Operational excellence strategy: how ready are you?

Jeff Bezos founded an online bookstore by the name of Amazon in 1994. Within just two years his fledgling company had generated almost $16 million in revenue. Amazon went public a year later and continued to grow into the largest e-commerce retailer in the world, becoming just the second publicly-traded company in the world to break the $1 trillion in market cap.

Rather than attributing this success to being in the right place at the right time, the Amazon story is one of consistent progress and performance, driven by vision and rapidly evolving technologies.

Operational excellence is high on the agenda for companies like Amazon, and it’s a vital foundation for lasting business success. The research reported by the Harvard Business Review suggests that organizations with strong management processes rate higher in expansion, productivity, profitability, and longevity than companies that don’t focus on process excellence at that level.

Defining an operational excellence strategy

Operational excellence is a company-wide emphasis on driving productivity, expansion, and innovation by leveraging operational capabilities through strong business processes, with a view to long-term results and ultimately, increased profitability.

That starts with the CEO and other executives who build an emphasis on effective business process management. Businesses with a focus on an operational excellence strategy that is led and supported from the top generally demonstrate more agility and are better placed to respond to shifting markets and new opportunities.

Identifying roadblocks

With the benefits so evident, you’d expect every organization to prioritize building better management processes, but the simple fact is many don’t recognize that they have a problem. Numerous companies don’t invest in operational excellence because they simply don’t see or won’t acknowledge the issues in their existing business processes.

Another common problem is the perception that improving business processes requires a much higher investment than is actually the case. That extends to an underestimation of the ROI that operational excellence can offer, creating a reluctance to invest in the initiative.

High-performing leaders recognize that the key to operational excellence and the business success it brings is effective process management. That knowledge is clear in leadership that promotes and prioritizes process excellence, and drives it through every level of their business teams.

Preparing an operational excellence strategy

There are a few key steps for a business that has identified operational excellence as one of the marks of differentiation for their company.

It starts with an executive team that is committed to the cause. Clear buy-in from leadership to ongoing process excellence sets the tone for the rest of the business. Starting with internal processes, management can establish a culture of continuous improvement that is communicated by action as much as company-wide memos.

The development of a company-wide culture is vital to the success of your operational excellence initiative. Check your readiness by asking yourself:

  • How clear is it to the teams in your business that operational excellence is a priority? How well does leadership communicate their commitment?
  • What do internal and external customers think about how you operate at present? Are there established avenues for feedback, and are recommendations actioned?
  • How much of your organizational knowledge is tied up in individuals, and what safeguards do you have for vital operational know-how should one of them move on?
  • What processes have been used in the past to respond to significant changes? How effective were they and what facilities exist for improving them?
  • When processes do need changing, what is the procedure for reviewing, enacting and communicating those changes to the affected parties and wider business?
  • How optimized are your teams and tools for operations? What incentives exist to inspire ongoing change and improvement?

It’s all about people

It’s the answers to these kinds of questions that will help shape the pursuit of operational excellence. Objective and comprehensive insight into these issues provides a perspective on the organizational culture and the changes that might be needed to make process excellence a priority.

The outcomes will vary, but some of the common steps that need to be taken include:

  • Communicate clearly from the top. Demonstrate your leadership team’s commitment through open, frank, and regular messages.
  • Don’t stop at talking about it. Encourage and resource efforts to improve business processes at every level.
  • Empower those who take ownership of processes to push them towards excellence. Make a point of championing the continuous improvement message.
  • Establish a process management platform that is easy to use and available to everyone. Invest in a tool that engages your teams and enables process excellence at every level.
  • Create a structure of governance that supports the initiative, and connects organically with the existing corporate culture. Include communication channels in the framework to maintain momentum.
  • Make ongoing process improvement discussions the norm, and encourage employees at every level to participate, providing feedback and offering suggestions on the processes they’re part of.

Take the lead

Operational excellence and process improvement aren’t one-off endeavors. They’re an ongoing focus for any organization serious about success. Circumstances change, markets shift and workforces ebb and flow, so no one can afford to be complacent or satisfied with the status quo.

Keep one question in front of everyone, from the executive leadership to the business teams on the front line: “How can we do things better?” Don’t make the mistake of thinking that once someone has offered a solution, the question has been answered for good. Keep asking and looking for new solutions, new ideas, and new approaches to the problem.

It does cost time and money to create operational excellence and invest in business process management. There’s an investment of resources that are required to do it well, but it pays dividends. Once you’re on that journey, you’re on the road to greatness and following in the footsteps of giants like Amazon.

 

 

Want to start achieving operational excellence in your organization? Request a demo of the Nintex Platform to learn how our product can help you.

 

 

Thomas Kohlenbach

Thomas Kohlenbach is a Sr. Product Evangelist at Nintex. Based in Auckland, New Zealand, he is an enthusiastic and passionate business improvement advocate with over 12 years of experience in improving business processes with Nintex Promapp process mapping and management software.

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