1. Sellafield 2nd November 2011
Redefining Quality – accelerating change reducing cost protecting reputation Professor John Oakland

2. Updating & sharing knowledge through research and education
Oakland in 30 seconds…
Redefining quality
Addressing
Real Needs
Updating & sharing knowledge through research and education
Transferring
Skills &
Knowledge

3. Oakland’s Business Model
Oakland Consulting plc
Oakland Consulting
European Centre for Business Excellence
CONSULTANCY DIVISION
RESEARCH & EDUCATION DIVISION
Carbon Ready Ltd
The “Voice of Experience”
informs new research
The “Voice of Research” ensures we employ cutting-edge practices

4. Some of our Private Sector Clients

5. Some of our Public Sector Clients

6. Why ‘Re-define Quality?’
The 21st Century world of business never rests – the speed of flow of information has created global markets in which we all trade. Consumer needs vary widely across time and space creating constant need for alertness and change. If we as managers are not keeping up with the pace, others will – it’s very competitive out there!
In the past Quality has become synonymous with control, compliance & cost. Excessive focus on internal capability generated overly bureaucratic approaches that attracted negative perception, particularly in boardrooms
Quality must play a wider role in business to meet the challenges of 21st century
The requirements are around building a ‘learning organisation’ that is quick to change, avoids excessive costs and reputational impacts of getting it wrong!

7. Key concept – the journey & maturity1 2 3 4 5
Time
Products, services, processes and organisations progress on a change journey, from idea to implementation, where quality maturity increases over time
Quality & Operations Maturity Level

8. Key concept – the journey & cost1 2 3 4 5
As the journey progresses costs accumulate. The rate increases early in the journey and slows as maturity is increased
Quality & Operations Maturity Level
Time

9. Scaling the maturity curve
World
class 1 2 3 4 5
Maturity level
Reputation
Improving – “Industrialized”
Net cost of quality In
control
Quality Maturity Level
Gaining
control
Variable
control
Time 9

10. The journey and the key stages
Journey Progress 5
Redefine the
industry
expectations
Bust assumptions 4
Clearly the best
in the industry
Link strategy to operations 3
As good as
competitors
Adopt best practice 2
Stop
“holding back”
Correct Problems 1
Time

11. Addressing the sustainability agenda
Environmental Sustainability Journey
Developing the right end-to-end value chain for the low-carbon economy
Successfully deploying new technologies, management systems and behaviours for operational excellence
Understanding the need for change, developing strategy and realistic objectives
Addressing increasing energy costs through, low-cost, quick wins
Financial & reputational cost of Carbon Emissions

12. What are the risks relating to speed of change, cost and reputation?
– failure to manage and avoid risks throughout the change journey
Speed related risks
Projects fail to meet their objectives through a loss of momentum, which leads to stalled progress
Benefits realisation delayed while change is taking too long
Going slow puts more pressure on critical resources because key personnel are tied up in projects
Slipping back down the curve due to loss of capability
Accelerate Change
Cost related risks
Costs get out of control due to poor quality through inadequate specification, excessive rework, or too much waste
Hidden costs don’t get addressed because they don’t feature in financial reports, because they are hard to identify
Carbon emissions cost money – under the Carbon Reduction Commitment many companies will start being penalised for carbon emissions
Reduce Cost
Protect Reputation
Reputation related risks
Reputation takes years to recover from failure making it harder to do business
Perception of poor CSR will damage your reputation – consumers expect modern companies to have strong demonstrable Corporate Social Responsibility
Reputational damage is deeper and quicker now than ever before because information, opinion, and ultimately consumer choice is affected at scale due to communication technologies

13. Accelerating change
“We were impressed at how well the techniques applied during the workshops helped us to quickly reach conclusion ”
Highways Agency
By accelerating transformation, significant costs can be reduced or avoided, and the benefits of transformation will start to accrue more quickly
Journey progress
Time

14. How do you accelerate change?
Oakland figure 8 model of effective change
Missing focus
Result
Implementing Change ‡
Readiness for Change
Planning
Leadership & Direction
Processes
Organisation & Resources
Behaviours
Systems & Controls
Need for Change
External or internal drivers of change
Need for Change
No urgency and no action
Leadership & Direction
Never leave the start
Planning
False starts and wrong directions
Processes
Effort wasted on non-core
To break into the top circle we need to start with the Drivers of Change – it is important to understand what are the key drivers for change inside or outside the organisation, in order that the Need for Change may be understood and articulated to focus the stakeholders’ desire for change. This is where leaders give meaning to the change, without which, as many organisations later discover, initial enthusiasm and energy quickly dissolves. Clear and consistent Leadership and Direction turns the need into expectations – values, aims, measured objectives and targets. Robust Planning then allows the priorities to emerge and focuses people’s minds on the way forward.
Following clarity on need, clear and unambiguous leadership, direction and good detailed planning, the first port of call must be the organisational Processes in which people live and work. Whether we like it or not, and whether we have worked them out or not, the processes drive the way the Organisation & Resources work – the structure, roles, competencies and resources deployed. Performance measures and technology then support the organisation’s Systems and Controls. This is where Behaviour comes in – all of the above drives behaviour – the way the organisation is structured, who my boss is, how I am measured, the processes and systems – good or bad – that I live and work in. When managers talk about attitudes of the people it might be interesting for them to understand where these come from. Attitudes stem from beliefs and values, both of which are management’s responsibility to influence. Most people start work for an organisation with positive attitudes and behaviours and it is frequently the systems and environment that cause problems and deterioration.
 The “figure of 8” closes when we return to the process for it is our behaviour, which makes the processes work or not, resulting in achievements in quality and on time delivery, or not. Taking another trip round the figure of 8 will verify the change protocols and ensure that anchorage to the strategies is maintained.
Organisation & Resources
Paralysis and frustration
Systems & Controls
Driving blind
Behaviours
Resistance endangers success
Successful change is possible when all 7 key elements are addressed and readiness is achieved before you start changing processes and implementing other changes

15. Reducing costs
“The application of the ‘DRIVER’ model to our claims process yielded an audited savings of €1.6m. This is evidence of the what the DRIVER model can deliver”
Eurocopter
The cost to deliver products and services is reduced by addressing the causes of poor quality (mainly waste & variation) and busting assumptions about how services are delivered
The cost of delivery
Time

16. How do you reduce cost? TIME COST QUALITY VALUE Waste Removal
Reduce process time
Apply approaches such as “Lean” to remove the non- value adding waste from a process, pathway or service
Reduce variation
Use techniques such as “Six- Sigma” to reduce undesirable variation in patient facing and back-office processes
Bust assumptions
Assumption busting leads to paradigm shifts – this can drastically reduce costs and create step changes in quality
Waste Removal
Variation Reduction
TIME
COST
£££
Improving customer satisfaction and
increasing value for money
QUALITY
VALUE
outputs
Lean
Six sigma

17. Protecting reputation
“You have taken us light years ahead – great value”
Shell
Desired outcome reputation lags by customer response time
Journey progress
The development of reputation
Time

18. How do you protect reputation?
Protecting reputation starts with understanding performance and risk
Use an assessment tool developed across the dimensions of quality management including:
Leadership
Policy
Organisation
Manufacturing
Supply
People management
Performance improvement
Bringing together your performance measurement across the supply chain will highlight areas of priority, risk and specific improvement actions

19. Customers and Consumers
Reducing Carbon
Whether its a recession, competition from the far-east or climate change, your organisation’s success depends on its fit with the external environment
As with other complex business problems, we use a structured approach based on many years research and practice coupled with the specific expertise required to address climate change.
Evaluate external events
Develop a strategy for success in a low-carbon economy
Establish 21st Century business processes which will enable performance
Support the operational delivery
Developing Strategy
Planning
Leadership
& Direction
Need for
Change ‡
Operational Delivery
Behaviours
Systems
& Controls
Organisation
& Resources
PROCESSES
External Events
Energy Costs
Customers and Consumers
Legislation
Reputation
Physical Environment

20. How do you address carbon reduction?
Energy Audit
Energy Surveys
Utility Metering
Carbon Footprinting
Aligning Costs and Carbon
Targeting Improvements
Implementation Support
Qualifying Opportunities to Reduce Costs
Successful Implementation Methodology
Carbon Stream Mapping
Product and Service Footprinting
Reducing Costs and Emissions in Complex Organisations
Embedding Low-Carbon
Policy Development
Corporate Social Responsibility
Carbon Management
Developing a Strategic Approach
Operational Delivery

21. Delivering value in Carbon
Linking CO2 with Service Delivery
Working with a large local authority we used Carbon Stream Mapping on each service line to identify CO2 hotspots.
This enabled the organisation to reduce emissions whilst maintaining service quality, improving delivery time and reducing cost.
Reducing Energy Intensity in Heavy Manufacturing
We developed and ran a change programme to mitigate energy price rises with minimal capital investment. Reduced site operating costs by £50K per annum and developed internal capability to sell goods in low-carbon markets.

22. Carbon reduction strategy
There are four key areas that our carbon services address
1: Understanding the need for change, developing strategy and realistic objectives
4: Bringing 1, 2 & 3 together to address specific non-discretionary needs – the CRC (Carbon Reduction Commitment)
2: Successfully deploying new technologies, management systems and behaviours for operational excellence
3: Developing the right end-to-end business processes for the low-carbon economy
Success depends on fit with external environment
Carbon management factors:
External Events
Energy Costs
Customers and Consumers
Legislation
Reputation
Physical Environment
Developing Strategy
Planning
Leadership
& Direction
Need for
Change ‡
Operational Delivery
Behaviours
Systems
& Controls
Organisation
& Resources
PROCESSES

23. Redefining Quality Collaborate Effectively Help Change Happen
Redefining Quality with understanding and applying what quality means in the 21st century
How are you going to accelerate change, reduce costs and protect reputation?
You need to:
Understand your customers
Set your strategic direction
Diagnose the problems in your business
Improve your efficiency and effectiveness
Transform the way you do business
Help change happen in your organisation so that it is sustained
Collaborate with your partners much more effectively
Understand Customers
Set Direction
Diagnose Problems
Improve Performance
Transform Business
Help
Change
Happen
Collaborate
Effectively

24.
“No great improvements in the lot of mankind are possible, until a great change takes place in the fundamental constituting of their modes of thought” – John Stuart Mill
Oakland Consulting plc
33 Park Square West
Leeds LS1 2PF
Tel

25. Professor John Oakland; Executive Chairman, Oakland Consulting plc Emeritus Professor, Leeds University Business School
John is Chairman of Oakland Consulting plc and Head of its Research and Education Division, the European Centre for Business Excellence. He is also Emeritus Professor of Business Excellence at Leeds University Business School. Over 30 years he has researched and consulted in all aspects of quality management, strategic process management and business improvement in literally thousands of organisations. He has directed several large business research projects in Europe which have brought him into contact with a diverse range of organisations.
Professor Oakland and his team have completed numerous advisory assignments and management development programmes in their field, the aim of which has been to bring the practical application of best practice within the reach of top management in all types of organisations. He is author of several best selling books, including: Total Organisational Excellence; Total Quality Management, Oakland on Quality Management, Statistical Process Control and Production and Operations Management. He has written hundreds of papers, articles and reports on various topics in these and related fields.
Oakland Consulting, in its original form, was created by Professor Oakland over twenty five years ago (1985) and now operates throughout the world, helping organisations in all areas of business improvement.
Professor Oakland is a Fellow of the Institute of Directors, Chartered Quality Institute and Royal Statistical Society. He is also a Member of the American Society for Quality.