By Forrest W. Breyfogle III
In his new book, "The Integrated Enterprise Excellence System: An Enhanced, Unified Approach to Balanced Scorecards, Strategic Planning, and Business Improvement," Forrest W. Breyfogle III seeks to take Lean Six Sigma and the balanced scorecard to the "next level" in the pursuit of excellence in the enterprise. Breyfogle, founder and CEO of Smarter Solutions, Inc. (www.SmarterSolutions.com), presents Integrated Enterprise Excellence as an enhanced methodology that can improve organizational efficiency and effectiveness. He documents a set of best practices derived from the strengths of past systems, illustrating the basics of structuring IEE metrics and a no-nonsense roadmap to initiate process improvement and achieve substantial benefits. In this exclusive excerpt, Breyfogle discusses the challenges facing executives and offers insights into the dangers of focusing on the wrong metrics — problems that he believes can be addressed through the application of IEE.
Challenges Facing Leaders — An Integrated Enterprise Excellence Resolution
The complexity of business is growing exponentially as data becomes more readily available, creating still more challenges. Senior management can feel a lack of control — vulnerable to being manipulated, unaware of the improper and even illegal movement of resources from one entity to another. Employees can be avoiding responsibility, playing the blame game, and using metrics to hide productivity shortfalls rather than monitor them. Without the proper enterprise management system these common issues will be uncontrollable. Providing some relief, programs such as Lean Six Sigma have helped many businesses make performance improvements. Usually, the results of the first few implementations are impressive because the goals were easily achievable, but the system is difficult to sustain. Though management may be satisfied with project execution, there is a nagging doubt about whether enterprise issues are being addressed. Quite often Lean Six Sigma projects as well as strategy statements show no direct alignment or specific direction in achieving corporate financial goals.
Many senior executives admit that there are significant gaps between what they should know about operations and what they do know. They cannot determine with certainty whether there are inherent flaws in critical operational processes. When asked to describe the progress their business is making, many will recite metrics but are not certain how they got to that point or if they can repeat the behavior. They may offer a snapshot of the company's status, while the real need is a continuous picture describing key outputs over time, along with the key inputs that contributed to the success/failure of the organization. In too many organizations, accurate forecasting has become a guessing game.
Management needs a measurement and improvement system that makes possible the orchestration of day-to-day activities so there is true business-needs alignment — a system that not only monitors operations for management but also provides the entire workforce with information that can be used down the line to make sure everyone's performance directly supports corporate goals or else becomes the target for corrective action. For any business to succeed, it must follow the three Rs of business: Everyone is doing the Right things and doing them Right at the Right time. As always, management's ultimate goal is to provide maximum, measurable, predictable, and sustainable bottom-line results for the entire, integrated enterprise. Emergence of the process called Integrated Enterprise Excellence (IEE) makes all of these possible.
Business Systems Can Stimulate the Wrong Behavior
It is said that what we measure is what we get. However, we need to be careful of what we ask for. Some questions for thought:
- 1. Do your metrics promote the right kind of behavior?
2. Do your presentation and the reward plan that surrounds your metrics lead to the right kind of behavior?