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Poised for Recovery:
A Powerful Preparation
 Fifty-six years ago last May, Edmund Hillary and
Tenzing Norgay commanded the attention,
imagination, and respect of the world when they were
the first to step on the summit of Mt. Everest—a
feat since duplicated by about 1,400 others. That initial
success was certainly the result of meticulous
planning, effective decision-making, and focus on the
ultimate destination. Today, a strong case can be
made that those same success characteristics now
need to be exercised, with significant numbers of
economists offering evidence that we've either
reached the bottom of the current recession or have
already taken tentative recovery steps. A long and
likely arduous climb is just ahead, and while there is
no mistaking its difficulty, forward-thinking leadership
recognizes this challenge as a watershed opportunity
for improvements that produce expense savings and
position the organization for rapid, cost-effective
growth.
Traditional improvement efforts are often defined
and limited by the needs of a particular function within
the organization. As a result, the approach and
techniques brought to bear in a given initiative may be
completely inappropriate for other opportunities. At
this critical moment in the economic cycle,
management needs a cost-effective improvement
solution that can be used across the company, that is
consistent with the sense of urgency the current
environment requires, and that maintains the fiscal
discipline demanded by operational budgets offering
little flexibility.
There is one improvement approach that meets
all of these requirements and more: Value Analysis.
Often used by Nolan senior consultants 'VA' is a
powerful tool that, when applied properly, delivers
significant savings and, just as important, can
fundamentally reshape a function, unit, or
division—producing a lean, fit, customer-
centric, and properly-equipped (but not overly-
equipped) organization. Here is a quick tour of the
elements that make this approach so successful:
- It's customer-focused. It begins with a
clear
understanding of the market needs being fulfilled by
the enterprise.
- It's inclusive. The workshop-based
team
includes functional subject-matter experts, customers
(either internal or external), and other upstream and
downstream stakeholders. Thoughtful team
composition helps ensure that the creative power of a
wide, diverse group of participants is brought to bear
on the improvement effort.
- It's flexible. The scope of the team's
efforts
can be as broad and deep as needed, addressing a
specific organizational unit, a cross-functional
process, or inter-relationships with external business
partners (be they customers, agencies, hospitals,
physicians, or regulatory bodies). Nearly any function
can benefit from Value Analysis-marketing, sales,
operations, systems, medical management,
contracting, compliance, or network management, to
name some of the organizational divisions for which
Nolan has conducted VA initiatives.
- It's disciplined. Discussions
surrounding
the 'essential purpose' of the workshop subject (the
distinct reason that the subject exists) and the 'primary
and supporting functions' that result in the execution of
the essential purpose are expressed in a simple
noun-verb format (for example, the Essential Purpose
of Hillary's Climb = Reach Summit). This precision,
combined with a customer-based statement about the
importance and reliability of the functions performed
and a functional cost summary, provides a common
language for workshop members and a quantified
understanding of the current service/product delivery
model.
- It's swift. Typical VA workshops are
completed
in six to eight weeks, with members meeting two or
three times each week.
- It's rigorous. Although quick-paced,
workshops are structured to ensure that all elements
of the functional subject are effectively scrutinized.
Depending upon the importance, reliability, and cost
of a particular element of a process or function,
workshop members question whether it can be
eliminated, transferred, automated, executed with
fewer resources, or retained but improved.
- It's measurable. Creative alternatives
are
quantitatively assessed against pre-determined
evaluation criteria.
- It offers near-term implementation
orientation.
Although long-term changes are not precluded by VA,
the vast majority of approved improvements are
typically implemented in fewer than 180 days and, in
some cases, nearly immediately.
- Benefits are sustained. Those directly
affected
by the workshop's recommended changes are the
authors of the change, with benefits validated by
customers and rigorous financial impact
analyses.
Just like the planning effort that Hillary and Norgay
must certainly have conducted, VA can create a truly
distinctive organization—one clearly focused
on universally understood objectives and equipped
with the tools needed for the journey, but not burdened
by accountabilities or distractions that slow progress
or jeopardize success. Whether you believe the
economic recovery is best described as a 'U,' a 'V,' or
even a 'W,' the question is not whether an exciting
climb is ahead of us, but when it will begin. Nolan
knows the best routes to the summit and stands
ready to assist you in preparing for and making the
journey. We would be very pleased to discuss your
plans.
Good fortune on your ascent!
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