CHAPTER 1

Building the Anatomy for High Performance

Because of its ability to withstand attack by improvised explosive devices(IEDs, including homemade bombs), the mine-resistant, ambush-protected vehicle(MRAP) has become a critical asset in protecting our warfighters across theglobe. Demand for MRAP vehicles increased virtually overnight, from about 200vehicles for the U.S. Marine Corps in late 2006 to more than 15,000 vehicles forthe combined services by early 2007. In response to growing public concern aboutthe adequacy of U.S. warfighters' field resources and protection, the U.S.Congress mandated delivery to Iraq of 1,500 MRAP vehicles by December 31, 2007.

Achieving this mandate required a rapid acceleration in production from 10vehicles per month to 50 vehicles per day. The Navy and Marineswere faced with a seemingly impossible challenge: increase output by a factor of150, as quickly as possible. Building more facilities was out of the questionbecause it would take too long. Simply throwing more and more bodies at theproblem wouldn't generate the results needed (at one point the final assemblyplant did reach maximum staffing and operated 24/7 but still fell far short ofthe 50-vehicle-per-day goal).

The leaders of the effort realized they needed a new approach that wouldgenerate greater productivity within the resource and time constraintsthey faced. There were three main components to the path they followed:

• Adopting practices for achieving Operational Excellence. Theseincluded continuous process improvement (CPI) methods that eliminate waste andimproved quality throughout a process (key to increasing productivity 150 timeswithout requiring 150 times more resources). Most importantly, the leadersapproached the challenge with an enterprise view of the productionprocesses, meaning they looked at how to make all the pieces of the puzzle worktogether most effectively, end to end.

• Driving a rapid response (agility). The leadership committedits own workforces and budgets appropriately. Recognizing the congressionallymandated timeline, the leaders brought in outside experts who guided decisionmaking and drove innovation while internal resources were being brought up tospeed.

• Shifting the culture. This will create a learning environmentin which workers were encouraged and supported in their efforts to obtain andapply new skills and tools for attaining Operational Excellence and agility.

Together, these three components—building Operational Excellence,developing agility, and creating a supportive culture and workforce—setthe foundation for increasing output and quality while reducing the amount ofresources and cost needed. These components give an organization the rightanatomy for achieving high performance: the capability to continuallyimprove productivity and to deliver more mission for the cost.

Targeted improvements in the MRAP assembly operation were launched in August2007. Production had reached 10 vehicles per week by that time, thanks to acombination of increasing the number of workers (= higher budget) and someinitial Operational Excellence improvements. Unfortunately, production was stillfar below the target.

Only by adding in the other two components of Performance anatomy—agilityand culture—did MRAP production reach its 50-vehicle-per-day goal justfour months later, in December 2007. (Published accounts cite 2008 productionfigures that occasionally rose even higher, to 70 vehicles per day.)

This book looks at the three components of a Performance anatomy from aleadership perspective, examining key leverage points in each area. To lay thefoundation, here is a quick overview of each component.

Component 1: Operational Excellence

It is likely that you have heard the term Operational Excellence before, perhapsframed as the ultimate goal of adopting a particular continuous improvementmethodology. Some related terms you may be familiar with are processimprovement, Lean Six Sigma (LSS), Lean Transformation, and businessreengineering.

We use the term Operational Excellence in its broadest sense to meanmaximizing outcomes for the cost. That definition describes a comparisonthat is not yet widely recognized in the public sector: that the valuedelivered by an organization will always be judged against the cost to deliverit. Operational Excellence means you can continue to deliver more and morevalue for less and less cost.

The comparison between value and cost is important for every organization and isbecoming increasingly important in the public sector. Managers and leaders areunder constant pressure to decide where and how to best allocate shrinking orlimited resources. In government organizations, the investment decisions areoften complicated by regulatory requirements that mandate how portions of thefunding must be allocated. This further pressures the organization to createfavorable outcomes within prescribed funding limits.

Key attributes of organizations that achieve Operational Excellence include:

• They understand and communicate what is important. They have a clearsense of mission, have identified their customers (the people and groups who usetheir services or products), and have expended the effort to deeply understandwhat those customers value most.

• They are constantly evaluating their own performance. They haveidentified metrics linked to strategic and operational goals and monitor themetrics regularly to evaluate progress and...