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Following the Operational Excellence Code

Wed, 01/31/2007 - 7:00pm
Van Macatee, CEO, The Evermore Group

Performance. It's a word we use all the time, but have you ever stopped and thought about it? What is it? Where does it come from? Why do some always seem to enjoy it, while others never do?

1 Effective problem-solvingTake organized racing, for example. There is an upper echelon of teams that are always lurking around the top tier of their sport–and there are teams that always seem to be stuck at the bottom. Why is that? Is it because the best teams have the best people or technology? Is it because they have more or less money?

Let's come back to those questions. In 30 years of operating carrier networks at scale, and recently, in operations consulting, we have had the privilege of working with some of the best and worst the industry had to offer. Over that time, we have been exposed to many operational methods including TQM, Process Re-engineering and Six Sigma. We tried them all, learning what worked and what didn't. Like the successful race teams, we collected a set of operating methods that worked. We call them performance principles.

Performance principles are the attributes and skills that always seem to be present in the consistently successful operations. They represent the intangibles that marshal the network technology, the intellectual capital of the people, the backoffice systems and even the vendor supply chain to come together in a way that results in lean and high-flying performance. In totality, they form an operational governance playbook that empowers organizations to get themselves aligned around the right goals, measure the right things, rapidly recognize and fix inevitable problems and produce world-class results–results that always improve. In short, these principles combine to eliminate operational friction. So how do they do it? Let me share our experience...

2 Meeting commitmentsIt is trite to say, but it is oh, so true–The very foundation of world-class operational performance is teamwork. Consider these truisms:

  • Technology breaks (everything will break sooner or later!).
  • Your team's ability to effectively collaborate to solve problems determines the quality of service.

We have learned that the quality of the personal relationships across your operational ecosystem largely determines the quality of service you provide your customers. The more trust across your team, the higher the likelihood that they will be able to set aside fear, insecurity and personal agendas, and instead focus on the issues at hand. In fact, when problems come to the operations, good teams come together and bad teams fall apart. We see this time and time again–especially at organizational boundaries and process hand-off points. Finger-pointing leads to internal argument and strife.

3 Have a planThe obvious truth here is that no one wins in this game–except maybe the competition. When you are fighting each other, you are not fighting the competition. Worse yet, these internal battles all too often occur in a way that is detectable by the customer. Fix your internal relationships and watch your teams swarm problems and your bottom line grow.

Let's face it–we are only as good as our last commitment. How do you feel about the car dealership that said it would have your car fixed by five p.m., only to be disappointed when it wasn't? Not too good, I'll bet. How do you think the service manager feels about the mechanic who committed to fix the car but didn't, or how does the mechanic feel about the parts manager who said he would have the part there in time, but didn't?

And so it goes. Every day we are affected by missed commitments that create dissatisfaction. It only takes one of these failed moments of truth with a customer to allow mistrust to creep in. Nothing undermines relationships (regardless of whether they are customer facing or internal) faster than chronic missed commitments.

4 Manage by factHigh-flying operations understand this and demonstrate a strong desire to meet commitments. They fret over it constantly, measure it and reward on it. They preach and teach the importance over and over until it becomes part of the company's DNA. They master the art of setting commitments such that they can be met without padding or sandbagging.

They understand that the parts manager is part of a supply chain of "little c" relationships that lead ultimately to the "Big C"–the customer–and that we only meet the customer commitments when we all meet our internal commitments. Whether it is a new installation or a service call, demonstrating an unwavering dedication to meeting the commitment is the cornerstone of quality. Do what you say you will do. Period.

It is amazing how many organizations (and people) go through life without a clear vision for where they want to end up. You would not likely embark on a vacation by climbing in the family car and heading out hoping to, somehow, have fun. Situational AwarenessMore likely, you would pick a specific destination, then build a timetable and budget to get there.

Yet in many operations, we find vague or ambiguous goals for the future. Sure, we hear things like "customer-friendly" or "world-class," but these clichés never seem to translate into a specific set of definitions or goals that can be cascaded across an operational ecosystem. High performing operations, on the other hand, always seem to have a clear definition and set of time-bound goals for their service. It is vital to invest the time to clearly define what level of service your customers must receive to fulfill your value proposition. That definition must then be cascaded such that every person in the operation KNOWS how they affect the outcome.

Would you climb in your car and attempt to drive across the country with the windows painted and the dashboard removed? Would you make it? What a silly thought...

5 The power of processYet how many operations go through the hours, days and weeks without real or near real-time situational awareness? Without situational awareness, you cannot possibly make adequate course corrections. Great operations always have their fingers on the pulse of the handful of key measures that describe their progress. Not 50 metrics, mind you, but eight to 10 key things that tell the story of how they are doing for their customers. Facts.

Facts should be rigorously collected and displayed to tell the truth about what is happening–not what they hope or wish was happening. Further, having the facts is a huge part of the culture of the organization. As an old friend loved to say, "Facts are the foot soldiers in the war of persuasion." Arm your operations with the facts about your service that matter most and you are armed to reach your destination.

Good network and service operations are a series of process steps toward a specific goal. Inputs are translated to outputs over and over.

6 High cognitive learning coefficientFor example, customer orders are collected, processed and completed. Network alarms are triaged and corrected. Customer calls are answered and dealt with. Hopefully, these processes all occur in a coordinated manner achieving the desired end. In a world-class operation, they do!

In fact, those rarified operations seem to have a maniacal obsession with making their process better. They fuss with them all the time. They do this because they understand a simple truth: To improve the operations, they must improve their process.

Think of it as a continuous optimization problem. Good process stewardship should contemplate four factors about the process: How fast do they run (cycle time)? At what throughput (capacity)? Quality (defects)? And cost (cost per unit)?

Here is an example. Let's say we are turning up new telephone customers. It takes us 10 business days to complete orders. We could do it faster, but we have an order backlog because we have more orders than our field force can keep up with. The quality of the orders is such that we have to send a technician back out to the client's home 40 percent of the time. Because of the re-work (a second truck roll), our cost of install is twice what we think it should be. Sound familiar?

7 EmpowermentSo we go to work on the process and learn through root cause analysis that the biggest reason for the re-work is related to a technician training issue. We re-train the techs, reducing the repeat visits to 10 percent, which frees up more tech time to do more installs.

This reduced cycle time gets the revenue flowing faster and makes the customer happy. And the best news is that our cost is reduced. A win-win-win for all. Now, let's repeat the process for the next biggest problem with our installation process.

Any questions?

How fast do you learn? Said another way, whenever you begin doing something new (like VoIP), it takes time to iron out the best process and methods. During this learning curve, the business likely suffers. So, the faster you can learn, the faster you can improve.

8 SpeedApex operations know this and set up entire systems and programs to drive this learning. On the other hand, perennial bottom-dwellers never seem to ask the questions or learn from their mistakes. One of the best ways to drive this learning is to measure performance frequently. The faster you need to improve, the more frequently you should measure. Here is an example:

The monthly network availability report comes out on the 10th of the subsequent month. The results are poor, so the boss asks for a "get-well plan." The team spends another few weeks meeting and (hopefully) fact gathering. They construct a plan and get on the boss' calendar (another week). The review with the boss goes well and is approved.

The team now goes into implementation mode, which takes another two weeks. If you are keeping score, this all takes four to six weeks to happen–assuming they are efficient.

9 No mistake twiceBut what if you change the process such that the results are tabulated and reviewed weekly? The entire process compresses. An operation that reviews results weekly has four learning opportunities, as compared to the monthly gang (see Figure 1). We have used this simple concept many times to rapidly drive improvements. In fact, there have been times that demanded a daily review. So you should know that if one day you look over the wall and see me as your competitor, you can bet I will be measuring my operations frequently. If you want to keep up, you should, too.

You have surely heard the word "empowerment" and understand the implication–I am empowered or I am not. But in practice, are your operations empowered, and if so, to do what?

Here is the deal. Network operations are complex and very difficult. Operating at high levels of performance is even harder. So why not recruit every mind to the table to help?

Yet in operations all over the world, the people in the organization are not made part of the solution. They see the problems and want to help. They have good ideas but may not have a voice. Voices are lost in many ways, but the effect is always the same–"learned helplessness."

10 Have skin in the gameWhy does it happen? We have seen many causes, but two of the most insidious are the deadly pair–"shoot the messenger" and "problem hiding." These two have done more to undermine otherwise good service than perhaps any other cause. The problem with this behavior is that it has a nasty way of spreading around the operation and becoming a culture.

The obvious point is that it robs the team of the powerful and creative intellectual capital you already have. Further, it feeds the negative relationship spiral. Skilled operations create a buzz around service improvement and the search for the truth. They reward and recognize people that raise their hands. They celebrate improvement. The people in the organization learn and see examples every day that getting better is everyone's job and that it is real. People learn to question tribal beliefs and replace those with a new belief:"There is nothing we cannot make better."

This one is so simple but so powerful. The faster you can make your processes run, the better your customers like it, the more revenue, the lower the cost, the greater the margin, the happier the investors.

Chronic underachievers fail to recognize the money on the table. Back to the principle of process power, making your customer-facing processes run faster is the closest thing to a money tree that an operation has. So if you aspire to high performance, then you must aspire to speed. The interesting thing about speed is that it can be a huge competitive differentiator. It is harder for your competitor to keep up with you if you are more nimble.

Again, this seems simple and should go without saying, but it continues to amaze us how many operators make the same mistakes over and over. All too often, we see operators confuse the symptoms for root-cause.

Once, we were working to improve a customer order fulfillment process in a commercial business process. Orders for service would come in from salespeople, then would go through an order entry step where the accuracy and completeness of the order was evaluated. We found a high percentage of orders were missing key information, so the order clerks would spend considerable time calling the customer to get correct information. Because of lost time, the installations would inevitably miss the committed installation date given to the customers. Having the order clerks calling the client was in effect a "repair pit." While well-intended and helpful, it had the effect of institutionalizing the order defects.

Finally, in a moment of clarity, we went back to the sales organization with a list of names and the count of incomplete orders. A root-cause analysis uncovered that the order forms failed to highlight the importance of the information in question. The form was redesigned, the sales force was retrained, and bingo! Order quality improved dramatically. Of course, this un-burdened the order clerks from endless phone calls, thus allowing them to do their real job. You guessed it–our overall cycle time improved and we increased the percentage of orders that meet our installation commitment.

Oh yeah, we also permanently lowered the cost of our installation process.

The definition of process insanity is doing the same thing over and over in the same way, and expecting a different result. Fix it right the first time and watch your operations improve.

Reach Critical MassAnother point of great leverage in the search for the operational high ground involves the notion of consequences. So many service organizations develop apathy toward problems and improvement.

People become tired or frustrated with the difficulty associated with making change. The question for operational leaders is one of motivation. Why exactly should someone go the extra mile or push an issue that seems futile?

Someone once said that in the end, we all behave in our own best self-interest. How true! The definition of an academic argument is one where there is nothing at stake. While hard work is its own reward, there are bills to pay. In typical operations, there is not enough thought given to aligning the needs of the workforce with the needs of the customer and shareholder. It sounds abstract, but it is not.

Recently, we were conducting an operational assessment, and during interviews with managers, the subject of recognition and compensation came up. The manager reported that she had received a nice bonus from the company, but could not say exactly why. She assumed that it was because she worked hard, but...

The more tightly that workforce rewards and recognition can be linked to the operational plan and performance, the better. Conversely, if people feel no difference in the wallet for good or bad performance, well, can you say "entitlement?" Operationally excellent organizations typically create consequences for performance–both good and bad. This is very powerful when it comes to eliminating apathy and rewarding the extra mile that so often is required to achieve high levels of performance.

So there you have it. Ten attributes of world-class performance. It is important to remember that achieving apex operational performance is a journey, not an event. It takes time to reach critical mass across a large and geographically dispersed organization, but when you do, the organization becomes self-healing. In a sense, continuous improvement occurs without really having to ask for it. Give these principles a try and watch operational friction diminish, and in its place, world-class operational excellence become your culture.

About the author
Author Information
Van Macatee has 30-plus years of experience operating large telecom networks and is now the CEO and founder of The Evermore Group. The Evermore Group specializes in technical operations disciplines and strategies. info@evermore.biz

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