Forrest W. Breyfogle III

CHAPTER THREE:
Integrated Enterprise Excellence®:
A Systems Approach to Improvement

Overview

This chapter is intended for business leaders, managers, Lean Six Sigma sponsors and project leaders who are interested in taking their business beyond traditional models and methodologies. This chapter approaches Lean Six Sigma tools through a business system viewpoint.

This chapter will help you to:

• Learn why many organizations fail at implementing Lean Six Sigma tools.
• Gain a basic understanding of the Integrated Enterprise Excellence.
• Discover the importance of value chain creation and where this process falls within the IEE business governance model.
• Develop an understanding of the importance of truly predictivemetric.

Avoiding Failure

Much has been said about the gains from process improvement efforts such as Total Quality Management (TQM), Six Sigma, and Lean. However, what frequently happens when implementing these programs is that a business expends much effort establishing a function to manage
this work only to terminate the efforts and perhaps lay off the function’s employees when times get tough or the enterprise is looking for ways to
cut costs.

To illustrate how traditional process improvement programs can be short-lived or not address the most important needs, consider how Bank of America might have been a benchmarked company in 2007 for their Lean Six Sigma deployment efforts. However, this executive bought-in process improvement effort did not help the company avoid severe problems during the financial crisis that began in 2008. In addition,

Consider also Toyota. Many companies have modeled the Toyota Production System (TPS) for their process improvement efforts. However, the system that the world so widely touted did not prevent this benchmarked company from having product quality, design and other management issues, which were uncovered in 2009 and resulted in significant issues and financial loss for the company.1 Bank of America

What went wrong?

Everyone understands that organizations need to improve or they will not survive; however, why, in general, do corporate, non-profit, and governmental process improvement efforts seem to have a finite life and a flavor-of-the-month stigma attached to them? The reason is that these efforts are not an integral part of an overall long-lasting business management system. Often, most process improvement project selection is determined in organizational silos without a business-as-a-whole assessment. The implication is that a Lean Six Sigma effort might later report 100 million dollars in savings, but nobody can find the money.

What really is needed is an overall business management system where process improvement efforts are pulled in from a long-lasting business measurement system that integrates big-picture analytics with innovation. The goal is to move the organization toward achieving the Three Rs of Business: everyone doing the right things, in the right way, all at the right time.

Nine-Step Business Management Governance System

The nine-step enhanced business management system described in this chapter addresses your need to do things right through the:

• Creation of non-silo performance metrics;
• Formulation of predictive measurements;
• Development of dynamic targeted strategies;
• Establishment of analytically determined performance metric improvement goals; and
• Use of a structured roadmap so everyone can follow a similar thought process when making improvements.

This unique business management system:

• Leads to healthy day-to-day behaviors;
• Reduces firefighting activities;
• Benefits the enterprise as a whole;
• Uses analytics and innovation within the business decisionmaking process;
• Pulls for the creation of projects that address overall businessneeds;
• Integrates the application of Lean and Six Sigma tools so that the right tool is used at the right time; and
• Provides a methodology for consistent and expedient projectexecution.

The financials of an enterprise are a result of the integration and interaction of its processes, not of individual procedures in isolation. Using a whole-system perspective, you come to realize the output of a system is a function of its weakest link or constraint. Without exercising caution, you can become focused on a subsystem that, while improved, does not impact the overall system. All too often, process improvement efforts are not expended in areas where the overall enterprise benefits the most.

Organizational leaders often discuss the growth in business environment complexity. Executive leadership needs to assess its business system, especially in times of economic challenge, to determine if its current management system can handle this increasing complexity. What organizations often need is an enhanced methodology that provides the framework for leadership to understand and manage its organization systematically through this ever-changing environment. (See Figure 1)

The business governance system graphically described below provides a roadmap for systematically addressing current management challenges head on.1 This constitutes a whole-business system, not just a problemsolving, project-execution system such as Lean Six Sigma or Lean kaizen events. Because this system is different from traditional methods, it needs a name: Integrated Enterprise Excellence (IEE).

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