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Cultivating Excellence

As a manager, you play a crucial role in guiding your organization through the challenges it faces, especially in crisis times. We’ll break down key concepts and strategies that will help you effectively manage your team and contribute to your company’s success.

1. Financial control and Data analysis

The foundation of continous improvement begins with financial control and data analysis.
Crisis and competition are prompting a need for rapid restructuring and a return to profitability.

To do this, you’ll need to:

• Analyze Financial Data: Understand your company’s financial health by analyzing data from various sources, including accounting, sales, after-sales service, procurement, and the executive team.
  
  
• Cash Flow Management: Develop a cash flow forecast that includes both disbursements and receipts. This should encompass fixed expenses, registered disbursements, and a historical percentage of spending on purchases per project (approximately X% of the turnover).
  
  
• Sales Forecast: Create a sales forecast that accounts for products sales, services, ongoing negotiations, and potential revenue from pending quotes.
  
  
• Financial Steering Committee: Establish a financial steering committee that meets regularly to adapt action plans and strategies based on forecasts. This committee will help improve the accuracy and structure of your forecasts while identifying weaknesses in your organization.

2. Management Matrix

One of your key responsibilities is to ensure that your projects are profitable. In the past, profitability was estimated informally. Now, you’ll need to implement a management matrix that includes:

• Time Tracking: Encourage your team members to track their hours spent on each project by client or project, even though this may be challenging initially.
  
  
• Standardized Cost: Apply a standard cost to all projects, calculated based on fixed expenses, depreciation, and salaries for the year, in addition to variable costs like supplier purchases.
  
  
• Profitability Analysis: Use this standardized cost approach to evaluate the profitability of each project. This will help your teams understand the importance of accurate time tracking, efficient operations, and productivity.

3. Impact on Lean practices

Your role as a Lean manager extends beyond financial control. It impacts Lean practices and continuous improvement throughout the organization. This includes:

• Streamlining Processes: The Controller of Management collaborates with teams to streamline processes within the organization. This means making the way work is done more efficient, reducing unnecessary steps, and eliminating wasteful activities.
  
  
• Identifying Improvements: Through VSM, the Controller can identify areas in the value stream where improvements can be made. This includes finding bottlenecks, reducing delays, and optimizing resource use.
  
  
• Cost Analysis: The Controller also analyzes the costs associated with different parts of the value stream. This involves looking at expenses related to labor, materials, and other resources. By understanding these costs, the Controller can find ways to reduce them while maintaining or improving quality.
  
  
• Data-Driven Decisions: To make informed decisions, the Controller relies on data and key performance indicators (KPIs). This data helps track progress and ensures that changes made to the value stream are effective and aligned with organizational goals.
  
  
• Continuous Improvement: Lean Management is all about continuous improvement. The Controller ensures that the organization doesn’t stop at one round of changes but continues to refine and optimize the value stream over time.

In essence, the Controller of Management’s role in VSM is about making the organization more efficient, cost-effective, and responsive to customer needs. By identifying opportunities for improvement and using data to drive decisions, this role is central to the organization’s journey toward Lean excellence.

4. Strategy and action plans

Lean Management isn’t just about analysis; it’s also about taking action. With the indicators and data in place, you can develop strategies and action plans to drive improvements in your organization.

Lean Management for managers involves a holistic approach to financial control, data analysis, and continuous improvement. By implementing these principles, you’ll contribute to your organization’s resilience and success in challenging times. Keep learning and adapting as you lead your team on this Lean journey.

These seven tools and strategies encompass various aspects of transformation, from strategic analysis and change management to process improvement, customer focus, digital adoption, leadership development, and effective communication. Tailoring these approaches to your organization’s specific needs and goals will contribute to a successful transformation journey.

1. SWOT Analysis: This strategic tool helps you assess your organization’s current state by analyzing its Strengths, Weaknesses, Opportunities, and Threats. It provides valuable insights for setting transformation priorities.
   
   
2. Change Management Frameworks: Utilize established change management frameworks like ADKAR or Kotter’s 8-Step Change Model to guide your transformation efforts systematically.
   
   
3. Process Improvement: Combine Lean Six Sigma principles to streamline processes, reduce waste, and enhance quality, ensuring efficient and effective operations.
   
   
4. Customer-Centric Approach: Implement a Voice of the Customer (VOC) program and leverage customer feedback to drive product and service improvements, fostering customer-centric transformation.
   
   
5. Digital Transformation: Embrace digital technologies and tools to modernize operations, enhance customer experiences, and stay competitive in a digital world.
   
   
6. Leadership Development: Invest in leadership development programs to equip leaders with the skills and mindset necessary to lead transformation effectively.
   
   
7. Strategic Communication: Develop a robust communication plan to keep employees informed and engaged throughout the transformation process, fostering a culture of transparency and collaboration.

5. Navigating transformation and overcoming challenges

In the wake of the impact of the crisis and increased competition on project demands for great products and services, we’ve encountered various challenges that necessitate transformation and adaptive strategies.

It has become evident that fluctuations in prices and supply chain disruptions have destabilized the procurement process.

Moreover, there’s a misalignment between procurement and revenue, highlighting the need for a more strategic financial steering tool, such as cash flow forecasting linked to the Industrial and Commercial Plan (ICP).

Governance challenges in transformation : Identifying obstacles to Lean and Financial Control Implementation

Successful transformation efforts often encounter governance challenges that can impede progress.

• One primary hurdle is the need to balance a dual management structure, which can grant employees a high degree of autonomy while also assigning them unsettling responsibilities. This challenge is not limited by the size or industry of the organization.
  
  
• Additionally, governance issues may arise from decision-making processes that are either too lengthy, non-existent, or subject to frequent revisions. Such challenges can disrupt the transformation journey, regardless of the organization’s scale or sector. Moreover, newly introduced organizational structures may lack clarity in defining roles and responsibilities, creating ambiguity in governance practices.
  
  
• The variable frequency of management rituals (Executive Committee, innovation committee, sales meetings, etc.) prevents teams from effectively monitoring and steering projects and accessing the necessary information. Communication and exchanges occur informally, mainly through email, within a departmentally segregated company, further exacerbated by a generational divide.
  
• A lack of transparency persists due to resistance to change and ego-related issues. Additionally, there is a deficit in training on existing digital tools, with no prior goals or process or service-oriented performance indicators in place.

Given these challenges, we have embarked on modifying certain managerial routines. We’ve initiated a more closely-knit Executive Committee that convenes weekly with a consistent agenda and a longer-term action plan focused on strategic themes such as governance, vision, company missions, 3- to 5-year strategies, and business development.

This proactive approach to addressing challenges and fostering transformation underscores our commitment to achieving Lean and Control Management objectives while nurturing a culture of collaboration and continuous improvement within the organization.

In summary, Cultivating excellence

As a manager, you play a crucial role in guiding your organization through challenges, especially in crisis times.

Financial Control and Data Analysis

• Foundation of continuous improvement lies in financial control and data analysis.
• Crisis and competition require rapid restructuring and a return to profitability.
• Key steps:
  • Analyze Financial Data
  • Cash Flow Management
  • Sales Forecast
  • Financial Steering Committee

Management Matrix

• Ensure project profitability with a management matrix.
• Key elements:
  • Time Tracking
  • Standardized Cost
  • Profitability Analysis

Impact on Lean Practices

• Lean management goes beyond financial control.
• Focus on:
  • Streamlining Processes
  • Identifying Improvements
  • Cost Analysis
  • Data-Driven Decisions
  • Continuous Improvement

Strategy and Action Plans

• Lean Management involves analysis and action.
• Implement principles for resilience and success.

Seven Tools and Strategies for Transformation

1. SWOT Analysis
2. Change Management Frameworks
3. Process Improvement
4. Customer-Centric Approach
5. Digital Transformation
6. Leadership Development
7. Strategic Communication

Navigating Transformation and Overcoming Challenges

• Crisis and competition impact project demands and procurement.
• Governance challenges in transformation:
  • Dual management structure
  • Decision-making processes
  • Lack of role clarity
  • Variable management rituals
  • Informal communication
  • Lack of transparency
  • Digital tool training deficit
  • Absence of performance indicators

Modifying Managerial Routines

• Initiating a closely-knit Executive Committee
• Weekly meetings with a strategic agenda
• Focused on governance, vision, missions, 3- to 5-year strategies, and business development

“Success is not final, failure is not fatal: It is the courage to continue that counts.”

Winston Churchill