A Competitive Excellence Strategy That Drives the Right ... · 14. Strength 15. Durability of...
Transcript of A Competitive Excellence Strategy That Drives the Right ... · 14. Strength 15. Durability of...
A Competitive Excellence StrategyThat Drives the Right Kind of
Change
Dr. Mark J. KiemeleAir Academy Associates
Waterton “Change” ChallengeBridgend
13 March 2008
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Agenda
• The Dilemma of Change
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• A Competitive Excellence Strategy
• Necessary Key Principles and Concepts
The Dilemma of Change
“It is not necessary to change. Survival is notmandatory.” W. Edwards Deming
“Change is inevitable—except from a vending machine.”
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Robert C. Gallagher
“Faced with the choice between changing one’s mindand proving that there is no need to do so, almosteveryone gets busy on the proof.” John Kenneth Galbraith
CAVE People:Nothing in the world will empowerthese. Seal off the cave so noneof the 80% drift in.
Pioneers:Training alone canempower these.
Settlers:Training alone will not empower these.
Readiness for Change: the Frontier Model
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empower these.
.10
.80
.10
To move an organization forward,management must act on these,setting/declaring expectations andaligning the rewards and recognitionstrategy with accountability andexpectations.
Evolution(Exploration)
Principal Domains in Competitive Excellence
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Preservation(Exploitation)
Biological S-Curve of Products and Services
decline
Extending theLifecycle
maturity
ProductAndServiceMaturityLevel
Preservation (Exploitation)
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adolescence
birth
pre-conception
conception
Time
obsolescence
death
Evolution(Exploration)
Foundation is a Strategy Based on Knowledge
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Preservation(Exploitation)
The Five Forces That Shape IndustryCompetition
Rivalry
BargainingPower ofBuyers
Threat ofNew Entrants
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RivalryAmongExisting
Competitors
Bargaining Powerof Suppliers
Threat of SubstituteProducts or Services
Commercial Aircraft Industry
Source: Michael Porter, HBR, January 2008
Profitability of Selected U.S. IndustriesAverage ROIC, 1992 - 2006
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Source: Michael Porter, HBR, January 2008
Competitive Excellence
• Means knowledge about and eliminating theconstraints throughout the entire concept tocommercialization value stream.
Where is the biggest constraint in concept to commercialization?
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Where is the biggest constraint in concept to commercialization?
(1) good concepts good development bad production
(2) good concepts bad development good production
(3) bad concepts good development good production
Evolution(Exploration)
Re-engineering
DFSS
TRIZ
Kaizen Events
Aligning the Initiatives with the Strategy
Innovation
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Preservation(Exploitation)
Balanced Scorecard
TPSTQM
TOC
Six SigmaCMMI
ISO
Lean
TRIZ
Evolution(Exploration)
Re-engineering
DFSS
TRIZ
Kaizen Events
Synchronizing
Innovation
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Preservation(Exploitation)
Balanced Scorecard
TPSTQM
TOC
Six SigmaCMMI
ISO
Lean
TRIZ
The Result of Synchronization
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The Completed Model
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Necessary Key Principles and Concepts inCompetitive Excellence
Understanding why Variation is the Enemy
Separating Signal from Noise
Knowing the Difference Between Correlation
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Knowing the Difference Between Correlationand Causality
Making Products, Processes, Services, andStrategy Robust to Noise
Infusing Systematic Innovation
Why is Variation the Enemy?
Because the customer never sees theaverage.
Customers see only the variation in aproduct or service.
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product or service.
Why is Variation the Enemy?
Because the customer never sees the average.
Customers see only the variation in a productor service.
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Variation creates bias and distorts the truth.
y = f(x) = x2x
Expected Value Analysis Example
6
2
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What is the mean or expected value of the y distribution?
Why is Variation the Enemy?
Because the customer never sees the average.
Customers see only the variation in a productor service.
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Variation creates bias and distorts the truth.
“The signature of mediocrity is NOT theinability to change, but chronicinconsistency.”
Jim Collins
Author of “Good to Great”
Separating Signal from Noise
Being able to distinguish between randomvariation and special cause
Separating significant effects from theinsignificant ones
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insignificant ones
Example: Jim Collins in “Good to Great”
Example: Human Resources Case Study
Modeling The Drivers of Turnover
Process of
Deciding to
External Market Factors(Local Labor Market Conditions)
Local Unemployment Rate
Local Employment Alternatives
Turnover Rate
Company’s Market Share
Organizational Characteristicsand Practices
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Stay / Leaveand Practices
Supervisor Stability
Lateral / Upward Mobility
Layoff Climate
Employee Attributes
Time Since Last Promotion
Education Level
Job Stability History
Correlation vs. Causality
70
80
Cit
yP
op
ula
tio
n(1
000's
)
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50
60
100 200 300
Number of Storks
Cit
yP
op
ula
tio
n(1
000's
)
A plot of the population of Oldenburg, Germany at the end of each yearagainst the number of storks observed in that year, 1930-1936.
Source: “Statistics for Experimenters”by Box, Hunter, and Hunter. (1978)
Oracle (Best Guess) Approach to Testing
W = Wetting Agent (1=.07 ml; 2=none)
P = Plasticizer (1=1ml; 2=none)
E = Environment (1=Ambient Mixing; 2=Semi-Evacuated)
C = Cement (1=Portland Type III; 2=Calcium Aluminate)
A = Additive (1=No Reinforcement; 2=Steel)
Y = Strength of Lunar Concrete
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Run W P E C A Y
1 1 2 1 1 1 5
2 1 1 1 1 1 63 2 2 1 1 1 54 2 1 1 1 2 65 1 2 2 2 2 76 1 1 2 2 2 87 2 2 2 2 2 10
8 2 1 2 2 1 11
Evaluating the Effects of Variables on Y
A
E = C
What we have is:
What we need is a designto provide independent
estimates of effects:
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A
C
E
How do we obtain this independence of effects?
Controllable:Plug Pressure (20-50)
Controllable:Bellow Pressure (10-20)
NuclearReservoir
Robust (Parameter) DesignSimulation* Example
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Bellow Pressure (10-20)
Controllable:Ball Valve Pressure (100-200)
Noise:Water Temp (70-100)
Reservoir Level (700-900)Reservoir
LevelControlProcess
* From SimWare Pro by Philip Mayfield and Digital Computations
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Necessary Key Principles and Concepts inCompetitive Excellence
Understanding why Variation is the Enemy
Separating Signal from Noise
Knowing the Difference Between Correlation and Causality
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Making Products, Processes, Services, and Strategy Robustto Noise
Infusing Systematic Innovation
An Innovative Conceptual Design Technique(TRIZ: Theory of Inventive Problem Solving)
TRIZ: Teoriya Resheniya Izobretatelskikh Zadatch
Founded by Genrich Altshuller (1926 – 1998), aRussian patent inspector, in 1946
Provides a systematic approach to invention/innovation
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Provides a systematic approach to invention/innovation
39 Problem Parameters (Weight, Strength,Temperature, etc…)
40 Inventive Principles
Built a 39 X 39 Contradiction Matrix which is populatedby the inventive principles
Source: INsourcing Innovation by Michael Slocum, et al
1. Weight of moving object
2. Weight of non-movingobject
3. Length of moving object
4. Length of non-movingobject
5. Area of moving object
6. Area of non-movingobject
7. Volume of moving object
14. Strength
15. Durability of moving object
16. Durability of non-movingobject
17. Temperature
18. Brightness
19. Energy spent by movingobject
20. Energy spent by non-moving object
Altshuller’s 39 Problem Parameters
27. Reliability
28. Accuracy of measurement
29. Accuracy of manufacturing
30. Harmful factors acting onobject
31. Harmful side effects
32. Manufacturability
33. Convenience of use
34. Repairability
35. Adaptability
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7. Volume of moving object
8. Volume of non- movingobject
9. Speed
10. Force
11. Tension, pressure
12. Shape
13. Stability of object
moving object
21. Power
22. Waste of energy
23. Waste of substance
24. Loss of information
25. Waste of time
26. Amount of substance
35. Adaptability
36. Complexity of device
37. Complexity of control
38. Level of automation
39. Productivity
Source: INsourcing Innovation by Michael Slocum, et al
1. Segmentation2. Extraction3. Local Conditions4. Asymmetry5. Combining6. Universality7. Nesting8. Counterweight9. Prior Counter-action10. Prior Action
18. Mechanical Vibration
19. Periodic Action
20. Continuity Of UsefulAction
21. Rushing Through
22. Convert Harm IntoBenefit
23. Feedback
30. Flexible Film Or ThinMembranes
31. Use Of Porous Material
32. Changing The Color
33. Homogeneity
34. Rejecting AndRegenerating Parts
35. Transformation OfPhysical And Chemical
40 Inventive Principles
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10. Prior Action11. Cushion In Advance12. Equipotentiality13. Inversion14. Spheroidality15. Dynamicity16. Partial Or Overdone
Action17. Moving To A New
Dimension
24. Mediator
25. Self-service
26. Copying
27. An Inexpensive Short-life Object Instead Of AnExpensive Durable One
28. Replacement Of AMechanical System
29. Use A Pneumatic OrHydraulic Construction
Physical And ChemicalStates Of An Object
36. Phase Transition
37. Thermal Expansion
38. Using Strong Oxidizers
39. Inert Environment
40. Composite Materials
Source: INsourcing Innovation by Michael Slocum, et al
Contradiction Matrix Cross Section
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TRIZ Problem-Solving Method
2ax b x + c = 0
General Problem General Solution
2ax bx c 0 2x= -b± b -4ac 2a/40 Inventive
Principles
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Specific SolutionSpecific Problem
Abstraction(39 Problem Parameters)
Specialization(Analogic Thought)
23 x 5 x 2 0 2x 1,3
Key Take-Aways
Much too often, luck is misinterpreted as skill.
All of us at one time or another are fooled by randomness.
It is not a sin to be affected by noise, but it is a sin not toknow how to go about separating fact from fiction and thendoing so.
The growth in available information has been exceeded only
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The growth in available information has been exceeded onlyby the expansion of noise.
Science has only recently begun its fight againstrandomness.
A powerful Competitive Excellence Strategy with all thenecessary parts is the first step in fighting through this “halo”of noise and randomness.
Get the facts! It is difficult to make good decisions if onecannot tell the difference between opinion and fact.
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