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Enhancing Operational Capability

The strategies and tactics that an organization uses to compete globally have radically changed. At one time, organizational size and available capital would ensure market share and allowed organizations to adapt slowly to changing market conditions. In these older bureaucratic systems, even if newly developed technologies were deployed by competitors, organizations often had enough time to reverse-engineer the new systems, independently develop similar versions, or buy out the competitive organization to remain dominant. Consumer preferences were also relatively stable and geographically isolated to regions. This allowed organizations to easily manage customer value expectations and meet needs. The customer experience was very simple and stable in these relatively static environments, so operational strategies could also remain static. But as globalization and technological advances evolved, customer expectations also evolved. They expected lower cost, high quality, and fast response times. Consider the home appliance industry. In response to competitive pressures, this industry rapidly moved from being a slow innovator to adopting leading-edge approaches to product and services design as well as supporting processes such as logistics, customer service, invoicing, and others. Most industries have reduced product and service development time and cost while offering more differentiated products and higher quality. Market dominance used to be determined by the ability of large organizations to set industry standards and deploy capital intensive barriers that prevented new entrants. Today, smaller organizations may dominate niche markets by neutralizing larger and historically more entrenched organizations. This is because of better customer knowledge, technology for scale, and the creation of flexible operations, including virtual operations.

In John Kotter’s book, “Leading Change,” he puts forth an eight-stage process to create major change within an organization. These characteristics of effective change include “establishing a sense of urgency,” “creating a guiding coalition,” “developing a vision and strategy,” “communicating the change vision,” “empowering a broad-based action,” “generating short-term wins,” “consolidating gains and producing more change,” and “anchoring new approaches in the culture.” The ability of an organization to adapt its organization, systems, and people to meet competitive threats is dependent on the organization’s culture and is the driving force behind an organization’s competitiveness. Organizations will not change without a strong reason. Behaviors that made them successful are not easily abandoned without justification. At times and for differing reasons, some organizations are in crisis. The crisis could be a new disruptive technology, a new competitor, or some other reason threat to the organization. Employees will try a new approach when they have few other choices.

A guiding coalition is also important. These are also called governance councils, and they consist of roles and responsibilities organized to promote an initiative. The leadership council reviews the initiative status through its workstreams and ensures strategy guidelines are followed and resources are made available. There are also workstream teams logically organized by geography, function, work type, or other logical groupings. Each workstream has a charter, a schedule, deliverables, a leader, team members, and associated information. The workstream periodically reports progress to the leadership council.

a e leadership council also creates the initiative’s vision and strategy, which should be aligned to the larger business strategy, a e strategy helps identify the initiative’s goals. Examples of goals would be achieving 2% year-over-year p roductivity i mprovement, i ncreasing ma rket s hare b у 10%, reducing operating expense by $1 billion. An initiative would include several types of goals, such as those related to higher customer satisfaction, reduced 1 ead t ime a nd c ost, a nd h igher q uality. a e 1 eadership c ouncil ensures the vision, strategy, and goals align with those of the workstream teams and projects to ensure realization of estimated benefits.

Organizations c annot c hange w ithout p racticing n ew b ehaviors. Communicating the vision and strategy as well as the enabling tools and methods help employees see how to align with and contribute to an initiative. a ere are different types of communication that need to be adjusted depending on the audience, the message, and the format, a e broad-based coalition includes both the workstream teams and other employees supporting t he t earns p rojects. a eg oal i s t о e mpower a 1 arge p ercentage of more than 30% of an organization to support an initiative by actively practicing the new behaviors. As projects are closed and benefits are realized, these need to be communicated to the organization. An initiative’s success depends on communicating the benefits that were gained by practicing the new behaviors. Seeing benefits helps convince people to try different things. As an initiative matures, lessons learned are summarized, changes are made to the strategy, and resources are reallocated to provide additional benefits.

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