By Rob Massa, CRO at Forecast
There’s never been more pressure on Directors of Operations to achieve Operational Excellence.
In a post-pandemic world, there’s a lot to adjust to. Employees are still discovering and adapting to new ways of working, profit margins remain in flux, and clients hamper financial forecasting due to their own uncertain prospects. But after almost two years of volatility, the need for growth and profitability is more urgent than ever.
For these reasons, many are choosing to prioritise Operational Excellence. But what exactly is it? Beyond understanding that it is business-critical, few Directors of Operations have a firm hold on what it means – let alone how to achieve it.
Why Operational Excellence Matters
Operational Excellence takes a view of the bigger picture. It’s a mindset that goes one step further than Operational Efficiency. When is efficiency your focus, you scrutinize processes and iterate to create the leanest path. It’s all about working fast, eliminating errors, and making products and services cheaper and better.
Excellence strives for more. Rather than merely trying to reduce costs or increase productivity, it aims to create an entire company culture that will drive efficient growth.
Businesses that are nailing Operational Excellence will be aware of exactly what is coming up in the next 6-12 months, and how they plan to deliver it. They are also confident that they’ll be able to deliver what’s needed efficiently and to a high standard, with a happy, productive team.
Strategies for Operational Excellence will take into account a few main areas (leadership, employee accountability, risk identification and control, knowledge sharing, management of change) and identify ways to improve interaction between these areas. The ultimate goal of Operational Excellence is to drive value, for customers and businesses alike.
Operational Excellence doesn’t happen from the top down, nor is it a tick-box exercise. It requires a culture shift. Changing one single product or process won’t have an instant impact on your bottom line, so it can be difficult to measure exactly how effectively a business has created a culture of Operational Excellence. Directors of Operations will therefore usually measure multiple things to make sure they’re on track. This could include financial and operational numbers, alongside qualitative data and feedback from employee and client surveys.
For Directors of Operations wanting to build towards Operational Excellence, there are four main areas to focus on.
- Create visibility around data
One of the most crucial parts of a Director of Operations’ role is to break down information silos and ensure that useful data insights reach the whole company. It’s only when you have the right data that cross-functional teams can excel, and improve the grasp of their areas of responsibility.
For this reason, creating visibility around data should be the top priority. Taking company-wide operational data out of silos and centralising it in a single, easy-to-use platform not only makes your job easier – it empowers teams to self-improve, too.
- Reduce manual burden
Ensuring visibility of operational data also means streamlining processes around the collection and management of that data. For most operations teams, gaining access to information about teams’ performance and profitability is a tricky manual task. It usually means digging through mountains of data, and is often made worse by poor data health.
These monotonous, low-reward activities have a negative effect on employee productivity and are susceptible to human error. Finding ways to automate some of these tasks improves visibility and is low-hanging fruit for kickstarting ongoing improvement.
- Get whole-team buy-in
To drive Operational Excellence, you need your improvement efforts to get traction across the whole company. This won’t happen unless you get buy-in from the whole team. Senior leaders need to be aligned on goals, and colleagues across the business need to feel able to contribute towards them.
Communication is key – and so is good user experience (UX). To gather the data you need to drive Operational Excellence, employees must be engaged and incentivised. Timesheets, for example, deliver much-needed data but are universally hated and neglected. Finding an alternative kills several birds with one stone: generating data while taking away the pain points of manual work and low morale.
- Report against relevant metrics
As we’ve seen, Operational Excellence goes beyond improving outcomes of single projects, processes or products. Directors of Operations need a bird’s eye view of outcomes. This begins with understanding what business outcomes should be. If the objectives are not clear from the start, the rest falls apart.
It will always come down to good data and good communication. For real business alignment, data needs to not only be collected, but understood and actioned. Directors of Operations need to think critically about who needs what data, and ensure ways to surface and share it quickly.
Follow these steps, and the pressure will be off – with happier customers and teams to boot.