SOURCE: Kay Sever | November 1, 2019
OPTIMIZATION… When we think about that word, phrases like “achieving the best results”, “eliminating bottlenecks” and “making the most money” come to mind. You are told by vendors and experts that you must buy new equipment and systems (often millions of dollars) to achieve optimization. If the executive team decides to move forward with optimization, three words commonly summarize management’s focus: Machines, Money and Maximization.
What if I told you that there are three more areas of focus that will make or break your efforts to maximize results? What if you knew that ROI would be less than you promised the board of directors AND less than was possible to achieve if these areas were ignored? What if you learned that little or no investment is required to include these areas of focus in your optimization plan and prevent lost ROI?
It’s time to pull the veil back on three aspects of optimization that are overlooked, underrated and misunderstood, especially since weaknesses or mismatches in these aspects cause preventable losses that are often not known, measured or reported. It’s time to explore the “organizational side of optimization”: Mindset, Measures and Management.
In this series of articles, you will gain some new perspectives about the Six “M’s” of optimization and how the organizational side of optimization can be linked to the equipment/systems side of optimization to produce the highest possible ROI that is sustainable over years, not months. We will also be touching on the “Performance-Culture Connection”, something that is at best vaguely understood by most executives and management teams.
Mindset, Measures and Management – The Other 3 “M’s” of Optimization
Last month I talked in detail about “ROI Math” and two ROI streams that executives must know about:
- There are two streams of ROI happening all the time… 24 hours a day, 7 days a week, 365 days per year. One stream is tracked and the other stream is seldom tracked or reported.
- The tracked ROI stream comes from equipment/systems (E/S) and is linked to the traditional ROI focus (Machines, Money and Maximization).
- A second (untracked) ROI stream comes from the corporate culture/organization (C/O). It is linked to Mindset, Measures and Management, the M’s that ultimately form the corporate culture/organization. These M’s are also under leadership’s direct control and influence.
There are two outcomes of tracking ONLY the traditional E/S ROI stream:
- You meet your ROI goals but are unaware that ROI could have been higher with little or no additional investment.
- ROI falls short of expectations (assuming equipment ran as expected) and you don’t know what to change to fix it.
In either case, your company incurs significant optimization losses that are unaccounted for!
Let’s link this new information to MINDSET, the 4th M of optimization.
Every leadership/management team shares a mindset about running an operation or an organization. New information can elevate management’s awareness of a threat or opportunity, expand management’s knowledge about factors that impact decision-making, or sharpen/shift a team’s focus. When new information is put into context with what you already know about your operations and organization, your executives and management teams can assess the magnitude of an overlooked opportunity or threat before taking action to chase it.
Learning that your corporate culture/organization (C/O) impacts your ability to achieve/sustain ROI targets long-term is that kind of opportunity!
The team’s shared “Mindset Shift” that occurs with this discovery:
- Helps you understand organizational weaknesses that have been eroding profits and “eating your lunch” from behind the scenes.
- Expands your thinking about your “upside potential” and what is possible to achieve!
- Allows you to start asking new questions about performance, people and management directives… questions that you have wanted to ask for a long time but had no answers for.
- Removes many limits or barriers for problems management teams have not been able to solve.
- Augments the traditional scope of optimization to include the corporate culture/organization.
- Helps you see that, if there is NO MONEY for new equipment and systems, you can INDEPENDENTLY focus on C/O ROI to improve results at little or no cost.
- Makes you want to learn more about that second ROI stream and its hidden financial impact on performance and financial results at your sites.
Next month we will continue to explore the 3M’s linked to the corporate culture and organization.
Thought for the month: “Full Optimization” of a site or company requires a “6M” focus to truly maximize profit over the long term.
Kay Sever is a leading expert in reducing financial losses caused by corporate cultures, optimization and change barriers. She has developed a management training system called MiningOpportunity which is based on her 20 years of experience working with mines and plants to reduce the losses they never measure… losses linked to corporate culture, hidden excess capacity and change barriers. MiningOpportunity modules teach executives and management teams how to find and quantify their losses and apply strategies and tactics that stop them. Unique insights from Kay’s 3-year study of management’s barriers to change and optimization are included in the content. See MiningOpportunity.com for her contact information and several training options for your team, including the NEW “Spend a Day with Kay” option.
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