Target NVA: How to dream big and deliver big with a results driven programme

Right at the start of this workshop, Jeff Patton promised to do something different. This workshop would be collaborative and not just a re-run of how successful a project was. Ostensibly, Jeff and his co-presenter Mike Atkinson had come to knowledge share a system Celerant had been working on for 6 to 12 months called Value Force^TM, and Jeff emphasised that this would be an interactive experience.

Celerant are actively seeking partners to work with them to develop the real world application of the approach. the name ‘Value Force^TM’ suitably details what it is: ‘Value’ being the identification and quantification of the total shareholder value that is available across the business in terms of Non-Value Adding (NVA) activities and especially in the white spaces or interfaces that exist. ‘Force’ is about applying resources, skills and tools at the optimum places to cause massive momentum – it’s coordinated, measured, controlled and results oriented.

Big questions on the minds of the attendees of the workshop included how to deliver culture change whilst maintaining the business goals, choosing the right tool for the right job, how to deliver the change whilst engaging the management, and trying to get more pull from the Six Sigma people, as well as benchmarking, of course.

The system that Celerant wanted to share very much aligned with these issues. In particular, the common problem that once a programme is created and approved, the pull from the leadership team in particular and the culture in general lessens. As we would be shown, Value Force^TM keeps management engaged by focusing on the NVA and incorporating it into management systems.

Many companies have systems based on the Toyota Production System (TPS), but studies have shown that even Toyota still have 75% non-value add activities built into their organisation. Across transactional environments, this figure is often as high as 99%. The challenge is to get management to recognize this and begin to see things differently, in terms of what is non-value add instead of simply P&L. To do that, any quality improvement initiative must be strongly linked to the business goals and ultimately the balance sheet, because that is the language of business.

After an excellent benchmarking session amongst the group, the question of the difference between Transformational Change and Continuous Improvement was raised. The group decided, after an interesting debate, that Continuous Improvement is incremental, data and processed based, short term, bottom up and shows where you are today. Transformational Change is behavioural/organisational, long term, top down, often a result of "burning platforms" (i.e. reactionary, for instance, a last resort when the company is in crisis), often utilises new technology and asks where you want to be and how you get there.

"Transformational Change fundamentally changes the way we do business," stated Mike. Consequently, a Continuous Improvement Programme should identify the what, where and how that Transformational Change needs to take place and then be the engine of it.

Many programmes suffer from a '3 year itch', where support and enthusiasm begin to wane, the quick wins are used up and people get nervous that it’s taking too long. Transformational change clearly isn’t going to happen, so how do you re-ignite the programme? According to Jeff, "the best way is to start with the answer and work back to how you do it".

When improvement programmes begin, the organisation doesn’t know how much opportunity exists. Instead of finding out, they set arbitrary goals that are most likely not linked to their improvement projects. A business is in business to create value, said Mike, and - most importantly - deliver that value, and as a result they have to decide what they want to do and how are they going to do it. An improvement programme therefore should be intrinsically connected with the business strategy.

Typically, improvement programmes concentrate on processes and people, but the business’s systems, which are often ignored, are the engines that truly drive behavioural change. To this end, creating a perfectly aligned management control system, tied to such things as the Key Performance Indicators, gives greater communication and visibility so everyone within the organisation is aware what is happening and where they are going.

Celerant have incorporated this into Value Force^TM. It is built off the 5 Box Model® which makes results sustainable through profound behaviour change and thus the model uses MCRS® (Management Control and Reporting System) as a backbone and engine to reinforce those beliefs and principles.

Fundamentally, it demonstrates to an organisation where they are in their improvement journey and identifies the opportunities available. The management systems – be they quantitative, qualitative, or experiential - can be scored. This can then be monitored against the three levels of maturity: existence, implementation and integration. This monitoring system guarantees the engagement of the management (a big question on the minds of the attendees, as mentioned earlier) by making them accountable. Additionally, in finely identifying NVA, the right tool for the right job (another big question) can be more accurately applied to fix the problem or improve the process.

Throughout the workshop, the concept of shifting the focus of an improvement programme onto NVA was emphasised. Tools such as Gemba or Day In the Life Of (DILO) can be used to find NVA on shop floor processes. Physical value streams and information value streams can be leveraged to identify NVA. (As an example, Tesco once did a value stream of a can of cola and found it to be 99% NVA). I found this concept very interesting and well explained, even if it does take the emphasis off of the customer. As Mike said in the workshop, "don’t give the customer what he wants: give him what he’ll pay for."

The workshop, well facilitated by Mike and Jeff, was as collaborative as promised. The Benchmarking session, which produced a lot of interesting cross-industry data, was excellent, although perhaps the results could have been used more to demonstrate the system.

The debate on Continuous Improvement Programme and Transformational Change was illuminating and it seems that what Celerant are doing with this system is to take Continuous Improvement Programme and make it Transformational. Value Force^TM is not a process, like BPM for instance, but it does change the processes of the business: it sits on top of the processes, the process management and the improvement programmes to focus the organisation on the changes required and the opportunities available.

After all, to be a world class business, you have to not only maximize your potential, but know how to get there.

This workshop was given as part of the Six Sigma Summit in London, April 2007
Facilitators: Jeff Patton & Mike Atkinson of Celerant Consulting.
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If you are interested in Value Force^TM, then contact:

Jeff Patton
Mobile: +31 650 685 016
Email: jeff.patton@celerant.cc

Mike Atkinson
Mobile: +1 970 227 3379
Email: mike.atkinson@celerant.cc