Thursday, March 27, 2014

Spreading Excellence or From Greatness to Art

The other day I came across a discussion between some company leaders. It was about excellence. Excellence in an organization. And questions were raised: How can excellence be achieved and maintained? How can excellence be spread all over the organization? What does it take to have everyone excel? What can leadership do to make it happen? And it was clearly identified as a core responsibility of leadership. And it is indeed.
The majority of organizations are still  traditional, older organizations. Therefore they are structured in the old ways: hierarchical, silos, linear, command and control.
Spreading excellence throughout any organization is the hardest thing to achieve. Even in the ideal case of only having A-players on board. In a large, traditional, and complicated organization it can become a nightmare. And it often does.
Technology is changing the playing field. It always did. Yet, never in history it happened so fast. And the changes are profound. There are more competitors than ever. New competitors no one had on the radar appeared out of nowhere. Businesses are being disrupted.
Leadership enables their organization to excel in such a complex environment. And it’s more important than ever. It requires to play the game in new ways.
What leadership can do
The single most important factor are the people in your organization. Including leaders. Leadership must create the environment and the conditions for excellence to thrive and prosper.
I think it’s best explained with an example:
The Situation
Some time ago the automotive company I used to work for was in dire straits. One of the largest players around. Fortunately for us we got a new CEO. This man had (and still has) long term vision. And he likes radical thinking and radical approaches.
One major problem we faced was the inefficient way car projects were handled. And I am speaking of billion $ projects. It took by far too long. And the quality was at best mediocre. Typical for our company were the silos and the linear thinking. Impenetrable walls between the different silos. Mistrust was the rule.
To give you an idea of the problem:
a car consists of thousands of parts. Some parts are manufactured inhouse. Others are manufactured by many suppliers. And then there are the suppliers of the suppliers. Add to this a global network of 60+ factories.. Add also a global network of suppliers. Just imagine the huge challenge of transportation to get the material just in time. Add to this different cultures. Add to this about 150 markets with different requirements. Now you have rough idea what that means.
The Analysis
The Process
What is the goal of the process? What is the scope of the process? Who are the players involved?
We took a radical approach. First, we threw away the existing project handbooks. We created the entire process from scratch. We described it from the very first idea to the end of the product cycle. We went into the nitty gritty of every task, even the smallest one. That gave us a profound understanding of the magnitude of the challenge. We called it the PEP, the Product Evolution Process. The core piece of car projects.
The Project Organization
How could we organize a car project in a way that eliminates all the issues mentioned above? How could we create an environment that makes sure that excellence is spread?
And again we started from scratch. And we had another radical approach. We thought of a gearbox. A gearbox gets the momentum on the driveshaft. That became our analogy. Each gear-wheel is equally important. And each dent as well. If only one dent breaks the result is disaster. We designed the entire project organization that way.
Now imagine all these gear-wheels put into the right places in the gearbox. The result was that excellence and know-how could be transferred fast and effective.
The Execution
Setting up the gearbox. We had to make sure that information flows in real time. The right information to the right person. Here’s how we achieved that:
All areas (like for instance  R&D, Manufacturing, Purchasing, Finance, Marketing & Sales …) are represented in each gear wheel.
The project leader (PL) now indeed leads the entire project. The PL reports directly to the Board, the CEO. You could call the PL the linchpin.
Next gear wheels are Development Specialty Groups (SG). There are different groups like for instance chassis, drivetrain, engine, interior, etc. The SG Leaders report to the PL.
Then there are Simultaneous Engineering Teams (SET). One team per component. Hence, quite many teams. And so are suppliers. The SET leaders report to that SG leader the SET belongs.
The PL at any time must know and understand what’s going on. Therefore, anyone can approach you with a problem. Hence, an outstanding memory is essential. And never hesitate to get your hands dirty.
The gearbox design made the organization flat. The assigned ranks were no longer important. The PL, for instance, had to lead CEO’s of other factories. Hence, what a PL needed was first and foremost the character of a true leader and expertise. No command and control. Instead, building mutual trust and respect. No territory for assigned and wannabe leaders.
Problem Handling
Problems are handled by people communicating with each other. The moment a problem was on the table, the leader gets involved. Involved means the leader takes an active part in solving the issue. That’s why expertise is so important. A leader needs expertise to understand the problem. Also, problems are not solved in video conferences. The leader solves problems by going personally to where the problem is rooted. And if you have to fly around the globe to get there, then do it! And immediately. I promise you that your presence makes a huge impact.
The People You Need
You must have A-players. In leadership as well as in specialist positions. People, understanding and able to solve problems. People able to communicate clear and precise. People able to deal with different cultures. People able to think critically. People with the mentality of unconditional success. People that have a clear understanding of how to work together and the importance of teamwork. People who consistently work to improve their and the teams performance.
What else
Training is essential. Ongoing training. and the people need to work hard in training, work like there is no tomorrow. A-players do that because they are passionate about what they do. A-players want to excel.
Ongoing training for the leaders and their teams is where greatness becomes art. Then excellence is spread like a wildfire.

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