You snooze you lose.
Founded in 1985, Blockbuster was one of the biggest brands in the video rental arena. However, when it came time to change, Blockbuster was asleep at the wheel. Failing to keep up with the digital times, Blockbuster had to file for bankruptcy in 2010.
What is operational excellence? It’s an approach that Blockbuster failed to take.
Operational excellence gives you the ability to immediately identify problems. It’s a way of empowering your business, by involving every employee on your journey to success.
Read on to understand how operational excellence works and why you need it.
What Is Operational Excellence?
It’s difficult to clearly define operational excellence. The definition will change from one organization to the next.
What is operational excellence? You have to start by asking yourself how you measure success for your company.
Here are a few ways you can define operational excellence
- Having a world-class business
- Being the best in your industry worldwide
- Providing excellent results in everything your company does
For your business to achieve excellence, you have to set crystal clear objectives. Make it clear to employees what you’re working towards. Let each team member know their role, and how they can help the company reach its ultimate goal.
Once everyone is on board, you can begin implementing operational excellence practices.
Continuous Improvement vs Operational Excellence
Continuous improvement and operational excellence are very similar, but not the same. Continuous improvement means you’re constantly adjusting your processes.
You may do adjust by reducing waste or maximizing human potential. Another adjustment could be improving the quality of your products.
For continuous improvement, your goal is to make each project or process run smoothly. Operational excellence takes things one step further than continuous improvement.
Operational excellence focuses on finding ways to set your organization up to grow. First, you have to understand what the market wants. Next, you need to come up with a plan to deliver uninterrupted value to your clients.
For this reason, operational excellence isn’t something that only applies to supervisors. Instead, it requires every person, at every level to be on board.
You Still Need a Strategy
You must understand that operational excellence by itself, will not guarantee industry-leading results. Instead, operational excellence focuses on delivering consistent and reliable execution.
You still have to make strategic decisions based on how the market is doing. You’ll also have to consider what your competition is up to as well.
The market you’ll compete in, and the products you’ll create, are also parts of your strategy. Next, you’ll have to decide on distribution methods. Finally, take into account where you’ll be manufacturing your products.
A wonderful strategy without operational excellence, will almost always have poor results. However, when you have a strong strategy, operational excellence can help a lot.
Sustainable Competitive Advantage
You have to be able to measure your operational excellence using results. For this reason, you’ll have to create sustainable plans.
A company that truly uses operational excellence will have a track record of success. When comparing them to their competition, you should be able to see a better performance.
Next, you should be able to make reasonable predictions. Looking at your past actions and results, it should be clear what you need to do moving forward.
Having a sustainable competitive edge requires you use the right workplace practices. When you have a world-class culture, with solid processes, you’ll be in a great place. If you add inconsistent efforts, your organization will always be competitive.
Capture Value for Your Business
Operational excellence is a very real way to capture value for your business. Here are a few ways to capture the value you deserve:
- Recruit top talent
- Develop your current workforce
- Customer retention
To achieve the values above, it’s a good idea to have an operational excellence management system. When you have a system, one of the first values you’ll capture is the ability to retain customers. As your organization streamlines it’s processed, customers will benefit.
Customers love relying on companies that can deliver quality results. When you’re able to do this for your consumers, you’ll have repeat business.
Another value you’ll be able to capture is quality talent. In the same way that you want to keep your customers, you also want to keep good workers.
When your operation focuses on blaming processes, rather than people, employees can thrive. Instead of worrying about job security, they’ll feel empowered to stay and help.
Next, you’ll also be able to attract quality talent. An operationally excellent company will have compelling career opportunities.
Current employees will enjoy being able to grow. Prospective employees will love hearing about exciting entry-level roles.
IDEX offers a real-life example of a company that’s benefiting from operational excellence. IDEX is a corporation that manufactures different fluids for diagnostic instruments.
Back in 2005 IDEX decided to start a program of operational excellence. Each segment, from large to small, became involved in their operational excellence plan.
One of the biggest challenges IDEX was facing, was interruptions in production. Since they offer so many types of products, it was tricky to streamline their process.
To overcome this challenge, they began getting feedback from each worker. As they listened to what their employees thought would help, new solutions began to arise. Not only did IDEX work to create flow, but they also began what we like to call a self-healing flow.
Every employee was able to see if the designed flow was acting normally or abnormally. If there was an interruption in flow, employees could help. Each employee had the power to identify interruptions as well as the ability to do to correct them.
Instead of relying on management, the flow was able to dictate what everyone would work on next. When you have a flow dictating what people work on, your company can work more efficiently. As a result, you’ll have a company that focuses on growth, and innovative solutions.
Work Smarter Not Harder
Now you know the answer to the question, “What is operational excellence?” When you allow employees to play a part in your success, the sky’s the limit for your company.
We understand that the business world is changing, evolving and adapting to new times. If you’re looking for more ways to stay one step ahead of your competition, we’d love to help. Go ahead and check out the other articles on the site.