I was reading one of Patrick Lencioni's books the other day and came across a statement that struck me as brutally true. He points out that most companies all have the necessary knowledge and skill sets to do well. Yet, not all companies perform the same. The question is then is why do some companies outperform their competitors when everything would seem equal?
For me the answer is simple - a culture of excellence. This may seem trite, after all don't all companies strive for excellence? The answer is that while many companies say they want this very few actually know how to pursue it. Don't believe me? According to leading venture capital firms the failure rate of startups is over 90%! (Most don't make it to year 5) For small businesses the average is around 50% and closer to 75% by year five. The reality is that "building a better mouse trap" is only the first step to becoming an exceptional company.
Success vs Failure
You can have a plan, a model, capital, a good leadership team and a solid staff and still not be exceptional. Let's take a moment to look at Southwest Airlines. They are now the largest discount carrier in the U.S. I did a brief look at how many airlines started up about the same time or after Southwest. During the time that they have been in the market well over 100 airlines have lived and died! Yet Southwest flourished? What was the difference? I call it operational excellence.
Operational excellence is the model in which management and staff are given latitude to take a high degree of ownership in the operation of the company. This is typically done by developing a culture of inclusion, using metrics and behavioural science and providing a structure to give employees input into processes and innovation. In short everyone owns the bottom line and everyone looks for ways to improve it.
Herb Kelleher, the mastermind behind the Southwest model was an early pioneer of this approach. He was keen to make sure that the right people were hired and often participated directly in that hiring process. Once part of the team he made sure that everyone had input and were listened to. On more than one occasion his faith in his staff paid off with Southwest constantly jumping in front of the competition at crucial times in their development. All thanks to the alert input from front line crews. His approach created a culture of excellence that every employee took personally.
I have seen many examples of how using operational excellence takes a company from staff who "just do their job" to staff who embrace excellence and won't settle for less. As a team they set high standards for each other. While you think this would drive people away in fact it does the opposite. After all who doesn't want to be part of a winning team? Performance Leadership - Think About It!