Two elements in the transformation framework assist in how to think about the key elements that are critical for sustainable transformation:
the 7 enterprise principles
the enterprise architecting framework
A 7 Principles of Enterprise Thinking:
The 7 principles of lean enterprise thinking provide the guiding philosophy for achieving sustainable enterprise transformation.
These principles have been distilled from extant academic research and from field experiences in enterprise transformation.
The focus of this section is on the seven principles, as shown in Figure 2.
Principle 1: Adopt a Holistic Approach to Enterprise Transformation
Organizations undergoing transformation often struggle to find the balance between demonstrating short term success and achieving long term enterprise level benefits.
Research documented in Lean Enterprise Value (Murman et al, 2002) describes how taking a reductionist approach to transformation results in “islands of success”.
Improvement in enterprise silos without consideration of the “enterprise system” may result in short term improvement but often is not sustainable and may actually sub-optimize the enterprise as a whole.
It has further been determined that a holistic approach to consideration and integration of lifecycle processes (e.g., design, development, manufacturing), enabling processes (e.g., finance, Information Technology, and HR) as well as key leadership processes (e.g., strategy, planning, resources).
The need for a holistic approach is further highlighted through the multiple instances wherein organizations attempting to replicate the Toyota Production System (TPS) have only found only limited success, as they replicated the practices, but not the context within which the practices became successful.
A classic example is the use of Kaizen/ Rapid Improvement events within transformation efforts (Manos, 2007).
Transformation has to operate at two levels: the strategic level, where improvement events are coordinated to achieve enterprise level benefits, and the tactical level, in which localized improvements are demonstrated (Kosandal and Ferris, 2004).
Gathering the benefits at the tactical level is often referred to as ‘harvesting low-hanging fruit’, and has diminishing returns when not coordinated at a strategic level.