Operational Excellence is not a “buzz word”

Push boundaries

As business process owners, we are much like the resourceful television character MacGyver in operations. We find new ways to use tools and people, not just to be lean, but also to be innovative and to progressively transform our relevant processes and relationships.  We push boundaries. This is how we produce the Operational Excellence attitude.  Click here to read the full Survey Report 2018/19.    

What is Operational Excellence?

Operational Excellence is not a “buzz word” that will be gone in 18 months. The best companies embrace this as a major leading edge, utilizing the tools and tenets of Operational Excellence to build incredible enterprise efficiency.

But what does this mean to you?

You’re a Director, a Senior Manager or even an Executive. You may or may not have an enterprise Operational Excellence strategy. You (hopefully) have a corporate long term growth strategy, but what does it mean to bring Operational Excellence to your team? 

Apart from your company being customer centric, the biggest impact you can have in your team, department or division is to make sure your frontline managers and employees know the cost and impact of their actions.

Does what you do make money, save money or save time? After your customer's satisfaction, these should be the biggest questions your team members think about. Improving the financial acumen of those team members in operations is your number one way to see immediate results.

So how do you move the needle on getting your team to be more financially savvy?

You want them to be innovative and creative without having a negative effect on the customer experience. Here are three ways you can immediately see improvements in your team:  

1. Every manager should know the cost of their team.

a. How much is the hourly rate of the team?

b. How does the manager keep this in mind when assigning work, conducting team meetings or having one on ones? How does the manager track where time is spent by the team and show where the cost of his team supports the revenue of the business?

c. How does the manager use this knowledge to make better decisions on where her team is spending their time?

If you don’t know the answers to these questions, get your managers in inexpensive financial team management classes. Read a financial acumen book with them and set a strategy map of financial expectations to the corporate bottom line.

2. Every manager should know the cost of their team’s business when broken down into common events.

a. How much does order management cost? How much does building the forecast plan cost? How much does running the report cost?

b. Are there different ways to make this work smarter not harder? How else can there be time saved or information used to make smarter decisions?

If you and your managers are not tracking to these events, what are the events within your organization which your team supports and how much do they cost? Do they bring value to the revenue that is recognized that quarter? Connect the dots with your managers and teams to assess the value they bring, even if they are a cost center. Build this map, monthly, quarterly and annually, and align with your managers regularly.

3. Every individual contributor should know the cost of their work event and what they contribute to the bottom line.

a. How much they cost individually per hour? Are they able to find new and different ways to get the work done?

b. What was the result building a better process for order intake or supply management? What was time was saved that supported the seasonal order book? What is the ROI on the project your individual contributor participated?

c. Equally, what revenue did your individual contributor bring in or support other teams to bring in?

Ensure your individual contributors know what financial cost or revenue they are working on. Create a "win wall" or another form or recognition on what your team is contributing. Show how it is associated it to the financial goals of the enterprise. If your individual contributors are able to speak effortlessly to these figures, you have just fired up the financial acumen of your team and consequently their enterprise knowledge.

Knowing this information will not only make your managers and individual contributors smarter, it will build team awareness that improves efficiency. It will become a tool of inspiration and change as your front line employees understand not just their value, but how they bring value to others. Over time, other departments will want to emulate your success and you will eventually have a global team of talent who understands the enormity of the value they bring to the enterprise and the world.

Okay, maybe that last part was a bit ambitious, but Operational Excellence will become an undeniable force with your team. They will be more motivated, more excited and more driven to find innovative ways of doing business. This is at the heart of Operational Excellence and mirrors what MacGyver said, “Maybe it's about time I expanded the realm of possibilities around here.”