Opportunity: A global leader in vehicle navigation databases faced several critical competitive challenges. After many years of developing a navigation database, the company was finally preparing to begin creating and selling data products into new markets.
Performance Excellence Audit: Reviews of operational procedures, critical incidents and meetings with clients identified several issues which could impact operations effectiveness:
Activities across the company were highly fragmented. Although the company employed only 1,000 people, they were spread across more than 90 locations in the U.S. and Europe.
There were numerous cultural perspectives on the mission of the business, and there was a high level of internal competition and turf protection.
Lack of coordination led to numerous duplications of efforts and disagreements about priorities for resource utilization.
Over 600 of the company's 1,000 employees were directly involved in the Database building and updating process, which represented an annual cost exceeding $50 million.
After many years of internal development activity, the company faced a critical challenge to re-orient its culture toward external customers and the competitive delivery of data products.
Many of the company's potential business partners were Global 500 companies which had achieved world-class capabilities and expected their partners to demonstrate comparable sophistication.
Quality problems with database releases were threatening product acceptance which would cause multi-million dollar revenue losses within the next six months.
Operating and Management Process Improvements: An organization-wide initiative was launched, specifically to reengineer the most promising core processes of the business. Principles of Performance Excellence were introduced to the organization, particularly emphasizing shared goals, empowerment and collaboration methodology. One large global team, representing all of the activities which occurred in the database building and updating process, committed 75% of its time over a period of 18 months to thoroughly map, analyze and redesign the entire database process. Several cross-functional, cross-hierarchical teams were given responsibility and facilitated through damage-control, problem-solving, and special-application projects. Management focus was shifted from functional to core process, utilizing cross-functional process management teams. Processes were examined to determine essential process-control and performance measurement points.
Results: The Database Reengineering team uncovered countless opportunities to improve the flow and quality of the database process, and initiated a master project plan to develop and implement improvements. Bottom-line impact included first-year, repeatable saving savings between $10-15 million annually, and projected annual productivity improvements of 25% from ongoing continuous improvements based on multi-year implementation of identified redesign projects. A method to track and continually prioritize improvement projects for resourcing was developed. The cross-functional Database Reengineering team served as a model for cross-functional process management, bringing numerous functions into a single, whole-process focus. One damage-control team prevented over $9 million in revenue loss by successfully releasing a floundering database product on time without error. This team then expanded its charter to problem-solving, and redesigned this portion of the process to eliminate the root causes of the database release quality problems. Culturally, the organization achieved a new level of focus on a clear mission, and many instances of cross-functional collaboration to achieve shared goals began to emerge.
April 13, 2008.
Copyright © 2008 Conard Associates, Inc.