State of Readiness

Operational Excellence as Precursor to Becoming a High-Performance Organization

Joseph F. Paris Jr.

• Publisher: Greenleaf Book Group Press
• Year: 2017
• Print ISBN: 9781626343115
• eBook ISBN: 9781626343122
• Topic: Business
• Subtopic: Organisational Development
• Index: Business

Accelerated Strategy Development and Execution
The company of today has its supply chains and finances stretched further around the globe than ever before while simultaneously having increasing pressures to drive value across a complicated and fluid set of metrics and deliver innovations, products, and services more quickly and reliably. The competitive advantage belongs to the companies that can quicken their vision-building and strategy-execution efforts—the ones that can identify challenges more swiftly and accelerate their decision making so they are better able to formulate and deploy responses decisively yet with greater agility. To successfully accomplish this, companies will have to prioritize creating a culture of leadership that strengthens communication skills and emphasizes systems thinking by building capacity and capability that cuts across the business smokestacks and permeates the entire organization. In State of Readiness, Joseph F. Paris Jr. shares over thirty years of international business and operations experience and guides C-suite executives and business-operations and -improvement specialists on a path toward operational excellence, the organizational capability and situational awareness that is attained as the enterprise reaches a state of alignment for pursuing its strategies. In doing so, create a corporate culture that is committed to the continuous and deliberate improvement of company performance and the circumstances of those who work there—a precursor to becoming a high-performance organization.

PART 1

OPERATIONAL EXCELLENCE

“The epitome of an elegant design is not when nothing else can be added but, rather, when nothing else can be taken away.”

—Antoine de Saint-Exupery

What do you want to be when you grow up? We have all heard this question since our childhood. For many of us, it might be the very first memory we have.

From the moment we realize we can become what we dreamed of becoming, we embark on the journey to realize that dream. Most of the time, these early dreams are replaced with other dreams. For instance, when I was younger, I wanted to be a pilot, an astronaut, a scientist, and a photojournalist, among any number of other professions. What was specifically not on that list is who I am today: businessman, entrepreneur, writer, teacher. Who’d a thunk . . ..

But at some point in our lives, we snap into focus some image of our future self; we create a vision of our future state. Once we create this vision, how do we pursue it? What does it take to achieve it? And, not to confuse a future state with an end state, once we are there, how do we continue on? Is reaching that goal the end of the road?

Can we do it alone? I’ve never heard of anyone achieving greatness by working alone in a vacuum. All along life’s path, we are being nurtured, coached, and taught by our parents, our extended family, and our community. Our teachers instill in us vast amounts of knowledge and information during our years as students. Our mentors in our professions and our businesses offer us guidance based on the wisdom they have gained over their years. And we certainly learn a lot from the mistakes we make on our journey.

We have also had to call on the expertise of others to facilitate us on our journey. Perhaps there were doctors who treated our injuries, or we hired a tutor or joined a study group to help us with a subject in school that was giving us difficulty. Even in the position we hold at work now, how many people do we routinely rely on for help?

When faced with a challenge—when the going gets tough—do you possess a state of readiness? Do you go it alone, or do you summon the help of those around you so that you can face the challenge together? Do you at least seek their sage advice before you make a decision and respond?

The same holds true in businesses and organizations. Your desired future state may change, and your means of getting to it may change. You will be faced with challenges—some anticipated and some not—but a constant state of readiness will increase your chances of successfully achieving that future state.

CHAPTER 1

WHAT IS OPERATIONAL EXCELLENCE?

“Desire is the key to motivation, but it’s the determination and commitment to unrelenting pursuit of your goal—a commitment to excellence—that will enable you to attain the success you seek.”

—Mario Andretti

Operational excellence is a term you’ve probably heard a thousand times. There are centers for excellence and even prizes and certifications awarded for various forms and manifestations of it. But what does it mean?

Let’s start by differentiating operations from operational. Operations refers to processes, whereas operational deals with systems—even entire enterprises. Accordingly, there must be a difference between excellence in operations, or process excellence, and operational excellence. Simply put, excellence in operations is efficiency, doing things right, but operational excellence is effectiveness, doing the right things.¹

For instance, when the United States Navy determines that a carrier group is operational, it means the carrier group, as an entity, is in a state of readiness to fulfill its intended purpose. And all of the nearly infinite number of individual processes that determine how the operations of the group are conducted are optimized and configured into systems that govern how the carrier group performs. When that state of readiness is achieved, the carrier group acts as a high-performance organization.

Let’s look at another example.

In the early days of the Great Depression, one of the most ambitious builds in modern history started in Midtown Manhattan—the Empire State Building. At the time, and for some time afterward, it was the tallest building in the world. Excavation of the site started on January 22, 1930, and the ribbon-cutting ceremony took place on May 1, 1931. From start to finish, it took only one year, three months, and nine days—464 days in all to build the 2,248,355 square feet of floor space.

Even more impressive is that all of this was accomplished with 1930s technology and infrastructure, when there was little in the way of automation and a lot of manual labor. There were no highways, only waterways and steam rail. Yet the materials came from Bethlehem and Pittsburgh (one hundred and four hundred miles away respectively), and all the limestone block for the edifice came from Indiana (eight hundred miles away).

Compare this with the construction of the Freedom Tower, which replaced the World Trade Center. After all of the legal and financial hurdles were overcome, construction started on June 23, 2006, with excavation of the foundation. The tower finally opened on November 3, 2014—a full 2,690 days later—with 3,501,274 square feet of floor space.

The floor space of the Freedom Tower was only one and a half times that of the Empire State Building, and it took almost six times as long to build. With all our technological advances in the prior seventy-five years, how did it take so much longer?

When I think about the story of the Empire State Building—all of the companies and workers involved in the project, the supply chain and the coordination required, the logistics necessary, the clarity of purpose held by all those involved—I think about operational excellence.

Let’s examine one more.

During World War II, at peak production in 1943, the United States produced² 1,238 Liberty ships (over 3 per day), 16,005 landing vessels (44 per day), 9,393 four-engine bombers (26 per day), 21,743 single-engine fighters (60 per day), and 29,497 tanks (80 per day). And we mustn’t forget the supply chain and logistics necessary to support this level of production.

The industrial world of the twenty-first century certainly outproduces what it did in the 1940s, but that is not what I find remarkable. We should be outproducing ourselves eighty years later. What I find remarkable is the pace of improvement in production over a very compressed period of time during the 1940s. The GDP of the United States doubled in three years (from 1940 to 1943; 33 percent per year on average). Compare that pace with what we consider healthy growth today (2–3 percent). Whatever inefficiencies might have existed were overcome by effectiveness—a key competitive factor of operational excellence.

When I think about the rapid scaling and transformation of industry in the United States in the 1940s—the reduction in time from thinking about the product to its being manufactured, the supply chains and logistics necessary for the raw materials to be manufactured and for the final product to get to the field, and all of the people involved, all working in concert—I think about operational excellence.

The motivation driving the Empire State Building was commercial, and the motivation driving the industrialization in the early 1940s was certainly national, but that only demonstrates that operational excellence—achieving a state of readiness and being a high-performance organization—transcends the source of motivation.

So what is operational excellence, and why is it important? If I were to stub my toe on it, what would it look like? We need to fully understand the term before we can pursue it as a strategy. I propose the following definition:

Operational Excellence is a state of readiness attained as the efforts throughout the enterprise reach a state of alignment for pursuing its strategies—where the corporate culture is committed to the continuous and deliberate improvement of company performance AND the circumstances of those who work there—and is a precursor to becoming a high-performance organization.

When a company reaches a state of readiness, it attains a situational awareness and command of its capabilities—the ability to see and anticipate opportunities and threats. Along with it comes the ability to react in a meaningful and expeditious manner to any such challenges that may present themselves—keeping in mind this awareness will never be perfect and will need to be perpetually refined. As Mike Tyson famously said, “Everyone has a plan, until they get punched in the mouth.” That is to say, even though you are talented, trained, professional, and on the offensive pursuing your plan, the business that is better prepared to identify and engage an unforeseen challenge more quickly than its competition has a strategic and tactical advantage.

The efforts throughout the enterprise—from the vendor’s vendor to the customer’s customer, every calorie expended and every bit of treasure invested, from inception through execution and even after action, all activities from all resources and assets in any capacity—must be dedicated to these endeavors.

The business needs to practice transparency and communicate its ambitions and vision of the future in a clear and concise manner so that all of this energy, efforts, and available assets reach a state of alignment—a unity of purpose and action throughout the enterprise—for pursuing its strategies.

There should demonstrably exist—through its effective leadership, stewardship, mentorship, and followership—an ethos throughout the enterprise where the corporate culture is committed and everyone is unreservedly devoted to the effort.

When the highest level of alignment and commitment is achieved, the enterprise is prepared for action and for the continuous—meaning never-ending—engagements it needs to perform to become and remain best in class. But the enterprise is not only continuously moving, it is also moving in an intentional, calculated, engineered, and deliberate manner with not only a sense of purpose but purpose itself. Operational excellence can only be achieved by design and implemented in an engineered manner—not by accident or coincidence.

The improvement of company performance simply means to improve profit in a sustainable manner—the bottom line, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), shareholder value, and whatever metric you might use to measure performance. There are many ways to facilitate increased profits, but make no mistake, businesses exist to make profits, and their improvement efforts must yield greater profits. And not just by engaging in the pursuit of short-term opportunities but also by keeping an eye ...

Table of contents

• Cover Page
• Title
• Copyright
• Dedication
• Contents
• Foreword
• Introduction
• Part 1 Operational Excellence
• Part 2 Leading Change
• Part 3 Preparing for Change
• Part 4 Strategy Execution
• Acknowledgments
• Notes
• Index
• About the Author