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Article
Poised for Recovery: A Powerful Preparation
By
Dave Edwards
Senior Consultant
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. |
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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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