Don’t Forget Your Management Operating System
Outdated Process Series
Previous articles in this series discussed the challenges of identifying outdated and inefficient processes and what tools are needed to successfully implement business process improvements. This article will look at one other important component that must be taken into consideration when implementing change: your Management Operating System.
The Importance of Your Management Operating System
The Management Operating System (MOS) is a set of tools or structures that allow for measuring, controlling, and managing a process, an operation, or a company. The main purpose of MOS is to provide management with visibility that empowers their decision-making process.
MOS elements are usually divided into sub-categories which are dependant on the level of management and outlook they support, starting with business direction – the longest and most strategic outlook which requires the most sophisticated MOS – down to execution control elements, which capture real-time data about current activities.
Operating a business without a robust MOS is akin to walking around blindfolded: you may be able to get somewhere, but it will take you much longer to get there, and you may end up in the wrong place altogether. Add to that the possibility that your competition is not blindfolded at all, and the result is not hard to predict.
Typical MOS Pitfalls
While the accuracy and quality of MOS varies greatly between organizations, many fall victim to one of these common deficiencies:
- Poor design is the most common pitfall, and results in an inadequate number and functionality of system elements to provide sufficient or accurate insight;
- Gaps created when MOS elements necessary for a given levels of management are either missing or insufficiently robust;
- System tools are not properly linked with one other and aren’t able to work together to paint an accurate picture; and
- Excessive or unnecessary elements are built in, and act as a distraction from key information, reducing the overall effectiveness of analysis.
The Gold Standard
While MOS elements will differ depending on the industry and on a particular company, the principles of its design remain the same. The best Management Operating System should give just enough of the right information to steer all aspects of the business, without clouding insight by generating inaccurate or unnecessary information. The data should be presented in a manner that promotes effective analysis and decision-making, and every element of the MOS should be used and useful in evaluating whether the company is on the right path to value creation.
Having an optimal MOS is a key part of eradicating outdated processes from your organization. However, the challenge of objectively evaluating your systems may get in the way. Click here to find out how Trindent Consulting can work with your organization to find and overhaul your MOS limitations.
The Path To Turnaround Time Improvement
We’ve all used John Ray’s adage, “Haste makes waste” to demonstrate that doing something too quickly causes mistakes and results in the waste of time, effort, and materials. And we’ve all experienced situations where we were asked to “work faster” only to subsequently face quality problems.
Similarly, many organizations who strive to eliminate waste often go about it the wrong way, making mistakes at the expense of Turnaround Time. At Trindent Consulting, we specialize in helping your teams accelerate work while maintaining quality and reducing waste.
Be Little to Increase Speed
Turnaround Time is the amount of time it takes to complete a process or request. It’s made up of Lead Time (the time between the initiation and completion of a process), Non-Value Time (time spent on a step in the process that adds nothing to the finished product), and Value-Added Time (time spent that improves the outcomes of a process), and has a direct impact on labor efficiency and cost.
Companies frequently address slow Turnaround Times by focusing on the average completion rate of tasks through process automation or digitization, but then miss much bigger opportunities by forgetting to use Little’s Law to address issues with Lead Time.
Little’s Law states that Lead Time equals the amount of Work-in-Process divided by Average Task Completion Rate. The speed of any process is inversely proportional to the amount of Work-in-Process. Therefore, identifying and eliminating unnecessary activity will inevitably improve Lead Time. Decreasing Work-in-Progress increases speed and shortens Turnaround Time without needing to address average completion rate.
Optimizing Turnaround Time: What’s Your Process Cycle Efficiency?
Often organizations don’t know if their Turnaround Time can be improved, or how to begin to tackle the issue. They don’t have the tools or knowledge to measure Process Cycle Efficiency (PCE), which shows what percentage of Turnaround Time is waste. Process Cycle Efficiency is calculated by dividing Value-Added Time by Total Lead Time. Decreasing Lead Time increases speed and decreases process Turnaround Time.
Measuring PCE allows companies to quantify the opportunity by process or workstream. A low PCE indicates opportunity to initiate improvement engagements.
Conclusion
Legendary UCLA Basketball Coach John Wooden used to say, “Be quick but don’t hurry”, meaning do the activities that matter with speed but with accuracy.
Speed doesn’t have to hurt quality and can provide a competitive advantage in service cost if you decrease Turnaround Time by focusing on the biggest part of processes using Little’s Law and Process Cycle Efficiency.