People often think of productivity on an individual scale: how can I be more productive? But most of us work for organizations, and if the organization isn’t productive, then you can’t be productive either.
The truth is, no matter how productive you are, there can be external obstacles blocking your path forward. If you’re looking to become more productive, then you must use work management tools and methods that help every aspect of your organization to achieve that goal.
Can there really be a magic bullet that can pierce through the complexities of collaboration and get everyone working together? Operational excellence is such a technique. If you’re tired of waiting for colleagues on assignments and dealing with overbearing red tape, then operational excellence can cure what ails you.
What Is Operational Excellence?
Operational excellence is when an organization executes its business strategy with consistency and is more reliable in that action than its competitors. The metrics that indicate that an organization is achieving its goal of operational excellence include lower operational risk, lower operating costs and increased revenues when compared to the competition. All this creates value for the customer and shareholder alike.
To make sure an organization can effectively adopt operational excellence, it must be actionable and measurable. But operational excellence alone doesn’t guarantee success. It should be consistent and have reliable execution, which means implementing company strategy on an ongoing basis. Also, operational excellence is systemic. It must positively influence all aspects of a business, including revenue, cost and risk. It doesn’t focus on one particular aspect, but lifts all to the same standard.
Of course, for operational excellence to be successful, it must complement your business strategy. In a sense, the two—operational excellence and business strategy—are the formula to achieve strong performance in the marketplace. Without one or the other, a business will struggle with weak performance.
Excellence is, however, relative. It can (and likely will) change over time. It’s important to not stay complacent with shifts in management, technology or whatever, but to remain flexible and adapt.
Elements of Operational Excellence
To excel at operational excellence, there must be two components: an integrated management system and operational discipline across all parts of an organization.
Integrated Management System
An integrated management system is a framework of processes and standards. This framework is designed to know where a company wants to go, and the risks inherent in such a course. This allows a company to identify and mitigate those risks while managing change and continuously improving.
The use of an integrated management system also helps manage these tasks more efficiently. There’s less likelihood of overlap, redundancy or conflict.
When talking about operational discipline, it means that the organization is always doing the right thing, the right way, every time. While seemingly impossible, there are principles that guide operational discipline so that a team can achieve these objectives.
10 Principles of Operational Excellence
There is an award given to organizations worldwide for outstanding operational excellence called the Shingo Prize. It started in 1988 and is presented by the Shingo Institute at Utah State University. It judges winners by how well they adhere to these 10 key principles:
- Respect every individual
- Lead with humility
- Seek perfection
- Assure quality at the source
- Flow and pull value
- Embrace scientific thinking
- Focus on process
- Think systemically
- Create constancy of purpose
- Create value for the customer
Some Methodologies for Operational Excellence
There are many different ways to execute operational excellence, but there are a few that have been codified and are regularly adopted across the globe. Let’s explore a few.
Iris Tsidon, co-founder and CEO of Okapi, a platform for improving organizational management, and Maya Gal, CTO of Okapi, created the Okapi method, which incorporates SMART key performance indicators (KPIs). Okapi is named after a unique mammal that has the features of a giraffe, dear and zebra.
SMART is an acronym for specific, measurable, achievable, relevant and timely. Applying this technique helps to by having more precise KPIs, which are measured by actions not behaviors. They’re challenging but attainable, relevant to the organization’s objective and scheduled within a defined timeline.
The Okapi method notes several major challenges for any organization in achieving operational excellence.
- Okapi struggles when people are disconnected to the larger business needs of the company.
- A lack of progress can stymie Okapi. This is when tasks necessary to the growth of the business are stalled. People are devoted and hard-working, but the priority of tasks assigned is poorly structured.
- If a company is unable to change to stay competitive and adapt management infrastructure in order to adapt and thrive in these changing environs, then the company is not staying competitive. A process of change must be applied quickly and efficiently in order for Okapi to thrive. (Read more on the importance of being flexible.)
- When data is too complicated, then understanding what that data means can become an issue. Complexity doesn’t serve the company. Within Okapi, reports must be timely, add value and be easy to digest, so they can be effectively acted on.
Finally, without a coherent management plan, all operational excellence efforts are doomed to fail. If people in the organization aren’t using the management system, or don’t bother to set it up and follow a plan to use it, the ability to achieve operational excellence is severely compromised. While facilitating transactions, leading business development and solving immediate problems are important, managers must delegate responsibility.
FLEX or PBED Method
There is also the flawless execution (FLEX) methodology, also known as PBED, for the plan, briefing, execution and debrief, which is based on what fighter pilots use in combat. The methodology moved to the private sector in 1998 and has roots in the agile manifesto created by software developers.
It’s an iterative process that values adapting business strategy to changing influences in the real world. That is done through a practice called debriefing, which is a tool that organizations can use to drive cultural change. It offers a voice to all employees, which then can be heard throughout the whole organization. This begins with establishing a long-term strategy that is focused on a common goal, which is the “plan” part of PBED. It must set a clear, measurable and achievable goal. Be sure to identify any risks and the resources needed to avoid them. For help, use lessons learned from debriefing after tasks, and develop objectives for team members that align with the overall goals.
In terms of the other parts of the PBED acronym, the “brief” refers to how the plan is communicated to the teams that must execute it. “Execute” is acting on the plan and focusing on its objects, while remaining flexible to cultural change. Finally, “debrief” is when the team looks at the daily execution and measures that against the plan. Any difference is analyzed and then changes are applied.
Regardless of the method chosen, operational excellence supports simplicity over complexity. Teams learn from mistakes and are rewarded for resolving them and finding more elegant solutions. The point of operational excellence is to constantly be working on improvements in the process.
Operational excellence requires a plan that is then tracked and measured against its progress. It’s a project, and like any project, it needs the right tool. ProjectManager is a cloud-based project management software with features that allow managers to schedule with online Gantt charts and track changes with a real-time dashboard. See how it can help your organization achieve operational excellence by taking this free 30-day trial.