Operational excellence is a comprehensive business management philosophy that recognizes truly high performing organizations are not driven by methods and tools alone, but leadership's ability to effectively focus and empower their teams to act autonomously. [more]/[less]
Unlike the methods of 6 Sigma and 8D that prescribe rigorous event based workflows or the LEAN manufacturing system that bundles many tools focused on the mindset of eliminating waste, Operational Excellence places significant focus on the organizational and personal understanding of performance.
Focus and alignment with an organization’s shared objectives can be translated through Vision and “Strategic Imperatives”. Using Hoshin Planning
Tools to prioritize initiatives, identify conflicting objectives, and establish organizational accountability, a foundation is laid for functional initiatives and employee engagement that flows up and down the group.
Developing real time metrics throughout the organization to monitor performance against Mission and progress towards Vision provides organizational focus. These measures offer management the needed information to execute tasks, correct course as needed, evolve the organization, and enable self-directed work at the line level of the business.
Functional Excellence [execution]:
Providing the proper guidance, structure, and oversight needed to ensure critical initiatives drive targeted outcomes. These tools, when implemented, are designed to optimize the impact of an organization and reduce the conflicts that arise when cross-functional programs drive independent initiatives while competing for fixed resources.
Process Excellence [optimization]:
Actively engaging an organization reduces waste, simplifies operation, and reduces variation with standardized processes and controls. Lean Manufacturing methods can be implemented to drive employee engagement, ownership, and pride in their workflow.
Using a suite of methods (Six Sigma, KAIZEN, KATA, 8D, etc), problem solving is facilitated through team workouts to identify and validate causes of failure, create corrective actions, and implement controls needed to ensure lasting improvement. Because these methods (similar to the LEAN activities in Process Excellence) focus highly on team engagement, solution ownership, and employee empowerment, Continuous Improvement can become an operational philosophy ultimately driving a culture of performance and excellence.
At the core of Operational Excellence is a realization that a business’ greatest asset is its employees. Consistent with the "Servant Leader" model, success is governed by management's ability to engage the organization to achieve a common vision, empower it to exceed expectations, support it unconditionally and to tap into the hidden potential that each employee has and wants to explore.
Within the workflow, leadership owns a key role in setting and holding accountability for the direction and expectations of the team; the people own responsibility for performance and improvements within their area of influence developing a culture that encourages involvement and celebrates learning, pushes ownership downward, supports risk taking, accepts set backs and celebrates improvement.