Ghana is at a crossroads, in an economic crisis with high Debt to GDP and currently engaged in implementing a Debt Sustainability Programme with support from the IMF. Like it or not, this is our reality with many contributing factors – and not least among these factors is our poor operational performance, in both the public and private sectors, stretching across the Services, Manufacturing, Industrial and Banking sectors. As a matter of fact, stretching across all sectors of the national economy.
But what then is Operational Excellence? Operational Excellence (OpX) is about setting up an organisation efficiently and effectively and managing that organisation – which therefore is always able to do the right thing to achieve customer value and high productivity at the lowest cost. Techniques such as Lean and Six Sigma are often suitable for this, but also the Theory of Constraints (TOC) and perhaps even concepts such as New Ways of Doing Things and The Agile Organisation.
There are many organisations and professionals in Ghana who, however, dispute the need for operational excellence, and many organisations find it difficult to improve their organisational processes, procedures and systems structurally – and above all to maintain a continuous improvement culture. Therefore, they are unable to ‘do the right thing, at the right time and first-time right’. It is these repeated actions of trial and error which most of the time lead to generation and accumulation of waste.
So, how does one determine when which concept works and when not? A few efficiency studies have been done in Ghana over recent years. The Ghana Energy Commission provides a comprehensive overview of the current energy efficiency status of three household appliances – namely refrigerators, air-conditioners and lighting systems – which contribute to significant savings that offset the national electricity peak demand by 200–240 MW.
A banking efficiency study conducted by Thierry Buchs et al in 2013 also provides some critical insights into competition and efficiency levels within the banking sector of Ghana. Another study by Eric Baah Nyanor et al investigated the efficiency of 26 commercial banks in Ghana in 2020. The results of the maximum likelihood estimation shows that the financial crisis reduced both cost and technical inefficiencies following the stochastic frontier analysis (SFA) approach.
This article is not meant to review and analyse the methods and concepts used, but to assert that regardless of the methodology, a common denominator is that a unit of measure has been arrived at – defined as Efficiency and Effectiveness of the organisation’s production process, reducing costs, achieving customer satisfaction, and improving productivity.
How do you achieve the operationally excellent organisation? First, let us begin with some definitions as a basis for understanding these measures.
- Efficiency is broadly the relationship between the use of an organisational resource of an expected input compliant with norm and or compared to actual inpu
In mathematical terms therefore, Efficiency (E) = Expected Input (EI)/Actual Input (AI) = EI/AI – and where Efficiency>1, then it is not problematic. In financial terms, one can define Efficiency (E) = Turnover(R)/ Employment Costs (EC).
- Effectiveness can broadly be defined as the relationship between the use of an organisational resource of an Expected Result compliant with Norm and or compared to Actual Result. In mathematical terms therefore Effectiveness (E) = Expected Result (ER)/Actual Result (AR) = ER/AR – and where Effectiveness<1, then it is problematic.
- Productivity can be defined as the relationship between the use of an organisational resource for an Actual result (Revenue) and Actual Input (Cost of input). In mathematical terms, Productivity (P) = R (Actual)/ Input (Actual) – where Productivity P< 1, then it is problematic.
Until recently in Ghana, the management agenda has been characterised by hierarchy and ownership rights in the private and public sectors, including SOEs, by bureaucracy and rationalisation for creating and controlling routine tasks. However, with the current economic crunch, Efficiency, Effectiveness and Productivity must become the most important operational and strategic priorities. Productivity must increase by skill specialisation, standardisation and mechanisation/automation to ensure value for money. Therefore, in the coming years Operational Excellence must become the management watchword. Ergo, Ghana will no longer have the resources to support loss-making SOEs and/or public enterprises.
In view of the foregoing, the Ghana Change Academy will be organising a series of trainings to cover Operational Excellence in corporates, communities and within the public sector starting from 2023.
Essentially, these trainings will aim to impart knowledge about methods and techniques to execute Operational Efficiency Programmes and Concepts to include topics such as:
- Execute Process Efficiency, Effectiveness and Productivity
Processes are organized in end-to-end flows and apply Lean principles of standard operations, balanced loads, segmentation of complexity, and quality ownership by the line. How to:
- Conduct initial stakeholder interviews
- TAVA-Time Allocation and Value-Added Analysis
- SIPOC- Delivery Process Analysis and Waste Reduction
- Detailed OPE (Overall Process Efficiency) Observations
- Individual & Skill variability of staff
- Performance Management
Ensure transparency of performance, a well-functioning cycle of escalation and action planning; and put a system in place to drive continuous improvement – How to:
- Develop a pragmatic cascade of key performance indicators
- Resource utilisation Analysis
- Develop performance managements dialogs
- Link behaviour to appraisal and rewards
- Organisation, Skills, Mindset & Behaviour
Ensure that staff have the skills and knowledge to always deliver on their accountabilities and the organisation is aligned to support them in this without overlap or unclear roles, which leads to desired behaviours; so, they understand what is required and are reinforced in those behaviours by formal mechanisms including:
- Mindset & Behaviour Surveys
- Rigidity Observations
- Business Process Redesign
- Organisational design
The learning objectives will be three key deliverables:
- Enhancing trust and confidence of participants toward a more strategic, stakeholder- oriented operational culture that saves cost,
- Engaging participants to become more dynamic, adaptable, meritocratic and continually improving workforce,
- Improving the ways of working: A more open and pro-active work environment with streamlined products and services, processes, procedures and systems.
Upon completion of the 2-day course, participants will be able to:
- Conduct a review of required processes, analyse and redesign processes – enabling efficient work processes and future growth of business.
- Implement clear standards of performance management that lead to continuous organisational improvement
- Lead, innovate and re-energise their organisations, processes; and understand the requirements for change
- Analyse leadership styles and embed positive change in people and teams, and how these affects the business
- Use powerful influencing skills to persuade decision-making
Training Approach & Methodology
Ghana Change Academy designs highly-creative solutions for our clients, whereby the learning is translated into skills, knowledge and behavioural changes which can be measured and assessed. In all cases, at the heart of our approach is a clear understanding of the training’s purpose and expected results. This provides a sound basis for the selection of appropriate training methods and evaluation techniques. We adopt a range of highly effective, interactive training methods to engage fully all participants in the training sessions. These include:
- Individual and group exercises
- Case studies & group discussions
- Business simulations & role plays
- Short lectures & self-reflective questionnaires
These powerful experiential training techniques help to develop self-awareness, confidence and competence to aid individual growth through analysis, observation, self- and collective reflection; and provide an opportunity to discuss complexities in business operations, learn new skills and acquire new knowledge.
Dates: Planned training dates: 23 and 24 March or 27 and 28, 2023.
Registration. If interested, kindly register by mail to: [email protected]
>>>The writer is a certified Change and Transformation professional, an economist by training and has a strong background in consulting and managing programmes for multinationals in banking operations, manufacturing and service organisations.
He possesses more than 30+ years’ solid history of effective leadership in corporate transformations with strategic impact, operational efficiency and executive stakeholder management. Has deep knowledge and experience in Lean environments with sourcing and outsourcing capability, transitioning production and manufacturing processes from Europe and US to Asia, India, turning around poor-performing organisations to low cost, profitable organisations.