage points in each area. To lay the foundation, here is a quick overview of each component.
Component 1: Operational Excellence
It is likely that you have heard the term Operational Excellence before, perhaps framed as the ultimate goal of adopting a particular continuous improvement methodology. Some related terms you may be familiar with are process improvement, Lean Six Sigma (LSS), Lean Transformation, and business reengineering.
We use the term Operational Excellence in its broadest sense to mean maximizing outcomes for the cost. That definition describes a comparison that is not yet widely recognized in the public sector: that the value delivered by an organization will always be judged against the cost to deliver it. Operational Excellence means you can continue to deliver more and more value for less and less cost.
The comparison between value and cost is important for every organization and is becoming increasingly important in the public sector. Managers and leaders are under constant pressure to decide where and how to best allocate shrinking or limited resources. In government organizations, the investment decisions are often complicated by regulatory requirements that mandate how portions of the funding must be allocated. This further pressures the organization to create favorable outcomes within prescribed funding limits.
Key attributes of organizations that achieve Operational Excellence include:
They understand and communicate what is important. They have a clear sense of mission, have identified their customers (the people and groups who use their services or products), and have expended the effort to deeply understand what those customers value most.
They are constantly evaluating their own performance. They have identified metrics linked to strategic and operational goals and monitor the metrics regularly to evaluate progress and gaps.
They link improvement efforts to strategic priorities. Improvement efforts at every level are linked to cascaded priorities; each effort drives the execution of agreed-upon strategic priorities.
Working toward Operational Excellence has many beneficial side effects. Think about the training that runners do to lower their time in a 5K race (a desired outcome). They need to make a number of "operational improvements": develop more efficient strides, control their breathing, and develop better running technique. As they make these improvements, they see additional benefits, such as better muscle tone, fat loss, decrease in resting heart rate, shorter recovery periods, and so on. Those benefits come along with achieving their key outcome, building speed for the 5K.
In the same way, High Performance government organizations gain from Operational Excellence in secondary ways. Besides the direct benefit of delivering on current outcomes with improved efficiency and effectiveness, they display execution excellence across other aspects of the enterprise (see Table A).
For example, suppose a public safety organization wants to reduce crime levels—an outcome. It conducts a survey to find out what citizens value most, which turns out to be a quick response when they report incidents. After identifying a range of possible actions that would contribute to faster responses (a citizen-oriented outcome), the organization makes operational improvements that consistently decrease response time. That effort leads to greater citizen satisfaction, a side benefit of a chain that started with a strategic focus on an important citizen-oriented outcome. This cascading of priorities is vital to the success of any organization as it plans investments and channels resources to achieve its desired outcomes.
Part I provides detail on shaping an effective Operational Excellence effort.
Component 2: Agility&L
Excerpted from Building High Performance Government Through Lean Six Sigma by Mark Price. Copyright © 2011 by Accenture. Excerpted by permission of The McGraw-Hill Companies, Inc..
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