Operational Excellence includes having a few clear objectives, supported by continuously monitored strategy execution, managed by unified cross-functional and simple metrics facilitated at each level, strategically, tactically and operationally with transparency and accountability.
In order to achieve operational excellence, an organization must first be willing to stop doing some of the things it has been doing historically, thereby making room for new ideas and practices. The communication must be one of readiness and commitment to change. This requires active change management and open dialogue. The readiness matrix below is an excellent example of this. Next, the organization must be committed to addressing the gaps by investing in new skills and processes designed to create competitive advantage. If a new initiative is not achieving the desired results, most often it can be traced back to communication and accountability.
As most any CEO will tell you, having a great strategy is easy compared to implementing and executing well. Communication must;
- Bridge Strategy, Tactical and Operational levels
- Identify the few most important key objectives that are clearly prioritized and measured
- Articulate and translate the actions and progress from each level down and up to the other 2 levels such that activities can be directly tied back to the primary strategic objectives.
Years of data show that improvement initiatives have a poor track record for achieving desired results, with something like ¾’s of initiatives failing to deliver. Whether lack of commitment, understanding, budget, training, each failure can generally be traced back to communication including planning. I’ve seen data demonstrating that too often the C-suite is not in tune with middle management and staff support. A recent survey that had approximately 100 firms responding, asked several questions relating to strategic alignment. One question I found most interesting was;
‘How well do your people understand and are able to implement your strategic objectives’?
The respondents were grouped into C-suite, Middle Management and Staff Support. Their answers are tallied as follows;
- C-Suite – 62% claimed yes
- Middle Management – 17% claimed yes
- Staff Support – 25% claimed yes.
What does this tell us?
First, the other 38% of C-suite respondents are in real trouble, with many of their people actively spending time and money on activities that do not directly support the stated strategic objectives. And this starts with the C-Suite. No wonder so many improvement initiatives fail?
Second, the gap between C-Suite and Middle Management is not a few pts, but rather a Grand Canyon gap of significant proportions. If the C-suite is not crystal clear and frequently prioritizing the initiatives, how can Middle Management hope to make progress? Of course we can probably guess what the Middle Management layer is doing in lieu of this gap…the same old things they did yesterday to survive. Conflicting objectives are common in business silos, and where there is a gap we find ways to fill it, often with incomplete or conflicting efforts or information.
Communication starts with having a VERY small number of objectives and managed for frequent status and action. Having 25 strategic objectives means you Zero strategic objectives and will accomplish very little beyond spending time and money.
Another common obstacle is that too often, leadership delegates more than is healthy to effectively drive cohesive action. Assigning a strategic initiative to one person, a direct report and checking back 6 to 8 months later often results in poor performance. Better that strategic initiatives, Operational Excellence carry the full weight and attention the top leadership demonstrating commitment and priority.
About Bob Forshay: Bob Forshay has over 30 years of experience delivering effective supply chain and Lean Six Sigma implementation solutions to manufacturing and service organizations. Bob has extensive experience working as an innovator, instructor, coach, project leader and consultant directing change for high performing organizations. His leadership efforts have led to dramatic improvements in process effectiveness and efficiency, value oriented customer satisfaction, reduced inventory while maintaining superior market performance. His ability to leverage his expertise and outstanding collaboration skills with a bias for results has yielded millions of dollars of benefits to the bottom-line. His primary focus is on the strategic deployment of organizational performance improvement methodologies with an emphasis on the application of best practices in planning, inventory management, operational optimization and Lean Six Sigma. He has provided over 4000 hours of classroom education in APICS and ISCEA certification programs to thousands of professionals since 1989.