Operational Excellence is the cultural transformation to improve business performance through continuous improvement that allows it to perform optimally and achieve its strategic objectives.
Through operational excellence, an organisation can improve its company culture and performance, which leads to long-term sustainable growth. Businesses should consider looking past the traditional one-time event (such as a typical business transformation initiative) and move toward a more long-term system for change. The impetus is on continuous improvement based on the Lean and change management principles, that organisations never standstill, and there is always room for improvement. This is how Operational excellence sustains growth.
At its heart, any business is about its people, its processes, technology and how those are managed. By focussing on how people work, what they do and why they do it, we can refine the execution of the operating model to greatly improve efficiency and productivity.
Operational Excellence is customer-centric. By supporting your business to look at what your customer really values and needs, we can enable your business strategy, operating model, people and processes to meet your customers’ demands.
Even though business process improvement projects can be carried out in a specific department or business function, they have the greatest impact when implemented throughout an organisation.
What does it mean to be operationally excellent?
In general, what is operation excellence? Simply put, it is better, faster, and cheaper.
Better. Better quality of products and services, better processes, and better user experience, and better value. Better in whatever’s relevant and important. For example, if safety and reliability are important, then better safety and better reliability. Better means improved performance on metrics in the quality dimension. Quality in its broadest sense.
Faster. Faster service, faster response, faster processing, and on-time or faster delivery, if customers prefer. Faster means improved performance on metrics in the time or temporal dimension.
Cheaper. Cheaper to operate, cheaper to process, and cheaper for customers. Cheaper means being more efficient in the use of resources and improved performance on metrics in the cost dimension.
To achieve operational excellence, organisations need to have processes and operating models that are effective and efficient in delivering value.
Processes need to be well-designed, capable, and consistent. Where people perform the work are capable and have the means of knowing what’s important, what to do, when to take action, and what actions to take. They have the necessary process authority, responsibility, and accountability.
Organisations also need to have the tools and techniques for design, improvement, and control. For example, for design, there’s Design for Six Sigma. For improvement, there’s Six Sigma and Lean. For control, there’s Value Stream or Process Management.
In addition, operational excellence means having the mindset and behaviours where everybody wants to and is able to be operationally excellent. The right mindset is embraced and the right behaviours are encouraged by the leadership, enabled by targets and metrics, and encouraged by performance goals, rewards, and recognition.