Operational excellence is practiced and achieved in fewer companies than you might think. Most leaders covet the benefits of effective operational excellence they hear about in competitor organizations–the long-term advantages of such programs are well known. However, leaders are reticent to take on something that may seem to be large scale and overly ambitious, even if the current environment demands improvement.
Here are three best practices for implementing operational excellence in uncertain economic environments:
1. Adopt a Continuous Improvement Culture.
Whether your operational excellence initiative is large or small-scale, cultivating a continuous improvement culture is a key to success. It is completely possible to implement a large-scale operational excellence program with thorough planning, true top management support, and effective change management practices. However, in the current turbulent business environment, an organization may hesitate to take on a large-scale effort, although an initiative like this is not as complicated as some make it out to be. You can start small. Well-implemented, smaller-scale efforts can start building and fostering the culture change needed to make operational excellence work. Perhaps you are a leader in the middle or lower half of the organization who wants to start an operational excellence process in your area. You don’t have to be at the top of the organization to be a strong leader in continuous improvement.
Key actions to take:
Build Employee involvement: Encourage and empower employees to identify areas for improvement and suggest solutions. Implement systems for capturing and evaluating these suggestions:
Train and Develop: Train, coach, and mentor employees across the company in continuous improvement. Coach managers to start encouraging employees to identify ways to improve processes and reduce waste. One-on-one sessions between managers and employees to encourage this kind of employee development are effective, as are manager-to-work-team efforts. A manager may meet with direct reports and ask a couple simple questions to start the ball rolling. One manager in a large chemical company asked his team, “What things keep you from doing a good job on a day-to-day basis?” The team met once a week to identify process obstacles and red tape, and the manager helped the team prioritize; then they started reducing or eliminating these issues. The process started small. When other managers heard what this manager was doing, the notion spread through the site, and set the stage for later, large-scale efforts.
Ongoing training is needed to train and equip employees with the skills and knowledge needed to identify inefficiencies and drive improvements as the operational excellence effort matures.
Use Kaizen Events or Blitz Teams: Conduct regular Kaizen or Blitz team events (focused, short-term projects using cross-functional teams) to rapidly implement improvements in specific areas of the business.
Implement Performance Metrics: Use and regularly review clear, relevant metrics to measure performance and track the impact of improvement initiatives and uncover additional opportunities for improvement.
2. Leverage Data and Analytics
Utilizing data and analytics effectively enables organizations, teams, and individuals to make informed decisions based on real-time insights.
Key actions to take:
Data Collection: Implement robust data collection systems to gather information on all aspects of operations, from production to customer feedback.
Data Availability: Collecting data, possessing strong data analytics capability, and real-time monitoring systems are good, but they are not enough. The key question to ask is this: is the data available and accessible to the people making the recommendations and decisions—the teams at various levels. Many companies have great data, but if they want teams to make improvements, the data needs to be accessible to the teams to support data driven decision-making.
3. Standardize Processes and Procedures
Standardizing processes and procedures ensures consistency, reduces variability, and enhances efficiency across the organization.
Key actions to take:
Document Standard Operating Procedures (SOPs): Create detailed SOPs for all critical processes. Ensure these documents are easily accessible, regularly updated, and an integral part of training and onboarding. Build these documents into Employee Standard Work at all levels, and make sure that regular feedback and accountability to employees supports these SOPs. One client had great SOPs, but training, feedback and accountability were not aligned, so there was reduced benefit to having them.
Audit and Compliance: Regularly audit processes and performance to ensure compliance with established standards. Use audit findings to drive additional improvement efforts.
Best Practice Sharing: Establish cross-functional mechanisms for sharing best practices across departments and teams as well as up and down the hierarchy so that the organization can benefit rapidly from improvements in individual areas.
By adopting a continuous improvement culture, leveraging data and analytics, and standardizing processes and procedures, organizations can achieve operational excellence, leading to improved efficiency, higher quality, and reduced costs. For a 60-minute complimentary session to jump start your operational excellence efforts, please email me or message me in LinkedIn.