What is Operational Excellence? Why should you and your business care about it?
Operational Excellence is more than a cool buzzword that pundits are bantering around these days. It is a shift in thinking. I am sure you have seen the memes with Richard Branson talking about treating your people well because when you treat them well they will treat your customers well. That is really the crux of what we are talking about with Operational Excellence. It is doing your business that much better than anyone else. That requires looking inward at everything you do and asking yourself, can we do things better? Can we be better?
There are three key elements to look at when you start down a path toward Operational Excellence: People, Process, and Plan.
Despite the negative-Nancy view of labor, being the most costly portion of your business, it is truly the single most important expense of your business. Without people to build your widgets, and help your customers love that widget, you don’t have a business.
Sure, when you started your business and you were small, you could get away with abusing the time and effort of the people put in because they were all committed to the end goal of the company’s success. But as you grew, and hired more people, you may have noticed a shift in those attitudes. Some were passed over for recognition or promotion while others were complaining that they were doing more than others. This shift was, likely, subtle. But it happened. Your “rock stars” were not putting in the same effort as before. Or, they were not as happy to take on the extra work and let you know it either by their expressions or their quality of work.
Some may have lost sight of the goal. Some new team members may have no idea what the goal is. Studies by Gallop and others have pointed out that employees without a clear understanding of their role, or the company’s overarching goals, are more likely to be disengaged. Disengage workers actually cost the company money.
On the flip-side, when employees are clear about what they are doing, and why, are more likely to work harder, share their company with others like them, and, in turn, express themselves more positively to your customers.
When a company has clearly defined processes, the people doing the work flourish.
When the processes are well defined they empower.
For example, I had the pleasure of attending a one-hour session for an amusement company that focuses heavily on customer service, but is also, unabashedly a for-profit company. The gentleman told us a story of a young girl visiting one of their parks who came across a construction wall, as are common. The young girl asked her mother what might be behind that wall, and when she didn’t get a satisfactory answer from her mom, she tossed her doll over the wall to have her do some recon. Most places, this would be the end of the doll. Not here.
The mother went to customer service to simply request the doll be retrieved. This company didn’t just do that, as the doll landed in a mud puddle and was essentially ruined. Since the doll was discontinued, they cleaned up the doll, made her a new dress, and took pictures of her day.
Now, I ask you… Do you think that mother fretted one bit over the high prices she paid for that visit after she, and her daughter, were presented with a clean, new dressed, doll with a picture book of her day? Of course not, she went and told everyone she could think of how well this team took care of her daughter, and her daughter’s doll.
The team didn’t have to “go ask their manager” to get permission to do all these things. Their process was built to allow for these sorts of contingencies. They were able to go that one step above and beyond for this family. And it will pay back in spades (dollars) in goodwill.
When you are ready to move toward Operational Excellence, Process will be one of your most important steps. The better your people understand the processes of their work and what they are allowed to manage on their own when things go awry, the better they are able to do their jobs autonomously and confidently.
We have all heard the adage, “failure to plan is planning to fail.” We know it so well because it is true.
So many businesses are so busy doing their business that they lose sight of their business. How many times have you, or your managers, said, “just wait until…, it will get better then.” Yet it never does… because some other “fire” jumps the line and the goal posts move again and again. In this “you must ship” world we are turning out one barely passible product after another and hoping that we will be forgiven for the lack of polish.
It is time to stop running on the wheel. Step off, and take a look at the business as a whole.
What does it look like? Are the goals clear, and SMART enough? Does the current production schedule make sense? Should we scrap something completely? Or should we tell the Emperor he(she) has no clothes?
Change is always difficult for humans. Which is quite ironic, as it is the only constant we have in our lives. Deploying Operational Excellence in your organization is going to require a cultural shift. This has to come from the leadership down. The leaders have to show that they are committed to this change.
Stop, take a breath, and write down your plan. Even if it seems a bit fuzzy. A plan started is better than no plan at all. Then the next step is to quit being so busy that you don’t have time. Build time to plan and keep planning into your calendar. If you want your business to be better, you need to give it the time it deserves, and take the time to be quiet with the goals. Write clear Key Performance Indicators (KPI) for you, the business, and the people in your business.
When you have taken the time to understand your people, reviewed your processes, and started your plan, you will have taken the first three steps toward Operational Excellence. You will be far from done, but you will have a clearer picture of where you stand now and where you can go.
Understand that not everyone will be ready for Operational Excellence, and you may have people that will either leave or will no longer fit the organization. That is okay. You want your company to have the right people, with the right attitudes, doing the right work, for the right reasons. When all those things come together, you will have a more successful business.