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Performance improvement consulting

August 13, 2011 by John Bryan

Implementation of change is sometimes strategic and sometimes more tactical in nature. Managers in most organizations have a general responsibility to control, and often reduce, costs and improve performance. Understanding the responsibility to do that is more common than
managers knowing how to do that.

The first trigger of the need for performance improvement for most managers is a report indicating performance that does not meet expectations, usually the budget. In that regard, many managers use financial reports to manage operations. The problem with financial reporting for operational performance management is that many organizations do not budget at a detailed enough level to be useful for most operational management. As a result, many managers find that costs, either material or personnel, are higher than expected, on a gross or per-unit basis, and must start an examination of the operation to identify the real, root cause of the problem. Many managers have neither the training or experience nor the time to successfully perform such an analysis.

Many organizations collect data and keep it in inaccessible forms, often paper. To successfully identify root causes of problems, or even identify the actual rather than the perceived problem, organizations need ready access to historical operating and financial data. Ideally, organizations will develop and maintain an electronic data warehouse that provides easy access to every piece of data that the organization collects. For too many organizations, nearly 30 years after the introduction of the PC, the only data warehouse they maintain is a decentralized set of filing cabinets.

A serious look at sustainable performance improvement takes more than a plan to chop the payroll. The 1950s through the early 1980s saw the rise and the beginning of the fall of so-called productivity consulting firms. Some of these firms did good work; I worked for two such firms, but many simply sold the client a promise to reduce costs by reducing payroll, often in a predetermined ratio to the firm’s billing. The good firms improved productivity by actually improving the processes of the client operation.

As the world entered the 21st Century, consulting firms and clients faced a reality that they had already capitalized on most of the easy improvement opportunities. Since at least the most recent turn of the century, performance improvement has been more sophisticated, more strategic, and more tactical. Lean and Six Sigma tools provide great insight into improvement opportunities. Rigorous data analysis, in many cases relying on data stored in 4-drawer vertical file cabinets, archaic data warehouses, adds substance to the scope and scale of the opportunities and provides evidence of actual change.

Operational improvement that is strategic usually appears in the company’s financial statements somewhere. Some improvements may appear
in human resource, environmental, or other non-financial sources. Because today’s performance improvement consultants generate results that are not limited to payroll costs, a Balanced Scorecard or management dashboard may be useful to many companies seeking performance improvement. Whichever the company selects, the reporting tool should have a view or a report or page that highlights the financial and non-financial impact of performance improvement efforts.

In 2007, eProcesses Consulting helped a mining client develop a dashboard that included links to dozens of performance improvement projects, some of which the consulting team initiated and some of which the client initiated. The dashboard included a summary page showing the status of each project and allowed drill down to each specific project to facilitate timely examination of each project’s detailed history and plans. The dashboard linked each project to corporate and location-specific goals for the year. The dashboard also enabled the management team to identify new projects to address new needs and opportunities.

The next generation of this dashboard will include a workflow automation tool to help automate semi-manual processes while providing real-time process reporting. The dashboard of the future will include built-in diagnostic to alert managers of the need to focus attention on specific performance anomalies. The next generation may be closer than you imagine.

Filed Under: Case Studies, Management Tagged With: change management, performance improvement

Enhanced management tools

August 12, 2011 by John Bryan

Almost 30 years since the introduction of the personal computer and the subsequent introduction of a plethora of networked devices, too many managers of private and public, large and small enterprises seem to rely on non-timely, accounting-dominated data, rarely in the form of  accessible, actionable information, for management decision making. Why?

One of my first managers, somewhat tongue in cheek, used to tell me that he liked to let small problems become big ones because he liked to solve big problems. That was not Bud’s only philosophical oddity. Many managers, by design or by default, effectively operate like Bud. Sadly, not only is it generally ineffective, it is also stressful and expensive.

In 1985, I created my first management dashboard for a client, the general manager for a textile plant in South Carolina. The dashboard provided him with daily and week-to-date comparisons of actual versus planned performance for each of the plant’s operating and support functions by shift.  In 1986, I provided the head of another processing facility in North Carolina with a similar dashboard.  Neither of these dashboards were true balanced scorecards, formally introduced to the management vernacular by Frick and Frack in 199x, because in neither case did the view extend beyond the immediate facility to monitor, for example, environmental or customer metrics. In both cases, however, icustomer metrics beyond backlog and on-time delivery measures were beyond the control of the facility because sales and marketing reported to a separate, central location.

In 2007 and 2010, I had the opportunity to introduce gold mining clients in South America and West Africa to an electronic balanced scorecard application. In each case, the application pulled data from a variety of sources and formats and displayed data by shift, by day, by week, and by month with comparisons against plan and tabular and graphic displays of data available. In the 2007 example, the basic technology was Microsoft Excel and it was a prototype for the 2010 example.

The general manager of the gold mine in Ghana had reasonably good information available and wanted to improve the detail available while eliminating the one hour daily he needed to create his existing dashboard. The general manager in Chile wanted a tool to supplement his daily meeting with his management team; he did not have a self-created dashboard to replace. As crude and tedious as the monster Excel spreadsheet was, it was better than daily oral reports with limited written reporting from each department.

The ideal dashboard or balanced scorecard would focus managerial attention on indicators where performance warrants managerial attention. It would help distinguish an anomaly from a problem and a one-time episode from a trend. It would also provide insight and status on key goals and objectives along individual and organizational performance improvement initiatives. Although nobody seems to have such a dashboard, it would seem to have great potential for improving manager effectiveness.

Filed Under: Case Studies, Management

Too many MBAs?

August 9, 2011 by John Bryan

A recent Time article tried to make a case for companies essentially firing all their MBAs because MBA graduates in the workforce had taken the collective eyes of business in the West off risk, innovation, operations, and creativity. That may be a valid point. The bigger concern for and  threat to a thriving and sustainable economy may be the apparent willingness of U.S. society to accept second place, or lower, and to condone degrees and certificates and diplomas that may increasingly be irrelevant, if not meaningless.

Over the past few generations, people in the United States have grown lazy and self centered. We look for the easy path. We check the box and see if we can stretch the lower bounds of the minimal require,nets and expectations in our academic and non-academic pursuits. As a consequence, degrees and diplomas are more uncertain in their meaning.  Prospective employers and academic admissions officers find themselves in positions where they must either do a more thorough job of vetting candidates or risk accepting lower quality, less qualified, perhaps minimally prepared candidates.

It is not the MBAs who are the problem with American business and it not strictly our elected leaders. Rather, it is the lazy attitude of barely
acceptable that is so endemic that drags us down.  The educational system in the United States simply reflects what society and culture establishes as norms and values. If we want something different for ourselves as a destiny, or a future, we need to adjust our current norms and values so that our path is also different.

We need to value education and create  a business economic climate that makes education valuable.  Why stay in high school if I cannot get a job or enter post-secondary education afterwards? Why go beyond minimal expectations when exceeding expectations adds no perceived value to my future? If actually learning something during an MBA, or other degree, program gets me no farther than taking the path of least effort and resistance, why bother?

Our humaneness motivates U. S. society to meet certain basic needs of our citizens or residents. We provide an opportunity for basic education and, to an extent and upmto a certain level, that education is not optional. We provide some measure of healthcare and financial support so that the sustenance and shelter needs, but not necessarily the wants, of most have some sense of floor or foundation from which people can live, but not necessarily thrive. The challenge for policymakers, educators, and society is how to avoid disincentives to exceed minimally acceptable while somehow ratcheting up our collective expectations, norms, and values.

Filed Under: John's Perspective and Views, Management

What and What if? The start of a typical eProcesses client relationship

June 16, 2011 by John Bryan

eProcesses Consulting helps clients implement strategic change. Since my start as a consultant in 1983, and full time since 1985, I have seen a range of approaches used by consulting firms to begin a client relationship. I have seen firms that basically had one tool or solution set and sold that tool as the appropriate solution for a client, even when it was not. As a Certified Management Consultant (CMC), I comply with the Code of Ethics of the Institute of Management Consultants (USA), which states that I will only recommend solutions appropriate to the needs of my clients. So, how does eProcesses Consulting determine a client’s needs?

The simple way for eProcesses Consulting to determine a client’s needs is for the client to tell us. Client disclosure has risks and benefits. The benefit is the saving of time and the client has emotional ownership of the scope of a potential consulting project. The risk is that the client’s perceived need may not address the root problems and opportunities.

Generically, an eProcesses consulting relationship, strategic change implementation, begins with what many firms call the analysis, assessment, or discovery phase. Having participated in many of these, the deliverable most firms leave with the client is a list of findings with a proposal to fix some of the identified deficiencies. The eProcesses approach is different from most. Because eProcesses wants to leave the client with something of enduring value that, candidly, we hope will set the stage for a longer term client relationship, we call the initial phase the Preparation phase and we expect to leave you with three valuable deliverables beyond a “to do” list and a proposal. 

Prepare

The Prepare phase deliverables are up-to-date process documentation, a high-level, balanced scorecard-like dashboard, and aligned organizational goals. Goal alignment and a scorecard are foundational to any sustainable operational and financial performance improvement. Aligned goals tell the organization where it is going. The organization’s processes are how it will reach those goals. The dashboard allows the organization to keep score and know when you reach or fall short of the goals. The combination reveals improvement opportunities. As part of the Prepare phase, eProcesses also analyzes historic operational and financial performance to identify performance gaps and bottlenecks that inform the goals and the dashboard and emerge from the process documentation and analysis. A plan to close the gaps and bottlenecks associated with the goals forms the basis for the next, the Provide, phase.

Provide

This is the Provide phase because it provides tools for sustainable change and improvement. These tools include process change and deployment of techniques under the headings of Lean, Six Sigma, and Reengineering. The Provide phase would normally include an expansion of the dashboard deployed in the Prepare phase; the expansion provides drill-down and additional analytical capability that will be useful in tracking progress on reaching the aligned goals and objectives, toward the closing of performance gaps, and for the identification of new performance gaps.

Produce

For the changes that begin in the Provide phase to be sustainable, the new tools, processes, and behaviors need to begin to be part of the organizational culture. During this phase, the culture observed at the beginning of the Prepare phase starts to change. True cultural change in organizations may take several years, but eProcesses can help the client team develop new habits and disciplines and shed old habits during this phase of continued, but less intense, involvement by the eProcesses team. This involvement includes working with the client’s technical team to support the dashboard application, working with the management team to increase the value of the new tools introduced in the Provide phase, and preparing the organization to sustain the cycle of change internally.

Filed Under: Management, Strategic Business

Mining – Consolidated Case Study

June 16, 2011 by John Bryan

The following is a consolidated overview of the various mining industry projects involving eProcesses Consulting since 2006 in iron ore and gold mines in North America, South America, and Africa. 

The project began with an analysis of the historic financial and operational data and the core processes. The analysis yielded best demonstrated performance, effective capacity, and average performance for each process and functional area. The analysis revealed performance gaps and a list of recommended projects.

Goal alignment assessed the extent to which executive level goals and objectives aligned with each level lower in the organization. A list of projects emerged as necessary for attaining the combined goals and objectives of the organization. Project management facilitated the achievement of each of the organization’s goals for the fiscal year.

Engineers and supervisors received training in Six Sigma, Lean, and Kaizen tools and techniques. The projects they did concurrent with the training added to the skill set of the individuals and contributed to the organization’s operational and financial improvement and goal attainment. The training prepared the organization to sustain a culture of continuous process improvement.

The improvement areas included increased equipment availability, increased yield per blast and blasts per shift, faster lab turnaround, better processing yield and capacity, and increased equipment and people utilization.

The project team worked with client management and IT staff to develop and implement a balanced scorecard management dashboard. The dashboard provides management with a view of operational performance by department, by shift, by area, by equipment type, and by individual piece of equipment. The dashboard home page includes a graphic representation of overall organizational performance by department or functional area using a single relevant or consolidated metric. Each view of the dashboard has drill down capability by month, week, day, or shift. Each metric has time series and pictorial views.

Mining and natural resources companies generally have tremendous improvement potential due to the scale and scope of most mining operations.

Filed Under: Case Studies, Management Tagged With: mining

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