The business environment in which we operate has changed significantly over the past two decades. Historically, the business environment tended to be stable and fairly predictable. Major changes and innovations happened relatively slowly and there was time for businesses to adapt to new requirements. Businesses generally had strong local competitive advantage and competition was low. Certain key input costs were dependable and often regulated, making the costs associated with running a business easier to estimate.
The current uncertain, highly competitive and pressured business environment has created the need for businesses to perform at a far higher level than was previously required in order to remain profitable and competitive. Companies can no longer afford to have inefficiencies or waste within their systems. The rate of change has also increased dramatically and the ability of businesses to anticipate and effectively react to change has become a key element of success. This ability to change is referred to as agility and is arguably seen as one of the most important modern business attributes. Cost and availability of resources have also become less predictable and businesses end up in a “wedge” between rapidly increasing input costs and a highly competitive market where they are trying to maintain or grow margins and profits. The global village and technological advancements have, in certain cases, reduced local competitive advantage and foreign competitors with vastly different cost bases, political agendas and structures are competing in previously protected local markets.
This shift has also changed how we do business. To be successful in the current scenario, businesses have needed to change their approach and many organisations that have reinvented themselves have managed not only to survive, but also to prosper in these difficult times. These successful businesses tend to have the following characteristics in common:
- An enabling culture with strong yet humble leadership.
- Management commitment and active, visible leadership.
- A strong focus on Safety, Health and Risk.
- Positive and empowering behaviour at all levels and active discouragement of negative behaviours such as: apathy, excuses, blame, gossip, avoidance of responsibility, empire building, discrimination, aggression, demeaning behaviour, complaining and resistance to change.
- Effective communication and good understanding of business objectives and WHY throughout the business.
- A strong policy of people development and training.
- Fully defined business objectives and strategies.
- Alignment of strategies and objectives creating a consistency of purpose – Executives to Shop-floor.
- Involvement of the entire workforce and the creation of cross functional teams.
- Organisational structure in place to support business objectives.
- Alignment of projects and priorities that support business strategy and deliver high value.
- Removal of departmental “silos” and alignment of departments in terms of targets, outputs and key performance indicators.
- Well defined responsibilities, measures and key performance indicators with a high level of accountability.
- A high performance culture with structured continuous improvement processes in place.
- Information, skills and decision making ability throughout the business.
- Accurate and real time information available at the lowest level possible.
- Outstanding basics in place.
- Focus on process flow and waste reduction.
- Quality assurance at the source.
- System based improvements – use of appropriate proven tools.
- Focus on results and sustainable business value creation.
Operational Excellence is based on the characteristics above and is the philosophy that many companies have used to positively change their approach, direction and ultimately their business results.
Operational Excellence is not a new concept as businesses have been striving to improve their performance for decades. The achievement of Operational Excellence, however, remains elusive due to complex internal and external business factors.
Operational Excellence requires a fundamental shift in approach and is about creating a business philosophy and a holistic approach, rather than implementing individual tasks or business tools. Sustainable excellence requires a transformation in business culture, where the business commits at ALL levels to creating and implementing a long term plan to generate sustainable business results and value.
Operational Excellence is about deliberately creating an enabling business culture and the overall guiding principles that will ensure that all employees are engaged in achieving the agreed results. It is about great leadership and vision and the ability to focus on the long term.
It is through the effective use of proven tools and a systematic approach in conjunction with the guiding principles and culture that the greatest benefit can be achieved.
It must also be recognised that this is not a “quick fix”. This is a journey that will take significant resources, time and effort in order to change the culture and performance of a business. Once achieved, however, the maximum sustainable business value can be achieved, thus benefiting both the employees and the shareholders.
“Perfection is not attainable, but if we chase perfection we can catch excellence”―Vince Lombardi
If you would like to learn more about Operational Excellence and start your journey towards sustainable business value, contact us at email@example.com