Often confused with the other but operational excellence isn’t synonymous with operational efficiency. Efficiency looks at the process – how products, services, and operations are delivered – and how they can be made better. That might mean implementing new tools or processes to make them faster, cheaper or less prone to error.

Operational Excellence takes a much wider view. It’s a competitive strategy that aims to make business more profitable and drive overall value to customers. It focuses on macro-outcomes. Rather than simply trying to reduce costs or increase productivity, it aims to create a company culture that’s conducive to efficient growth.

Operational Excellence – getting started with GEM – C3C
Getting it right at the start, before embarking on this change initiative, is critical. It’s important to not get overcomplicated and to keep it strategically simple. Start with GEM – C3C

G = Define your Goals
Outline what is to be achieved – both with broad goals and specific KPIs that will measure success. For example, if the goal is to enhance customer experience with a more knowledgeable workforce, set specific KPIs for the amount of training employees should go through to understand the products, services and SOPs better.

E = Employee buy-in
Employees are the ones that will put a strategy to work to achieve operational excellence. Bringing them into the conversation as soon as possible is a crucial step. To start, consider including employees that are likely to be the most impacted by process changes, as they can provide real-time insight and share their own ideas of how to address issues vis-a-vis the operational excellence initiative.

M = Identify the Methodology
Select a process that that will help achieve the outlined goals as efficiently as possible. The methodology selected, such as Lean Management, Six Sigma, or Kaizen ought to be based on the outlined focus area. For example, if waste reduction in a factory is the goal, go with Lean Management. If enhanced customer experience is the desired outcome, Six Sigma would be the way to go.

C3 = Communicate, Communicate, Communicate
As with any organizational change, communication is key to achieving operational excellence. Ensure to communicate the essential aspects of the program, such as the mission, goals, and KPIs and provide an open feedback channel so employees, managers, and leaders can stay in close contact throughout the process.

C = Continuous Improvement
Unlike other corporate initiatives, operational excellence doesn’t stop once it’s achieved. It requires constant communication, continuous improvements, and workforce engagement to sustain growth and keep a company ahead of the competitive curve.

Our top-picks of organizations leading the way with their Operational Excellence initiatives

Amazon
Just because of their dynamic business model.
Because of the way they have nailed customer service.
Because of how they manage sourcing and distribution so well and on such a wide scale.
Because they deal with millions of customers and have high customer satisfaction ratings. They must be doing something right.
Because they tap into every industry and are able to capitalize and strive with it.

Toyota
Because Toyota is the benchmark in terms of an effective production system.
Just to see their Lean Manufacturing in action.
Due to their history and best practices related to their use of Operational Excellence initiatives.

Google
Because they have a non-standard way of operating their business and are yet so successful.
Because of their culture of innovations being based on customer observations.

Tesla
Because of the massive innovations in everything they do.
Because of their diverse use of technology and processes.

Disney
Because of their ability to build the right working environment and to integrate fun within operations to achieve excellence.

GE
Because they, along with Motorola, were the original developers of Six Sigma principles and methodologies.

COVID-19 has tested every company’s operational effectiveness. Even the best-prepared financial services firms have learned a great deal about what they’re doing well and where they can further improve. One strength, leaders pointed to, was that they define operational excellence in terms of customer experience, end to end. Starting with the customer forms the bases for all the decisions leaders need to make throughout and within the operating infrastructure. This may seem to be a subtle shift in focus, but it is actually quite a dramatic pivot from what has traditionally been viewed as operational excellence. Firms seeking to put operational excellence at the center of their way of working also ought to put in place the right people, the right operating model, and the right culture: one focused on agility, purpose and simplicity. For companies that succeed, excellence will be, as Tom Peters put it, “a way of life.”

And because you need to partner with an experienced and knowledgeable team to make excellence a way of life in your organization, please reach out to us at EZDynamic. We are a Management Consulting service, based in New York, that caters to the niche requirements of the Financial Services sector.

Schedule a call to learn how we can support your organization