What is Operational Excellence? More importantly, How and Why?

Operational Excellence is emerging as a definitive business strategy, a corporate culture if you will, that uses modern management and Lean tools to drive performance.

There is a definition in wikipedia that suggests:

“Operational Excellence is the execution of the business strategy more consistently and reliably than the competition. Operational Excellence is evidenced by results. Given two companies with the same strategy, the Operationally Excellent company will have lower operational risk, lower operating costs, and increased revenues relative to its competitors, creating value for customers and shareholders.”

That speaks to the end result, but it doesn’t explain the “how.” I prefer this:

“Operational Excellence means strategically aligning your¬†people and your processes to achieve your plan.”

PLAN. This sounds simple, but in reality it isn’t. First, your plan must be clear and transparent, usually stemming from a longer term vision. It must be measurable, achievable, and understood by everyone. Next comes the critical idea of alignment. Having a beautiful plan is no good if no one is working on it. Ask yourself: Is your team – this week – actively working on your plan? Do they even know what it is? Without this alignment from the executive level through your leadership team to the work force – your success is going to be limited.

PEOPLE. People are the engine that drive your business. They each perform both simple and complex tasks every day, on your behalf.  They are your subject matter experts. They experience the frustrations of a bad process, or faulty equipment, or missing data, tools, or supplies that are limiting your business performance, and perhaps causing customer dissatisfaction. Everyone on your team needs to be engaged in the success of the business, and empowered to make improvements when there is need and opportunity.

PROCESS. An engaged and empowered workforce, executing a flawed process is going to be much less effective, and ultimately demotivated, in achieving excellence. There are many powerful methods and tools, often described as “Lean” or “Lean Six Sigma” that are designed to eliminate waste, in all its forms, in a process.

Operational Excellence is the culmination of these key principles. Development and communication of a clear plan. Empowered people and optimized processes working collectively to achieve success.

STRATEGY. It is rare for all of this to happen naturally. Business leaders must make intentional and strategic decisions and take concrete action to create the culture necessary for Operational Excellence.

Consider enlisting the Operational Excellence Network — we’ll help you reach Strategic Success!

1 thought on “What is Operational Excellence? More importantly, How and Why?”

  1. Not only is it rare for it to happen naturally, you need this proven framework to follow to get it in place efficiently and effectively. When it’s in place, it will help you hone your overall strategy faster as you will learn what’s working and what needs tweaking. Without it, you won’t know what to suspect when your business performance isn’t where you want it. Get this in place, and your people will thank you, your investors will thank you, and your family will thank you because you won’t be constantly worried about what’s going on at the office.

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