From the Desk of Paul:
The manufacturing example is one of the easiest to understand in the Operational Health discussion; however, Operational Health is just as important in any other type of organization, whether it is a service-based business or even a non-profit organization. Let’s consider an HVAC repair business. If we wanted to measure the productivity of the organization, we may choose a KPI such as mean-time-to-repair (MTTR) which would indicate how productive the service team is. If we wanted to measure our operational health in terms of the quality of work, we may look at a KPI related to the number or recalls or re-work. Most organizations would want to measure both and others as well.
A non-profit that is missionally-charged to provide free healthcare for underprivileged patients may use KPIs related to number of patients treated. To ensure the organization is operationally healthy in its ability to provide good quality healthcare, they may measure positive outcomes, like recovery rate, for patients.
In essence, once any organization determines what their KPIs should be, they can then assess their own Operational Health frequently by recording and analyzing their KPIs. So, what if the KPIs indicate that Operational Health is not good in an area? At this point, the organization would want take a closer look at the cause(s) of their score being off the mark with that given KPI. Some questions they may ask themselves are, “Is the process adequate”, “do the employees understand the process”, “are the system functioning properly”, etc. The answers to such questions will allow the organization to recognize what improvements need to be made in order to improve the score for the given KPI. Often there is a need for a combination of improvement in training, processes and systems at varying levels. Pursuit of such improvements will immediately or at least, eventually result in improvement of KPI scores, thus improving Operational Health.
A regular focus on KPIs by the entire organization can drastically improve the Operational Health. Standards, baselines or goals should be established for each KPI. The standard, baseline or goal should also be prominently displayed along with the actual periodic measurements so that everyone is regularly visually queued to focus on achieving the desired scores for each KPI. If KPIs are regularly less than satisfactory, then such focus by all will make identifying the issues much easier. This collective focus, emphasized regularly and repetitiously will enhance the focus on improvement of Operational Health across the entire organization and the results will be recognizable to all.
As always, if you have questions or comments that you would like for me to address, please contact me at pmeadows@itgroupva.com.
Paul Meadows,
President/CEO
