What is Operational Excellence?

As an Operational Excellence (OpEx) consultant, I was asked today a seemingly simple question. What is Operational Excellence? As the definitions one can find on the internet are either too broad or too ambiguous, here is the working definition of OpEx that I gave as my answer.

OpEx is a highly functioning engaged culture of leadership, teams and tools, that continually grows its people, and optimizes processes, and products. This enables business to expand, producing repeatable products safely, at minimum cost and maximum profit, agreed quality and in the consistent and sustainable quantities required by the customer.

However, research in the USA, Europe and the UK consistently shows that between 70% and 90% of business that start the OpEx journey fail to achieve the initiators intent. Why? Simply because these businesses think that the Lean manufacturing tools will revolutionize their business. But it is not the tools but the culture and the people engaging with those tools that is revolutionary in business. So, if leaders are not nurturing their people in such a way that their teams desire to engage with the processes and products, then the company will be restricted in how successful they will be on their journey to OpEx.

Excellence Driven by Culture

Though continuous improvement and the lean manufacturing tools are integral to OpEx and can of themselves drive reduced costs and improve quality for a time, the core of OpEx, essential for continuous improvement is the cultural imperative that puts engaged individuals at the center of business success. These engaged individuals are then consistently looking to drive OpEx in their part pf the business.

This people-centered approach begins with a business understanding and being able to concisely articulate its own culture. When the business is able to do this, they then have to honestly ask, “Is this stated culture the lived reality of our people, and is it the culture by which the business would want to be known? From this understanding, the business works with an OpEx expert to complete a gap analysis to track from current state to the future desired state to undertake the cultural alignment of people, process and products to drive OpEx.

When OpEx and its driving culture is understood, it must now be modelled by reflective leaders who learn how to nurture highly engaged teams, building corporate citizens who optimize the Lean manufacturing tools that drive value for the business and the customer.

Too often businesses first strive for quantity, then due to poor quality introduce more and more processes; lastly, they turn to their people to solve the business problems who are by now demoralized and swamped with processes. The businesses that succeed know how essential it is to live the culture, through their leaders, their people and all that they do.

So, a long answer to a short question but essential for anyone looking to engage in business changing Operational Excellence. I hope this clarifies what OpEx is and what it can do for you. Drop me a note if you have any questions or are interested in engaging a OpEx consultant.

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