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SBS Hosts Top 100 Companies in Operational Excellence Forum

  Jan 22, 2015

Strathmore Business School (SBS), in conjunction with Nation Media Group (NMG) and KPMG, hosted a forum on Operational Excellence at its Madaraka Campus on Thursday, January 22nd, 2015.

The main speaker was Prof Alejandro Lago from IESE Business School, a world-leading Spanish institution and main partner of SBS. The forum was attended by representatives from diverse firms, including some KPMG TOP 100 companies.

Prof Lago took the participants through a well-prepared, insightful and engaging session, incorporating a number of hilarious videos. “I am not here to give you a magic solution to operational inefficiency. None exists,” He stated at the very beginning.

A company just has to create the right mix of product cost, range and convenience. It should focus on what it’s good at, instead of trying to satisfy every market segment with sub-standard and overstretched services.

To build an ‘agile’ and ‘waste-less’ business process, a company has to map its value stream. Unnecessary or value-subtracting processes should be eliminated or improved by, for example, decreasing documentation and waiting times, optimising transport, reducing manual repetitive work, minimising errors and reducing parallel functions to eliminate re-work, and planning.

He illustrated this with what he calls the ‘Kenyan Signatory Disease,’ which, by requiring too many signatories for even simple financial transactions which employees can take care of, bogs down operations, increases turnaround times and introduces multiple redundancies along the production process.

“Trust your employees. Let things go!” Prof Lago insisted. Micro-managing employees and sacking them for every fault only ensures the reason behind their faults are never discovered. “It is better to pay claims and risk your reputation, than to have a hidden operational problem.” Mistakes should provide lessons, not make heads roll. This boosts the active support of employees.

For those tempted to turn to IT to solve operational malaise, he warned, things would probably get worse because the new system would absorb the existent inefficiency. Things first have to be simplified.

Order, punctuality, measurement of statistics, problem visibility and a non-blame culture ensure continuous improvement. The gap between marketing and operations should be eliminated because customers, apart from buying products and services, buy the operations that go into their production as well. And if happy, they are likely to return gladly, and refer others, sustaining the company’s growth. “Build a relational, not transactional, attitude to business,” Prof Lago said.

To become even better, a company needs to extend its product value proposition by improving product visibility and process reliability, creating in customers an emotional attachment to its products, fragmenting tasks through delegation and making employees love the system instead of just following rules.

He concluded by offering the consultancy services of his MBA students, who visit SBS every year, for free to companies which needed them. Rose Lutta of NMG closed the forum by thanking Prof Lago. When she asked the participants what they had thought of the session, the answer was unanimous; “Inspirational!”

Ochieng Omondi, from Richmonds Press Ltd said, “We, as a small and growing company, need more forums like this to help us manage growth.”

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