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Deborah E. Wallace
Principal
Wallace Consulting
Board Advisory Services
Phone:
781.259.0550
Cell: 617.875.7069
Fax: 781.459.7999
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Operations Review
Wallace Consulting, Board Development, and Board Advisory Services
specializes in Operations Reviews.
Boards of Directors request Operations Reviews for a variety of reasons.
Increasing labor costs, decline in sales, revenue and profit margin,
voluntary departure of key employees and poor communication within the
organization that may be a source of unexpected slowdowns or product errors
are some of the more common issues that prompt a comprehensive review. Most
often, Operations Reviews are requested by a board of directors in an effort
to improve cost-effectiveness and organizational efficiency.
They are also a very effective means of identifying best practices in one or
more parts of an organization. An organization’s most efficient and
effective operations and ways of conducting business are identified,
highlighted and documented they then become part of the organization’s
knowledge base. or may be formally institutionalized in an effort to
transfer or adapt them to other areas.
Wallace Consulting, Board Development, and Board Advisory Services can
provide an objective, systematic and integrated review of your
organization’s operations. The process includes identifying specific problem
areas, determining which of those are likely to provide the best leverage
for change, analyzing those high leverage areas both individually and in
relation to each other and finally recommending a feasible action plan for
improvement. The action plan for improvement must also support or align with
your organization’s strategy, objectives, culture, and policies and
procedures that are currently in place.
In addition to a feasible plan for improving the efficiency and
effectiveness of your organization, an operations review provides several
long-term benefits for the board of directors and for the organization at
large including:
Providing an objective benchmark for measuring progress toward improvement
goals
Providing a single coherent document by which Directors can learn how the
organization actually works
Identifying the potential need for changes in the organization’s structure,
staffing and resource allocations
Generating interest in and ideas for on-going improvement of operations
EXAMPLE: SUMMARY OF COMPLETED OPERATIONS REVIEW - This project,
requested by the Board of Trustees of a Taft-Hartley healthcare fund, was
prompted by a collective and increasing concern about the fund’s
organizational efficiency and cost effectiveness. Like so many health care
plans, maintaining a high standard of service to members while ensuring the
financial health and sustainability of the fund was an increasingly
difficult balance.
The Trustees had specific objectives in mind when they commissioned this
study:
To determine whether the fund was operating as efficiently as it could be
(i.e. Is there duplication of effort? Is there “fat” in the organization? Is
the level of productivity where it should be? Is the staff paid at
appropriate levels compared to other similar funds?
To determine whether the fund’s overhead (especially its management
overhead) was too high
To determine the cost efficiency of the fund’s operating model of providing
its own clinical services to members To determine whether the fund is being
run the way a well-run business would be run
To receive a set of specific recommendations – supported by objective data
-- for consideration and implementation
The study focused on identifying specific organizational factors, as well as
management, staffing and business practices, that might be affecting the
fund’s efficiency and effectiveness.
The review relied on five main sources of data: interviews with each of the
trustees and on-going conversations with the Co-Chairmen; initial
conversations with the fund’s executive Director; interviews with each of
the Fund’s department managers and in some cases their direct reports;
operating data from each of the departments; national and regional
Taft-Hartley fund databases; and normative data from various research and
professional organizations. Labor costs and productivity measures -- by
location, by department and per person – analyzed in the context of external
data were central to the rationale and recommendations suggested to the
Trustees.
With some minor changes, the full set of recommendations was approved by the
board. Implementation of those changes is in process and will be completed
by year-end.
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