To achieve operational excellence, interpretations can vary greatly based on industry and individual insights. Regardless of these variances, the primary goal remains the same: to optimize operations and fuel business growth. Achieving this requires a relentless focus and periodic adjustments to a company’s operational framework. In this blog, Altivate lays out a comprehensive 7-step guide designed to catalyze your operational excellence journey, tailored to fit any industry.
Step 1: Discovery and Ideation
Starting your operational excellence journey, whether it’s your first attempt or a recurring effort, always begins with a reality check. This involves diving into discovery. Techniques for discovery vary—process mining might be ideal for data in systems, while direct tools might be best for capturing personal insights. Remember, perfection isn’t the goal at this stage. It’s about understanding and consistency. Listen to existing ideas within the organization—often, there are untapped solutions already present. Especially when paired with a business transformation initiative, these insights can guide your discovery and ideation process. The essence of this step is to comprehend the current operational landscape, pinpoint inefficiencies, and capture potential improvements. This gives you a clear understanding of what needs to evolve.
Step 2: Benchmarking and Validation
After gathering organizational insights in step 1, it is essential to expand your perspective. Often, individuals lack a comprehensive understanding of how their tasks impact the broader business or how their methods may differ from colleagues in other regions, leading to inconsistencies.
To ensure genuine improvement, validate your initial findings. Benchmarking stands out as a pivotal tool here. You can:
- Industry Standards: Compare your processes against “best practices” in your industry, though remember this might simply mean matching the industry average.
- Top Performer Analysis: Assess how your highest performers handle tasks versus their peers, capitalizing on their efficient strategies.
- Cross-industry Inspiration: Look beyond your industry. For instance, explore the hotel industry’s customer service protocols or the aviation sector’s commitment to quality.
By identifying risks and opportunities, engage stakeholders to secure early support for changes, ensuring they resonate and add value. Now’s also the time to establish baseline metrics to later measure your success.
Step 3: Evaluation
While benchmarking provides valuable insights, not all ideas and opportunities will be relevant immediately. Prioritization is key. For instance, even if improving financial reporting seems enticing, if your core goal is enhancing customer service or boosting revenue, that’s where your attention should lie.
As you prioritize, also quantify the resources—time, cost, and effort—required to implement changes. This quantification, combined with the metrics from Step 2, forms the foundation of a compelling business case. Sometimes, management might hesitate when faced with tangible costs. In such cases, highlighting the long-term costs of inaction can offer a new perspective.
Step 3’s success hinges on pinpointing validated, evaluated, and quantified opportunities that align with business goals and have stakeholder buy-in.
Step 4: Simplify and Standardize
Before diving into process changes, it’s crucial to first seek simplification. Instead of hastily automating or creating new processes, ask if certain steps are even necessary—a key tactic in waste elimination.
After streamlining, it’s time for standardization. While this might demand extra effort, especially from system administrators, it bridges the gap between business and IT, minimizing miscommunication risks. However, when standardizing, it’s essential to account for regional and cultural differences. Sometimes, you might need a global process, like ‘order to cash’, with localized operational procedures, striking a balance between standardization and localization.
Step 5: Streamline and Automate for Operational Excellence
Once you’ve pinpointed areas for enhancement, it’s time to streamline. This often involves process automation. With the right tools from prior steps, certain processes might be directly automated. But be cautious; not all processes are straightforward.
Many organizations opt for business process management system (BPMS) tools for complex processes. However, this typically covers only 70% of the process. While a simpler workflow system might handle another 20%, some processes, about 10%, might remain manual. This underscores the need to separate analysis from your implementation tool.
For situations beyond push-button automation, avoid traditional, lengthy requirement processes. Instead, many find using process documentation more effective. In fact, some organizations believe that adopting process-based thinking enhanced their requirement control.
Step 6: Promote Governance and Share Knowledge for Operational Excellence
After streamlining and automating, ensuring everyone is informed is crucial. Many innovations fall short simply because they aren’t communicated effectively. Moreover, compliance with regulations is essential to avoid penalties. Employees need to understand procedural changes and the reasons behind them, ideally involving them in decision-making. Operational excellence encompasses providing this information in an accessible manner. Proper governance ensures everyone is informed, reducing excuses like, “I didn’t know.” Beyond just regulatory compliance, a consistent, positive customer experience is integral to operational excellence.
Step 7: Observe, Compare, and Uphold Standards
The true worth of any operational excellence initiative is in its results. While introducing new metrics is beneficial, keeping some old ones helps in drawing comparisons between past and present performances. However, don’t cling to all outdated metrics, as many might no longer serve a purpose. Consistent monitoring ensures that standards don’t slip back to old habits, especially when management is observant. Infuse customer-focused metrics, as operational excellence is primarily about meeting customer needs efficiently. Sometimes, even if operational costs rise, if it leads to increased revenues or reduced customer attrition, it’s a win. Think of this step as “sustaining the achievements.”
These seven steps provide a foundational roadmap for your operational excellence journey. While they present a general framework, they are versatile enough to be tailored to any industry or sector’s unique demands. In today’s competitive landscape, operational excellence isn’t a mere luxury—it’s a customer expectation. By proactively analyzing and refining your operations, you’ll be better positioned to meet and exceed these expectations. Ready to embark on this transformative journey? Begin today with these seven steps and steer your business towards unparalleled excellence.
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