Achieving operational excellence –
how you can and why you may not be already.
Agility System | 06.04.2021
Operational excellence is often seen as a bit of a throwaway ‘management-speak’ term or a goal set by a business that, realistically, will never be achieved in any meaningful form.
But with a framework in place; people and leadership teams who buy into the vision; and a clear view of what operational excellence means for your organisation in real terms, it doesn’t have to be such a distant dream or unquantifiable aim.
What is operational excellence?
A one-line definition of operational excellence is the achievement and maintenance of world-class business performance on a regular and sustainable basis.
But, in real terms, what does this mean to your organisation? Many factors will contribute to your operational excellence but generally you’ll have full and effective management of your operations; clear objectives; reliability; cost control; personal and process health and safety; and asset integrity.
These are the cornerstones of safe and effective operations and are designed to ensure a robust connection between your corporate standards and your internal and external requirements.
This structure, and the definition of minimum standards, promotes standardisation across your business and enables everyone to understand what sustainable success looks like, how it’s achieved and their role in achieving it.
How you can work towards operational excellence – three key factors
Before you can achieve operational excellence, you need to know the most important pillars that must be in place first.
While there are many ingredients to this recipe, we’ve reduced it down to three of the most crucial elements:
Operational excellence key factor #1: Leadership
Your leadership team should uphold core values, demonstrate and encourage ownership and accountability across the business and develop and encourage a culture of teamwork.
Strong functional governance, managing risks and opportunities, and focusing on value generation for all stakeholders is also critical, as well as establishing plans and targets for business performance and continuous improvement.
Operational excellence key factor #2: Governance
The concept of good governance goes hand-in-hand with the responsibilities your leadership team takes on and, along with every individual in the organisation, they will have responsibility to ensure this is maintained at all times.
Good governance means being clear about your business objectives and ensuring you have the capacity and competency to deliver against them.
A simple, easily understood structure is important here along with well communicated roles, accountabilities and responsibilities, a focus on developing your personnel development, and the sort of job succession planning, culture and behaviours that are associated with a learning organisation.
Operational excellence key factor #3: Processes and systems
Supporting both your leadership team and your governance structures are the processes and systems that should underpin everything you do.
An established operations management system that meets the needs and expectations of your business will have a defined set of key processes and standards. These in turn will have clear ownership, be fit for purpose and enable you to continually collect performance data through the monitoring and analysis of your business and how it is working.
When combining a robust process with focused leadership and good governance, you’re set up for operational excellence and success in everything you do as a business.
What could be holding you back?
There are many issues that businesses grapple with that prevent them from achieving operational excellence. Every organisation is different in that way but, at Agility System, we usually find our client’s challenges are somewhere in this list:
- A lack of clarity around roles and responsibilities, and a lack of accountability
- An abundance of text-based procedures and not enough processes
- Processes, where they exist, are not robust and transparent
- Poor understanding of cross-functional processes
- Poor document control with storage in multiple disconnected repositories