Speed and the ability to adapt to changing market conditions are a significant challenge for business. Look at the FTSE100/DJIA from the last 100 years, and see how fast some of the biggest companies have dropped out, even though most people from the outside believed they were impregnatable.
The threat of new competition, rising customer expectations, expanding markets, and digitalisation are the key drivers of change and operational excellence challenges. I’ve just come off and Operational excellence assignment with a design and engineering consultancy, one of the biggest and most prestigious. Even with all the IPR and years of excellent experience, they are being challenged by new design companies that offer full digital services for the design. To react, their Digital Future programme is all about transforming the way infrastructure outcomes are delivered and is something they need to bring into the core of everything they do. If they do not change and adapt, they lose market share fast.
These are driving force behind the ever-increasing need for Operational Excellence, especially for end-to-end Business Transformation, and rapid, agile, flexible solution offerings and execution. You need to make sure your company is running as efficiently and effectively as possible, with little wastage and being agile enough to react to market demands.
New technologies and innovation acceleration are disrupting all traditional industries and markets. Start-ups no longer have major barriers to entry, computing powering is accelerating, and business models are being disrupted in just a few months, causing massive pressures on margins.
Every change in the market affects how a company operates and performs, often dramatically. And these days, it is difficult to respond to one disruption before being thrown off course by the next one. Advanced technologies, increasing digitisation such as AI, Robotic Process Automation(RPA), Machine Learning, Cloud Computing, Big Data, Data Analytics, 3D Modelling, Mobile Applications are just some of the technology shifts.
These digitalisation’s’ bring a quantum leap in productively improvement, but consequently leaders have to rethink their operations end to end, including how to incorporate digitalization activities along the whole value chain, e.g. use of big data in customer operations, or 3D modelling technology in design and engineering.
operational excellence principles
Teams will need to embrace a culture of operational excellence, reimagined operations every day, foster open communication and faster decision-making. Product development, procurement, supply chain management, production system design, and all manufacturing and services will need to be transformed. Operational Excellence professionals needs to adapt and actively embrace all these new technologies and the new business models they create to ensure the organisation is always at the cutting edge of execution excellence.
Remember to use these tried and tested guiding Operational excellence principles I have developed for ANY organisation to ensure sucess:
- Focus on value-adding activity and removing waste.
- Increase operational control through reduced complexity and increased transparency.
- Encourage speedy risk mitigation and decision making to impact the bottom line.
- Standardisation and simplification across your business processes.
- Reduction of duplication and effort across the business.
- Improve not just efficiency but effectiveness too.
- Create a performance culture through the project teams to sustain long-lasting benefits.
Whether its the need to keep up with new technologies, the pressures of implementing and sustaining a fully-fledged culture of Operational Excellence, or encouraging the allocation of resources and buy-in for Operational Excellence projects, it is clear that Operational Excellence practitioners are facing a period of incredible change and upheaval.
Exceptionally savvy companies manage these changes by developing end-to-end global operating strategies that enable profitable growth that take charge of innovation execution and stay nimble enough to respond to rapidly changing condition. Strategies that embrace and thrive on the power of technology to drive innovation.
Operational excellence is a key attribute of leading companies in any industry. Through the combination of the right business strategy, the right technology strategy, the right operating model, and the right execution path, companies ride out recessions more successfully and emerge from them more quickly, developing competitive advantage regardless of economic conditions.
Key challenges
- Rethinking operations end-to-end, incorporating digitalisation / new advance technologies along the whole value chain.
- Adapting and embracing new technologies and new business models.
- Cultural Transformation and creating a culture of Operational Excellence and Innovation.
- Implementing effective Change Management programs.
- Driving Corporate Culture Change and How to build and transform Organizational Culture.
- Leadership Understanding, Buy-In, Support and Sponsorship from ALL Leaders is critical. Operational Excellence needs commitment; resources and this cannot be optional.
- Sustaining a Continuous Improvement Culture (Key to this is Leadership Buy-In)
- Achieving an Enterprise-Wide Operational Excellence Strategy
- End-to-end business transformation, with all departments’ processes working in unison at scale to aligned goals and priorities.
- Keeping up with new technologies, relative value relevance, and the creation of new opportunities.
- Integrating New Advanced Technologies
- Acquiring and managing start-ups
- Changing Customer Demands & Channels
- Building New Competitive Advantages.
- Integrating CI methodologies personalised to the organization.
- Ensuring initiatives are aligned with key strategic priorities, across the organization.
- Failure to innovate fast enough.
- Building a culture of innovation & agile mind-set.
- Changing Workforce, Millennial Generation, Freelance Culture, & Open Innovation.
- Customer Experience Excellence in a less high touch environment.
Companies in pursuit of Operational Excellence do two things significantly differently than other companies: they manage their business and operational processes systematically and invest in developing the right culture.
Operational Excellence manifests itself through integrated performance across revenue, cost, and risk. It focuses on meeting customer expectation through the continuous improvement of the operational processes and the culture of the organisation. The goal is to develop one single, integrated enterprise-level management system with the ideal flow.
The second component, a culture of Operational Discipline, is commonly described as doing the right thing, the right way, every time. This culture is built upon guiding principles of integrity, questioning attitude, always problem-solving, daily continuous improvement mind-set, level of knowledge, teamwork, and process drive.