Operational Excellence is one of those terms that can have a wide variety of meanings depending upon who you speak with. For one group it is about streamlining processes. For another it is about developing and tracking key operational metrics. And for others it is about developing an "engaged" workforce that can spot and adjust to necessary changes quickly. I am sure you have your own unique understanding for what operational excellence is and what it means to your group. The fact is that all of these things are correct. Operational excellence is a dynamic blend of organizational design and process improvement, the development and use of metrics and continuous improvement and performance management.
This interesting blend of approaches is indeed dynamic with a unique ratio of each of these elements depending upon your company and what it needs. What is not dynamic and what is not up for interpretation is the purpose of operational excellence. Improving profitability. This can mean "becoming" profitable, increasing your profit margins, ramping up a competitive advantage, increasing client satisfaction, increasing quality - you get it - and the list goes on. All of these goals center around increasing profits.
Let's look at a couple of examples; one that was pretty straight forward with an immediate outcome. And a second scenario that took a bit more time but with pretty spectacular outcomes as well.
We Need To Free Up Budget Room Now!
Company A was already well into developing operational excellence into its field work force when it suddenly realized it needed some pretty drastic and immediate savings around its Op Ex budget. Gains were beginning to come in from the field but this was a bigger and more immediate issue. A team of facilitators was brought in and various components of the company came together to spend the day brainstorming. Breakout rooms were created for teams that had representation from each department that touched production from start to finish. I facilitated one team and had them create a process map from when they came into the picture until they handing something off to the next group. It all went up on one wall and for the first half of the meeting it was just each department mapping their part of the process. The second half of the meeting each group described their process and needs until all had presented. Then the magic happened. For many of them this was the first time they saw the process in detail from start to finish and questions and ideas began to percolate and flow. By the end of that session they had come up with a pretty extensive list of potential operational savings. It won't say that every item was approved but that day generated literally tens of millions of dollars in savings!
Law of Unintended Consequences
Company B wanted to get field operations to become familiar with and use performance metrics to drive day to day activities. For the executive it was really about developing a more detailed data set to stay in front of needs and issues. We took it a bit further by teaching the frontline leadership to not only get their crews to develop their own metrics but to use those metrics to drive performance and innovation for their teams. In a short span of time crews increased performance by over 40% (based on their own metrics), downtime virtually disappeared (it was not uncommon to have more "perfect days" each month than days with issues), crew engagement went up and client satisfaction soared! And oh yes, they collected so much valuable data that clients were now coming to them to use it. One of the more unintended and pleasant side effects of this improvement was the awarding of several very high value contracts (over $100M) with companies that only months before were considered well beyond this groups reach!
Necessity is The Mother of Invention
Two different companies, two different applications of operational excellence yet very similar outcomes in terms of impact on profit. The thing I notice is by the time I get called in the pain is unbearable for these companies and in desperation they look for answers they would not normally have considered. I guess necessity truly is the mother of invention! My question for you is simply this; why wait? Operational excellence is something any company can implement and it works! Performance Leadership - Think About It!
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