Businesses are valuing process management and improvement more than ever and this is reflected in C-suites across the business world. It’s clear that creating new roles responsible for shaping the way businesses manage and optimize their processes will influence the next era of digital transformation.
When Target revealed that Anu Gupta was going to be its Vice President of Operational Excellence last year, the announcement received a lot of media attention. While this was no doubt partly because of Gupta’s high profile, it could also be attributed to the clarity of her brief – to help the retailer become more agile and responsive to its customers by simplifying and optimizing processes across the business.
A Definition of Operational Excellence
For the purposes of this article, operational excellence is defined as: “the point at which each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.” It’s not a new concept; Adam Smith’s description of a pin factory’s workings in The Wealth of Nations talks at length about operational excellence. It has been practiced for centuries and over the years a number of companies have been recognized, or claimed themselves, as being operationally excellent.
The Rise of New Roles
What’s new, however, is the emphasis upon operational excellence in more and more organizations, and on a wider, more holistic approach. The title may change – director of mortgage operations in the financial industry, director of operations, director of patient admission and accounting in the healthcare industry or director of compliance and risk management. But all these new roles have one purpose in common; the achievement of operational excellence through continual process innovation on an organizational-wide scale, rather than evolving in separate siloes.
Operational Excellence for Competitiveness
A big part of the reason for this recent emphasis on operational excellence is the sheer competitiveness of our globalized business world – every company is looking for an edge. However, a technical component also comes into play. Many of the historically very difficult steps required to create an operationally excellent company have recently been rendered easier by technology and automation.
Your Framework for Operational Excellence
The steps sound simple; visualize salient operational processes, design workflows and predefined responses to variations in those workflows, and develop metrics and gauges to report on these same processes and workflow. Once these measures are in place, it’s important to ensure that the organization operates functionally and measures systemically. These metrics can then be used to drive continuous improvement.
The reality is, however, that many companies are still too rigid and siloed to easily complete this process, and it takes too long to get the needed information out of disparate systems. To achieve operational excellence, information on processes needs to be real time or as near real time as possible. It needs to be universally connected and accessible to line of business users, as often they’re the first ones to see where processes go wrong and how they can be improved. To be effective, the operational intelligence gleaned from these processes needs to be business process aware and produce actionable insights.
Using this framework to strive for and achieve operational excellence gives enterprises an intelligent process that enables them to continuously improve all areas of the company’s performance. It is a journey, not a destination.
Operational excellence impacts everything in an enterprise, from profitability to decision-making and customer service. If you’re ready to begin your journey, download our free ePaper, Digitally Transform the Way You Work and start making a difference in your organization.