Achieving operational excellence requires a unifying vision, a dynamic structure, and mindful management.
What distinguishes a true industry leader from its competitors? A company’s success may be aided by a superior product or service, competitive prices, or a high degree of brand recognition, but ultimately, operational excellence is the driving force setting industry leaders apart from the pack. Simply put, operational excellence is the highly effective and consistent execution of strategy.
Operational excellence is inextricably linked to continuous improvement, but while continuous improvement requires constant, minor adjustments to maximize potential, operational excellence is an overarching organizational mindset. Operational excellence requires a sense of harmony between every department, individual, and level of an organization as they work toward a shared vision and a set of common goals.
No two organizations approach operational excellence in the same way. For some, it may mean perfect adherence to Lean, Agile, or Six Sigma, while others may rely on bespoke or legacy practices. But regardless of an organization’s goals or strategy, certain elements are universal necessities to achieving long-lasting operational excellence, including the following:
1. A Unifying Vision
The pursuit of operational excellence is a lost cause without a unifying vision. This vision refers to an organization’s value system and driving ideals — where it came from, and where it’s going. Without an overarching vision, an organization will struggle to clearly define the targets toward which it is aiming — and how to hit those targets most effectively.
A single driving vision ensures that each person understands the organization’s mission and helps achieve consistency of purpose. This clarity helps to align decision-making, innovation, and risk-taking efforts across departments and functions.
2. A Dynamic Structure
Achieving operational excellence hinges on an organization’s ability to move as a cohesive whole. Silos, bottlenecks, and overhead time can hinder agility and drastically reduce productivity. Most opportunities for structural improvement can be found at the intersection of departments or processes; smoothing these edges can create the ideal conditions for effective cross-functional collaboration and vastly increase output.
Structure and strategy should go hand-in-hand; while some organizations require great flexibility and others require clearly defined hierarchies to maintain order and efficiency, the organizational structure should reflect the larger goals, not hinder them.
3. Mindful People Management
Operational excellence, while influenced by a number of factors, ultimately derives from the people at the heart of the organization. Achieving consistent excellence requires focused productivity and effort from each person within the organization — but performance at this level can’t be sustained without ongoing psychological investment and active engagement. In fact, employees who feel their voices are heard are 4.6 times more likely to feel inspired to do their best work, and highly-engaged teams are 21% more profitable.
Create the conditions that allow employees to perform at the highest level by allowing them to ask for feedback, offer their input, learn, and take calculated risks. Adopt a coaching approach to problem-solving and professional development focused on empowering employees to continuously improve. Only with a team whose members feel valued, are bought-in, and are committed to achieving shared goals will organizations achieve the level of harmony and efficiency that fosters operational excellence.