Operational Excellence… a term that we all use regularly, but what does it really mean? Despite regular usage there may not be clarity or agreement on what each individual means by the term. This is also reflected in the literature where there are many different and conflicting definitions. Just as a quick example, here is the current definition in Wikipedia:
Operational Excellence is an element of organizational leadership that stresses the application of a variety of principles, systems, and tools toward the sustainable improvement of key performance metrics.
Much of this management philosophy is based on earlier continuous improvement methodologies, such as Lean Manufacturing, Six Sigma, and Scientific Management. The focus of Operational Excellence goes beyond the traditional event-based model of improvement toward a long-term change in organizational culture.
This definition seems kind of vague (IMHO). A big reason for this lack of clarity is that, in a large number of cases, Operational Excellence is a term consultants use to sell a tool program that they would be happy to teach anyone. (Note, I am not criticizing consultants, they serve many useful purposes.) When you move away from the consultants (or at least toward a different set of consultants), the definitions tend to move away from “tools” and more towards cultural definitions. My own inclination is that Operational Excellence is a culture and as such is not tool based or an adjunct of Continuous Improvement, lean six sigma, Total Quality Management or any other set of acronyms. The tools are there to help achieve the metrics but concentration on the tools will not enhance innovation or effectiveness. I firmly believe that it is these innovation and effectiveness aspects that is both the strength and a critical aspect of Operations Excellence. With this in mind, here is the definition I would propose for Operations Excellence:
A corporate culture where the strategy / tactics / metrics spectrum is aligned and clearly understood by all members of the organization leading to an inclusive environment for continuous improvement, innovation and collaboration between all stakeholders (both internally and externally ). This means that everyone in the organization understands the why and the how of what the organization is trying to accomplish and is encouraged to not only do their best but to actively contribute to change and improvement in all organizational processes.
What this means is that management must communicate clearly to the organization what the corporate strategies are, how they see these strategies affecting the day to day tactics and ensuring that there is a clear and measurable connection between the strategies and any metrics at use in the organization. Management must also support cross training, process training and bottom up innovation at all levels of the organization. The goal of doing this is to create a culture of continuous improvement, quality products & processes, cost control, and customer centric thinking. The firmer this culture takes hold within the organization, the better all their processes (operational and back office) should become. As with all “cultural” initiatives however, there is really no finish line to this. Instead it is a vision to aim for that will change over time as circumstances and environmental factors change.
If you would like to discuss more about Operational Excellence and how to embed it in your organization, I would be more than happy to meet with you and to explore this in more detail. Please feel free to contact me at firstname.lastname@example.org.
If you would like to read more about this and other topics check out the other posting on my website – http://jadetrilliumconsulting.com