innovation & business excellence

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Delivered to the Feb 2010 meeting of the Major Projects Association

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  • 1THE POTENTIAL OF BUSINESS EXCELLENCE IN DEVELOPING AN INNOVATIVE APPROACH: the logistics of innovation

    Mark BrownHalcrow

  • Contents

    Exploration of innovation The feedback loop Business excellence Case studies Conclusions

  • Innovation: it isnt just

    the R&D department

    new technology

    a discrete outcome

  • Innovation: it can

    embrace the wholeorganisation

    the whole work-force

    be continuous

    but be challenging to sustain

  • Process prevents innovation being a one-off bonus

  • Source: Think forA change, LLC, 2008

    Process embedsinnovation acrossthe wholeorganisation

  • Linear approach to meeting market need

    strategy objectives approach delivery outcome

    Problem/opportunity

    Marketneed

    if we keep on doing what weve always done, wewill keep on generating the same outcomes

  • Iterative approach: the innovation loop

    strategy objectives approach delivery outcome

    Problem/opportunity

    Marketneed

    reviewassess

    change Learning &innovation

    Double looplearning

  • Nothing new under the sun!

    strategy objectives approach delivery outcome

    Problem/opportunity

    Marketneed

    reviewassess

    change Learning &innovation

    MANAGEMENT BY OBJECTIVES

    HARD SYSTEMS ENGINEERING

    BUSINESS EXCELLENCE

    PLAN DO REVIEW

  • The fundamental concepts of business excellence

    Results orientation

    Customer focus

    Leadership and constancy

    of purpose

    Continuous learning,

    improvement and innovation

    People development

    and involvement

    Management by processes

    and facts

    Partnership development

    Corporate social

    responsibility

    Customer feedback

    Staff feedback

  • Leadership

    People

    Policy &Strategy

    Partnership& Resources

    Processes

    People Results

    CustomerResults

    Society Results

    Key Performance

    Results

    Innovation & Learning

    Enablers 50% Results 50%

    EFQM Business Excellence Model

  • Leadership10%

    People9%

    Policy &Strategy

    8%

    Partnership& Resources

    9%

    Processes14%

    People Results

    9%

    CustomerResults

    20%

    Society Results

    6%

    Key Performance

    Results15%

    Innovation & Learning

    Enablers 50% Results 50%

    Drivers of innovationStaff feedback

    Customer feedback

    Responsive tostakeholders

    Alignment of organisationTo strategy Process

    improvement

    Alignmentof partners

    Assessment & reviewfeedback loop

  • RADAR LogicRADAR Logic is applied to all enablers to:

    Determine the Results aimed for as part of its policy and strategy making process

    Plan and develop an integrated set of sound Approaches to deliver the results

    Deploy the approaches in a systematic way to ensure full implementation

    Assess and Review the approaches, comparing outputs against expectations and amending approach where required

    A focus on results along with assessment and review of outputs against these drives the feedback process

    Continuous learning, improvement and innovation

  • Ingredients for continuous improvement & excellence

    Strategic leadership & directionto drive change

    Creating strategic linkages across organisation

    Clarity on objectives

    An ability & desire to review progress

    Willingness to change if objectives are not being achieved

  • Case studies

    Leadership and people

    People engagement & recognition

    Aligning partners through procurement

    Process improvement

  • Context: program behind time and over-budget - monster of the deep wreaks havoc - threat to remainder of programme. Concluded whole workforce must be engaged in turn-around

    Goals: 20-30% reduction in costs/boat change in project culture

    Source: Murray Easton, World Quality Day, Sellafield, November 2009

    Leadership & Innovation: Astute class submarine development

  • Leadership, teamwork, engagement

    Approach: strong focus on employee engagement and teamwork: Behaviours (sickness, motivation, reward); recruitment; coaching; open to challenge; communication;

    Outcome: employee satisfaction 39% to 80%; absence down by 66%; costs reduced; program returned to timetable and continued

  • Excellence & Innovation: staff recognition and feedback

    Context: We thought our staff were happy, butHalcrow staff survey showed poor results for feedback &recognition (10 points lower than any other measure) 2004-7

    Goals: engaged and motivated staff; need to raise BEM score Sample of staff survey results

    2000 2002 2004Job Clarity 74 75 75Client Focus 71 74 76Competence 73 74 76Feedback 45 58 58Recognition 54 62 63

  • Excellence & Innovation: staff recognition Approach: introduction of monthly gold, silver &

    bronze awards (cash + certificate); line managers to nominate staff; target set for no. awards to be given per month

    Outcome: 2008 recognition & feedback score increases by 8 pointsimprovement sustained in 2009

    Recognition score: Staff Survey

    58

    60

    62

    64

    66

    68

    70

    72

    2004 2006 2007 2008

    Year

    S

    c

    o

    r

    e

  • Excellence & Innovation: aligning partners through procurement

    Context: how to align supply chain to your goals (eg: best value in government) and evaluate complex tenders?

    Goals: auditable tender process; value for money

    Approach: Highways Agency; DfT Rail; TfL all applied EFQM Radar to structure bidders tender documents

    Outcome: alignment of supply chain to client goals; auditable bid appraisal; measureable value for money; many suppliers now using BEM themselves

  • Excellence & Innovation: process improvement

    Context: Spanish textile company, Inditex, facing growing global competition; major threat to domestic based industry

    Analysis of competitive environment rejected low cost models of others: instead, focus on time

    Goals: adapt offer to customer desires in shortest possible time

  • Excellence & Innovation: process improvement

    Approach: introduction of high degree of vertical integration with closer links between design, manufacture & retail by systematic feedback of trend data from stores to designers

    Outcome: Turnaround time from detection of a trend to design-on-shelves down to 15 days; Spanish manufacturing base maintained; growth to 2000 outlets in 52 countries

  • Excellence & continuous improvement

    Business excellence winners and control groupAverage % change in performance measures

    0%20%40%60%80%

    100%120%140%

    Stoc

    k pric

    eOp

    eratin

    g inc

    ome

    Sales

    Retur

    n on s

    ales

    No E

    mploy

    ees

    Total

    asse

    ts

    Award winnersControl Group

    >Twice as

    good!

    >Twice as

    good!

  • CONCLUSIONS Innovation is more usefully viewed as a process (verb)

    rather than an event

    Successful firms innovate continuously across the full range of their activities

    Innovation is driven by the feedback loop

    Frameworks exist to hard-wire innovation into firms (& projects) eg: business excellence

    Firms which apply business excellence techniques are more successful, partly because they are more innovative

  • Thank-you

    Id be happy to give you innovative thinking..what are the guidelines?

    THE POTENTIAL OF BUSINESS EXCELLENCE IN DEVELOPING AN INNOVATIVE APPROACH: the logistics of innovation ContentsInnovation: it isnt justInnovation: it canProcess prevents innovation being a one-off bonusLinear approach to meeting market needIterative approach: the innovation loopNothing new under the sun!The fundamental concepts of business excellenceEFQM Business Excellence ModelDrivers of innovationRADAR LogicIngredients for continuous improvement & excellenceCase studiesLeadership & Innovation: Astute class submarine developmentLeadership, teamwork, engagementExcellence & Innovation: staff recognition and feedbackExcellence & Innovation: staff recognitionExcellence & Innovation: aligning partners through procurementExcellence & Innovation: process improvementExcellence & Innovation: process improvementExcellence & continuous improvement CONCLUSIONSThank-you

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