Did you know that organizations which follow operational excellence strategies report profits 2.5 times higher than those which don’t? Thousands of businesses in practically every industry have implemented operational excellence techniques today. But what is operational excellence and what does it look like?
Here is everything you need to know about this concept — and ways you can improve operational excellence for your organization.
Operational excellence definition
Operational excellence is a management strategy that focuses on changing operations as well as culture at a business. The underlying principle of operational excellence is that everyone in the organization understands the value chain and their role within it. Once people understand the value chain, they are then empowered to improve it.
Operational excellence is not really about tactical changes to specific processes that might be inefficient or unnecessary (although this certainly plays a part). Instead, it is about an organization-wide shift in culture, which prioritizes continual improvement. This broadness can make it hard to pin down exactly what it should look like. Still, businesses which have invested in operational excellence strategies experience serious benefits.
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Benefits: what is operational excellence able to do for you?
Implementing an operational excellence strategy can deliver wide ranging benefits to your organization. These include:
- Greater value: When organizations improve operational excellence, they generate more value for the bottom line, for their customers, as well as many other metrics including sustainability, productivity, or safety.
- More empowered employees: In organizations that have implemented operational excellence strategies, all employees are engaged on the journey to improve how the company works. That means they feel more empowered, valued, and dedicated to their work.
- Continual improvement is embedded: At one time or another, most organizations will implement a productivity or efficiency drive. Typically, this might focus on improving how one particular department or workflow functions. There is no doubt that this can help, but it is usually a short-term change, and sometimes old habits can creep back in. By contrast, an operational excellence strategy means continual improvement is constant and is always a part of anything the organization does.
- Better teamwork and problem solving: When you implement an operational excellence strategy, employees within and between departments must collaborate with one another on a more frequent basis to discover opportunities for improvement. This fosters greater understanding and increases overall efficiency and productivity.
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Operational excellence examples
The following operational excellence strategy examples demonstrate how this concept could be deployed in different sorts of organizations:
Healthcare
When a patient visits their specialist at hospital, the doctor may refer them for a walk-in visit at the X-Ray department. Unfortunately, this process can be very inefficient because the X-Ray department is often busy and struggles to accommodate lots of non-scheduled visits.
If that hospital had developed an operational excellence strategy, the doctor would understand that unscheduled visits for X-Rays are a burden on that department. By communicating with one another, the doctors and the X-Ray team could find an automated way to schedule same-day referrals. This would help the X-Ray department manage their waiting times better, while also leading to a better experience for the patient.
Events business
An employee who works for an events business chooses event locations for upcoming conferences. However, she often notices there are delays in getting equipment and food delivered to events she organizes — for which she blames the procurement team.
However, if the company had mapped out its value chain, the event managers would understand how the company’s procurement department works and the constraints on their activities. Working together, the two departments could improve the process to ensure better planning and communication when selecting venues, selecting dates and procuring goods.
Media organization
Editors at a media business frequently contract freelancers to produce video content for the website. However, many freelancers complain that the media company is slow at paying them and refuse to work with the business in future.
If that organization had implemented an operational excellence strategy, editors would have a clearer idea of the finance department’s workflows. They could work together so that a smoother invoicing process could be set up, and ensure freelancers get paid faster. That would ultimately result in greater value for visitors to the website since there would be more interesting content to consume.
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Where to begin with an operational excellence strategy
As the operational excellence examples above show, this strategy could be used in practically any business for almost any purpose. When staff understand the wider value chain, they can then collaborate with other departments to continually improve efficiency. So how do you begin doing this?
The first step to improve operational excellence is to map out, at a high level, the value chain at your organization. This will show what each department in your organization actually does, and how they contribute to the overall value for the business. It can be really helpful to use interactive technology like Nintex Promapp® to fluidly draw out this value chain.
Once employees understand the organization’s entire value chain, they should be encouraged to continually improve it. In some cases, teams may decide to remove steps in the workflow, or other times they may choose to automate certain tasks with Nintex workflow automation.
By choosing to improve operational excellence, your organization can deliver more value to employees, customers, and the bottom line. So, are you ready to join the many organizations that have already begun on this journey?
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