It’s Time for SMBs to implement Operational Excellence themselves

We know that when implemented properly, a well-crafted approach to implementing full end-to-end operational excellence based on ‘lean’ thinking yields immense net benefits for any SMB. That's the good news. Click here to read the full Survey Report 2018/19. 

THE PROBLEM

The bad news is that less than 1% of SMBs are actually doing it. Sadly, the vast majority of operational excellence commentary is focused on larger businesses - and that doesn’t help!    

My concern has long been for the other 99% of SMBs. When asked why they are NOT actively implementing operational excellence in a well-structured approach, SMB CEOs usually respond with one or more comments along the following lines...

• “Don't really know what would be involved”

• “Thought it was more for big companies like Toyota, Coca Cola or General Electric - not a small company like ours”

• “Can't afford the costs of the associated consulting assistance”

• “Don’t have the staff resources (IT; HR) of large companies to help drive the implementation”

This widespread non-awareness and non-participation represents a huge handicap for individual SMBs as well as for every national economy. Much more damage is caused by this than having too much regulatory control, too much corporate tax or poor industrial relations.

THE SOLUTION

 We need a pragmatic solution that overcomes all of the above 4 common excuses cited by CEOs.

Having advised more than 1,000 companies over the past 37 years and conducted over 300 half-day group sessions with the CEOs of SMBs, it became clear to me years ago that the SMB solution for operational excellence must have several features...

1. Be consistent with the proven global frameworks for operational / business excellence and criteria for success

2. NOT need a comprehensive up-front assessment of the business before real implementation starts

3. NOT need a lot of external consulting assistance

4. Provide detailed step-by-step 'How To' instructions for the way forward

5. Sequence things in the right order for maximum impact and early wins

6. Integrate everything for maximum impact

7. Be led from the top

8. Progressively build sound leadership and management of cultural change

9. Simplify the approach and use a simple, common language that every employee can understand

10. Generate ‘Quick Wins’ to gain the confidence and trust of line managers

11. Involve all employees working to some extent ON the business via their own local processes

12. Enable key business processes with the right technology

13. Ensure accountability for critical individual and collective actions

14. Visually track the resultant business impacts every month via the right Strategic KPIs and the right Operational KPIs - plus quantification of net benefits for all process improvement projects

15. Be available via the Internet at far lower cost than the traditional consulting-led alternative

Simple, Integrated, Sequenced 

Such a Simple, Integrated, Sequenced solution has been developed exclusively for SMBs over the past 7 years and is now readily available. The governing framework is as follows:

The numbered implementation sequence of these 5 prerequisites is critical to avoid sub-optimal outcomes. Every prerequisite requires both external and internal Customer Focus.

We have found that this pragmatic ‘learn by doing’ approach yields better results far faster than the traditional consultant-led approach that first involves awareness training followed by assessment of the business against Operational Excellence criteria followed by targeted project-by-project implementations. That traditional approach is far more complex, takes far longer to get results and does NOT result in fully integrated outcomes across the business.

THE BENEFITS

Completed case studies from around the globe demonstrate that typical benefits one can expect from rigorous implementation of full operational excellence are as follows:

• Business revenue doubling every 3 years or so

• Benefit to Cost ratio >> 5:1 for completed process improvement projects

• Overall productivity gain of 25% - 35% over 5 years

• Net financial benefits over 5 years accruing to at least 22.5% of this year's total Sales revenue. This is too big for any business CEO to ignore!

What’s not to like? It can be done provided the Board, the full Management Team and other employees commit to making it happen by following the detailed roadmap and instructions from Day 1. It's time to radically change the way we do things in our SMBs if we are to overcome the malaise of only 1% market penetration of proven Operational Excellence techniques. Learn more >