With the change that 2020 brought, it might be time for us to get used to change. Business Enterprise Mapping's Donald James speaks with Amanda Del Buono to help us understand how manufacturers can manage that change in their organizations going forward.
Transcript
Amanda Del Buono: Welcome back to Manufacturing Tomorrow's Workforce. I'm Amanda Del Buono, and you're listening to the podcast that helps manufacturers with day-to-day workforce challenges.
Today, I'm joined by Donald James, a leader in business process improvement and business excellence and founder of Business Enterprise Mapping. With the change that 2020 brought, it might be time for us to get used to change. So, Don's here to help us understand how manufacturers can manage that change in their organizations going forward. And we're going to touch a little bit on how they managed that change during the pandemic. Thanks for joining me today, Donald.
Donald James: Yep. I'm very glad you invited me.
Amanda: So, I know you have some experience in the manufacturing industry. Can you tell us a little bit about that and what led you to create the Paragon method and found BEM?
Donald: Yeah. My background started out in manufacturing engineering and test engineering many years ago now. I was invited to America—that's the strange accent that I have—in 1980 to help IBM manufacture the first IBM PC that was in Huntsville, Alabama. And I was also sent back to Europe in 1989 to open up a manufacturing facility in Dublin, Ireland. At the time when we were starting a manufacturing line, a lot of our European customers were asking for us to be compliant to international standards, ISO 9000, and I had to sort of do a very quick research into that to get the plant compliant. What I saw was a lot of documentation. However, what I did see in the standard was the first time I'd actually ever seen a quality management system well-defined, but the downside of it was that a lot of written narrative procedures, SOPs, were the methodology to define the quality management system. And I think “Dilbert” had a whole range of ISO 9000 comic strips, and he referred to this documentation as the honking great binders. So, being an engineer, I looked at the methodology and I was used to basically defining diagrams either in schematics or flow diagrams, and I thought there had to be a better way than writing endless procedures that quite honestly, people wrote them and they stayed on the shelf.
So, I developed a methodology, which was certainly a lot simpler than SOPs, but also when you look at standard documentation in the form of maps, swim lane method was the adapted method of diagramming processes, and I thought those were too simple to be useful. That sort of led me to developing process maps using the Paragon method.
So, that was with that company. When I came back to the United States, I started the company back in Boston. This is the time when reengineering the corporation was the forefront of process development. That was about '93. Mike Hammer wrote the book, reengineering the company. So, what I did was use the program that we developed to define processes, and at the time, ISO 9000 in America was fairly new, typically taking anywhere from 18 months to 24 months. Mainly, in the form of documenting, it took that long. So, we developed something that basically was implemented … our first client, a small subcontracting manufacturer up in New Hampshire achieved ISO compliance in record time. And they did it in less than five months. But what was interesting, the auditor, the third-party audit could not find a defect. And so they were one of the first to actually have zero non-conformances.
And so, it sort of springboarded from there, and I was also fortunate enough that that client wanted to document more than the quality management system, and they wondered why finance was not included, and HR was not included. So, we extended it beyond just the quality function and focus to more of a business management system. And since then, we've just added to it, improved upon it, looked at various initiatives, taken the goodness from those initiatives, and added to the program. So, a lot of our innovation now comes about by seeing and working with some very good clients. And when we see best practice, we try to integrate it into our program.
Amanda: Interesting. So, it's kind of one problem you saw broke out to become a much bigger solution.
Donald: Yes. Yeah. In manufacturing, you know, we've always had good quality programs in manufacturing, very much focused around the production line. And a lot of the quality practices going back to Deming was focused around just the manufacturing. And when you look at the Paragon model, they're actually 12 business systems and manufacturing is only one of those. So, we're seeing a migration now to a lot of those programs and initiatives really migrating to the back office work within the production entity.
Amanda: So, I think that change is always something that as humans is looked at with apprehension. I'm curious with the amount of change that was forced on people and organizations in such a quick time during the pandemic, how did you notice manufacturers that you work with handling it? Maybe what were some of the best tactics that you noticed for keeping processes and projects moving along in the past year as they have to adjust how business and operations are run?
Donald: Yeah. In fact, it affected us drastically also because a lot of our work was done on-site and we had to rapidly migrate away. We've always had remote access to some of our international clients. They always log on when we're doing our workshops, but we migrated very rapidly within months, weeks to a remote operation.
So, what we've seen in industry, of course, and also in government is this very rapid had to move away from being on-site. So, the manufacturing entities themselves obviously have to be there. The robots, the automation on the factory line is still there, but what we saw a lot of the back office work migrate to home very quickly, HR, for instance, payroll, procurement, IT. So, a lot of the back office work was migrated rapidly offsite. This forced a lot of burden on IT, for instance. IT was really key to this migration effort. You know, a lot of companies that had very strict security rules, all of a sudden, they didn't apply when people were working from home. But what happened is people became more reliant on information platforms, data platforms, encouraged the various groups to work closer together finding better ways to interface with the production entities, and so forth.
We're also seeing workflow programs more utilized, artificial intelligence. We're seeing a lot of non-value-added work coming to the surface and rapidly doing away with that. Even simple things like DocuSign, for instance, where companies, in fact, government was demanding things should be done in wet-signature had to very quickly take that rule away and start using some of the tools that have been around for years. So, we've seen some of those things change rapidly. A lot of non-value-added, things like reviews and approvals. Meetings were more effective using things like Zoom that we're using today. Silos, sort of the operational organizational silos were broken down. So, we've seen some very rapid change and, as I said, you know, it's been a very tough year for many businesses, but there are a lot of good things that have come out of this utilizing technology. Even in our day-to-day, I always think, you know, when you go to the doctor, for instance, most of it is consultation and there were rules in place that you couldn't have remote consultation, and those came down. And so, you know, that's kind of the things that we've seen, very rapid change, more automation, removing non-value barriers going down, and of course, trust. You know, trusting people in doing their work. They're working from home. You have to trust people. They're not doing other things, they're doing work. And so, I think a lot more trust in the employees took place.
Amanda: Yeah, definitely. And with your experience in manufacturing, I think that trust kind of might be a thing here. I'm curious what some of the biggest sticking points are when executing an organizational change. Where do manufacturers getting stuck when they're implementing a new software or a new piece of automation or maybe even a cultural change, what should they avoid or what should they be doing to make sure they're successful?
Donald: Yeah. You're absolutely right. And I'm glad you've mentioned cultural change as well because that's a key part of this. Trust, of course, trusting people is cultural change. And quite honestly, I feel that a lot of employees over the years, they've participated in many failed initiatives. A new initiative comes along, we've sort of gone through this over the last 20 years with TQM and zero-defects, reengineering the corporation. Quite honestly, employees are kind of tired, and you know, the most recent one is Six Sigma. And quite often, they don't last very long. They disappear. So, it's very difficult for us when we go into a company and we're promoting defining processes and so forth. And sometimes they say to us, you know, we've done this before and it didn't work. So, that's a big barrier, so those changing initiatives. Not putting the infrastructure in place to support change, strategy, for instance. Companies come up with some really good strategies, but they don't have the systems to actually execute those strategies. So, we're seeing more and more companies really getting to grips with understanding their processes, defining them, and executing against those.
So the other aspect too to change is getting the processes in the state of control. Many of the clients that we go into, they ask us to participate because they haven't defined their processes. And what we found over the years that about 70% of all business problems are process-related, process not defined, process not followed, process is not effective. The other thing that we're seeing as a part of change is more reliance upon breaking down some of those key supplier and key customer boundaries and making sure that those are seamless. So, that's sort of happening over the last few years. The other thing that's really a big barrier for us is leadership commitment. That doesn't mean we've got great leadership in a lot of these companies, but quite often, leadership, as I've mentioned earlier, changes initiative, when they do musical chairs at the top, leadership changes, a new person comes on board, wants to change everything before they fully understand what they have in place. And we find a lot of good practice when we go into companies. And quite often, we see good practice change for the sake of change.
The other thing that we often see is too much reliance upon automation. Even though automation, I think, is a way of doing things faster, cheaper, better, but you have to understand what problems you have and automation doesn't always solve them. Sometimes we've seen automation put in place, the problem hasn't been solved so the problem happens faster. We've seen examples of SAP, for instance, being removed, Oracle replacing it. And in other cases, we're seeing the opposite. So, we even had a client once when we went in there, the CIO didn't understand the enterprise software. So, basically, they changed it. So, I think the way to automation is there's a pretty standard route if people had the discipline to follow it. And that is, first of all, define and understand your process, look for ways of simplifying that process before you automate. Then once you've automated where you need to, then integrate it into the system. And that's integrating it to all aspects, not just to production, but sales, marketing, HR, and then be prepared to measure and monitor it and support continuous improvement.
Amanda: Right. Right. And I presume sometimes it's hard to, for a company itself, to identify some of those sticking points like, you know, if they have an ineffective process. I would think leaders have a hard time seeing that they're the problem in the communication breakdown or whatever.
Donald: Communication breakdown, the silos breakdown, and you've raised another good point. In a typical business, they literally have thousands of opportunities, big and small. And quite often, some of those opportunities raise to the leadership team to solve and they may not be a priority. So, companies have difficulty really understanding all of their opportunities, packaging them, prioritizing them, categorizing them, and which ones to solve to support strategic initiatives. And some of the things we found in companies that over 50% of their business opportunities can easily be solved within a 90-day window. We call those quick wins, but quite often, those are sort of left lying around and they interfere or hide some of the bigger problems that we see in business.
Amanda: Interesting. So, I understand that you also work across industries. Have you picked up tactics from industries outside of manufacturing that you found are applicable or helpful to the manufacturing industry?
Donald: Yes. Absolutely. Some of the things we run across are companies that specialize in the resource-based processes like a company whose main focus and revenue stream is hiring people or procuring material or maintenance. So, we see these companies that are focused on best practice and delivering that product and service, and that's how they get their revenue. And we find a lot of this can easily be utilized within a business. So, that's the most common ones that we're seeing.
Amanda: Okay. And I guess, I just kind of want to close out by asking, you know, your advice. What advice would you give to manufacturers as they plan out the next year or two? What would be your top five points to consider, top five to-dos prior to any changes that they're thinking of making over the next year or so?
Donald: I think I've mentioned this a little earlier in one of the questions and maybe I should repeat it again is companies have to really truly understand their 12 business systems, not just manufacturing, whether that be HR, sales, and marketing. And they've got to define those systems and processes within their business making sure that people are following them, that means educating them and then continuously improve them. So, clearly understanding the processes they have, understanding the opportunities within those processes, and then systematically start solving them. The other thing that we push and help companies identify ownership of those processes and systems. So, for instance, a financial management system, your chief financial officer may be the system owner, but under that system, there may be 10 to 12 processes that need ownership. So, having clearly defined responsibility and accountability is the second point. Then I mentioned again, the opportunities, understanding what opportunities you have, making sure you prioritize those opportunities, also tackle the ones that are aligned to your strategic objectives.
So, getting your systems and processes in a state of control. We have a five-tier methodology that goes from no processes to best-in-class. And we would say that it's very important for business systems, all of their systems to be in what we call a state of control, a level three business before you can start putting in effective continuous improvement programs. Then also, take a look at not only your short-term goals but take a look at your longer-term goals. A lot of companies rely on a SWAT analysis, for instance, to implement their strategic initiatives. And we found this not to be as effective and companies that have used that have not been successful in the long-term in producing results. So, we like to take a look at the business opportunities that exist, prioritize those, determine what goals to support those strategies, both at the system level and process level. And to ensure that you have a means of measuring those goals effectively. Then define the strategy over an 18-month to 24-month period, and really stick to it. And then you obviously can make adjustments along the way as you find opportunity to improve that as well. And then finally, aligning your systems and tactics to meet those strategic objectives. So, that's some of the things I would definitely recommend companies do.
Amanda: Wonderful. Wonderful. Well, thank you so much. I appreciate you taking the time to join us today and share some of your insights. Again, it's Donald James with Business Enterprise Mapping.
