Risk management. Process improvement. Operational excellence. Whatever you call it, organizations of every type strive to optimize their people and processes to increase productivity, eliminate waste, and achieve sustainable improvements to critical business key performance indicators (KPIs). The goal is to create a continuous improvement culture that achieves excellent results in business metrics.
The process seems simple on paper. A typical approach would include the following four stages:
- Plan: Establish strategy, performance standards, and KPIs in key areas and conduct discovery using current organizational, operational, and performance data.
- Do: Conduct OE assessments for a few (e.g., 3–6) critical areas each year.
- Check: Analyze and benchmark the OE assessment results to recognized performance standards.
- Act: Implement actionable recommendations that improve critical KPIs.
This approach is not linear, rather a cycle that repeats upon itself over time to achieve continuous improvement. A crucial factor in achieving a state of operational excellence is having a holistic view of the organization, where individuals at all levels understand the flow of value to the customer and are empowered to modify or adjust the flow when it breaks down, without management intervention. If that is achieved, performance at all levels can be optimized.
All of this is fairly basic to an operational excellence consulting approach.
But there are nuances that are often overlooked by leadership, especially when an organization chooses to plan, execute, and manage their OE efforts in house. If you’re an OE or learning leader, we recommend you add the following to your strategic checklist.
Thorough Discovery and Analysis
In the discovery phase, it’s not enough to just capture the current state and identify gaps. You also want to capture intelligence and best practices from your high performers to help define the pathway to improvement. Your future state may exist somewhere beyond the performance of your top people, but their knowledge and insights can help you get there. Another key point of discovery in larger organizations is to capture the best practices of field offices and other entities throughout the enterprise. Your operations in Seattle are increasing revenue for a reason, and your operations in Singapore have lowered costs because they’re doing something right. Uncover and share their secrets so you can replicate them throughout the organization.
Once you’re into the implementation and continuous improvement stages, maintaining consistency across all departments and all offices, foreign and domestic, is also key. Often individual departments and offices take what they learn from their training and reinvent the wheel to match their culture or way of doing things. But inconsistency is the road that leads back to where you started. Your company should be united under one culture. Over time that culture will evolve, improve, and lead to consistent performance across the organization.
People often do things because they’ve always done them that way. And they will tell you they’re unique snowflakes, and while your models may apply to everyone else, they don’t apply to them. That kind of subjectivity is the death of performance optimization and consistency. The only truly objective approach is to be data driven, benchmarking against industry standards to see where you fall in key areas (and then using that information to shape your approach and interventions).
You not only need a way to measure progress at key points along the way, you also need to use that data for strategic purposes. Many evaluate performance to measure program success, but don’t use the data effectively as a benchmarking tool to guide “business” success. Operational excellence is not a destination you reach and declare success. Instead, it’s a continually evolving process that is fueled by both successes and failures to guide the business to higher performance.
While it may seem like a biased position to take, we recommend that organizations work with an experienced third party during the OE process. First, implementing OE is something third parties do every day for a wide variety of clients. Third parties have proven expertise, tools, and strategies that could easily pay for themselves with actual business improvements. And equally important, they have an objectivity that puts a fresh eye on internal processes and hierarchies that may be overlooked from within.
The complexity and changeability of today’s business environment cannot be overstated. Success hinges on an organization’s ability to adapt quickly, remain profitable, and manage risk. By taking a holistic view of organizational performance, deploying sustainable interventions that create true impact, and empowering a culture of continuous improvement, your organization will be nimble enough to overcome any challenge.
During his career, Mr. Garrity has supported power companies within the United States, South Africa, Abu Dhabi, Malaysia, Singapore, Chile, Morocco, and other many countries.For the past 10 years, he has supported Operational Excellence projects for various power generation facilities that face increasing competitive pressures.
Latest posts by Russ Garrity (see all)
- Assessing Performance in the Age of Digital Transformation - August 18, 2017
- Taking a Holistic Approach to Operational Excellence - October 26, 2016