COmprehensive Management
the Whole organization the WholE time

Connecting ALL ACTIONS to their Global IMpacts

The biggest single stumbling block for organizations is to understand, in a simple and practical manner, what are the global consequences of local actions and initiatives. Most of the time, this is poorly mitigated by guessing, reductionist considerations and short-sighted evaluations.

Current management techniques either sidestep or mishandle this challenge. The result is what we call "Partial Management". And by doing so organizations suffer from chronic conflicts between areas; low ROI and Profits; difficulties in synchronizing and operating reliably; spread out focus; too many projects open and few projects actually delivering real value; miscommunications and misunderstandings between top management and ownership and/or board.

Local2Global

What would happen if you could connect each and every action (or initiative) with its respective consequences for the whole organization throughout time?

How becoming aware of the effects can transform your managing decisions and results? And, more importantly: reclaim control over the fate of your organization.

Complexity

Is both our friend and foe. It allows organizations to achieve true synergy - a whole that is greater than the sum of the parts - but at a cost.

Complexity overwhelms our thinking almost instantly and we end up resorting and becoming hostage to poor methods that split the organization, curtailing results, fostering dissent and failing to really handle complexity.

Benefits of being Comprehensive

Each organization possess different possibilities, and when management acquires a comprehensive mindset these improve considerably.

To illustrate some of impacts of managing comprehensively let's check two effects:

Managing Initiatives

Initiatives do not yield the same global impacts nor do they take the same amount of effort. It is very difficult to evaluate these aspects accurately when separate, but it is much worse when we have to integrate both.

After we observe a year's load of initiatives we can organize them in a Pareto (80:20) scale: 20% of the efforts spent or 20% of the initiatives yield 80% of the benefits.

Now imagine that it is possible to have a solid understanding of the global impact (both in terms of benefits and efforts) before starting the next year. What would be the improvement?

It is possible to select the best 20% initiatives and implement them, and pick another best 20% and implement those, etc. Each time generating the equivalent of the 80% results, five times in one year.

Graphically:

We can see that choosing and implementing initiatives comprehensively can increase the benefits of one year of initiatives by 300%. Not to mention the learning factor and the time advantage in being able to deploy valuable initiatives faster.

Managing the Value Flow

And what about current operations?

These also benefit a lot from managing comprehensively:

If you look at the larger Value Flow of the company you can see several steps crossing several departments. Each demanding certain resources and attention. As the company does not produce unlimited output there must be one step limiting the flow. And due to the complexity of steps and processes, it is virtually impossible to match perfectly the capacity of other steps with the limiting one. So all other steps have more capacity than the limiting one.

Without a comprehensive view, all departments and steps are treated equally, with a reasonably balanced distribution of attention and resources. This makes all steps, but the limiting one, receive more than they should and the limiting one to receive less.

If the limiting step receives less attention and resources the global value output decreases (less margin generated).

If the non-limiting steps receive more attention and resources the expenses are higher and the work in progress is higher, leading to longer times, lower flexibility.

These two produce lower ROI and a pervasive sensation of "elusive waste" that often hurts relations between teams and within management that can dwarf the financial impacts.

An independent study published the following results of operating comprehensively (even if sometimes only partially):

- - - Lead-time 70% reduction
    - Cycle times 65% reduction
    - Due Date Performance 44% improvement
    - Inventory levels 49% reduction
    - Revenue/Throughput 76% increase

Imagine what these improvements can yield in your organization. And what else lies in other crucial flows like sales, marketing, NPD, etc.

SIx Obstacles to overcome

To achieve Comprehensive Management there are six obstacles to overcome:

Decision making: is usually guided by local considerations, both in space (department or unit) and time. The necessary focus between results and efforts is practically non-existent on a global level.
Managerial Finance: reports and statements are rarely (if ever) a practical and timely decision support tool. They are great to report what happened, but of little help in deciding what to do next.
Value Flow: the reductionist view makes it hard for organizations to understand and manage the global flow of value. The synchronization is hard and conflicts are common. It is even worse: support areas are confounded with line areas and capacity limitations appear where they shouldn't.
Capacity Management: it is unfeasible to manage the capacity of all resources in an organization, so this is either done incorrectly (everyone must work to the max) or not done at all. The distinction between constraints/bottlenecks/leverage points is seldom done and bears no consequence for the management of other resources.
Protection: losses are very hard to recover from. Risks and initiatives are commonly assessed looking at parts of the organization and without any structured global criteria to gauge them.
Value Generation: value is really only generated in the hands of the consumer and yet most "value-oriented" initiatives and actions look inward to "improve".

The right help

As a leading expert in Theory and Constraint for 20 years, I have developed projects to synchronize, to uncover and utilize the synergy existing in organizations. The Local2Global methodology - that is at the heart of the Comprehensive Management - is my brainchild.

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COmprehensive Management the Whole organization the WholE time