Throughout the years, a plethora of management concepts have been introduced with the aim of improving the performance of a company or an organization. These concepts promise continuous improvements, efficiency or profitability – you probably know a few of them. Many initiatives, although looking promising at first glance, end up with very limited success, perhaps even failure. A mere few turn out to bring substantial and sustained improvement.
What is the difference between those who fail and those who succeed?
Although sometimes labelled “Operational excellence”, what many initiatives lack is a complete understanding of what operational excellence means.
Perhaps taking the term too literally, “operational” is associated with operations and then with production. We have met many examples throughout the years where the operational excellence initiatives tend to get stuck in production, often even limited to just one part of the production system.
This limited view focused on just one part of the organization leads to sub-optimization. Production acts on input from other units, like sales and product development. Production, in turn, delivers to logistics or transport. In the back of our heads, we know that all functions in the company are there for a reason, which means that everyone, through their output, is connected to a customer delivery and experience in the end. However, these relations between parts of the organization, tying it all together, are very often neglected. Instead, excellence is pushed within a single unit.
Operational excellence, as it was originally conceived, includes the functionality of the whole company. It can be achieved when all departments, functions and roles in an organization interact and cooperate to successfully and profitably deliver products to customers, and continuously improve the way this is done, according to the strategy of the company. Production, purchasing, marketing, sales, management, product development, HR, finance…
Establishing operational excellence becomes a matter of not only structure and measurement, but perhaps even more of attitudes and culture. Therefore, leadership plays a crucial role in this journey.
Since our start more than 40 years ago, SAM has worked with organizations to establish operational excellence by connecting the individual units and people through attention to the relations between them and the nature of their work.
With a toolbox of different methods that help everyone gather around a common picture, it is possible to release everyone’s natural motivation to cooperate, improve and problem-solve, building a “self-improving system”.
Do you want to know more about our approach to operational excellence? On March 21th, SAM is hosting a breakfast seminar on the topic, more details coming shortly.