Four Keys to Operational Excellence

As we’ve stated before, operational excellence is no longer a competitive advantage. Globalization, access to technology, sophisticated communications and highly demanding and knowledgeable customers make it a competitive necessity. If your company is not world class now or becoming world class, chances are it won’t be any class in the not too distant future. The good news is that world class business tools and techniques are available and affordable for virtually any company. The brutal truth, however, is that operational excellence has as much to do with the will, drive and focus of the company’s leaders as it does with scientific management. Here are a few of those key characteristics that go hand in hand with operational excellence, along with some tips on how to make them work for you.

1. An Obsession With Quality.

People who take pride in the quality and value of their products and services deliver great quality. Such people are embarrassed to provide anything less. Whether it’s manufacturing auto parts, counseling a client, building a computer or teaching a workshop, quality obsessed people will find a way to do it right. Although a few of us are born with this obsession, most of us are not. However, you can take deliberate action to cultivate this obsession in your company. First, define the value equation for your products and services, the simple and very definitive statement of why customers should buy from you. Second, repeatedly communicate your value equation to all associates and business partners, letting everyone know that it takes discipline and collaboration to meet customer needs. Last, make it clear to everyone that products and services falling short of customer needs are simply not acceptable. Call it pride of workmanship. People who understand the value equation care about quality and will always search for ways to do it better.

2. A Relentless Focus on Productivity.

Any way you look at it, improving operations means reducing cycle time or “doing more with less.” Such improvements go straight to the bottom line. This is as true for the one-person real-estate franchise as it is for the multi-national manufacturer. To encourage this kind of thinking throughout your company, develop macro productivity measures, chart and communicate them frequently and benchmark them against tough standards. Macro measures, such as products/services to market, campaigns to profitability, staff to revenue, expenses to sales, etc., provide a simple and clear picture of productivity, how your company is doing and how it must continually improve. Tracking productivity is the first step to influencing, controlling and improving it. Although you should never look at it as the sole indicator of company performance, you must view it as a requisite for “staying in the game” and remaining competitive.

3. A Continuous Search for the Voice of the Customer.

With all the demands for your attention, listening to the customer can get pushed down the priority list. Unfortunately, this can be a serious oversight since all that other important stuff – systems, human resources, budgets, planning, etc. – should really be driven by what customers are telling you. To optimize business processes, you must find out what customers are saying and thinking, what they like and don’t like, what they value and what they need from you to give you their business. By understanding what your customers want, you can then change, simplify and modify processes to meet their needs.

4. A Willingness to Change.

Operational excellence lasts for but a fleeting moment – just ask the leaders of most “top” companies who have been in business for more than a few years. Once you design products and services for your ideal customer and you finely tune your operations to deliver those products and services at a world-class level, customer expectations, markets, technology, the economy, will change. You cannot be enamored with or wed to the way your company operates; you must look for opportunities to initiate positive change. As Jack Welch once stated, “Change before you have to.” So, how will you change your company to become even better?

Operational excellence is not simply the result of applying analytical business tools (although they, too, are helpful). It is the development and nurturing of key “excellence” characteristics – quality, productivity, customer focus and change – that will lead you to continued success.