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Benchmarking REPORT 2018: Process or People?: Powered by
Benchmarking REPORT 2018: Process or People?: Powered by
REPORT 2018:
PROCESS OR PEOPLE?
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Daniel Abrantes is Global Change and Communication Manager at IKEA Group. He has international
experience in managing teams, developing staff at leader level, and communicating and cooperating with
individuals on all organizational levels. With a background in change management and practical experience at
operational, managerial and consultancy level, he is experienced in strategic initiatives transforming
organizational culture, structure and process.
Leslie Behnke leads Global Business Transformation and Operational Excellence enterprise strategies to
increase top line growth, enhance productivity, optimize process effectiveness, drive standardization, mitigate
risk while instilling a culture of continuous improvement. She has held OPEX leadership positions with
Motorola, Cigna And TD Bank Financial Group
ecognized as an industry key, Leslie says: ‘I am passionate about people development and creating leaders
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who collaboratively think end-to-end across Supply Chain, Operations, Risk and IT. I believe in continuous
learning and giving back to the Transformation and Operational Excellence leadership community.’
Shane Wentz is an Executive Leader who leverages Master Black Belt (MBB) certification with 12 plus years
experience in Continuous Improvement, Operations, Supply Chain, and Quality for multi-million dollar global
organizations such as the US Army, Siemens, Nike and Radial.
He says: ‘At its core, continuous improvement is about enabling people to improve the processes they work on
everyday (as the subject matter experts) through respect, training, enabling and facilitating their improving of
their own areas.’
As well as scripting television and radio, Ian’s live event experience led to writing an acclaimed book, Insider
Secrets of Public Speaking and running communications workshops on both sides of the Atlantic.
Ian’s passion is helping businesses of all sizes understand how technology and communication can give them a
competitive edge.
www.linkedin.com/in/ianrhawkins
Digital disruption and transformation is upon all the businesses, large or small. In our
recent benchmarking survey, digital transformation has been mentioned as the number one
business challenge in 2018-2019. The reality is that we are still in a learning phase. Decision
makers and transformation leaders are playing catch up to truly turn this into the biggest
transformation opportunities.
hich priorities are you placing your key transformation investments and
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resources?
here are you with your business transformation as an organization against your
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peers?
What should be the next steps to strategize and lead your transformation?
ave you got the right balance of people, process and technology to drive your
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transformation along?
These are the questions we aim to help you understand through our OPEX Summer Business
Transformation Leaders Benchmarking survey.
The results of the OPEX Benchmarking survey tell us that digital disruption is real and
anyone not ready to transform will be left behind. Yet humans are still very much at the heart
that transformation strategy.
We have an intriguing opportunity before us: we can make work more productive and
enjoyable. We have the tools to eliminate waste and inefficiency. We can take out the tasks
that are done better by machines and free up human beings to act like human beings. The
question is whether we really will take the opportunity to transform your business.
Our respondents came from across the board with the largest group from a company of more than 10,000 employees.
This is a clear indication that many of the largest organizations are on the journey of process led transformation.
There is massive disruption expected as a result of digital technology, we should anticipate the closure of those companies left
behind who aren’t ready to adopt but there is significant advantages for those early adopters
Clearly not all businesses and industries are going to be affected in the same way, but we have to ask whether the ‘business as
usual’ approach is wishful thinking; or whether technology will burn itself out.
Daniel Abrantes: The three first options are more or less: adopt some new technology, but mainly remain with
what we know works. They speak more to behavior than the last option, which is more of a prediction. Can they
really be compared? To me, the result indicates that many expect disruption, but because disruption by definition
cannot be foreseen, the chosen strategy is some level of caution (staying with what works, but adopting sufficient
new tech to be able to transform quickly if/when needed).
50.00% I am an influencer
Increased Corporate
Changing
46.30% Operating 5.56%
Social
38.89% Customer Pressure Responsibility/
Behaviour Costs 29.63% of Growth Local Content
Quotas
Employee
23.15% Digital
Attrition 59.26%
Transformation Regulatory
35.19% Compliance
Uncertain Human
29.63% 22.22% Capital
Economy
Deficit
10.2% Other
Digital transformation and increased operating costs are the big concerns in the next 12 months. This may speak to anxiety about
the world changing very quickly thanks to technology – and businesses then feeling the need to spend on technology to keep up
with the competition.
Daniel Abrantes: Also, digital transformation is the most difficult to accomplish, because it involve complex changes
which are often not very visible to the many people in the company despite having a big impact. Many companies
have less experience with digital transformation than with other kinds of business transformation.
Operating costs may also be affected by legislation – the GDPR (General Data Protection Regulation) which is
affecting the EU and any organization that does business with the EU is just one example: batting the responsibility
for data protection onto individuals within a company has meant that organizations are having to roll out training programmes for
their staff – under threat of punitive fines if they break the rules.
This is just one area of risk for strategy – after Facebook/Cambridge Analytica, privacy is at the front of people’s minds. But data
protection is just one of the ‘known unknowns’ – there are also the ‘unknown unknowns’ the perfect storms that become inevitable
problems – inevitable, that is, in hindsight.
Another issue of concern is the change in customer behavior. There used to be a saying that customers changed their spouses
more often than they changed their bank. With better technology and volatility in banking, people are more open to attractive offers
to join different banks, and the threshold at which customers will jump ship is perceived to have lowered. Customer loyalty isn’t
something any business can afford to take for granted.
Technology makes the world accessible to anyone, anywhere – and as a result, customers have less patience for suboptimal service,
(too) high prices, or long delivery times.
Shane Wentz: If increased operating costs is a major challenge then it would appear having a mature OE program
would be beneficial to these organizations. A major goal of any OE program is to improve efficiencies which should
drive down costs. Changing customer behaviors is also an area where a mature OE program would aid an
organization. OE leverages tools such as journey mapping to get a focused understanding of the customer which
then allows the organization to better exceed customer expectations.
Processes - 53.70%
People - 26.85%
Technology - 19.44%
Process is, overwhelmingly, the focus area, unsurprisingly given this sample set.
Shane Wentz: A focus on process isn’t a surprise given the make-up of the respondents. Operational Excellence,
at it’s core, is process based. Focus on improving processes and the result will be a more effective and efficient
operation. However, we shouldn’t forget the importance of people in operational excellence. As Fujio Cho,
former president of Toyota, used to emphasize: people are at the center of everything we do and respect for
people is a critical component of continuous improvement. In addition, if one wants to get “buy in” for
operational excellence then that buy-in comes from the people of the organization. Research shows that between
60 and 80 percent (depending on the study) of transformational efforts fail. The only way to not be a “transformational casualty”
is to focus on the people in terms of getting support for those efforts.
There is an interesting gap in responses between this question and the previous one. Though respondents see their biggest
challenge as digital transformation (overwhelmingly), their number one focus is process and not technology. I can only ascertain
that either respondents see digital transformation as process focused and not technology or there is a conflict in responses with
the two questions. In addition, people being cited as number two with respect to focus area but not in the top five responses
in terms of biggest challenges faced is interesting. Many organizations don’t have adequate metrics to measure employee
engagement therefore that could be one reason for the difference in responses. A majority of the respondents to the survey were
also in organizations with very new OE program or no program at all. I would presume that respondents from more mature OE
organizations would put more emphasis on people as they are critical in getting OE programs off the ground and again in the
sustainment phase.
Daniel Abrantes: Given that the main challenge is digital transformation, why is technology only third here? It
might be that this question speaks more to the individuals (“your number one focus”) whereas the previous
question is phrased in a more general manner (“the three biggest challenges to your business”).
Although we are in the process business, people are the ultimate barrier for success with operational strategies. To quote Peter
Drucker “culture eats strategy for breakfast”. Without a mindset and skillset shift OPEX strategies could fail.
- OPEX Project Leader, company size 10,000+
No matter how smart and simple you make the process, without buy-in and adoption from the people involved it will never work.
- Head of Productivity, company size 10,000+
People is more important to successful operational excellence strategies because the old adage is true...culture will have
processes for lunch. We have to work on the people and their understanding of the WHY and how every PROCESS impacts
the outcome, good or bad. I have seen countless times over the last 4 years how improvement has been stagnated or not even
attempted because of the culture and the habits associated with a few people impacted what would have been a good outcome
or lesson learned to future OE strategy. - Project Manager, company size 10,000+
PROCESS
By optimising the process you get people engaged and improve engagement and satisfaction on the people.
- Robotics & Automation Manager, company size 10,000+
People can overcome bad processes, but then you burn out those people / need firefighters. Good processes allow everyone to
do well - and not have just elite “heroes”. - Director, Process Improvement, company size 10,000+
The most important element to successful OE strategy implementation is getting the people within the organization to understand
what OE is, believe it is what is needed to improve performance and commit to making it work it. If the people don’t buy into it or
believe it is just the latest fad, then they won’t put in the effort to make it succeed. - Project Manager, company size 10,000
50%
40% 33.33%
18.52% 25.00%
17.59%
30%
20%
10% 5.56%
0%
We are looking OE program in place OE program in place OE program in place OE program in place
to start an OE for 1-3 years for 3-5 years for 5-10 years for 10+ years
programme in the
next 12-24 months
This area skews young: put together the options ‘we are looking to start an OE programme in the next 12-24 months’
and ‘OE programme in place for 1-3 years’ and you have almost half of the data set (include the next category along,
‘OE programme in place for 3-5 years’ and you’ve got over three-quarters of the responses).
The message from the data is loud and clear: in a year’s time, those who haven’t done anything will be seriously behind
the curve.
30.00%
Individual
Department Head
25.56%
CEO
17.78%
Chief Operating Officer
16.67%
Other (please specify)
6.67%
Chief
Transformation Officer
3.33%
Chief
Information Officer
Daniel Abrantes: This is important! Despite many change management schools telling us that top-level
sponsorship is crucial (and we are conditioned to believe it), it is the individual department heads which make the
biggest difference in real life. This result mirrors other studies. It should inspire us to rethink our stakeholder and
sponsorship mapping when aiming to implement programs or drive transformation. I wonder if the CEO was rated
more important in the small or large companies?
36.67%
Lean/
Lean Six Sigma
15.56%
Business Process
Management (BPM)
Strategy Planning
13.33%
Agile
8.89%
8.89%
Other
Project Portfolio
Management 7.78%
Lean Start Up
3.33%
Design thinking
3.33%
2.22%
Dynamic Case
Management
Lean Six Sigma continues to prove its worth and is the runaway winner here; in a rapidly changing world, respondents are clearly
comfortable with a tried-and-tested methodology that has been adopted around the world and is regarded as a credible approach
to OPEX.
Echoing other results in the survey, the human element of change and OE are a clear priority - managing the people involved is
essential to seeing the technology work.
RPA and Data & Analytics are riding high as the two most attractive areas for further investment, offering impressive RoI and
industry-wide enthusiasm
Shane Wentz: Once again, there is an interesting dynamic in responses to this question. Two of the top three
responses revolved around technology, which appears to line up with a previous question in which respondents
called out digital transformation as their biggest challenge. However, question three could still be seen as
misaligned in that respondents planned to focus on process more than technology. It’s also clear that “people
engagement” is far down in the list of where respondents were looking to invest; coming in with the same
percentage as process mapping/modeling. Responses thus far would appear to suggest that respondents aren’t
as concerned with building a culture of operational excellence; as culture is driven by leaders which is about people engagement.
In addition, as previously noted: without getting buy-in from people operational excellence efforts are doomed to fail.
Daniel Abrantes: I do not see any clear trends here – at least none I would think to be statistically significant –
except maybe one: PMO Management is lowest on the list, which could either indicate that everyone already has
well-functioning PMOs in place, or that we are realizing that PMOs might not be the best way to drive business
improvement (that is certainly the case in IKEA, and I believe in other companies as well).
Enhance collaboration
across verticals
Generating insights
from data
Streamline information
management
Create a center
of excellence
Improve operational
efficiencies
Monetise
intellectual property
Cutting down
service times
Reducing headcount
Enhanced risk
management
Improve customer
experience
Leslie Behnke: OPEX practices can be viewed as old news-and that’s where companies potentially run in to
trouble. If you don’t truly know how your processes are performing, what gaps you need to close or improve and
what controls should be in place and understood by everyone then this could ultimately lead to customer facing
catastrophic failures. Companies who understand this don’t make negative headlines.
RESISTANCE TO CHANGE
Understanding resistance to change is key to overcoming it, according to HBR. They offer the following points:
Getting people to ‘participate’ in change programmes is popular, but may itself lead to problems.
Understand that the true nature of resistance is not usually technical change - but the change in their human relationships.
Blind spots and attitudes held by the people driving the change are breeding grounds for resentment.
Management can make use of the fact that signs of resistance may serve as a practical warning signal in directing and timing
technological changes.
Top executives can shift their attention from the facts of schedules, technical details, work assignments, and so forth, to what the
discussion of these items indicates in regard to developing resistance and receptiveness to change.
Leslie Behnke: Massive disruptive change will continue. Leaders need to navigate improving their customers
experience with innovation and unfailing integrity. It is not business as usual. It is more important than ever for
OPEX practitioners to partner with their leaders to evolve and keep the business viable and thriving for years to
come.
Daniel Abrantes: The result is not surprising, since the question is phrased using the word ‘adoption’. I wonder if
some of the resistance might not be active resistance to a specific OE initiatives, but rather lack of internal
cooperation, coordination, and collaboration.
Shane Wentz: Respondents appear to be placing a lot of importance in both the “hard” or data analytics type
skills as well as “soft skills”, which in this author’s opinion includes coaching. This would appear to be in line with
most research on the topic which shows that to have a successful OE program, organizations need training to
instill the “hard skills” as well as having OE professionals in place who have those skills and can train others in
those areas. The same research, and my experience, also emphasizes the ability to coach and influence others for
an organization’s OE program to be successful. Processes are critical, but people are at the center of OE.
The broad spread of responses indicates that there are openings for practitioners across a spectrum of industries. There are
opportunities to include OPEX in many different businesses and room for improvement is a fact of life across the board.
Change and transformation are the inevitable products of technological progress. The advances in computer power
and smart machines have not merely enabled us to do things better; they have given us the opportunity to do things
very differently.
Smartphones and tablet computers are but two examples of devices that have rapidly made our world very different, yet
both are comparatively new on the scene. For those of us trying to predict what will happen next and have a strategy for the
future, how can we figure out what our next move should be when tomorrow could see another black swan that upsets our
idea of what is normal?
The answer is that you can’t second guess the inventiveness of humans or the end game of chaos. What you can do, though,
is figure out how people will react to change and disruption.
You can put things in place that make change less stressful, and adaptation easier for all concerned: you can make your team
flexible enough to withstand the changes, build in flexibility and resilience.
As behemoths of the establishment tumble, we do well to remember that the most rigid structures are not the strongest.
So when we ask what the future will look like in terms of what does it take for businesses to be able to transform successfully,
you may have spotted a few shift toward the following:
FLAT HIERARCHY LEADING TO PROCESS DRIVEN TRANSFORMATION – expect large businesses to be flatter in structure,
to see more people given autonomy and leadership over their areas.
A DEEPER PURPOSE FOR TRANSFORMATION – people want to work for businesses that they believe are going to do the
world good. It’s easier to be motivated by your part in a grander purpose than making money for other people.
VOLATILITY CALLS FOR STRONG AND INCLUSIVE LEADERS TO DRIVE CHANGE – businesses are going to find
it difficult to hold onto people for long. So when we ask what the future will look like in terms of what does it take for
businesses to be able to transform successfully, you may have spotted a few shift toward the following:
So the future of successful business will be: nimble, flexible, yet ambitious to reach further. And there will be an emphasis on
the individual’s fulfillment within the workplace.
Technology is often unpredictable; people’s motivations can be understood and catered for. We are certainly going to find
ourselves working alongside artificial intelligence; but it takes two to make a relationship and human beings still have the
upper hand – form now.
Anything less than 10x improvements is no longer enough to impress your CEO and CFOs – they demand more from
you, their COOs, Transformation and OPEX leaders.
They need you to lead the charge to true business excellence, and to use technology, people and process methodology
to deliver cutting-edge operational excellence.
Join Operational Excellence Leaders from companies from across North America, all exclusively under one roof. With the
ability to benchmark and learn from operational leaders across industries, leading brands, market disrupters and industry
gurus, OPEX Summer: Business Transformation leaders summit will leave you inspired to take your technology, people
and process strategy to the next level.
www.opexweeksummer.com
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