Organizational Optimization

By Robert Hutcherson

Organizations are constantly trying to figure out how to improve and do more with less, especially with todays budgetary pressures. We must not only find a way to improve our companies and countries, but we must find a way to optimize them. How do we get the biggest strategic bang for our budgetary buck? There is continuous pressure on corporate leaders and government officials to reduce waste, improve services and margins that provide a better overall value to its shareholders and citizens.

Organizational Optimization is the new way to look at your organization, assess its current health and optimize its future potential. Its purpose is to strategically align the organization, optimize the execution of its strategy, and culturally set the stage for growth and prosperity. It can be applied to any type of organization whether an international conglomerate, a federal agency, a city, a professional sports team or an entrepreneurial organization looking to optimize their true potential.

• Language: English
• Publisher: AuthorHouse
• Release date: Dec 11, 2014
• ISBN: 9781496944788

Robert Hutcherson

Hutcherson knows how to take organizations to the next level and get the best possible results. I’ve seen him do this time and time again with the most complex organizations in the most difficult environments and witnessed the extraordinary results at the highest levels. Brigadier General Bob McCaleb US Army (Ret) & Defense Industry Executive If you are looking for guidance in moving your organization from a reactive to a proactive optimized organization, look no further. If you believe in the saying “Be All You Can Be”, this book can help you become a superhero leader for your organization! I wish I had this book 30 years ago. Mr. Rex Berggren Healthcare Executive This is a remarkable “how to” book on finding your azimuth and getting on the right path to optimize any organization. It is a bright laser that cuts across the murky world of process improvement and enlightens all of us leaders who continuously look for the best way forward for our organizations. Lieutenant Colonel Tony Stelly US Army (Ret)

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© 2014 Robert Hutcherson. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

Published by AuthorHouse 12/09/2014

ISBN: 978-1-4969-4480-1 (sc)

ISBN: 978-1-4969-4479-5 (hc)

ISBN: 978-1-4969-4478-8 (e)

Library of Congress Control Number: 2014918007

Any people depicted in stock imagery provided by Thinkstock are models,

and such images are being used for illustrative purposes only.

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

TABLE OF CONTENTS

Dedication

Epigraph

Foreword

Preface

1)   Organizational Optimization

a. What is Organizational Optimization?

b. What is the Value Proposition of Organizational Optimization?

2)   Organizational Alignment

a. The Importance of Alignment

b. The Value of Alignment

i. Maximizing the Efforts of All

ii. Increasing the Value of Speed

iii. Minimize Chaos

c. The Leader’s Responsibility to the Organization

3)   From a Reactionary Organization to Proactive

a. The Reactionary Organization

b. Examples of Working in a Reactionary Environment

c. Firefighting becomes the Norm

d. The Reactionary Organization Effect on the Employees

e. The Value of Proactively identifying Issues

f. The Migration from Reactionary to Proactive

g. The Organizational Assessment

h. Progression to an Optimized Organization

i. Agile, Mobile and Hostile

j. Your REPUTATION is Everything!

4)   Organizational Effectiveness and Efficiency

a. Effectiveness vs. Efficiency

b. Organizational Effectiveness

c. Voice of the Customer

d. Organizational Efficiency

e. Why Effectiveness Measures Should Drive Efficiency Opportunities

5)   The Organizational Optimization Framework

a. The Organizational Optimization Model

b. Categories of Optimization

c. Maturing the Organization to Optimization

6)   Strategic Optimization

a. Aligned Execution

b. Voice of the Customer

c. Strategic Planning

d. Strategy Maps

i. Strategy Mapping

ii. Understanding the Linkages and Casual Effects of Strategy

iii. Creating the Organizational Strategy Map

e. Strategic Goal Alignment/Deployment

i. Goal Alignment/Deployment

ii. Hoshin Planning Process

iii. Determining the Strategic Organizational Goals

f. Key Strategic Metrics

i. Measureable Strategic Indicators

7)   Performance Optimization

a. Aligned Metrics

b. Organizational Performance Measurement System

c. Alignment of the Strategic Plan

d. Quantifying the Strategic Plan

e. Determining Key Performance Indicators

f. Cascading Supportive Performance Metrics

g. Critical Factors to a Successful Organizational Performance Measurement System

h. Organizational Effectiveness

i. Organizational Efficiency

8)   Process Optimization

a. Optimized Value Streams

b. Organizational Process Alignment (OPA)

c. Complexity to Mission Effectiveness

d. Benefits of a Holistic Common Operating Picture

e. The Need for Prime Value Streams

f. Components of the Optimized Value Streams

i. Process Mapping

ii. Process Quantification

iii. Process Accountability

iv. Process Certification

v. Process Integration

vi. Process Intelligence

vii. Process Compliance

g. Process Optimization Council

9)   Improvement Optimization

a. Strategically Aligned Improvements

b. Improvement Quotes from Notable Leadersvi

c. Improvement Methodologies

i. Theory of Constraints

ii. Six Sigma

iii. Lean

d. The Recommended Improvement Methodology

i. PHASE I: DEFINE - (DMAIIC)

ii. PHASE II: MEASURE - (DMAIIC)

iii. PHASE III: ANALYZE - (DMAIIC)

iv. PHASE IV: IMPROVE/INNOVATE - (DMAIIC)

v. PHASE V: IMPLEMENT - (DMAIIC)

vi. PHASE VI: CONTROL - (DMAIIC)

e. Determining the Type of Deployment

f. Determining the Project Pipeline

g. Strategically Valued Projects

h. Leadership Benefit and Effort Project Assessment

i. Bottom-Up Project Identification

j. Prioritized Project Management

k. Improving Existing Processes or Designing New Ones

l. Lean Six Sigma Project Lifecycle

m. Determining the Training Program

10) Resource Optimization

a. Optimize Resource Utilization

b. Workforce Optimization

c. Energy Optimization

d. Energy Strategies

e. How to Optimize your Energy Consumption

i. Developing an Energy Optimization Plan

f. Space Optimization

g. Supply Chain Optimization

11) Financial Optimization

a. Maximize Financial Value

b. Financial Auditability

c. Financial Efficiency

d. Risk Mitigation

e. Optimization of Financial Value

f. Financial Optimization Categories

12) Systems Optimization

a. Optimize Technological Solutions

b. Systems Optimization

c. Systems Effectiveness

d. Technological Opportunities

e. Systems Efficiency

13) Knowledge Optimization

a. Shared Intellectual Capital & Information

b. Establish a Centralized Knowledge Repository

c. Educate all Personnel on the Big Picture

d. Educate Personnel on Syncing all Internal Customer/Suppliers

e. Critical-to-Optimization

14) Relationship Optimization

a. Synchronized Partners

b. Assessing Organizational Relationships

c. Relationship Stakeholder Analysis

d. Internal Partners

e. Organizational Partners

f. Community Partners

g. Critical-to-Relationship Assessment

15) Innovation Optimization

a. Creative Capital

b. Innovation

c. Creativity

d. Innovation Leadership

e. Incentivizing Innovation & Thought Leadership

f. Intellectual Capital

16) Cultural Optimization

a. Supportive Collaborative People

b. Supportive Environment for Optimization

c. Organizational Etiquette

d. Organizational Collaboration

17) Market Optimization

a. Optimizing The Reach

b. Marketing Effectiveness

c. Marketing Efficiency

d. Predictive Marketing

e. Lifetime Value of a Customer

18) World Class Optimization

a. Benchmark The Best

b. Best Practices

c. Benchmarking

d. Types of Benchmarking

e. External Assessment

i. International – Deming Prize

ii. National (U.S.) – Malcolm Baldrige Award

f. State Quality Awards

19) OO Certification Levels

a. Certification Levels

b. Level I Organization:

c. Level II Organization:

d. Level III Organization:

e. Level IV Organization:

f. Level V Organization:

g. Level VI Organization:

h. Level VII Organization:

20) Summarizing Organizational Optimization

a. The Organizational Optimization Model

b. Organizational Optimization Model

c. Notes To Capture Your Organization’s Current Optimization State

d. Maturing the Organization to Optimization

Acknowledgements

References

Glossary

Resources

Dedication

I want to dedicate this book to my dear wife, Christie and our boys, Daniel and Benjamin, who have endured many years of me on the road during my improvement deployments worldwide and to my father, Robert Sr., who has always encouraged me to continuously improve and to be the best I can possibly be.

Epigraph

Strive not to be a success, but rather to be of value.

Albert Einstein

Action is the foundational key to all success.

Pablo Picasso

Things do not happen. Things are made to happen.

John F. Kennedy

If everyone is moving forward together, then success takes care of itself.

Henry Ford

The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.

Vince Lombardi

If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success.

John D. Rockefeller

You don't have to be a genius or a visionary or even a college graduate to be successful. You just need a framework and a dream.

Michael Dell

Success is peace of mind which is a direct result of self-satisfaction in knowing you did your best to become the best you are capable of becoming.

John Wooden

Foreword

Robert Hutcherson knows how to take organizations to the next level and get the best possible results. I’ve seen him do this time and time again with the most complex organizations in the most difficult environments (i.e., combat environments). I worked closely with Robert in the Middle East as part of the Army Central Command and witnessed the extraordinary results he was able to achieve at the highest levels.

Robert is clearly a doer who has certainly honed his extraordinary organizational skills strategically and tactically. He knows how to quickly understand complex processes, assess what’s value vs. non-value added, and implement recommended changes to achieve optimal results to the strategic mission.

The good news is that you can now learn about the techniques Robert has mastered by reading this insightful book on Organizational Optimization. The book is a compilation of years of experience, knowledge and insights. I hope you become doers as well and apply these techniques to your own organization. I know they will work, based on my experience.

Brigadier General Bob McCaleb

U.S. Army (Retired) & Defense Industry Executive

If you are looking for a book that will assist you in moving your organization from the current state to a highly optimized organization, look no further. Hutcherson draws on his expertise in both commercial and government service in writing this book on Organizational Optimization.

Hutcherson’s award winning proven techniques will show you how to optimize your organization strategically and in all of its key functions to accomplish your mission and vision. But more importantly, if applied your organization will progress from a reactive Level 1 organization to a certified Level VII proactive organization. I wish I had this book 30 years ago, when I first started working in the healthcare industry. If you believe in the saying Be All You Can Be, this book can help you become a superhero leader for your organization!

Mr. Rex Berggren

Healthcare Executive

When Hutcherson told me he was writing a book on Organization Optimization, it was all I could do to keep from sighing – another book on how to increase productivity and quality? But Robert has figured out how to rethink the big picture and translate it in a way to optimize without regurgitating many of the old traditional ways of thinking. Hutcherson’s grouping of optimization into thirteen categories (Strategic, Performance, Process, Improvement, Resource, Financial, Systems, Knowledge, Relationship, Innovation, Cultural, Market, and World-Class) creates a forcing function to evaluate and optimize each category for the common good of any organization.

Like our teenagers who live in a dimly lit world parallel to our own playing their video games, Hutcherson lives, breathes, and eats in the world of organizational optimization. Over the past years I’ve known Robert, his methodically approach to optimization has created a pathway that will enable any and all organizations to reach their full potential.

This is a remarkable book, a how to book on finding your azimuth and getting on the right path to optimize any organization. It is a bright laser that cuts across the murky world of process improvement and enlightens all of us leaders who continuously look for the best way forward for our organizations.

Lieutenant Colonel Tony Stelly

U.S. Army (Retired)

Preface

Organizations throughout history have always been trying to figure out how to improve and do more with less. When I say organizations that means business corporations, non-profits, governments, etc. Today’s organizations are constantly trying to figure out how to get an edge on the competition. How do we do more with less? How can we gain efficiencies and save money? How can we become more effective in attaining our goals?

As a citizen, do you believe our governments (countries, state, providences, cities) are wasteful and can operate more efficiently? Are they effective in the services they provide? Is there room for improvement in the delivery of those services? Any cost savings opportunities in the budgets they propose? As a citizen, I believe so. I have seen a lack of ability in government to cut spending to prevent tax hikes on its citizens. Is there waste in government operations that are being funded by your tax dollars and mine? I would venture to say that would be a resounding yes in most places on the globe and I’m sure most everyone would agree.

This is unacceptable to most of us as local and federal governments are mounting enormous debts and hindering the future of our children’s way of life. We must not accept the mentality of kicking the can down the road for our children to deal with. We, as a city, state, country must solve our issues and be more effective and efficient as governmental bodies. We must provide a better place and situation for our children and the hope of their future. Governments must give the citizens hope by being better stewards and managing their budgets properly and not project future doom and gloom because of their mismanagement and wasteful spending.

What about in the sports world? Yes, sports! Sports organizations and teams are always trying to figure out how to put the best product on the field from a competitive standpoint to win, get to the postseason and ultimately a championship trophy. As far as the product on the field, is the team’s management getting the best bang for their buck in player production? Does a player’s production justify their contract amount? What is the value of their contribution to the team’s output – Scoreboard? Are general managers and coaches optimizing their player rosters so that it translates into wins, then championships? Are team executives providing fans with the right services to maximize their fan base? Is management optimizing the marketing reach to the fans and revenue potential of the team? Does the fan (customer) experience breed loyalty to the team for years to come? How can you optimize the fan relationship with the team? What is the Lifetime Value of that Fan?

What about in the corporate business world? Is there waste and inefficiencies? Absolutely, but in the business world there is much more competition like sports and this competition breeds innovation, the need to become agile and efficient, the desire to know your customer well to increase market share and so on. The business world has generated scores of brilliant minds in this need to continually improve the organization through quality improvement, efficiency gains, re-engineering, strategy deployment, etc. driven by the need to operate better and outdo the competition. Without outdoing the competition, like in sports, you won’t be lifting the trophy during earnings season. You won’t be maximizing the company’s valuation and you definitely will not like the market’s reaction to your company underperforming expectations. Therefore, organizational optimization is not simply an option, but a necessity. A necessity to make sure you are optimizing all cylinders of your organization (strategy, alignment, operations, finances, marketing, culture and relationships).

In the military world, it is essential to ensure mission success by optimizing effectiveness and being good stewards with the taxpayer’s money by accomplishing that mission in a cost efficient manner.

In the healthcare world, the need for organizational optimization is critical for providers and payers especially with all the constant changes taking place legislatively or from a care prospective. Pharmaceutical organizations are always striving for shorter cycle times to market solutions for patients.

In the entertainment world, a movie production organization must get the biggest bang for their production buck and get the optimal marketing reach globally to maximize profits per project. In a church, where the leaders are strategically trying to figure out how to meet their mission, budget and grow the congregation.

Once again in the government world, a president, governor or mayor must hear the Voice of the Citizen, strategize a plan and align its governmental organization with that strategy to provide services in the most effective and cost efficient manner to the citizens it swore to serve.

Throughout my years as an organizational improvement leader or advisor of an organization’s improvement efforts, I have always been striving on how things can be done better or how we can get the Biggest Bang for our improvement efforts for the organization. What things do we focus on and spend our time with? For those of us in the organizational improvement space, we are all infected with the continuous improvement bug with always trying to improve quality, cost and speed and trying to figure how to improve the actual organizational improvement deployment throughout the organization and show value. We even get frustrated at the grocery store and make recommendations to store managers while we’re waiting in the one lane that’s open, while the other ten are closed. We constantly want to fix problems and improve operations and situations.

The improvement bug even comes home with us with suggestions and recommendations to our family until the spouse tells us to take your efficiency ideas and ……. We can’t help it! It’s in our blood and definitely in our minds. I wish more of these people infected with the improvement bug would actually get elected and help all of us and the future of our communities, countries and world.

Back to point, we improvement professionals are always trying to figure what’s the next best way to make the best improvements and make meaningful impacts to the organizations we work with. This drive is internal to most of us, but there’s also that continuous pressure from organizational leaders to improve margins, grow the brand, expand markets, provide better financial value for stock holders or from governments and federal agencies to become more effective and efficient because of sequester and so taxes don’t have to be raised or services to the citizens cut. This pressure is ever so constant and ever so present and relentless. This type of pressure is ever so present in today’s business environment.

You also deal with a shifting landscape of leaders, who each have their own way of thinking of how an improvement initiative should look. You are constantly having to market the value proposition of your improvement program to an ever changing cast of leaders on the leadership carousel. The pressure here, is constantly having to prove your efforts and answering the never ending question of What have you done for me lately?

It is that internal drive and constant pressure to improve that has led me to create the new improvement methodology that any organization can adopt to optimize the execution of their strategy, their resources and organizational improvement