Beyond the Lean Revolution
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1 Beyond the Lean Revolution Achieving Successful and Sustainable Enterprise Transformation Deborah J. Nightingale and Jayakanth Srinivasan AMACOM American Management Association New York Atlanta Brussels Chicago Mexico City San Francisco Shanghai Tokyo Toronto Washington, D.C.
2 Contents LIST OF FIGURES AND TABLES xi ACKNOWLEDGMENTS xv CHAPTER 1. WHY ENTERPRISE TRANSFORMATION? 1 Paradigms of Change 4 Going Beyond Lean 6 What Is an Enterprise? 8 The Value Proposition 8 Seeing Things Holistically 10 CHAPTER 2. THE SEVEN PRINCIPLES OF ENTERPRISE TRANSFORMATION 12 Principle: Adopt a Holistic Approach to Enterprise Transformation 13 Principle: Secure Leadership Commitment to Drive and Institutionalize Enterprise Behaviors 18 Principle: Identify Relevant Stakeholders and Determine their Value Propositions 19 Principle: Focus on Enterprise Effectiveness Before Efficiency 21 Principle: Address Internal and External Enterprise Interdependencies 23 Principle: Ensure Stability and Flow Within and Across the Enterprise 24 Principle: Emphasize Organizational Learning 25 Chapter 2 Takeaways 28 CHAPTER 3. A ROADMAP TO SUCCESSFUL ENTERPRISE TRANSFORMATION 29 Why Enterprise Transformation Fails 29 Avoid Failure with the Roadmap 32 Enterprise Transformation and Strategic Planning 35 Strategic Cycle: Determine the Strategic Objectives and Engage the Leadership 38 vii
3 Vjjj CONTENTS Planning Cycle: Understand, Envision, Design, Align 40 Execution Cycle: Nurture, Embed, Implement, Coordinate 43 Chapter 3 Takeaways 46 CHAPTER 4. TRANSFORMATION LEADERSHIP 47 Strategic Perspectives 48 Urgency 50 Enterprise Thinking 52 Executive Buy-In 53 Executive Transformation Council 54 How It All Comes Together 55 Chapter 4 Takeaways 59 CHAPTER 5. THE STAKEHOLDER LENS 60 Stakeholder Identification 62 Stakeholder Prioritization 66 Stakeholder Value Elicitation 72 Stakeholder Value Exchange Analysis 73 Chapter 5 Takeaways 78 CHAPTER 6. THE PROCESS ARCHITECTURE LENS 79 Identify Enterprise Processes 80 Collect Enterprise Process Data 84 Develop the Enterprise Process Map 88 Analyze the Enterprise Process Map 90 Analyze the Enterprise Process Interactions 91 Chapter 6 Takeaways 96 CHAPTER 7. THE PERFORMANCE MEASUREMENT LENS 97 The Actual Metrics Matter 99 Select and Structure a System of Metrics 102 Develop and Sustain an Enterprise Performance Measurement System 107 Performance Measurement Systems and Transformation 110 Chapter 7 Takeaways 112 CHAPTER 8. THE INTEGRATIVE LENSES 113 The Alignment Lens 113 The Resource Lens 118 The Maturity Lens 121
4 CONTENTS j x The Waste Lens 127 Bringing the Lenses Together 130 Chapter 8 Takeaways 133 CHAPTER 9. PREPARING TO TRANSFORM 134 Begin with the Current State 135 Set Long-Term Goals 137 Articulate What the Futurg_ Enterprise Looks Like 139 Align the Enterprise Infrastructure 141 Is the Enterprise Organized to Support Transformation? 142 Does the Enterprise Have the Information Systems It Needs? 144 Will the Enterprise's Policies Promote Transformation? 145 Are the Enterprise Metrics Appropriate for Transformation? 145 Who Are Your Change Agents? 146 Chapter 9 Takeaways 147 CHAPTER 10. TRANSFORMATION PLANNING 148 Identify Focus Areas 150 Select and Sequence Enterprise Projects 159 Develop Actionable Projects 161 Develop the Transformation Plan 164 Chapter 10 Takeaways 167 CHAPTER 11. EXECUTING THE TRANSFORMATION PLAN 168 Communicate the Transformation Plan 169 Provide Education and Training 171 Implement Projects and Track Their Progress 172 Monitor Overall Transformation Progress 173 Nurture the Transformation and Embed Enterprise Thinking 174 Capture and Diffuse the Lessons Learned 177 Adjust and Align the Planning and Execution Cycles 178 Reentering the Strategic Cycle 180 Chapter 11 Takeaways 182 CHAPTER 12. ENTERPRISE TRANSFORMATION FROM INCEPTION TO IMPLEMENTATION 183 Background on the Enterprise 184 Strategic Issues 186 Strategic Objectives 189 StayCool's Stakeholder Lens 191
5 CONTENTS StayCool's Process Architecture Lens 196 StayCool's Performance Measurement Lens 200 StayCool's Alignment Lens 201 StayCool's Resource Lens 203 StayCool's Maturity Lens 204 StayCool's Waste Lens 208 StayCool's Future-State Vision 209 StayCool's Focus Areas 210 Revisiting Transformation Through the Seven Principles 213 APPENDIX A. LEAN ENTERPRISE SELF-ASSESSMENT TOOL: CASE STUDIES 221 APPENDIX B. A BRIEF COMPARISON OF OTHER APPROACHES TO PROCESS ANALYSIS 252 ENDNOTES 249 KEY TERMS 259 INDEX 261
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