This page goes into greater detail of our practical 100 criteria Operational Excellence model, on the Improvement Excellence pillar, with 17 criteria numbered from 55 to 71. This page is not designed to explain at great length all the criteria described here. Instead, we simply want to give you enough details to understand them, allowing you to use them to evaluate your own organisation's Operational Excellence level moving forward.
In a rapidly and constantly changing business environment, companies MUST be able to constantly improve and innovate. There are several dimensions of improvement, and all must be part of an organisation's improvement agenda:
The first step for improvement will always involve taking a closer look at the operations themselves, as managed by the operational employee and managers. To be crystal clear: this needs to happen on a daily basis.
It starts by first understanding what to improve or what issues to solve. It is important to use a structured problem solving methodology, that will always be based on factual data, Root Cause Analysis and - above all else - teamwork.
The collection and rigorous analysis of fact based data should be a common practice for all teams for each of the problem-solving steps: presenting the problem, identifying the causes, and defining solutions.
There should be a defined and approved methodology to analyse issues and define solutions. It may be a standard methodology, such as 8D (eight dimensional) problem solving. A custom solution may also be employed.
Regardless, it should be structured, comprehensive, rigorous and should include some specific tools like:
There should be clear guidelines about WHEN to use a full and deep analysis, like for a critical, repetitive issue; and a lighter version would be used when an issue is less important.
The general practice here is that problem solving and Root Cause Analysis are performed in teams. Generally, ad-hoc and cross functional teams would be used with members who are knowledgeable of the area where the issue is occurring. Operational personnel (workers, employees) are often, if not systematically, involved. This teamwork is not only important for identifying the right causes and defining the right solutions, but also for facilitating the implementation of the solutions, these being defined by the people who must use them.
Most managers should be formally trained in problem solving and Root Cause Analysis techniques, with at least some level of awareness training. Specific and well-defined people should be fully trained and experienced in conducting problem solving sessions.
All problem solving or Root Cause Analysis sessions should be facilitated by people thoroughly trained in these techniques. These sessions are nothing if not opportunities to coach other managers in both problem solving and Root Cause Analysis. The best is that these experts are within the operational team, though some Continuous Improvement team may support or train people if the organisation isn't yet mature in problem solving.
The organisation must seek to improve on a consistent basis, with identified and trained resources. However, those resources do not necessarily need to be dedicated full-time to improvement. In fact, when the maturity of the organisation is high, most of the continuous improvement is driven by operational staff, and not by dedicated teams.
Continuous improvement must be aligned with the organisational objectives and people, no matter what; many lean or six sigma initiatives, which are key components of continuous improvement, have failed in the past because one of these two was missing (if not both ).
Continuous improvement initiatives should be seen for what they are - a means to an end - and should not have their own independent life, just because the resources are there (and they need to be kept busy).
In the end, continuous improvement is an investment, in financial and human resources, or in training; and as any investment, it must also be re-evaluated and adapted as the context changes.
Continuous improvement efforts, through bringing incremental improvements, should be aligned with the organisational strategy and objectives. Likewise, those efforts should not only be focused on "fixing" things and resolving issues; they are also to be used for genuine improvement, including those things that are proven to already work.
Continuous improvement is by definition an incremental improvement. Because of that, it may not always be easy or even worth the effort to measure the cost and benefits of each initiative. However, each significant continuous improvement action should only take place after management validation - this based on organisational objectives - and the significant ones should always measure the cost and benefits. Otherwise, there is a risk of energy waste, or continuous improvement resources are more likely to be the target for future potential cost reduction measures.
Of course, the daily actions, carried out in a way that is fully integrated into the operations, do not have to follow these rules completely (although in a way they follow them since they are part of the actions launched as part of the steering system); nevertheless it is necessary to ensure that there are no hidden costs (training, not so negligible an effort for marginal gains...).
Kaizen events, continuous improvement team workshops, initiatives and even small improvement projects are a common practice and are fully integrated into the daily operational work of all teams, both for operational activities (production, logistics...) and for more administrative or intellectual activities.
Six sigma or similar quantitative, driven techniques should be regularly used within the business for improvement. A good portion of staff should have received an awareness training (yellow-belt equivalent). There should also be the appropriate number of practitioners (black-belt equivalent) and experts (master black belt equivalent).
Staff do not necessarily need to be trained specifically in six sigma; Six sigma is a well-known and standard methodology, but other equivalent methodologies can be used, provided they are also based on quantitative, statistical analysis and a structured method.
All new elements, systems, mechanisms and processes should go through a process of design, trial, testing and improvement BEFORE you think about a full implementation. There should always be formal feedback and learning sessions, supported by standard feedback forms, that are recorded.
Improvement is, of course, continuous, starting at the design stage and continuing during and after implementation.
Transformational improvement is distinguished from continuous improvement by the higher degree of change - a change that is not incremental and requires a specific change management approach. This may be the result of a new strategy, a merger or acquisition, an emergency to improve results or other imperatives.
There cannot be transformational improvement "all the time and ANYWHERE within an organization, because it is demanding and difficult for the people involved. However, given the rapidly changing environment of most companies, they should adopt a transformational improvement mentality, "all the time, SOMEWHERE" within the organisation.
This may not always be a complete reinvention of the business model and organizational structure. But this must be important enough to require a change management approach and to be visible at the CEO or Deputy Director level.
Transformational improvement must be in place in the Organisation, with a level of change significant enough to require a change management approach and be visible at the CEO or Deputy Director level (or for large multi-site organisations, the Division Director, subsidiary...). As with any major project, this improvement must have a project management approach, objectives, deliverables, detailed planning, clear roles and responsibilities including a steering committee and project reviews.
In addition, it must have sufficient competent (but not necessarily full-time) resources experienced in change management and must be well communicated throughout the company..
It is essential that the transformation is well coordinated and integrated with the company's various teams and activities, as well as with local operational actions and continuous improvement activities. This is necessary not only to align them, but also to reuse local best practices and avoid duplication.
The objectives of the transformation plan must always be integrated into the teams' operational objectives. The plan's performance indicators must be reviewed, like the others (even if they may be the subject of a specific section of the dashboards), during each meeting to monitor the performance of the management teams
In this area, each organisation must have in place a "living" culture and system of knowledge sharing and innovation. They must enable individuals to learn, share their knowledge and innovate, both internally and in relation to the outside world. The scope here is focused on innovation and the sharing of operational practices, not on product / service innovation or development processes.
The organisation must not only accept ideas or innovations from outside, it must seek them out. To this end, it regularly organises or participates in events, forums and conferences with external speakers or experts, or partners (suppliers, universities, customers, etc.). Nevertheless, it should not "copy" ideas, especially if they are in vogue, and test them well and adapt them to the organization and its staff.
Your organisation should also regularly benchmark itself on different areas of its core business functions. These can be standard industry benchmarks as well as specific exchanges with other organisations, such as mutual visits to teams or operational sites (factories, research and development centres, call centres, etc.)
Your business should have regular internal events, forums, “learning days” and similar techniques to present internal innovations or improvements. These can be technical, functional or managerial topics.
You may have a look at the 12 criteria of the Organisation Design Excellence pillar.