Taking Operational Excellence to the Next Level

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Best in class companies understand that Operational Excellence (Op Ex) is the means to an end and not an end in itself. Yet, many organizations dedicated to Op Ex focus mostly on assuring that the core skills of Lean and Six Sigma are in place and that people understand work as a process. In some cases, companies choose to deploy Op Ex along departmental lines and fail to take full advantage of removing the non-value added steps residing in cross functional handoffs. While building the foundation for Op Ex is important, it’s not enough on its own. A company intent on taking Op Ex to the next level may wish to consider the following four tactics.

Integrate Op Ex with CX (Customer Experience). While Op Ex emphasizes creating value for customers, many Lean Six Sigma programs focus on cost reduction, sometimes at the expense of customer value creation.  By integrating CX with Op Ex, organizations can recapture the passion for customer value creation. They can supplement the use of tools such as Voice of the Customer (VOC) with Customer Journey Models and emphasize the benefits of viewing the business from the “outside-in.”  Forrester has found a clear correlation between superior customer experience and superior revenue growth for a broad range of vertical industry sectors including cable companies, airlines, investment firms, and retailers*. 

Leverage technology. Op Ex programs often shy away from engaging their counterparts in information technology (IT). But the current reality is that the technology world is racing ahead with amazing new capabilities including; but not limited to, process automation, data analytics, robotics, cloud computing, low code, artificial intelligence and cognitive computing. Op Ex professionals who are intent on taking it to the next level need to forge stronger alliances with their colleagues in IT and anticipate which technologies can best be built in to the improvement methods of BPM and LSS. Process automation needs to be built in to Op Ex driven process improvement and thoughtful process professionals will take advantage of novel ways to experiment with technology and automate processes in ways that previously were simply not viable. Low code process automation and the increasing viability of robotics will surely play a prominent role as companies learn to better leverage technology. 

Emphasize speed of execution. According to a research report by PEX, over 20% of process improvement projects took 3 months or less to complete in 2013, versus less than 10% of projects taking less than 3 months in 2005**.  On the other hand, this same report found that nearly 80% of process improvement projects still took longer than 3 months and over 10% took longer than one year. Organizations intent on taking Op Ex to the next level need to focus on speed of execution.  In addition to delivering rapid results, Op Ex professionals need to create an end to end context for process improvement and at the same time take a more modular approach. Op Ex can learn much from “agile” methods in IT in this respect and also examine the factors needed to drive productivity and improve alignment between business and IT.

Drive executive commitment. This has been a perennial problem not just for Op Ex but also for many other performance improvement approaches. Most organizations simply launch more projects than they can ever hope to successfully execute. A 2014 PEX survey of over 500 respondents found that nearly 50% of companies had identified process excellence as one of the top priorities in the year ahead but over 30% (32.2%) found it difficult to commit adequate resources and investment for process improvement***.  To get to the next level an organization needs deep commitment from executives, not just rhetoric. This deep commitment will become increasingly important as process professionals tackle larger processes with a customer centric focus and an emphasis on speed of execution and step up to the bar on initiatives such as digital transformation.

When an organization embraces the above mentioned tactics, they will discover the power of Op Ex in creating value for both customers and shareholders. That’s the essence of the opportunity of taking Operational Excellence and the related methods of Business Process Management (BPM) and Lean Six Sigma to the next level. 

 

References:
* http://blogs.forrester.com/harley_manning  
** PEX Network survey, 2013
** http://www.processexcellencenetwork.com/business-transformation/articles...

Comments

Roberta O'Keith
,
posted 48 weeks 6 days ago
As a custimer experience expert that leverages all aspects of Lean Six Sigma and other innovation/change management tools, I appreciate this article for stating what I preach to my constituants. Love it!

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