Operations Excellence & Business Model Innovation

Process improvement begins with the inception of the initial idea. Identifying what customers to target, what products to focus on, and what resources are needed. The next step moves onto operations considerations of the industry and competencies needed to remain competitive if not dominate one’s niche.

The focus on the processes, tools, and structures needed to support continual improvements and innovation is often delayed (except during registration as a corporation) until the growth stage is entered; a delay that can be critical as growth is often unpredictable.

A common challenge facing startups or new business’ is the chasm between the initial build up stage and the gap crossed to reach the growth stage.

The processes, tools, structures, and competencies are different in the startup vs. growth stage and yet remain interdependent. A coherent operations strategy requires:

  • Coherence
  • Foresight
  • Prioritization
  • Agility
  • Structure
  • Systematization, &
  • Commitment

Without these one’s pursuit of operations excellence will likely remain deterministic, linear, and lack the perquisite foresight to integrate all relevant drivers and performance vectors.

Initiating the preparation for the growth stage requires a lot of foresight and commitment serving the company’s different customer segments:

The challenge is choosing what tools to use in the pursuit of operations excellence as each tends to emphasize its focus.

Focusing on inputs can improve the rest of the funnel but not if inadequately integrated. The process (or means) can help integrate inputs but this does not necessarily drive the outputs or impact KPI’s desired by the client. Whereas the outputs can help deliver a minimum viable product (MVP) or impact but miss the opportunity of delighting the customer.

Reducing the 7 wastes in a process can decrease variability and improve quality; both a focus of LEAN and six-sigma.

What is needed is an operations excellence approach that integrates and aligns the inputs with the processes and the outputs across the business model ecosystem.

Many tools are available for introducing improvements while aligning the business model ecosystem. Solutions proposed will be determined by the context, cause, and severity of the problem investigated. This will often depend on whether this is an common cause or special cause:

A Project Management Framework

A generic Lean Six Sigma project management framework for improving operations excellence is depicted below:

StageStrategies
Initiation (stage 1): Identify opportunity for improvements (critical incidents) based on known critical to quality factors
InputsForm Working Group
Schedule Working Group meeting
 Planning (stage 2)
Identify Critical Incident
InputsEvaluate Road map
Confirm Requirements
Charter, Communications Plan, Risk Register, Stakeholder, List, Change Management Plan,  Customer/ Product Development Journey Map, etc.Isolate area of focus: Supply Chain? Resources? Talent? Technology? Business Model? Environment? 
Execution (stage 3)
ProcessEvaluate Common Cause; Evaluate Special Cause (review customer/ product / service journey map)
Sprint: In product development, a sprint is a set period of time during which specific work has to be completed and made ready for review. Each sprint begins with a planning meeting.Evaluate Performance Gap
PDCA is an iterative four-step management method used in business for the control and continual improvement of processes and products.Propose Solution
Implement Solution
Test/ Evaluate Solution
The Six Sigma DMAIC (Define, Measure, Analyze, Improve, Control) methodology can be thought of as a roadmap for problem solving and product/process improvement (isixsigma.com)
Controlling & Monitoring (stage 4)Communication
 ProcessConfirm Solution Meets Requirements (or repeat above steps)
Standardize Solution
Change Management
Training
Closing (stage 5)Deliver Solution
OutputsConfirm Final Solution Meets Requirements
 (for example, are have any critical to quality factors been missing in the existing requirements and specifications documents?)Document Lessons Learned

 

Additional tools available: TQM, MBO, Lean, Statistical Process Control, etc.

Opportunities for business model innovation, and process improvement, are often unlimited. A focus on the critical to quality factors helps the product/ service team to not only focus their efforts but emphasize impact areas best aligned with customer requirements.

 Operations excellence begins with the initial execution of your company’s business idea but it doesn’t stop there. It requires a business model ecosystem to support its success across the business cycle. 

Critical to Quality – Examples

The following examples of ‘critical to quality’ parameters are provided from projects managed by Innovate Vancouver. This high level overview of CTQ’s was used to support ‘root cause analysis’ efforts as critical variations surfaced in the project.

Operations Excellence & Business Model Innovation Plan

The following documentation tool is available for tracking and monitoring the roll out of each of the project steps documented above.
Cross system Organizational Learning must occur if business model components are to be aligned and continue to evolve. Without it the learning exists in isolated silos and limits the team’s ability to anticipate and respond to change in the rest of the system.

What other tools, strategies, or models is your business using to improve process and quality innovation? Share your comments below.

Travis Barker, MPA GCPM

Innovate Vancouver

[email protected] 

 

Resource:

History of ITIL. (2005). Retrieved December 10, 2017, from http://itsm.fwtk.org/History.htm
Shaffie, S., & Shahbazi, S. (2012). Lean Six Sigma. New York: McGraw-Hill.