Any approach to embedding the productivity disciplines has to recognize that all organizations are different – with different legacy systems, operating models, governance arrangements, skill sets and cultures. This is why implementation is an art, rather than a science.
All the necessary productivity improvement tools exist and are well known – from LEAN to Six Sigma, from Zero Based Budgeting to Activity Based Costing/Activity Based Management and from Listening to the Customer to End-to- End Value. But there can never be a straightforward manual that explains how this plethora of tools should be applied in any particular organization. Certainly it is logical to begin with a gap analysis to understand the current initiatives already in place and to decide which of them are contributing to reaching the firm’s strategic goals and target operating model, which are distractions and what is missing. Thereafter, however, the skill lies in prioritizing the discipline areas and identifying which productivity improvement activities can be run simultaneously and which require a step-wise approach, taking account of any potential impacts in areas such as customer service and risk.
Of course, the emphasis on overall productivity inevitably involves trade-offs between costs and income and between different groups in the organization. This is why a culture of trust and willing engagement with the long-term interests of the enterprise as a whole is so important. But equally important is the ability to stand at one remove, conduct end-to-end analyses that identify how the organization really works, take fact-based, clinical decisions about how to move forward and then align everyone behind the new customer-focused, productivity-led approach. In this respect, change management skills are key.
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