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CHAPTER FIVE
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information. The information system must clearly specify sources of input or data gathering as well as their aggregation for analysis.
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Gary Hamel and C. K. Prahalad, in Competing for the Future (1994), state that the strategic architecture is a blueprint that shows how various functions should be deployed, what new competencies the company needs to acquire, or how existing competencies can be refigured to meet new goals. It helps align the organization to its planned initiatives, assigns leaders to each task, and outlines critical milestones. Without a highlevel architecture to guide the process, detailed plans will lead to conflicting priorities and fragmented deployment of resources and efforts. This translates to a higher potential for failure. In many cases, detailed plans can even lead to the kind of false starts that have plagued many corporate initiatives, resulting in their abandonment and a change in leadership. When this happens, the entire organization is disrupted. Unwanted outcomes, even bankruptcies, have been the result.
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Each organization, division, or department is an integrated and interrelated part of a larger system. Every part of the system affects the performance of other organizations in a larger system, such as in society or even the universe. Each level of a natural system interfaces or collides with other systems at the same level. Individuals work with other individuals, groups or departments interact with the whole organization, and the organization interrelates with the outside world. Managing these interactions is critical in an organization encompassing a new vision, if it is to lead to dramatic improvement and higher profitability. Organizations naturally exist in a continuum where the environment, the organization, and feedback are interconnected.
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According to Stephen Haines, the author of The Manager s Pocket Guide to Systems Thinking and Learning (1998), systems thinking involves thinking backward. Define first the vision, then the goals that will let the organization realize that vision, while simultaneously considering the environment as it will exist in the future. By establishing processes to realize vision and goals, we can then create measurement criteria that describe the specific factors defining success. These clear and consistent measurement criteria are used to evaluate the strategies effectiveness.
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A few companies are able to execute business strategies effectively to meet their objectives. Linking strategy to the operation and operator levels requires employees to work effectively toward the objectives. Conventionally, businesses have assumed that the people at the working level contribute through their physical effort their time and their productivity. Managers were assumed to be the only ones who should think and make decisions. However, no initiative can be even fractionally successful without the intellectual involvement of all employees. In a recent Six Sigma Green Belt training class for a Fortune 50 company, participants said they had no incentives to cooperate with their leaders and Six Sigma Black Belts. They understood that the Black Belts are the chosen leaders and the Green Belts are there to assist them. If a project succeeds, Black Belts get stock options, recognition, promotion, and all the other benefits. The Green Belts, however, get no tangible rewards for the success of the project. When true teamwork does not exist, projects will not succeed. In another company, a consultant was hired to improve the productivity of employees who had already been pushed to the limit. Employees told me that when the productivity consultant went there to work with them, they slowed down. They felt that the consultant had been imposed on them by the management to extract greater effort from employees and that
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CHAPTER FIVE
neither the consultant nor management understood the employees concerns. When productivity did not improve, the productivity consultant was fired, quality degraded, and the company closed. In this case, everyone on the floor knew the state of the business except the leadership. Employees knew that the leadership favored some employees over others and did not objectively try to achieve business goals. No plan was communicated to employees for achieving total customer satisfaction. Instead, the leadership always pushed employees to produce more while ignoring their ideas for improvement. Surveys reveal that employees loyalty improves when they accomplish a lot; that happens when employees are intellectually challenged and recognized for their accomplishments. To implement the Six Sigma Business Scorecard and an appropriate strategy to improve profitability, people must be challenged and recognized. To empower people, five things must be done: 1. 2. 3. 4. 5. Define roles and match people appropriately to those roles. Delegate ownership of goals. Establish a framework for performance and accountability. Enable employees to develop or acquire necessary skills. Recognize employees efforts as well as results.
Employees must clearly relate the consequences of marginal performance and the rewards of excellence. Leadership must create the sense of urgency to achieve results. Good companies maintain the same level of urgency in good as well as tough economic times. Good work ethics motivate people to perform in a long-term way; incentives that are short-lived instigators do not.
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