Implementing operational excellence so that the organization benefits is an important question that needs close examination. An operational excellence initiative requires many elements. The model requires the implementation of:

1. Program—What are you deploying and how will you manage it?

2. Leadership—How will leadership lead the program?

3. Processes—What will you be improving?

4. Measurements—How will you know when you are successful?

5. Projects—How will improvement work be parsed into actionable and manageable units?

6. People—After these steps have been thoroughly planned and evaluated, what you have learned will be the foundation for:

7. Strategy—How will you deploy the initiative?

Implementing operational excellence so that the enterprise benefits is an important issue that needs close examination. An operational excellence strategy model implementation should result in a business management system that encourages process improvement so that the organization’s key performance indicators (KPIs) benefit. In order to accomplish this successfully we must have the appropriate skills available to the organization.

Deploy: to organize and send out (people or things) to be used for a particular purpose; to open up and spread out the parts of (something, such as a parachute).     Source: Merriam-Webster’s Learner’s Dictionary

Organizations face many challenges when trying to deploy or redeploy an improvement program. So much of the success of any initiative depends on how it is implemented and used by the organization. To be successful, you must consider what is the correct method to use, what are the change management issues, and how it will be deployed. A one-size-fits-all mentality will not work in any of these three areas.

It all begins with culture

We must begin with self-examination of the current culture in your organization. Several questions must be answered:

In order to initiate Operational Excellence we focus on establishing the structures, tools, methodologies and systems required. The manage program phase sustains that work by providing ongoing oversight and leadership for this initiative. In this phase the executive leadership attends to the following ongoing responsibilities: • Sets and deploys enterprise goals and strategies via core business processes. • Manages program-level plans and accountabilities. • Monitors priority process performance and related interventions. • Maintains alignment between enterprise structures, systems, and core business processes. •Leverages best practices across the enterprise. The ultimate objective is that these responsibilities gradually become integrated into the fabric of enterprise management practices. That is, they become “the way we do things around here.” We will discuss these responsibilities in greater detail in the following.

Before an organization can embark on the journey to Organizational Excellence there are some conditions that need to exist beforehand. The five essentials are pre-existing conditions provide the foundation upon which the tools of Organizational Excellence are built.

The five essentials of Operational Excellence assumes that the organizational leadership and each functional area has a vision and a structure to direct its efforts, operates to principles, needs people to deliver value and tools to help develop basic capabilities and processes.

The five essentials of Operational Excellence are:

• Vision
• Structure
• People
• Principles
• Tools

Each is an essential and critical element, creating a whole that is greater than the sum of the parts.

1. Vision

In the past few years Operational Excellence (OpEx) has become one of the most prominent trends in the improvement arena, many large corporations have ambitiously applied OpEx. Because the results have often been extremely good, this has stimulated growing interest among other organizations. A serious drawback of the increasing attention that OpEx is receiving is that some companies choose to be trendy and simply follow the herd without questioning, adapting and designing an OpEx program to suit their own specific needs.

Operational Excellence stresses the application of a variety of principles, systems, and tools toward the sustainable improvement of performance through process improvement.

This management philosophy is based on applying methodologies, such as BPM and Lean Six Sigma. The focus of Operational Excellence goes beyond the traditional event-based model of improvement toward a long-term change in organizational culture.

One of the most powerful ways to improve business performance is combining business process management (BPM) methods with Lean Six Sigma methods. BPM emphasizes process improvements and automation to drive performance improvement, while Lean Six Sigma uses statistical analysis to drive quality improvements. The two methodologies have been considered by times to be mutually exclusive, however, some savvy companies have discovered that combining BPM and Lean Six Sigma can create dramatic results.

BPM Basics

Operational Excellence is not easy to define. Some descriptions are too broad. Others are so narrow that the ultimate definition seems too focused in scope. Often, we end up with definitions that seem plausible in an academic sense, such as “Being world class,” “Being the best globally,” or, “Excellence in everything we do,” but these are difficult to translate into specific practices.

To properly define Operational Excellence, there is value in looking at the evolution of the term. 

In “The Discipline of Market Leaders – Choose your Customers, Narrow your Focus, Dominate your Market“, Michael Treacy and Fred Wiersema described three distinct value propositions or disciplines an organization could choose to compete in their market or industry – Operational Excellence, Product Leadership, and Customer Intimacy.

During the 1980s and 1990’s the use of flowcharts began to evolve. Next Business Process Management (BPM) came along to more formalize their use and combine their use with computer systems technology. Also in this timeframe, Six Sigma came into play as a means to improve processes by minimizing variability. Next, Lean six sigma evolved as a further means of reducing waste in processes.