Transcript John Oakland - Chartered Quality Institute

Sellafield 2nd November 2011
Redefining Quality –
accelerating change
reducing cost
protecting reputation
Professor John Oakland
Oakland in 30 seconds…
Redefining quality
Updating & sharing
knowledge through
research and
education
Oakland’s Business Model
Oakland
Consulting plc
Oakland
Consulting
European Centre
for Business
Excellence
CONSULTANCY DIVISION
RESEARCH & EDUCATION DIVISION
The “Voice of Experience”
informs new research
Carbon
Ready Ltd
The “Voice of Research” ensures we
employ cutting-edge practices
Some of our Private Sector Clients
Some of our Public Sector Clients
Why ‘Re-define Quality?’
The 21st Century world of business
never rests – the speed of flow of
information has created global markets
in which we all trade. Consumer needs
vary widely across time and space
creating constant need for alertness
and change. If we as managers are not
keeping up with the pace, others will –
it’s very competitive out there!
In the past Quality has become
synonymous with control, compliance
& cost. Excessive focus on internal
capability generated overly
bureaucratic approaches that attracted
negative perception, particularly in
boardrooms
Quality must play a wider role in business
to meet the challenges of 21st century
The requirements are around building a
‘learning organisation’ that is quick to
change, avoids excessive costs and
reputational impacts of getting it
wrong!
Key concept – the journey & maturity
Quality & Operations Maturity Level
5
4
3
2
Products, services, processes
and organisations progress
on a change journey, from
idea to implementation,
where quality maturity
increases over time
1
Time
Key concept – the journey & cost
Quality & Operations Maturity Level
5
4
3
2
As the journey progresses
costs accumulate. The rate
increases early in the journey
and slows as maturity is
increased
1
Time
Scaling the maturity curve
5
Maturity level
Improving – “Industrialized”
Quality Maturity Level
4
Reputation
In
control
3
Gaining
control
2
Variable
control
Net cost of quality
1
Time
World
class
The journey and the key stages
Journey Progress
5
Redefine the
industry
expectations
Bust
assumptions
4
Link strategy to
operations
Clearly the best
in the industry
3
Adopt best
practice
As good as
competitors
2
Correct
Problems
Stop
“holding back”
1
Time
Addressing the sustainability agenda
Environmental Sustainability Journey
Successfully deploying
new technologies,
management systems
and behaviours for
operational excellence
Developing the right
end-to-end value
chain for the lowcarbon economy
Understanding the need
for change, developing
strategy and realistic
objectives
Addressing increasing
energy costs through,
low-cost, quick wins
Financial & reputational cost of Carbon
Emissions
What are the risks relating to speed of change, cost and reputation?
– failure to manage and avoid risks throughout the change journey
Accelerate Change
Reduce Cost
Protect Reputation
Speed related risks
Cost related risks
Reputation related risks
• Projects fail to meet their
objectives through a loss of
momentum, which leads to stalled
progress
• Costs get out of control due to poor
quality through inadequate
specification, excessive rework, or too
much waste
• Reputation takes years to recover from
failure making it harder to do business
• Benefits realisation delayed while
change is taking too long
• Hidden costs don’t get addressed
because they don’t feature in financial
reports, because they are hard to
identify
• Going slow puts more pressure on
critical resources because key
personnel are tied up in projects
• Slipping back down the curve due
to loss of capability
• Carbon emissions cost money – under
the Carbon Reduction Commitment
many companies will start being
penalised for carbon emissions
• Perception of poor CSR will damage
your reputation – consumers expect
modern companies to have strong
demonstrable Corporate Social
Responsibility
• Reputational damage is deeper and
quicker now than ever before because
information, opinion, and ultimately
consumer choice is affected at scale due
to communication technologies
Accelerating change
“We were impressed at how well the techniques applied during the workshops helped
us to quickly reach conclusion ”
Highways Agency
Journey progress
By accelerating
transformation, significant
costs can be reduced or
avoided, and the benefits
of transformation will start
to accrue more quickly
Time
How do you accelerate change?
Oakland figure 8 model of effective change
External or
internal
drivers of
change
Need for
Change
Leadership
& Direction
Need for
Change
Readiness
for
Change
Leadership
& Direction
Implementing
Change
Systems
& Controls
Result
No urgency and no action
Never leave the start
Planning
Processes
Organisation
& Resources
Missing focus
Behaviours
Planning
False starts and wrong directions
Processes
Effort wasted on non-core
Organisation
& Resources
Paralysis and frustration
Systems
& Controls
Driving blind
Behaviours
Resistance endangers success
Successful change is possible when all 7 key elements are addressed and readiness is
achieved before you start changing processes and implementing other changes
Reducing costs
“The application of the ‘DRIVER’ model to our claims process yielded an audited
savings of €1.6m. This is evidence of the what the DRIVER model can deliver”
Eurocopter
The cost of delivery
The cost to deliver products
and services is reduced by
addressing the causes of
poor quality (mainly waste
& variation) and busting
assumptions about how
services are delivered
Time
How do you reduce cost?
Reduce process time
Waste
Removal
Variation
Reduction
TIME
QUALITY
Lean
VALUE
Six sigma
outputs
• Apply approaches such as
“Lean” to remove the nonvalue adding waste from a
process, pathway or service
Reduce variation
• Use techniques such as “SixSigma” to reduce undesirable
variation in patient facing and
back-office processes
Bust assumptions
COST
£££
Improving customer satisfaction and
increasing value for money
• Assumption busting leads to
paradigm shifts – this can
drastically reduce costs and
create step changes in quality
Protecting reputation
“You have taken us light years ahead – great value”
Shell
Time
The development of reputation
Journey progress
Desired outcome
reputation lags by
customer response
time
How do you protect reputation?
Protecting reputation
starts with understanding
performance and risk
Use an assessment tool
developed across the
dimensions of quality
management including:
Leadership
Policy
Organisation
Manufacturing
Supply
People management
Performance
improvement
Bringing together your performance
measurement across the supply chain will
highlight areas of priority, risk and
specific improvement actions
Reducing Carbon
Whether its a recession, competition from the far-east or climate change,
your organisation’s success depends on its fit with the external environment
As with other complex business problems, we use a structured approach
based on many years research and practice coupled with the specific
expertise required to address climate change.
External Events
Leadership
& Direction
Energy Costs
Customers and
Consumers
Need for
Change
Developing
Strategy
Planning
Legislation
Reputation
PROCESSES
Physical
Environment
Organisation
& Resources
Operational
Delivery
Systems
& Controls
Behaviours
1. Evaluate external events
2. Develop a strategy for
success in a low-carbon
economy
3. Establish 21st Century
business processes which
will enable performance
4. Support the operational
delivery
How do you address
carbon reduction?
• Energy Surveys
• Utility Metering
• Aligning Costs and Carbon
• Targeting Improvements
Energy Audit
Carbon Footprinting
• Qualifying Opportunities to Reduce Costs
• Successful Implementation Methodology
Implementation Support
• Product and Service Footprinting
• Reducing Costs and Emissions in Complex
Organisations
Carbon Stream Mapping
• Policy Development
• Corporate Social Responsibility
Embedding Low-Carbon
• Developing a Strategic Approach
• Operational Delivery
Carbon Management
Delivering value in Carbon
Linking CO2 with Service Delivery
Working with a large local authority we used
Carbon Stream Mapping on each service
line to identify CO2 hotspots.
This enabled the organisation to reduce
emissions whilst maintaining service quality,
improving delivery time and reducing cost.
Reducing Energy Intensity in Heavy
Manufacturing
We developed and ran a change
programme to mitigate energy price
rises with minimal capital investment.
Reduced site operating costs by £50K
per annum and developed internal
capability to sell goods in low-carbon
markets.
Carbon reduction strategy
There are four key areas that our carbon services address
1: Understanding the need for
change, developing strategy and
realistic objectives
Success
depends on fit
with external
environment
External Events
Energy Costs
Customers and
Consumers
Legislation
Carbon
management
factors:
Leadership
& Direction
Need for
Change
Developing
Strategy
Planning
Reputation
PROCESSES
Physical
Environment
Organisation
& Resources
Operational
Delivery
Behaviours
Systems
& Controls
2: Successfully deploying new
technologies, management systems
and behaviours for operational
excellence
3: Developing
the right endto-end business
processes for
the low-carbon
economy
4: Bringing 1, 2 & 3
together to address
specific nondiscretionary needs
– the CRC (Carbon
Reduction
Commitment)
Redefining Quality
• Redefining Quality with understanding and
applying what quality means in the 21st
century
• How are you going to accelerate change,
reduce costs and protect reputation?
• You need to:
Transform Understand
Business Customers
• Understand your customers
• Set your strategic direction
• Diagnose the problems in your business
• Improve your efficiency and
effectiveness
• Transform the way you do business
• Help change happen in your organisation
so that it is sustained
• Collaborate with your partners much
more effectively
Improve
Performance
Diagnose
Problems
Set
Direction
www.oaklandconsulting.com
“No great improvements in the lot of mankind are possible, until a great
change takes place in the fundamental constituting of their modes of
thought” – John Stuart Mill
Oakland Consulting plc
33 Park Square West
Leeds LS1 2PF
Tel 0113 234 1944
Professor John Oakland; Executive Chairman, Oakland Consulting plc
Emeritus Professor, Leeds University Business School
John is Chairman of Oakland Consulting plc and Head of its Research and Education Division,
the European Centre for Business Excellence. He is also Emeritus Professor of Business
Excellence at Leeds University Business School. Over 30 years he has researched and
consulted in all aspects of quality management, strategic process management and business
improvement in literally thousands of organisations. He has directed several large business
research projects in Europe which have brought him into contact with a diverse range of
organisations.
Professor Oakland and his team have completed numerous advisory assignments and management development
programmes in their field, the aim of which has been to bring the practical application of best practice within the reach of
top management in all types of organisations. He is author of several best selling books, including: Total Organisational
Excellence; Total Quality Management, Oakland on Quality Management, Statistical Process Control and Production
and Operations Management. He has written hundreds of papers, articles and reports on various topics in these and
related fields.
Oakland Consulting, in its original form, was created by Professor Oakland over twenty five years ago (1985) and now
operates throughout the world, helping organisations in all areas of business improvement.
Professor Oakland is a Fellow of the Institute of Directors, Chartered Quality Institute and Royal Statistical Society. He is
also a Member of the American Society for Quality.