Blog-Operational Excellence

Why Operational Excellence is important?

"Speed is everything. It is the indispensable ingredients to competitiveness."

Jack Welch

 

Today the business landscape is altering at a very fast pace. Growing and sustaining a business has become difficult due to changing customer needs and competition. This is the age of the customer- customer service and customer experience can make or break a business. Organizations must have an effective and efficient operation to gain a competitive advantage. Hence, it is imperative that organizations make operational excellence as a key deliverable and align it to their strategic goals, resulting in long term sustainable growth.

 

Seamless operations are vital to keeping up with market demands. Organizations with strong operational capabilities have a direct impact on their overall performance. As per research by Harvard Business Review, organizations that achieve operational excellence saw a 25% faster annual growth rates and 75% higher productivity.

 

Poor operations have a negative impact on overall organizations performance. As per research by Wrike Inc., only 32% of the leaders were very satisfied with their team’s ability to plan, manage, and complete the work. The research also highlights a big concern about the difference of opinion between management and non-management on how well their company’s operations run. Achieving operational excellence continues to be a major challenge for most organizations. As per the BTOES research report, 35.6% of the respondent mentioned executing operational excellence programs as a top critical challenge.

 

Focus on the following areas to build a strong foundation to successfully execute the operational excellence program.

 

Leadership Involvement 

Business leaders should focus on making operational excellence as a culture and a key driver for top-line growth. Operational excellence is an organization-wide change and resistance to change among employees can derail the program. Leaders should proactively communicate and help employees understand the need for operational excellence, to achieve its strategic goals. Leaders should empower employees, and focus on building an environment of trust & transparency to drive collaboration & commitment.

 

People & Processes 

Business leaders focusing on people and processes run high performing organizations. Leaders need to continuously focus on building a cohesive team with versatile skill sets by continuously investing in robust training programs, and strengthening the hiring and on-boarding process. Process excellence is an essential factor to achieve operational excellence. The objective should be to build effective and efficient processes keeping in mind the customer’s need. Leaders at every level should ensure employees recognize the importance of the processes and the value delivered to the customers by adhering to the processes.

 

Governance and Communication 

As per research conducted by Mckinsey & Company, the failure rate of organizational transformation like operational excellence is more than 70%, hence governance is important. Leaders should implement governance in order to effectively manage people and processes. A clearly defined organizational structure, roles & responsibilities, policies, and, procedures will smoothen the journey towards operational excellence. Building a governance framework is the first step, however, if not clearly communicated and understood by the employees, the risk of the program failing is high. Effective and consistent communication will ensure employees follow the guidelines, reinforce collaboration, and work towards a common goal of achieving operational excellence.

 

Measuring performance 

If you can’t measure it, you can’t improve it – Peter Drucker. Organizations that do not measure performance fail to operate effectively and efficiently. Business leaders should implement robust performance management systems to track progress and achieve superior results. The goals of the operational excellence program should be defined in terms of metrics to evaluate performance periodically. It is equally important to regularly communicate the progress with the employees to keep them focused and engaged.

 

Operational excellence is the key to gain a competitive advantage and continuous business growth. It helps organizations to add continuous value to the customers and boost organizational flexibility to stay competitive in the market.

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