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Delivered to the Feb 2010 meeting of the Major Projects Association
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1
THE 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 isn’t 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 we’ve 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 & direction…to 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, but…Halcrow 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 points…improvement sustained in 2009
Recognition score: Staff Survey
58
60
62
64
66
68
70
72
2004 2006 2007 2008
Year
Scor
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%
Stock p
rice
Operat
ing in
come
Sales
Return
on sa
lesNo E
mploye
esTota
l ass
ets
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
‘I’d be happy to give you innovative thinking…..what are the guidelines?’