Overview

Do you know that two-thirds of Operational Excellence initiatives (i.e., Lean, Six Sigma, TPM, TQM, and others) fail to meet expectations, and only 3% report great results? 1, 2, 3, 4 That poor track record occurs despite spending significant time and money on these initiatives and the competitive and economic pressures that organizations face. What is causing this poor performance, and what can you do to help your organization be successful? How do we reach a tipping point where the momentum for the change exceeds the natural tendency to revert to longstanding habits?

When polled, 82% of business leaders say that significant culture change remains their top challenge.5 If the cause of failed initiatives is an inability to change culture, then you need to drill deeper to identify countermeasures. The main causes of these challenges are a) the failure to change the behaviors of supervisors and managers, and b) the failure to engage a sufficient percentage of the organization’s workforce.

This chapter will help you to:

• Understand why most organizations must transform their culture
• Define the Transformation Tipping Point and discover the five primary causes for failing to reach it.
• Understand the approaches to Daily Management and implement the Continuous Improvement Routine.
• Apply eight steps to transform your organization and implement Daily Management to achieve the Transformation Tipping Point.

The Transformation Imperative

No organization is safe from economic pressures and hungry competitors, including those that are currently performing well. As Will Rogers said, “Even if you are on the right track, you’ll get run over if you just sit there.”

In response, many companies have deployed some type of Operational Excellence initiative. However, even when an initiative appears to be successful, a deeper look reveals that employees often short cut standard work, supervisors lack the skills to reinforce standard routines, and managers seem to prefer to move on to the next initiative. The result is continued service and product snafus, excessive waste, and employees that work more hours and become increasingly frustrated.

Furthermore, processes are becoming more complex and prone to failure. Steven Spear concludes that it is the little things that go wrong all the time that can combine in just the right way to wreak havoc.6 Major disasters like Three Mile Island, the losses of the space shuttles, and now the BP oil spill in the Gulf of Mexico, all occurred despite indications of vulnerability. In these situations, as in most organizations, people develop workarounds and firefighting techniques, and they fail to address the causes of frequent glitches that cause significant waste and can lead to major disasters. Failure to act on glitches denies typical organizations of the opportunity to learn and improve.

Organizations can no longer be content to improve just a few processes through their Operational Excellence initiative. Certainly, successful kaizen events and completed Six Sigma projects create benefits. However, they simply cannot create a culture where everyone is addressing the root causes of glitches, learning from them, and ensuring that every process is executed flawlessly. As Rother says in Toyota Kata, “Let’s agree on a definition of continuous improvement: it means that you are improving all processes every day.”7 Such a culture has two
major competitive benefits. First, it creates a high rate of improvement – a key to long-term competitive success. Second, it creates a dynamic,
enjoyable and satisfying work environment – a key to attracting and retaining competent talent. To achieve this level of excellence, most
organizations must accomplish nothing short of a cultural transformation – the Transformation Imperative.

The Transformation Tipping Point

Malcolm Gladwell describes a tipping point as the moment of critical mass, the threshold, the boiling point.8 Walsh defines a tipping point as “the level at which momentum for change becomes unstoppable.”9 Elaborating on Walsh’s definition, I define the Transformation Tipping Point as the time when the momentum for operational excellence exceeds the natural tendency to revert to long-standing habits.

Typical initiatives fail to achieve the Transformation Tipping Point due to five fatal failure modes:

• Failure to unequivocally declare that nothing short of a cultural transformation is acceptable.
• Failure to articulate the cultural True North and build ownership.

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