YAGNA Assessment - Why should you go for it

Yagna Entrepreneur Success Services Profile Presentation

1. YAGNA Entrepreneur Success Services
Why subject your company
to YAGNA Assessment?

2. YAGNA White Paper
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YAGNA brings you the service offering of Business Assessment to help you with a
dispassionate third-party view of the current reality of your business. We will follow both
qualitative and quantitative methods of conducting the Assessment.
The focus of the assessment will be on unlocking value for all three important stakeholders
– Key Customers, Employees, and Owners / Promoters / Shareholders / Investors.
· Is your organisation consistently keeping the customers happy by delivering what they
need and what is valued by them (products / services / solutions)?
- Is the value delivery without defects, on-time in-full, with short lead time and at a
price which is welcome by them?
- Do you have a way to measure and keep track of this?
- Is the value unique and no other competitor can easily provide the same for
significant long time?
· Is your organisation consistently keeping the employees happy by empowering them,
and developing them?
- Is your organisation providing opportunity to employees to become better and
grow with respect, and a fair share of rewards and recognition?
- Do you have a way to measure and keep track of this?
- Is assured remuneration to employees comparable / better than the
competition?
· Is your organisation consistently making profits, with increasing returns on investment of
resources and time, and giving you access to increasing flow of free cash?
- Is your organisation enhancing the reputation in the market and society?
- Are you keeping track of these (above two) and reviewing frequently?

If your organisation is not consistently reaching the level of expectations that each
stakeholder has from it, then there is a case for you and your leadership team to have a fresh
look at the way decisions are taken and actions are performed at various levels in the
organisation.
If you think that your organisation is meeting the expectations of the stakeholders today, but
you want to sustain and further enhance the satisfaction of all the key stakeholders
considering the emerging future uncertainties, volatility, risks, then there is a case for you
and your leadership team to have a fresh look at the ways decisions are taken and initiatives
are taken for specific points such as ‘Where to Play?’ and ‘How to Win?’ in future.

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From Top-Floor to Shopfloor and the market field where the Sales and Service personnel are
engaging with prospects and customers, they need to
● Take decisions for choosing to do or not do certain actions.
● Prioritize within the chosen set of actions
● Act on the chosen actions
Think of two scenarios
1. All the players involved from top-floor to shop-floor have no means of coordinating
amongst them or synchronizing their actions.
2. There is smooth communication and coordination and perfect synchronization
amongst them.
If it were an orchestra, the scenario one will create a cacophony of sounds which will not be
pleasing to the audience, nor give satisfaction to the players themselves.
The second scenario would result in a pleasing harmonious output. The orchestra manages
to do this by using three necessary conditions.
1. Agreed upon musical score for the decided symphony that is to be played.
2. Each musician is an accomplished one and has practiced the score.
3. There is a conductor who brings the real time synchronization by starting and
stopping different instruments.
It is not that the team members do not want to align with the stakeholder expectations and
deliver their best. They encounter conflicting choices when they consider requirements of
different stakeholders simultaneously. They are in dilemma and must choose between a
rock and a hard-place, equally untenable alternatives. They make these choices with
whatever information is available with them and whatever priority that they sense at that
moment of time. The choices could shift from one to another depending on the changes in
the above - information available and priority communicated to them.

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What we attempt to discover during Assessment
“Give me a firm place to stand and a lever and I can move the Earth.” Archimedes
We follow the scientific management principles given by Dr. Eliyahu Goldratt in the body of
knowledge called Theory of Constraints.
To bring about a radical improvement in the performance of a company, one does not need
to change many things. One needs to discover and act on the leverage points which give
highest effectiveness and efficiency to improvement efforts.
We have more than 100 years of cumulative experience in our team of executing and
consulting with medium and large sized companies.
Each one of your stakeholders is not experiencing always good effect of the way things exist
at any typical organization. We all agree that there is a need to do something better than
what is happening today. We may need to look inside for the decisions and actions that we
have taken ourselves. We may need to revisit the decisions and refine the actions ourselves.
There are two types of misjudgments in decisions that anyone can make.
· Omission – Decision of Not doing something, that should be done.
· Commission – Decision of Doing something that should NOT be done.
These are embedded in the way each of team members view their and other team members'
role in the organization.
And, existing policy frameworks promote the dilemmas where people know the two types
of errors but are compelled to still commit the errors.
We all have a viewpoint about what should be done and what should not be done. These
viewpoints are not the same. We keep on debating about our viewpoints with an underlying
assumption that this tug-of-war is inevitable while running a large complex organization like
ours. Our decisions are also swayed by the changing and diverse signals given by our external
stakeholders - customers, suppliers, regulatory authorities.
We could compare our situation with the fable of eight blind men and an elephant. Each
one of the blind men had a different conception of the elephant and was very confident of
the same as their viewpoint was based on their first hand observation and the lens from
which they are making these observations.
But the fact remains that all of them may need to be observed through a different lens. They,
literally, could not see the big elephant in the room.

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We have different mental models in our individual minds. A mental model is an explanation
of someone's thought process about how something works in the real world. It is a
representation of the surrounding world, the relationships between its various parts and a
person's intuitive perception about their own acts and their consequences. Mental models
can help shape behavior and set an approach to solving problems (like a personal algorithm)
and doing tasks.
Mental model of reality is about a system which is made up of many parts (organs of the
elephant) and they are interconnected. The system is as much about the individual parts as
it is about the interconnections. We are all trained to break the system into parts to analyze
each part separately. But by following that method of analysis we lose sight of the
interconnections.
The interconnected parts lead to a situation, where the system has leverage points which
are highly potent. Any decision and action on these leverage points cascades down to the
entire system through the interconnection linkages. The other parts, non-leverage ones, do
not offer any benefit or to the contrary they could harm the system.
Based on the above mental model, it is imperative
● To ACT on the Leverage Point
AND
● Do NOT ACT with emphasis only on the non-leverage points.
Any behavior contrary to the above will lead to both types of errors in judgement - omission
as well commission.
The above can be tricky and needs to be unpacked with care.
Chain Analogy:
Imagine a chain made of 1000 different links. These links are connected linearly. Except for
the two end-links, each link is connected to two other links. The task given to us is to improve
the strength of the chain.
We know by experience, in the case of a chain, its strength is determined by the strength of
the weakest link. We must, hence, first locate the weakest link and take decisions and actions
to increase the strength of this ONE link. Our action would directly lead to the goal of
improving the strength of the chain. If we were to randomly start an improvement initiative
to increase the strength of all the links, then in 999 cases, all our actions would result in sub-
optimal utilization of time, effort, resources, and emotions; as ultimately the strength of the
chain will not increase. This is like unnecessary expenditure, delays and frustration all around.

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Doctor Analogy:
If I were to approach a doctor to get treatment for my ailment, the doctor would start by
asking me about the afflictions that I am experiencing. I might reel out a list of symptoms -
headache, watery eyes, sore throat, dry mouth, indigestion, body ache, lack of sleep, high
body temperature etc.
The method of the Doctor is to consider every observation as a symptom, not to be
addressed individually. Otherwise, the treatment will involve a balm to cure headache, eye
drops, lozenge for throat, juices for moisturizing mouth, lemon soda for upset stomach, you
get the drift.
Doctor observes the symptoms and decides whether any further tests and investigations are
required. Based on the observed symptoms as well as results of tests and investigations, the
Doctor arrives at disease which could be causing these symptoms. A medicine with or
without treatment regimen is prescribed. The patient is observed for the efficacy of the
treatment and if any new symptoms have emerged.
The idea here is about science and the scientific method. Scientists do not believe there is
anything random in this world. Everything is connected by cause and effect. For every effect,
there is a cause and vice-versa. Chain of cause and effect could form a causal loop where the
subsidiary effect becomes the cause of the starting phenomena.
Scientists also believe that at any point of time, the number of effects are more than the
causes. As the cause-and-effect analysis is conducted for multiple layers, the causes
converge and, in the end, only one cause remains. The implication of this is that in any system
of observations, there is only ONE cause, and all the remaining observations are symptoms.
Any lasting change can be brought about by impacting the cause. If s ymptoms are
addressed individually, the change will not be permanent and there could be unintended
consequences.

3 Bottle Video and Flow analogy
https://www.youtube.com/watch?v=mWh0cSsNmGY
In any flow system, the bottleneck is the leverage point. Cleaning plaque or sedimentations
at the bottleneck will have an immediate positive impact on the speed and quantity of flow.

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Flow is represented by work flowing through dependent steps. The capacity of each step is
subjected to variations or statistical fluctuations due common cause variability.

Assessment Methodology
Assessment will be conducted based on Yagna’s successful experience of implementing Theory of
Constraints methodology across various companies.
Our experts will study your organisation to identify few changes required to:
● Secure higher Throughput from existing products and markets.
● Growth through new markets and products.
● Improve Measurements and MIS
The focus of the Assessment will be to answer the following questions:
● Why Change – List of Challenges and unmet aspirations – also known as Undesirable Effects
(UDEs).
● What to Change – Core issue which is causing different problems – also known as Core
Cause or Constraint
● What to Change To – Direction of solution to overcome the core cause. Key principles which
will help to address the core issue and high-level solution steps based on these principles.
● What is the potential – likely impact on financial and operations performance over next 2
years.
High level roadmap for 2 years and indicative project plan for immediate 13 weeks
The Assessment will be a collaborative discovery with your team and will involve
● Discussions,
● Direct Observation,
● Data analysis.
Discussions will be through meetings with your team (individual meeting with different members
and joint meetings with functional / cross-functional teams). Direct observation will be through shop
floor / office / branch / warehouse visit. Data analysis will involve financial and operations data.
The objective during Discussions is to understand the current challenges and unmet aspirations of
the company, initiatives taken to overcome them, and obstacles encountered.

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It is proposed to have discussions with all key functions. Indicative list below:
● Directors / Top Management
● Marketing and Sales
● Design
● Planning
● Procurement
● Production
● Quality
● Installation
● Service and Spares
● Finance
● HR
● Cross-Functional Teams (e.g. Project team, New
Product Development & Introduction team)
● Key Customers and Suppliers* (optional)

*Interaction with key customers and suppliers will bring in additional perspective
Direct observation involves visit to different locations. The objective of direct observation is for our
team to better understand the current reality at the company and clarify the points picked up during
discussion phase.
Data Analysis will involve analysis of financial, operational and transactions data. The objective of data
analysis is for the team to get better acquainted with your business and validate the problems or
undesirable effects (UDEs) picked up during Discussions. Data analysis will be included as part of
Assessment presentation to the senior leadership team.
Data requirement is given below:
● Financial and Non-Financial Data to understand the performance trend over last 3 years
● Operations measures of Lead Time, On-time in Full (OTIF), Inventory Turns over last 3 years
● Transaction data of Purchase, Sales, Production, Inventory, Receivables, Payables for last 104
weeks
● Sample Bill of Material of key products
● Projections for next 2 years

Estimated interaction time for Assessment – 5 days (including buffer)
Assessment presentation will be scheduled within 2 weeks of completing the Assessment.
It is recommended that data be shared prior to onsite visit such that our team can be better prepared.
Yagna will present back the findings to your team at the end of Assessment.

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Rule for adding Salt to Recipe

Salt is an important ingredient of many recipes. Absence of salt in such is immediately felt
by blandness of the food. Similarly, excess salt is also immediately felt by inedible state of the
food.
The good amount of salt is somewhere between these extremes. It is not some exact
quantity by a range of quantities which is good enough - neither too less nor too more.
It is interesting to note that salt is also added to cakes. The main function of salt in cake
recipes is to enhance the flavor of the other ingredients. Its presence perks up the depth and
complexity of other flavors as the ingredients meld. Salt also provides a balance to the
sweetness of cake batters - but a salty flavor should not be discernible.
Many decisions that need to be taken while running a business also follow such pattern. We
need to discover a range of good enough - neither too less nor too more.
Take the example of pricing. Pricing less might help us get volume, but it has an impact on
the margins and overall money that the company could earn. Pricing more, might help us
position our offering as a premium one but then, the volume will be compromised and again
it has an impact on overall money that the company could earn.
Example of variety of offerings. Low variety limits the customers who will be interested in our
offering. High variety could cause confusion externally as well as internally. It there are
changeover cost due to set-up time and wastages due to frequent set -up, the capacity
available for good output could be impacted. Both these extremes have an impact on the
overall money that the company could earn.
Extremism in such decision -making junctures could be harmful at the same time
compromise is also suboptimal.
We could go on with many more such dilemmas that people in the organisation must
grapple with:
● Keeping inventory in the system - Too little v/s too high
● Time before the shipment date, material is released to the shopfloor for processing. -
Too early v/s too late
● Measuring people for their local contribution or global alignment. Local v/s global
● Geographical presence - concentrated v/s widely distributed.

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● Distribution through channel partners - number of channel partners - too less v/s too
high
● Layoff or retain people at the time of downturn.
● Starting tasks within project / multi-projects - Start early v/s start late
● Stock on material in a distribution topology - Stock close to consumption points v/s
stocking close to production points.
● Manpower selection - Candidates from Tier1 institutes vs from Tier 2,3,4 institutes
○ Candidates with lot of relevant experience vs relatively fresher / trainees
● Batching - Big vs Small
● Quality Assurance - Quality inspectors vs Self Certification
● Extent of buffer to be kept in Project Planning – too less v/s too high
● Capital investment – too less v/s too high

Using the above insights and modifying the policies that drive behavior at all levels is not a
trivial exercise. It is like putting together 1000s of jumbled up pieces of a jig-saw puzzle. It is
like conducting a major operation without sedating the patient who is going about their
routine activities.
Dr. Goldratt has left behind a huge body of knowledge for solving such puzzles and
conducting such operations. Our team has spent more than 10,000 hours each to learn this
knowledge. We can claim to a great extent to solve any puzzle with a high degree of
confidence in ultimate success.

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Assessment Output:
Our Assessment brings out insights, which on hindsight looks common sense, but was completely
missed out by your top team and advisors.
1. If your organization demonstrates the characteristics of a Learning Organization. One clear pointer
of a Learning Organization is an increasing trend of the overall productivity. We will help you define
the productivity measurement using your Financial Reports and share the trend over last few years.
2. If you are leveraging Pareto Principle in your business? Every situation naturally accumulates variety
which follow Pareto rule. Your customers, offerings, channel partners, vendor partners, investments,
inventories, receivables, assets have this distribution.
3. The flow shapes that define the material and information flow in your organization as well as your
extended value chain. The physical and logical constraints that define the speed of flow in your
organization.
4. What is the real experience of your customers regarding your track record of making and keeping
commitments to them?
5. How does inventory behave in your system behave, is it an asset or a liability?
6. We will create a picture of your current reality using cause and effect logic. The picture usually
depicts various:
a. Vicious cycles that you experience on a day-to-day basis but are mostly oblivious to them.
b. Dilemmas that your leaders and team members experience as being stuck between a rock
and a hard place.
c. A single unique cause which is at the root of all the dilemmas and vicious cycles.
7. Conservative projection of adopting the direction of solution of focusing on the leverage points:
a. Improvement in customer experience
b. Improvement in operational parameters
c. Improvement in decision making SOPs
d. Improvement in financial measures
8. High Level Adoption Initiative Steps
9. Plan for Implementation and Sustenance of the new way of working