6 Telling Questions to Assess your Operational Excellence
On July 5, 1994, Jeff Bezos founded Amazon as an online bookstore. Within two years the organization generated almost $16 million in revenue, and in 1997 it went public. Over time, Amazon became the largest e-commerce retailer in the world, and in September 2018 it became the second publicly-traded company in the world to achieve $1 trillion in market cap.
Consistently achieving results, Amazon’s performance illustrates the revolutionary role that technology and vision can play in an organization’s progress.
Interestingly, research shows that operational excellence is another aspect that creates a viable, sustainable foundation for lasting business success. According to Harvard Business Review, companies that have strong management processes by far outperform those that don’t on high-level metrics such as expansion, productivity, profitability and longevity.
What is operational excellence?
According to the experts, operational excellence is a company-wide focus on leveraging operational capabilities to drive productivity, expansion, innovation and profitability in the long-term by means of strong business processes.
It begins at the top — with the CEO and other executives emphasizing robust business process management. Ultimately, it makes a business more agile and responsive to market opportunities than its competitors.
Obstacles to achieving process excellence
Considering the clear value of operational excellence, why don’t more organizations achieve it?
There are two main reasons. To begin with, many businesses fail to recognize or acknowledge there are issues with their existing business processes.
In addition, businesses sometimes perceive the investment required to improve processes to be much higher than it really is — and the ROI much lower.
By failing to recognize and act on the opportunity to improve processes, organizations are placing themselves at a disadvantage.
In contrast, high-performing leaders know effective process management is key to operational excellence and business success — so they lead from the front and drive it through their teams.
Find out whether your organization is ready for the challenge
So exactly how can you leverage operational excellence as the big differentiator?
First and foremost, your leadership team should be committed to outstanding process management. Focusing on continuously improving internal processes sets an example for the rest of the organization to follow.
Next, examine your business’s culture and overall attitude. Ask yourself:
- Is it clear that our leadership is committed to operational excellence? How do our employees feel about this?
- What do our teams and customers think of the way we operate? Do we listen to - and incorporate - feedback?
- How heavily do we depend on a number of key individuals in order to operate effectively? What measures are in place in case one of those people goes elsewhere?
- What processes have we used in the past to respond to external pressures? Were they effective? Should they be improved?
- How are changes to processes reviewed, implemented and communicated throughout our organization?
- Have we invested in optimizing our operations in terms of tools, capabilities and incentives for teams?
Place your people at the heart of process improvement
Once you’ve answered these questions comprehensively and objectively, you’ll better understand the attitude towards process excellence in your organizational culture. Based on this insight, you’ll know what changes you need to make.
Taking the following steps could help you to leverage operational excellence:
- Communicate and demonstrate your leadership team’s commitment to operational excellence. It’s not enough to merely talk about it — leaders have to encourage and enable the improvement of business processes.
- Empower process owners to continually strive for operational excellence.
- Invest in a centralized process management tool that is easily accessible by everyone in your organization, to engage teams in your process improvement efforts.
- Build a communication and governance structure to support your continuous improvement endeavors, and assimilate it into the company culture.
- Encourage your employees to participate in an ongoing discussion about process improvement, and enable them to give feedback on existing process maps.
Claim the competitive advantage
The drive for process improvement and operational excellence should be ongoing. Internal and external pressures are variable, so don’t become complacent — avoid being satisfied with the status quo.
You can prioritize progress by empowering your execs and your teams to constantly ask, “How can we do things better?”, and then repeatedly finding new answers to the question.
Optimizing your business process management might take an investment of time and resources but, in the long run, it can lead you to operational excellence. And once you’ve achieved that, you’ll be following in the footsteps of giants.