2020 is an outstanding year for Honeywell. Honeywell stock went back in the Dow Jones Industry Average in Aug and celebrated being listed in NYSE for 100 years in Sep.
Honeywell ex-CEO Date Cote’s new book “Winning Now, Winning Later” was also released in 2020. In his new book, there is a chapter with 12 topics to introduce the secret of success - Honeywell Operating System (HOS). A 2012 article in the Economist credited HOS with helping to make Honeywell “one of America’s most successful companies.” Fortune observed that the “rewards” of the Honeywell Operating System “have been spectacular.”
HOS was – and is - a comprehensive system for operating our businesses that brought managers and employees together to continuously improve processes. Whereas companies often struggle to make process improvement stick, we designed HOS to help us make changes permanent so we wouldn’t have to go back a few years later and implement them again.
Although HOS owed about 80% of methodologies to Toyota Production System (TPS) and incorporated tools from the widely adopted Six Sigma and Lean process improvement approaches, it was boarder, addressing not just specific processes and workflows but the complex relationships between the many processes in a given facility. Involving everyone associated with a given process, HOS fit specific tools within an overall culture and management system that determined how a given plant would operate in its entirety, and that allowed us to standardize our approach to process change across Honeywell’s operations.
With HOS in place, individual plants had both the mind-set and the tools to scrutinize their existing operations and improve them on an ongoing basis. The result was a constant stream of projects large and small that permanently improved quality, customer satisfaction, and safety while reducing cost, inventory, and our environmental footprint. Our plants performed better financially because they were better.
In his new book, Mr. Cote emphasized below questions to ask ourselves as a leader:
1. Are processes in your team or organization as efficient as they might be? Do you understand them fully – not just the core steps, but the links between those steps? If employee engagement isn’t as high as you’d like, might inefficient processes be playing a role?
All along team member might have considered each core step individually and thought about how to make that step more efficient. But they hadn’t thought about the whole process, which included connections between the core steps, as well as the external players that performed those steps. A sizable part of the inefficiency lay precisely in those connections. Mr. Cote gave an example when he was a CFO at GE in the 1980’s, some engineers in his team complained that 7 months to make design changes on specific products. When they investigated the process carefully, 3 months were spent by external players - the mail (no email at that time) and photocopy services.
2. Do you have a system in place for constantly improving processes? How well does it works? Do you empower frontline workers to improve how work gets done?
At Honeywell, involving frontline staff in process improvement would allow us to achieve multiple objectives at the same time: we could weed out inefficiencies and improve performance across a number of dimensions while also giving workers a voice and engaging their minds to the fullest. The senior management “Go See, Ask Why, and Show Respect” during Kaizen events. The plants hold “Kaizen Day” each month which is led and facilitated by site leader and HOS to drive cross function complex problem solving.
3. Aside from your core business operations, have you worked on rendering your back-office, administrative functions more efficient? How efficient and effective are these functions really?
Mr. Cote mentioned that he came up with a financial goal for our functions (HR, Finance, IT, legal etc.), asking them to reduce their costs by 50 percent as a percent of sales since 2002. And in keeping with his philosophy of doing two conflicting things at the same time. He wanted them to cut those costs while also enhancing the services they delivered. To achieve this seemingly impossible goal, he asked function leaders to enhance work processes, implementing metrics to ensure that they delivered better service to their internal customers even as they reduced costs. This initiative was referred as Functional Transformation. As part of this effort, all functional leaders were asked to begin submitting five-year strategic plans every year, just like our business units did.
Functional transformation efforts paid off handsomely. Between 2004 and 2006 alone, it was saved over $170M thanks to this initiative. Over the next ten years, Honeywell doubled in size, yet the budgets for back office functions declined by about $1B.
4. Are change initiatives “sticking” in your organization? If not, why not?
At Honeywell, strategic plan is long term plan for 5 years. In order to facilitate it, there are different levels of business planning and operating processes tightly linked, including medium plan such as annual operation plan and short-term plan such as monthly forecast and sales inventory operations planning (SIOP). The long-term plan and medium plan was deployed as key initiatives and assigned owner through Strategy Deployment X-Matrix by different level. Once the X-Matrix was approved, monthly review and cross-function brainstorming by HOS will be held to ensure everything is on track. Any identified issues will be taken quick actions.
5. How much attention have you paid to pushing process improvement forward? Are you driving it daily, or are you abdicating responsibility? Are you pushing your organization to achieve small-company speed with big-company efficiency?
True process improvement must accomplish two seemingly conflicting things at the same time: it must make process more efficient, but it must also make them more effective so that they deliver more value to end users, whether these are paying customers or internal ones. Our HOS-compliant plants not only were cheaper to operate, they produced goods more quickly and of higher quality, allowing us to deliver better for customers.
6. Have you structured your process improvement initiative in such a way to sustain improvement over time? Are you personally verifying that it is working?
Entropy is the rule in organizations, as it is in the physical universe. Over time, all organized systems evolve toward chaos. Unless you pursue change relentlessly, your efforts will eventually wither away. The metrics we used to evaluate our HOS introduction at individual plants allowed us to confirm that the changes we wanted were real, and that the plant was sustaining them.
7. Is your team or organization adept at constantly evolving, or do you cling too closely to the operational status quo?
The true magic of process improvement is that it enables an organization to evolve and stay flexible over time. When people think of Charles Darwin, they always associate him with the mantra of “survival of the fittest.” In Mr. Cote's view, Darwin’s key point was survival of the most flexible. Over the history of life on earth, many species have existed that were well-adapted or “fit” to survive in a particular environment.
8. Are there situations in which you might use the top ten/bottom ten technique to improve performance?
The plants were publicized internally the top ten and bottom ten performers on HOS. Leaders and teams liked placing in the top ten, but they absolutely detested being publicly identified as a bottom-ten performer. This tactic helped generate a sense of urgency around HOS, raising performance across the entire organization. In fact, this tactic is good to use in changing anything in an organization. It helped us accelerate improvement in quality, delivery, and number of other change initiatives.
9. Are you resourcing your improvement initiatives well enough? Remember, all change efforts require an injection of bureaucracy.
As the old saying goes, if you make a change initiative everyone’s part-time job, you get part-time results. We wanted full-time results, so we put the necessary people and money behind it…full time.
In general, working in century-old brand of Honeywell, I am so impressive its quick response for changing and evolving, high sensibility to free cash flow and cost, continuous improvement on operating system for a few decades, sticking to innovation all the time…… thinking of survival first then development under crisis. Be proud of being one member in Honeywell and wish Honeywell another prosperous 100 years!
References: David M. Cote “Winning Now, Winning Later”
David M. Cote's new book
Question to ask yourself
1. Are processes in your team or organization as efficient as they might be? Do you understand them fully – not just the core steps, but the links between those steps? If employee engagement isn’t as high as you’d like, might inefficient processes be playing a role?
2. Do you have a system in place for constantly improving processes? How well does it works? Do you empower frontline workers to improve how work gets done?
3. Aside from your core business operations, have you worked on rendering your back-office, administrative functions more efficient? How efficient and effective are these functions really?
4. Are change initiatives “sticking” in your organization? If not, why not?
5. How much attention have you paid to pushing process improvement forward? Are you driving it daily, or are you abdicating responsibility? Are you pushing your organization to achieve small-company speed with big-company efficiency?
6. Have you structured your process improvement initiative in such a way to sustain improvement over time? Are you personally verifying that it is working?
7. Is your team or organization adept at constantly evolving, or do you cling too closely to the operational status quo?
8. Are there situations in which you might use the top ten/bottom ten technique to improve performance?
9. Are you resourcing your improvement initiatives well enough? Remember, all change efforts require an injection of bureaucracy.
网友评论