Regardless of the type of business you're running or even the industry you're operating in, it's safe to say that the world is becoming increasingly competitive all the time. Every day, new competitors emerge into a marketplace that is already increasingly fractured, thus eating into profit margins that were likely already razor thin as it is.
But at the same time, while there may be many companies that do what you do, nobody does it quite like how you do it. That simple idea has major ramifications and is the foundation upon which a true competitive advantage is built.
Making sure that this value differentiator is as strong - and as genuine - as it can possibly be is also a large part of what Operational Excellence is all about.
At its core, Operational Excellence is the pitch perfect execution of your business strategy - including the implementation of all systems therein - in a way that allows you to adapt and improve that strategy to keep up with the ever-changing demands of the market you're trying to serve.
To put it another way, you're talking about taking advantage of an opportunity to execute your business strategy more consistently and more reliably than your competitors. At that point, it doesn't matter how many competitors you're facing or how much money they have.
Why try to outspend someone when you can just outperform them instead?
As proven industry leaders in this space, we believe that the Operational Excellence strategy definition and execution are more than just a unilateral thought process that comes down to the operations side of a business. Operations must also be positioned in a way that provides actionable, insightful information that itself feeds directly back into the strategy definition itself. They're both sides of the same coin, but they feed off of and empower one another in a way that allows them to become something far more powerful than either could be on its own.
That's why, unlike most definitions of Operational Excellence that focus exclusively on the "execution" of the business strategy, we also include elements like its definition and improvement as well.
We believe that this is absolutely critical as a staggering 67% of well-formulated strategies still fail due to poor execution, this according to a study published in 2017 in the Harvard Business Review.
After a great deal of time and consideration, we have developed our own Operational Excellence model to be used as a framework to build a performance improvement roadmap within your organisation - as well as ways to check the progress moving forward. Our model is practical, with 100 unique Operational Excellence criteria that are designed to enable any manager to self assess his own organisation maturity level before deciding for consulting support.
These criteria are based on not only years of observing all best practices, but have been defined and implemented through management consulting experience with countless organisations and managers over the same period of time. All of these factors apply across each industry and regardless of company size.
At this point, however, there are a few important things to keep in mind. Specific industry criteria are not included in the model and would be evaluated through custom analysis. Likewise, the initial number of criteria we have collected and experienced - all of which was based purely on best practices - totaled very close to 100. As a result, we added a few more to reach that 100 number to make it easier for more people to perform the self assessment they need at this most pivotal of moments.
Finally, one thing to be aware of before you continue is that Operational Excellence is nothing if not human-based. It is not a process, nor an organisation, nor is it KPI-based - though it does include elements of all three of those things.
An organisation can easily have what are objectively considered to be the best processes and systems in place and it will all still be close to useless if this organism is not alive. If everything isn't connected together and none of it is actually used by the humans of the organisation, Operational Excellence isn't just difficult. It's essentially impossible.
Because of that, we like to think of Operational Excellence as a human body - something that will become clearer as you examine the pillars that make up this model. The strategy is the body's eyes, showing where to go. The people and leadership in a business are the heart, giving the energy to the larger whole. The management system is the brain and the nervous system, taking the decisions and transmitting the information to where it can do the most good.
The organisation itself is the skeleton, giving everything a solid structure and pulling it all together. The processes and methods are the arms, actually doing the hard work that needs to be done. Finally, the improvement and innovation are the legs - the essential appendages upon which everything else rests that ultimately bring with them the most important thing of all:
The never-ending ability to move that organisation forward.
The very first step on the Operational Excellence model is the strategy pillar, as by definition it refers to the execution of everything that comes after. The main criteria of our model focuses on the types of strategy characteristics that facilitate not only its implementation but also the willingness of the people to adhere to it.
This includes the way the vision, mission and strategy are defined and formulated, for example. This also includes the strategy implementation in and of itself and how agile it is within the context of the system. For more information, please see our detailed page on the 8 Criteria for Operational Excellence for the Strategy Implementation Pillar.
Excellent processes are and will always be key building blocks of Operational Excellence. These include but are not limited to things like your processes, procedures, methodologies, tools and templates.
However, unlike many others, we do NOT believe that Operational Excellence is process-centered. Instead, it must be people-centered to be successful. Yes, all processes must be defined, measured and optimized... but if they're not perfectly adopted by your people, everything will have been for nothing.
To find out more about how important this truly is, see our piece on the 10 Criteria for Operational Excellence for the Process Management Pillar.
Next comes the performance management pillar, which consists of cascading the strategy into operational objectives and indicators across the organisation and its processes. This will also involve collecting all the right data and enabling management to make the right decisions and to take the best actions through meetings and routines that are themselves supported by effective dashboards.
For more information, please see our 36 Criteria for Operational Excellence for the Performance Management Pillar.
The improvement and innovation pillar is made up of that which you will need to make sure the organisation actually improves at different points of time in the future. This is directly tied into daily operations problem solving, continuous improvement best practices, a structured improvement plan and more - all coming together to create the right system to both innovate and share knowledge with all involved.
To learn more about these ideas, please see our 18 Criteria for Operational Excellence for the Improvement and Innovation Pillar.
As the skeleton of Operational Excellence, the organisation itself is a very structuring and visible element that MUST be defined carefully. In other words, to make it work efficiently, you have to enable it to "come alive." The importance of this, too, is something that cannot be overstated.
To learn more, please see our 12 Criteria for Operational Excellence for the Organisation Pillar.
Employee engagement excellence is truly the center of Operational Excellence - it is the metaphorical heart of it all, after all. Leadership will need to define the right operational model, but you can't get to that point without first engaging your workforce. Ultimately, that is the way the employees not only use the model but make it successful in the long-term.
To find out more, check out our 17 Criteria for Operational Excellence for the Employee Engagement Pillar.